Summer Zine - Importer's conversation, The true cost of coffee, Shrinking gap between commodity & craft

This month, we sat down with Billy McMillan, founder of Common Goal Coffee and one of Holm's primary import partners. You'll recognize Common Goal's coffees – Finca El Morito in Peru and Testi Coffee in Ethiopia – from some of Holm's favourite blends. Billy has spent nearly two decades building relationships across the coffee supply chain, connecting producers with roasters through long-term partnerships built on transparency, trust and fair pricing. Our conversation explored the people behind the coffee: the relationships that sustain the industry, the rising costs producers are navigating, and why knowing who grows your coffee matters as much as what's in the cup.

— Billy: I've been in coffee for almost 17 years, but I founded Common Goal in 2023 after working in several different roles in Coffee. I wanted to create something that could genuinely benefit both coffee producers and roasters by acting as a bridge between them. The goal was to help producers receive better prices for their coffee while giving roasters more stability in what they offer on their menus. Just as importantly, I wanted to help create real relationships between roasters and producers, so people could better understand both the challenges and the successes that producers experience while producing coffee.

— Billy: It came from years of working on all sides of the industry. Technology has made direct communication much easier, and people's expectations have changed. Consumers want to know where their coffee comes from, and roasters increasingly want long-term relationships with producers. It makes me happy to see that shift, and Common Goal exists to help make those relationships possible.

— Billy: I source coffee from a relatively small group of producers. They're farms that have organized themselves and their communities so they're able to export directly to a company like Common Goal.

That allows us to buy different tiers of coffee from the same producer depending on what each roaster needs. Some may be looking for coffee for blends, while others want exceptional lots that really stand out. By purchasing multiple grades of quality, we're able to create more volume for producers. So instead of selling those coffees in bulk on the wider internal market at lower prices, they can export more directly through us and receive a higher premium.

— Billy: Mostly through relationships built over the years. Some introductions came from coffee roasters, but many came from roasters or other producers who would simply say, "You should meet this person."

 Like-minded producers tend to know each other. Neighbouring farms, family members and communities all become connected. Coffee is also an industry with a lot of succession. As producers retire, their children often take on larger roles within the business, which opens the door to new relationships.

— Billy: Absolutely. Honestly, Common Goal exists because we felt we had an opportunity to do better. It's a family business, and everything we've built comes back to relationships and support from coffee producers, coffee roasters, coffee companies and the communities they're part of.

— Billy: Mostly producers who own their own farms, although some groups include several farms within one extended family. You'll often find brothers, sisters, parents, aunts, uncles and cousins all farming together.

 One thing I actively look for is family-owned and family-operated businesses. Working that way makes everything much more transparent. You can clearly see where your support is going and the impact it has on families and communities. That matters to me.

— Billy: It really depends on what's available. It's nice to have some variety while also building strong relationships.

 Many producers sell coffee to multiple buyers. If they can separate out exceptional lots and offer them to someone like me, who's willing to pay a premium, they're able to showcase that coffee instead of selling everything into a larger commodity market where it simply disappears into a blend. That can make a real difference to the profitability of a farm.

— Billy: It starts by paying a premium above the average market price so producers can invest not only in their coffee businesses but also in their homes and communities. Many of these coffee communities are made up of small, remote family businesses.

 One area I really value is education. If you invest in education, you're investing in future generations.

 In Guatemala, for example, I work with producers who have established a scholarship programme supporting more than forty students from kindergarten right through university. I've known some of those students for over a decade. They're now adults who have graduated with university degrees. Seeing the impact coffee can have beyond the farm is incredible.

 The financial support is only one part of it. I also speak regularly with producers about what's happening in their communities, what they're planning and where they need support. Those conversations are honestly what I enjoy most about coffee. They take me away from spreadsheets and remind me why I do this work.

— Billy: It's both. I value exceptional coffee, but I also value the work that goes into producing it. I don't just value what's in the cup. I value the people and the effort behind it.

 And to be perfectly honest, most coffee producers are barely getting by. The cost of producing coffee has increased dramatically, and in many cases the prices they're receiving simply don't reflect that. Personally, I think we should all be paying more.

 I want producers to look forward to the next harvest. Some years are incredibly difficult. Crops vary, weather changes, and yields can be much lower than expected. I don't want producers feeling like they have to abandon their farms, move to the city or plant some other cash crop because coffee is no longer viable.

— Billy: We more or less work with the same producers year after year. Whatever they can offer, we'll buy.

 I have a philosophy that every coffee has a home. And our role at Common Goal is to explain the realities of each harvest to our roasting partners and find the right home for that coffee. Usually, it doesn't take long to find roasters who genuinely want to support producers. They buy the coffee, we move it, and we all hope for a better harvest the following year.

— Billy: Curiosity. Over the years I've learned there are environmental, historical and situational reasons behind almost everything. When I talk with producers, I don't say, "You should do this differently." Instead I say, "I'm curious about this. Can you help me understand?"

 I'm not a coffee producer so I’m never going to tell a producer how to grow coffee. I handle logistics, distribution and relationships. But those conversations become learning opportunities for me as much as anyone else, and then I take that knowledge back to my clients.

 As coffee becomes more experimental, those conversations become even more important. Sometimes producers think roasters are looking for one flavour profile when they're actually looking for something completely different. The only way everyone learns is by talking openly.

— Billy: Absolutely. A good example is Finca Marito in Peru, which Holm buys as you know.

 I'd bought coffee from them once, years ago, but only in a very small amount. I'd almost forgotten about it until one of my clients mentioned they were buying coffee from them and offered to make a reintroduction.

 What attracted me first wasn't even the coffee. It was the people.

 Finca Morito is made up of more than a dozen family members, each farming relatively small parcels of land. Parents, children, aunts, uncles and cousins had organized themselves into a collective so they could export directly instead of relying entirely on larger buyers. That sense of family drew me in before I'd even tasted the coffee.

 When the samples arrived, the coffee was excellent too. After a few more conversations to understand how everything worked, we shipped our first container in 2023.

 People loved the coffee, so the following year we doubled our purchases and moved from one container to two. That kind of growth definitely doesn't happen very often, but it happened because of the quality of the coffee, the hard work of the producers and the values they bring to what they do.

— Billy: Rising production costs. The conversations I have with producers make it very clear that the prices many of them receive still don't cover what it actually costs to grow coffee.

— Billy: The same things we're experiencing here. Fuel is more expensive. Transportation costs more. Labour costs have increased significantly because producers are competing with other industries for workers.

 The good news is that people are earning better wages in coffee producing countries, which is exactly what should be happening. But it also increases costs for producers, meaning coffee needs to be priced accordingly.

— Billy: The relationships. There's much more open communication than there used to be. People genuinely want to know where their coffee comes from. They want to meet producers and visit farms. That isn't entirely new, but every year it feels like more people care. That part of the industry keeps growing.

Coffee has reached historic prices on the global market, but for many of the producers growing it, it’s harder than ever to earn a living. At first glance, those two things don't add up. If coffee is worth more than ever, shouldn't farmers be benefiting? 

The answer has less to do with what coffee is worth than with how it's bought and sold.

By most measures, the last two to three years have been extraordinary for coffee. In 2024, world coffee prices rose by 38.8%, driven by widespread supply reductions due to extreme weather events in Brazil and Vietnam, namely droughts and floods.¹ Arabica prices in December 2024 were 58% higher than a year earlier, while Robusta surged 70% in real terms.² By February 2025, the C price (more on that in the next section) reached an all-time high of USD $4.41 per pound.³ 

Green coffee is traded as a global commodity, alongside wheat, sugar and crude oil. Its benchmark price isn't determined by the person who grew it though: it's set on a futures exchange in New York called the ICE (Intercontinental Exchange). The price established there, known as the C price, becomes the reference point against which much of the world's coffee is bought and sold.⁴ 

Producers don't set the price of coffee; they receive whatever the market offers them. Economists call this being a price-taker.

The reason for this lies in how futures markets work. A futures contract is simply an agreement to buy or sell a set amount of coffee at a fixed price on a future date. Originally designed to help producers and buyers manage risk, these contracts are now also traded by financial investors who never intend to buy or sell physical coffee.⁵ As a result, the C price moves not only based on what's happening today, but on what traders believe might happen tomorrow.

Imagine weather forecasts predict a severe drought in Brazil. Within hours, traders begin buying coffee futures in anticipation of tighter supply. The C price climbs not because any coffee has been lost, but because enough people believe it might be.⁶

The trader who anticipated that movement may profit almost immediately. But the producer living through that drought faces a very different reality: lower yields, higher costs and often more debt. Many smallholder farmers have already agreed to sell part of their crop months before harvest to access cash for fertilizer, labour and other inputs, not unlike buying a CSA share from a local farm here in Revelstoke. But if prices spike after those agreements have been signed and fulfilled, producers rarely benefit.⁷

Where a trader can enter and exit the market in seconds, a coffee producer works on a cycle measured in years, as trees take three to four years to mature after planting. So if prices collapse, farmers can't simply pivot or wait out the market.⁸

So why don’t producers make more when prices rise? 

Even if producers captured every increase in the C price, it would only tell half the story. Coffee farmers are running businesses, and their costs have climbed for many of the same reasons our own lives have become more expensive: post-pandemic disruptions, extreme weather events, geopolitical shocks, and inflation impacting key inputs like fuel, fertilizer, labour, and infrastructure. But unlike most businesses, they have almost no ability to adjust their prices in response.

If you own a bakery in Revelstoke and the price of flour doubles, you eventually raise the price of bread. It’s commonly understood that most businesses will pass rising costs on to their customers. By contrast, coffee producers, especially smallholders, have remarkably little ability to do the same. The gap between market price and farm income runs deeper still.

While the C price is a global benchmark, it's not what producers are paid. The price most commonly discussed within the coffee trade is the FOB (Freight on Board) price, generally a calculation of the C price plus quality premiums, processing costs, and taxes. What a producer actually receives is known as the farmgate price: the amount paid at the point where they exit the supply chain, whether they're selling cherry, wet parchment, or dry parchment. Depending on supply chain structure and country context, farmgate prices can be as little as 60% of the FOB price, and this price is rarely published, making it incredibly difficult to know how much of the final value actually reached the person who grew the coffee.⁹ 

This is a clear place where the system works against producers. Costs have risen with extreme weather events, geopolitics, and inflation, but the C price doesn't reflect those realities. The revenue available to smallholders is tied to a futures market that moves on expectations, not on what it actually costs to grow coffee. And many producers also pre-sell part of their crop before prices rise, meaning they don't capture the benefit of record highs even when they occur. Whatever price they do receive is reduced further by processing, transport, and export costs before any value reaches the farm.

As a result, in some regions, the cost of production has exceeded the income from selling coffee altogether. The people carrying the most risk, from weather and debt to timing and yield, have the least influence over the price they receive for their work.

Understanding these dynamics helps explain why many specialty coffee companies place so much emphasis on long-term relationships, transparent pricing, and paying well above the market benchmark. The C price may shape the global market, but it doesn't have to determine what producers are ultimately paid.

The conversations we’ve had with our importing partners over the last months have been deeply illuminating about the price of coffee, and what that means for all of us along the supply chain, from producer to drinker. Inflation has made everything more expensive, but it’s also changed the way many of us think about value.

For years, there were clear price differences between supermarket coffee and specialty coffee, chain restaurants and independent ones, supermarket vegetables and the farmers' market, or something handmade instead of mass produced. Those choices weren't only about flavour or quality. They were also financial decisions. Choosing the independent option often meant paying a noticeable premium.

That premium hasn't disappeared, but in many cases it has become much smaller.

As we’ve mentioned, coffee has become more expensive across the board over the past few years. But, the gap between supermarket coffee and thoughtfully sourced specialty coffee has narrowed. That's partly because specialty coffee has long been priced according to relationships and quality, not simply the daily movements of the commodity market.

At the same time, people haven't stopped drinking coffee. They might visit cafés a little less often, but coffee remains one of those purchases many of us continue to make despite rising prices. Economists describe it as an inelastic good, meaning demand changes very little even as prices rise. 

In other words, we’re all hooked on coffee.

During our conversation, Billy said something thoughtful when he suggested that it's become "more affordable to tap into our values." We've kept thinking about that, because it reframes what inflation actually does to decision-making. When everything costs more, we start asking different questions. Not just what's affordable, but what's worth it.

Living in a town that’s full of small, independent businesses, we see it clearly. Why spend forty or fifty dollars on a chain dinner, when another ten or fifteen dollars would allow us to eat at an independent restaurant we genuinely love? It starts to feel less like an extravagance and more like a decision about where we’d rather spend our money. The same could be said of farmers' markets, independent bookstores, local breweries or handmade goods. When the difference between two options is large, price naturally dominates the decision. As that difference narrows, other considerations begin to carry more weight.

What’s more, price has never been the only thing we're buying. We're also buying quality, craftsmanship, relationships, convenience, ethics, familiarity, or the kind of businesses we'd like to see continue to exist. Those things have always mattered to most people. But what's changed is that, in many cases, making those choices no longer requires quite the same financial leap.

At Holm, we've welcomed many new customers over the past few years. We can't know exactly what motivates every purchasing decision, but many customers have told us that this shift in pricing is part of what brought them to us. Increasingly, the decision isn't between a cheap bag of coffee at a big box store and an expensive one at a roastery. It's between two bags that are now relatively close in price, but represent very different approaches to sourcing, quality and relationships.

None of this is to suggest that everyone is buying specialty coffee as budgets are real, and price will always matter. But inflation has changed the calculation. When the gap between options was wide, price naturally dominated consumers’ choices. 

Now that it's narrowed, many of us are finding ourselves asking a different question: not simply what costs less, but if I'm already spending this much, what do I want my money to support?