Supply Chain Crisis?
The major factors affecting the cost of coffee include, raw materials, packaging, transportation, and wages. In 2021 all of these items cost more than they did in 2020 or 2019; in some cases significantly more.
Due to shipping issues, a lack of shipping containers, one of our friends here in Nicaragua could not send coffee up to a roaster in the United States earlier this year. Once he was able to get the containers, he could send the coffee but with higher shipping costs. Thousands of stories like this are causing shortages and higher prices. Let’s take a look.
[this is just a quick overview, not a deep analysis]
Shipping - You may have heard about the delays at ports. These are real and are caused by a variety of factors. But one of the most dramatic issues in shipping is this: SHIPPING IS MUCH MORE EXPENSIVE IN 2021. For example, a container shipped from Asia to Central America used to cost about $2,500. Today it is around $10,000. This impacts the cost of packaging material and machinery used to roast, grind, and package.
Raw Material - There are a number of forces causing the cost of raw material to increase. There is a little less high quality coffee available on the market this year which always causes prices to increase. But additionally, wages are increasing everywhere in the world. Look at what is happening in your locality and trust me, a similar thing is happening in the places where coffee is grown.
[How to avoid supply chain issues]
Twin Engine Coffee keeps a just in time inventory of roasted coffee. That is how we keep sending customers the freshest coffee to keep everyone satiated. But with these supply chain issues, can we keep doing this? Yes. We have invested in packaging materials so that we have a healthy inventory and are not concerned about delays from which other companies are suffering.
Also, we bring coffee from the farm to the roastery in a truck. It doesn’t need to go on a container ship so we are not impacted by this and our roasting is always fed with a fresh supply of green coffee. There is no doubt that we are well served by the decision to roast coffee here where the coffee grows, rather than in some far remote location (like Vermont for example).
The final leg of shipping which takes coffee from us to your home, shop or cafe has also gone up in price but less than long distance shipping. UPS, USPS, DHL, and FEDEX remain the most efficient ways to deliver coffee the final distance.
In case you were wondering why certain coffees are unavailable or why their prices have risen, I thought I would give you my thoughts from the source. We work every day to have the strategy and actions which will bring you the best coffees, at great prices, with maximum positive impact. Thank you for your support.
Colin Ganley - Co-Founder