I have been actively holding off writing this post for as long as possible, avoiding looking too closely at our numbers and hoping it will all just sort itself out. The past 3 years have been challenging at best, traumatic at worst and running a business has felt akin to laying down the tracks for a train that is already in motion, frantically casting about for a solution to the next problem.
The facts are, we can’t hold off for any longer. You all know the situation, I know it has likely already been communicated to you from numerous suppliers and we know many of you are facing every day with an ever dwindling budget. I can only apologise if this post makes life feel even harder. We have spent the last 10 years ensuring that our coffee provides joy and comfort for you whilst building real and positive impact across our supply chain. We could never have prepared for what we have faced these past 3 years but the decisions we make right now will dictate how successfully we realise our vision of building a coffee industry that works for everyone. And we are determined to achieve that goal. It is what drives us to continue getting up every day, to face whatever needs to be faced, and to take the decisions that need to be taken.
To many of you, it might be news that coffee as an industry is not already working for everyone. This might seem hard to hear especially given the growth our sector has experienced in recent years. Coffee shops are everywhere right?! The reality is that our supply chain is actually on the brink of survival. There are many broken assumptions that have contributed to this reality. There have been the decade-long expectations of cheap coffee, which has forced a reliance on cheap labour and created a buyer’s market that sees producers taking a price that does not, in many cases, cover their costs of production. Coffee is not economically viable in many cases, and with climate change related events in the mix, producers are simply walking away.
Closer to this end of the supply chain, the twin hammers of Brexit and Covid have wrought more destruction on coffee and the hospitality industry as a whole. In the last 3 years:
- Our energy costs are 5 times what they were 3 years ago
- Our business rates and service charges have gone up by 30%
- Our wages have risen by 20%
- Our raw coffee costs have gone up by 50% in some cases - the costs of production for a producer in Colombia have risen by a whopping 75%
- Packaging is 46% more expensive
For these reasons, we have had to ask ourselves what do we need to do to make the numbers work? How much do we have to raise prices to get to a point where we are able to maintain our commitment to working in a manner that helps the coffee industry thrive rather than survive?
Here is what you need to know:
- From the 22nd of October, we are increasing pricing by an average of 20% across our 250g bag range to allow us to continue creating positive impact in our supply chain and business
- The largest jump will happen for our single origins Brazil and El Salvador and also for our house blend The Docks which will be increased by an average of 40%
- In many cases, our 1kg pricing has reduced with just an average of 1% increase across the range
- Our subscriptions now include 10% off regardless of order frequency as well as 2nd class shipping and are therefore better value than they have been previously
We could have found ways to avoid having to do this. We could have ditched our commitment to home compostable packaging, scrapped our ethical procurement policy to buy cheaper coffee or abandoned our commitment to paying our team fairly. Maybe this would have helped to hold the pricing stable for a while longer, who knows.
What I do know is that, had we made those changes, North Star would no longer be a business I would want to run. It would no longer be a business our team would want to be employed by, or feel fulfilled by through their work. It would no longer be a business contributing to safeguarding a future for the coffee industry and the families it provides for. It would no longer be a business providing you with delicious coffee that creates impact in every cup you drink. In short, the alternative is not a world I, or my team wants to be a part of. We are interested in fighting for a better world. And we really really hope you are too.
There will be the opportunity to ask us any questions about this change, how we run North Star, or how we are working to make a real change in our supply chain to safeguard the future of coffee. Keep an eye on this blog, your inbox and our social media channels for more details.