The specialty coffee industry has built a narrative that ethical sourcing, quality and direct trade relationships are decoupled from the commodity market – and many brands do not realise how closely their supply chains are intertwined with futures prices, says Nick Mabey, co-founder of Assembly Coffee
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Nick Mabey, co-founder of Assembly Coffee | Photo credit: Courtesy of Nick Mabey
The New York Arabica Futures price – often called the ‘C market’ – serves as the global benchmark for coffee supply and demand dynamics. While it is articulated in terms of price, it is fundamentally a price signal rather than a true reflection of coffee’s value. Despite its central role in coffee economics, a significant knowledge gap persists in the specialty sector regarding how the futures market functions and influences price discovery. This gap manifests in several ways:
Misinterpretation of price signals
The C price is driven by multiple factors, including supply and demand, weather events, geopolitics and speculative trading. It serves as both a tool for price discovery and risk management. However, the specialty coffee sector has often positioned the futures market as an adversary rather than recognising its critical role.
The futures market and its direct connection to the many smaller niche importers upon which specialty brands rely remains largely overlooked. As a result, many coffee professionals exhibit, at best, a naïve understanding of basic economics and, at worst, a fundamentally flawed perception of how markets function.
Many have worked for businesses that built their operating models on these misconceptions – making them inherently unsustainable and perpetuating a cycle of misunderstanding.
Overreliance on the market as a baseline
Extended periods of low C market prices have led the industry to treat this benchmark as a measure of ethical sourcing. In reality, tying ‘ethical’ pricing strictly to the C market can obscure broader factors that genuinely drive quality and fairness. The irony is that for this narrative to persist, the specialty coffee industry requires the market to remain unfairly low in order for it to prevail, which contradicts its own mission.
Premiums touted as ‘ethical price discovery’ may instead reflect higher costs driven by inefficiencies rather than true value creation. Meanwhile, transparency efforts often reveal that many transactions still ultimately conform to fundamental market forces, exposing the limited scope of structural reform within the sector. A shift in perspective is therefore necessary
Roasters must deepen their understanding of market forces to make informed sourcing and pricing decisions. Rather than relying solely on niche importers, they should explore alternative, more efficient sourcing models that align costs with genuine value.
“This moment presents an opportunity to prioritise relationships over marketing narratives”
Coffee roasters must deepen their understanding of market forces to make informed sourcing and pricing decisions. Rather than relying solely on niche importers, they should explore alternative, more efficient sourcing models that align costs with genuine value.
They should also have a downstream focus that prioritises consumer needs by clearly demonstrating value and fostering strong customer relationships. This customer-centric approach can justify higher price points through quality and brand experience rather than inflated supply-chain costs.
Opportunities for roasting, packaging and other forms of value addition at origin can also help to raise producer incomes and bolster local economies. However, roasters in the Global North must recognise their limitations in driving value at origin. Instead, they should focus on signalling demand and supporting producer-led initiatives through long-term partnerships.
The future of specialty coffee
The specialty coffee landscape will continue to be shaped by shifting consumer preferences, market volatility, and the escalating effects of climate change. To succeed, the industry must adapt by embracing a more nuanced understanding of market dynamics and innovating around value creation.
Historically, coffee markets tend to correct 18 months to three years after breaking through record resistance levels. Given current trends, a return to a $2.50–$3.00 market may be on the horizon in the medium term. Roasters must focus on sound business models rather than clinging to outdated low-price-era ideologies.
Coffee prices for end consumers are likely to rise. Communicating the reasons behind these increases – quality, sustainability, and equity – will be crucial in maintaining consumer trust.
As the gap between high-end commercial offerings and entry-level specialty coffee narrows, businesses that identify as specialty must differentiate themselves through immersive experiences and product diversity.
While quality and ethical sourcing will remain central, roasters must expand their focus to include sustainability, transparency, deeper consumer engagement, and operational efficiency. Many specialty brands struggle to maintain sustainable models due to a lack of alignment between pricing strategies and actual business costs. Demonstrating tangible, localised environmental and social commitments will be key.
Understanding how the C market and speculative trading impact prices will enable roasters to make more informed sourcing and pricing decisions, manage risk effectively and build resilience. Achieving this may require working with well-resourced, vertically integrated producer entities where fixing landed prices for coffee is possible without relying on the liquidity mechanisms of the futures market. This is no small feat, but it represents the true ambition of the Direct Trade movement.
Roasters looking to scale should seek this model, even if it means narrowing their scope to fewer origins while increasing diversity within those supply chains. This strategy would grant them greater purchasing power and more meaningful influence over fewer, more strategic supply chains.
For those seeking to deepen their understanding of this topic, I highly recommend following experts like Judy Ganes, a seasoned coffee market analyst who brings a wealth of experience to the conversation.
Despite the challenges, the market for premium, differentiated coffees remains incredibly strong. In fact, this moment presents an opportunity to prioritise relationships over marketing narratives. If specialty coffee’s goal is to reduce volatility, then ideological rhetoric alone will not suffice. Instead, the industry must shift its focus to sound business models, shared stakeholder responsibility (roasters in particular), and a deeper understanding of macroeconomics.
Nick Mabey is the co-founder of Assembly, an award-winning specialty coffee roaster based in Brixton, London. He is also Chief Operating Officer at Assembly and Volcano Coffee Works parent company Fullsteam Espresso and writes extensively on specialty coffee supply chains and economics.