The Economics of Coffee at the Secret Garden Party

July 29, 2015

 

 

Coffee at Secret Garden Party became a luxury item in the mornings when hundreds of British souls came for a personal appointment with our Head Coffee Master.

 

In our local SGP economy, we run an economical experiment where coffee prices adjusted following supply and demand.  It’s good to point out that Coffee is the second most traded commodity in the world after oil.  So far only coffee farmers in far away countries are exposed to the volatility of coffee market prices, but at SGP we were all exposed to the laws of supply and demand.

 

We were running dangerously short of our exquisite Borbón coffee variety and the demand for it on Saturday morning reached a peak, there was nothing we could do: prices had to adjust if we were to accept basic economic laws.

 

However, it was a big ethical issue as well because we had committed to a price list and although we are a charity we don’t want people to buy our coffees out of pity.  But coffee lovers from all over the UK who came to SGP came to our stall looking for carefully crafted single origin coffee varieties and 99% of the time people were willing to engage in our conversation and played with us "Fair-trade Coffee" games.

 

We asked coffee lovers if they would be prepared to pay what we considered where market prices (price list plus a donation), taking into account competition -interestingly as no one else offered single origin coffee varieties- and supply & demand.  All of you SGP goers who played our games are very welcome to ask for a free coffee soon at our stall in Borough Market!

 

For the very first time in the history of coffee in the UK, local consumers were totally exposed to the volatility of market prices.  Coffee lovers at SGP understood what it is like for coffee farmers in Colombia not to know how much they will get for their produce.  This uncertainty creates huge pressure on families as they cannot take long-term economic decisions.

 

Big thanks to all coffee lovers at SGP who shared the economics of coffee with us!  

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