• maupc7

What Is Specialty Coffee?

Updated: Jul 1

What is specialty coffee and why is this term becoming so popular among producers and consumers? Specialty coffee encompasses more than just the quality standards used to grade coffee – it involves a market segment where coffee producers can earn more for their coffees. This is different from the traditional pricing model determined by futures in the stock market where coffee is traded as a commodity. In the specialty coffee segment the price is set according to its quality grade, cupping score, processing method, and cost of production and transportation. Motivated by higher profits, producers are looking to establish direct trade relationships with buyers, who at the same time are aware or their quality and thrive for the producers' socioeconomic welfare.

Before we delve deeper into this topic, it should be said that the definitions of these two pricing concepts are quite open and have been debated within the global value chain. The purpose of this blog is to offer a reference of what specialty coffee is and to understand why Coffee Exchange focuses on helping producers find new markets for their coffees. By bringing specialty coffee into the conversation, we hope to encourage producers to see for themselves the real value of their coffees outside traditional trading and pricing channels.

Coffee bags on their way to China. Source: CEx file.

What's Specialty Coffee?

Referring to a superior quality and exclusive goods, this term is becoming more popular for two reasons: 1) a growing consumer preference for a direct connection with farmers and better quality and 2) the standards brought by the Specialty Coffee Association (SCA) for cupping and trading. More consumers are worried about the welfare of coffee producers and they are willing to pay more for higher quality instead of conventional coffee traded in bulk.

This new market allows better profit margins for producers and is shifting coffee to being traded as a delicatessen (rather than a commodity) where coffee quality is superior and well-appreciated. Rooted in the concept of terroir, the quality of the coffee is the result of human interaction and agricultural practices, in addition to the influence of geographical and natural surroundings that make the coffee a unique, limited, and exotic good.

Logo of the Specialty Coffee Association. (SCA)

To reach these quality expectations and grading standards, sophisticated processing methods and extensive labour are required. For this reason, the Specialty Coffee Association has set different criterion that uses coffee grading to determine what constitutes specialty coffee. While the term is still debated among different stakeholders, by the SCA standard, we can understand it as: "coffee that is free of primary defects, has no quakers, is properly sized and dried, presents in the cup free of faults and taints and has distinctive attributes."

Customers ready for cupping at our events. Source: CEx File.

In other words , the quality of the coffee is determined by the compliance to these standards taking into account the screening size and defect rate, biometrics and cupping scores (at least 80+ points). If standards are met, the evaluated coffees will be considered Specialty Coffee grade. Easy, right? It is more complicated than it sounds and every standard has its own parameters (for example, classification of defects) that we will discuss in different blogs. In Coffee Exchange we prefer coffee above 85+ points because it is the minimum requirement from our customers. This is also a term in the industry and helps us filter and source coffee for our clients.

Quality-Price Relationship. Specialty for the win!

After this introduction, we can see the inherent relationship between quality and price where coffee lots of higher quality get better prices. In practice, you can see this in the price comparison undergone in the