The £5 cup of coffee was only part of the story

In October 2024, we wrote about the possibility of the £5 cup of coffee becoming a reality.

At the time, the coffee industry was dealing with rising green coffee prices, climate disruption, droughts in major producing countries, higher finance costs, shipping disruption, and increasing instability across the global coffee market. The question we asked then was: if coffee prices are rising, who is actually benefiting?

That question still matters. But over the last year, we’ve found ourselves thinking about a slightly different one: how do you build a coffee business that can handle volatility without pushing all of the risk onto producers, customers, or the team?

Higher prices are not the whole problem

When coffee prices rise, it is tempting to see that as either good or bad, depending on where you sit in the supply chain.

For producers, a higher market price can mean better income for the coffee they sell. For roasters, higher green coffee prices can mean tighter margins, higher retail prices and harder decisions. For customers, it can mean a more expensive bag of coffee or a more expensive flat white. But coffee pricing rarely moves that neatly through the supply chain.

A higher C-market does not automatically mean every farmer is better off. Some producers may have sold earlier at a lower price. Some may have lower yields because the same climate conditions pushing prices up have damaged their crop. Others may be facing higher labour, fertiliser, finance or processing costs. And in many supply chains, value is still absorbed before it reaches the people growing the coffee.

Lower prices are not automatically good either. They may help roasters and customers in the short term, but they can be damaging for producers if prices fall below the cost of sustainable production.

So the issue is not simply whether coffee prices are high or low. The bigger issue is volatility.

Volatility makes good decisions harder

Coffee is an agricultural product, but it is also traded in a global financial market. The C-market is the global benchmark for arabica coffee. It does not tell the whole story of what a coffee is worth, but it affects the price of most coffee in some way - including coffee bought through direct relationships. That means prices can move quickly because of weather, climate risk, supply forecasts, currency movements, freight costs, finance costs and speculation.

For a roaster like Chimney Fire, that creates a difficult balance. We want producers to be paid properly. We want to keep buying from the same people year after year. We want customers to feel that our coffee is fairly priced. And we need the business itself to be financially stable enough to keep doing those things.

When the market moves sharply, that balance becomes harder. If prices rise suddenly, a roaster may have to absorb the increase, raise prices quickly, reduce margins, change blends, reduce quality, or buy less coffee. None of those are ideal.

If prices fall sharply, the opposite problem can occur. Short-term buying decisions may look attractive, but lower market prices can put pressure on producers and undermine long-term value at origin. That is why stability matters.

Sustainability has to include resilience

In coffee, sustainability is often talked about in terms of traceability, certifications, premiums and direct relationships. All of those things matter. But we think sustainability also has to include resilience.

A coffee business cannot support producers properly if it is constantly reacting to market shocks. It cannot offer customers stability if its buying decisions are short-term and exposed to every price movement. And it cannot build genuine long-term relationships if it only behaves responsibly when the market is comfortable.

For us, responsible sourcing means more than knowing where a coffee comes from. It means building the systems, relationships and commercial discipline to keep buying well through difficult markets.

That includes long-term producer relationships. It includes transparent pricing. It includes multi-year commitments where possible. It includes better stock planning, currency management, financing, logistics and understanding how the C-market affects the coffee we buy.

It also means asking whether we can manage green coffee price risk more deliberately, rather than simply reacting when the market moves.

Hedging volatility, not producer value

This is where the conversation can easily become misunderstood. When people hear terms like futures, options or hedging, it can sound like the opposite of sustainable coffee. It can sound like finance taking over from farming.

To be clear, we do not believe coffee should become detached from the people who grow it. We do not want to speculate on producer hardship, climate shocks or market instability. That would be completely at odds with what Chimney Fire stands for.

But there is another way to look at it. Used responsibly, financial risk-management tools can help a coffee business manage volatility without changing what the producer is paid.

If a coffee contract is linked to the C-market, and the C-market rises before the price is fixed, the producer or exporter can still receive the agreed market-linked value. A separate hedge can help the roaster absorb that movement, rather than having to immediately pass the whole increase onto customers, reduce volume, or put pressure on future buying decisions.

In other words, the aim is not to suppress producer value. The aim is to protect stability. We do not want to hedge against producers earning more. We want to hedge against volatility damaging the whole chain.

Why this matters for customers

Most customers do not need to know the mechanics of the C-market, FOB contracts, currency exposure or green coffee financing. But customers do feel the consequences.

They feel it when coffee prices rise suddenly. They feel it when quality drops because businesses are trying to protect margins. They feel it when their favourite coffees disappear. They feel it when independent businesses have to increase prices just to keep up with costs.

Our goal is not to avoid price increases forever. That would be unrealistic, and it would not be honest. Good coffee has to be paid for properly.

But we do want to avoid unnecessary shocks. We want to make decisions early, buy carefully, support long-term producer relationships and keep our pricing as stable and transparent as possible.

That is better for customers, but it is also better for producers. A stable roaster can make better commitments, buy more consistently and avoid short-term decisions that damage relationships.

Direct trade is not enough on its own

We still believe direct producer relationships are one of the best ways to make sure more value reaches origin. But direct trade on its own is not enough.

A direct relationship does not remove climate risk. It does not remove currency risk. It does not remove shipping costs, financing costs, crop volatility or the influence of the global C-market. So the next stage for us is about combining values-led sourcing with better commercial discipline.

That means continuing to buy selected coffees directly from producers, but also becoming more deliberate about how we manage the risks around those purchases. It means looking further ahead. It means understanding when to fix prices, how to plan stock, how to manage currency exposure, and how to protect the business from market movements without compromising what producers are paid. That may not be the most romantic part of coffee but it may be one of the most important.

A better coffee business has to be stable

The coffee industry does not need more short-term thinking. Producers need buyers who can keep showing up. Customers need businesses they can trust. Teams need stability. Independent roasters need enough resilience to survive a market that is becoming more volatile, not less.

For Chimney Fire, the goal is not simply to buy good coffee. It is to build a better coffee business: one that creates value for producers, gives customers confidence, and is strong enough to keep doing the right thing when the market gets difficult. That means paying attention to the coffee itself, but also to the systems behind it. Because the future of sustainable coffee will not only be shaped by what we pay for coffee. It will also be shaped by how well we manage uncertainty.