If you walked through the bustling halls of the recent Philippine Coffee Expo last June 5, you likely smelled the rich aromas of coffee, heard the rhythmic tapping of portafilters, and witnessed the coffee community vibrant with energy. But behind every exquisite cup of local specialty coffee lies a complex, often fragile web of economics, hard labor, and shared risk.
At this yearβs Kapeβt Kwentuhan plenary segment, the local coffee community gathered to listen to a vital conversation led by an industry titan: Mrs. Rosario "Cherry" Cruz. As a Coffee Quality Institute (CQI) Lifetime Achievement Awardee, Q Grader, SCA Sensory Instructor, and Founder of the Barista and Coffee Academy of Asia (BCAA), Ms. Cherry pulled back the curtain on the structural dynamics of our local ecosystem. Her presentation, "Who carries the Cost and the Value of Philippine Coffee?", served as both an eye-opener and a rallying cry for everyone in the coffee value chain. Here is the story of that thrilling talk, and the mindset shift we all need to embrace.
To understand where value comes from, we have to look at the journey from seed to cup. Ms. Cherry beautifully broke down how each sector acts as an essential link in the chain, contributing something unique while carrying its own set of heavy burdens.
Value begins at the roots. Farmers are the caretakers of our genetic coffee heritage; they carefully select which plants to germinate and serve as the ultimate stewards of our land. But their job doesn't end at harvest. Todayβs Filipino coffee farmers are increasingly becoming processors, mastering the intricate chemistry of post-harvest transformation to turn raw cherries into pristine green coffee beans ready for the roaster.
Once the green beans leave the farm, the roasters take over. They carry multiple operational risks, such as:
Chemical Risk: The pressure to nail the perfect roast profile to bring out the beans' best flavors.
Volume Risk: The inevitable loss of beans used during essential testing, cupping, and training.
Energy Risk: Managing the volatile costs of materials, resources, and fuel required to keep the roasters running.
Finally, the coffee lands in our cafes. Ms. Cherry highlighted baristas and cafe owners as the true brand builders of Philippine coffee. They stand on the front lines. They are the advocates, the storytellers, and the promoters who connect the consumer directly to the origin of the bean.
When we look at how value is added from bean to cup, the data reveals a telling picture of where the financial weight and appreciation lie. Ms. Cherry further shared a breakdown of how value is distributed across the production stages:
Farm Level - 57%
Processing - 28%
Roasting - 14%
While it's encouraging to see the majority of the percentage sitting at the farm and processing levels, reflecting the immense effort required to produce specialty lots, the actual expenses incurred by each sector show just how expensive it is to keep the chain moving.
Farm-level: Heavy investments in farm inputs, direct labor, management, administration, and basic utilities like electricity, water, and fuel.
Post-Harvest Processing: Coffee cherries, intensive labor, specialized equipment, utilities, and the heavy burden of depreciation expenses on infrastructure and packaging.
Roasting Operations: Quality green beans, manpower, continuous sensory training, machinery repairs, maintenance, and navigating recovery and investment costs.
Cafe Operations: Manpower, barista training, steady coffee supply, commercial rent, marketing, menu development, business permits, licenses, packaging, and even the cost of competing to keep the brand relevant.
With costs stacking up at every single corner of the industry, how do we prevent the chain from breaking? Ms. Cherry introduced a powerful concept: The Golden Circle of Respect.
For the Philippine coffee value chain to continuously grow and operate seamlessly, interconnectivity is a non-negotiable. We cannot operate in silos. Roasters must respect the financial realities of the farmers; cafes must recognize the risks taken by the roasters; and consumers must appreciate everything that goes into their cup. Mutual respect, consideration, and transparent equity are the only ways forward.
Perhaps the most profound takeaway from the session was a challenge to our collective mindset as consumers. For the longest time, commercial systems have treated coffee as a mere ingredientβa bitter powder meant to deliver a quick hit of caffeine.
"Itβs time to change the mindset. Coffee is not just a caffeine sourceβit is a protagonist."
When we view coffee as the main character of the story, our relationship with it changes. We stop looking for the cheapest option and start looking for the quality, the value, and most importantly, the story behind each cup.
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As the plenary drew to a close, Ms. Cherry directed her message toward the future, to the young consumers and the next generation of coffee professionals. The sustainability of Philippine specialty coffee rests in their hands, and it requires a definitive mindset shift built on three pillars:
Demanding Transparency: Ask where your coffee comes from, who grew it, and if the farmers were paid fairly.
Valuing Quality Over Volume: Shift away from the culture of fast, mass-produced consumption. Appreciate the nuance of a well-nurtured, well-roasted local lot.
Respecting the Craft: Honor the labor of the farmers, the precision of the roasters, and the dedication of the baristas who bring it all to life.
By understanding who carries the cost and actively choosing to invest in the true value of Philippine coffee, we ensure that the local industry survives and thrives equitably for generations to come.
Letβs keep the coffee conversation going! If youβre looking for a reliable partner in your coffee business, Equilibrium Intertrade Corporation has been an end-to-end cafe solutions provider since 1998. Connect with us today or follow us on social (@equilibrium_intertradecorp) to stay updated on more discussions, programs, and initiatives we do for the love of coffee!
Footnotes:
To help visualize and map out the actual percentages of the roasted coffee value distribution per sector/stage, Ms. Cherry shared a typical setup that reflects the reality of our local producers. Here are the baseline assumptions used to get these numbers:
Farm size: A smallholder farm lot averaging 1 to 2 hectares
Planting density: A standard spacing layout of 1m x 1.5m per tree
Farmgate price: Green coffee beans (GCB) valued at β±750/kg
Roasted coffee price: A market valuation of β±1,200/kg
*Important: While these figures are grounded in actual, real-world data, the coffee world is beautifully diverse! The exact numbers can always shift depending on your farm's scale, planting density, and the operational size of the roaster or cafΓ© handling the beans.
An eye-opening look at the Philippine coffee value chain. Uncover the economic reality, costs, and vital roles of farmers and roasters as shared by Ms. Cherry Cruz.
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