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By: Holly Kragiopoulos 16 October 2020
2020 has by far been the toughest year we have faced as a business. Not only because of the huge interruptions to many of the exciting plans we had for the year (our 7th year of trading) – nor because of the total disruption of the hospitality industry (our biggest customer base). The hardest part of keeping things going through a global pandemic has been the toll it has taken on the belief we have in what we are doing. The constant fear we have carried on our shoulders since March balanced with daily determination to stay positive has been tough – combine that with the fact we are at the helm of a staff force of nearly 30 who look to us for answers we have often not been able to give has been a pretty hellish experience to say the least. We have had to watch so many of our beloved customers and coffee producers suffer whilst being powerless to help them through it. Being optimistic has proved challenging at times but the moments we have had to think about the core of what North Star is are the flashes of hope that will ultimately see us survive this.
We firmly believe now more than ever that what we do is important. Your increased orders for good coffee through lockdown showed us that, along with the action we were able to take for our producing partners in Kenya (read more about it here) to help them through the harvest. This only happened because of the strength of the relationships we have worked hard to cultivate the last few years.
So where am I going with this? Well…unfortunately we are at a point where, for many reasons, we are having to review our pricing. This is not something we are in a habit of doing and is certainly not something we would usually look to action or think about at this time of year. But as I said, this year is different. I want to take a bit of time to explain the situation we are in – and by ‘we’, I don’t mean just North Star but the specialty industry at large…
I have written extensively in the past about the impacts of climate change on the coffee producing part of the supply chain. Yields are down, costs of production are up nearly year on year due to the increasing inputs required to battle pests and disease that are affecting higher farms purely because of global warming. This factor, combined with the increasing competition we face to secure the best quality coffees has meant we are paying increasingly more for our raw green coffee year on year.
This year, because of the pandemic, costs of production have risen by 20-30 per cent across most of the origins we work with due to increased expenditure on PPE and other equipment required to maintain social distancing through the harvest. What’s more, many producers have had to watch 30-40 per cent of their cherry overripen on the tree due to having fewer pickers available or to over-ferment at washing stations because of the strict curfews that have been in place which have stopped crucial coffee processing from happening on an evening once the cherry has been delivered. These factors combined have meant we are (rightly) facing steeper costs for sourcing our coffee to ensure we continue to see out our ethical procurement policy. Again, as I have written about before, this consideration will simply not come into play for larger commercial companies or for businesses buying solely through Fairtrade certification where there is a set minimum price in place regardless of how the costs of production fluctuates.
On a more positive note, since 2017 we have also begun to see out some of the greatest ambitions we had when first starting the company in 2013 – to contribute to and set up initiatives in the areas we buy from which assist with our core themes of gender equity, social and environmental responsibility, youth empowerment and income diversification. This development has seen us begin a partnership in Rwanda with International Service and their Firm Foundation project working with female business owners in rural areas of the country. We have set up a relationship with Gente del Futuro which we donate to financially and with our time to assist with coffee scholarships for women and youth in Kenya and Tanzania. This year we have also commenced a North Star funded project with a cherished producer in El Salvador, Maria Zoila Pineda, to assist with the construction of raised beds and a micro wet mill meaning she can access more income from the price we pay for our Chelazos coffee. These donations have come from whatever we have felt able to contribute at the end of the year and have not been charged out to our customers – though imagine how much more we could do if you guys knowingly got on board with these things too!
Other investments we have made have been more focused on reducing our environmental impact. We are not a social enterprise but we ultimately operate in a manner that ensures we have done our absolute best each year to become better before we consider the traditional bottom line of profit (out of which we pay for the initiatives mentioned above). One such investment has been in our 35kg Loring roaster which has cut our emissions by around 92,000lbs of carbon each year. We have also recently upgraded our delivery van to cut down emissions and will ultimately move to an electric option when a solution to fit our needs exists. We have chosen to work with a carbon neutral courier and we offset our packaging production by contributing to offsetting projects in Kenya and Uganda. We participate in research projects and initiatives designed around seeking cleaner, greener ways of working.
Quality is crucial to all we do to continuously connect the consumer with the producer, therefore creating a demand for more ethical coffee. We generally find this happens when coffee tastes exceptional. This is not an easy feat to achieve and a lot of time and money goes into maintaining our internal procedures and expertise. The amount of time we spend on QC alone is pretty huge (estimated to be around 220 hours per year) and that does not include our own training time to improve our sensory ability. I have maintained my licensed Q Grader status since 2014 by paying to be a member of the Cup of Excellence and to participate as an international judge for their quality competitions over the past 3 years. We also have two AST’s amongst our workforce (Authorised Specialty Coffee Association Trainers) and a Barista Hustle coach so that we are absolutely at the forefront of coffee theory and all that is happening in the industry.
Our business model has always been built on principles of sustainability to the extent that we really do measure success using the triple bottom line, looking not only at profit but also at the impact we have had on people and planet every year. We have been doing this since day one and it is an activity we are looking forward to formalising in the coming months to get a bit better at telling you all what we do on a day to day basis. The fact remains though that operating in a responsible manner sadly does come at a higher cost. Businesses are not currently incentivised in any way to be better environmentally or socially – we are not necessarily saying they should be but the reality is it costs a lot more to make ethical decisions when running a business than it does to focus solely on profit.
When we set North Star up in 2013, we were the first coffee roastery in Leeds. Yes we know that is pretty surprising and we absolutely loved being the first, but it was pretty tough too! Unlike other cities with a more established specialty coffee scene, there was no market set up for us to sell into. This meant there were no comparisons to our product and service and we had to try and make what we did as approachable as we possibly could to grow a market one customer at a time – the majority of people we converted had been drinking instant coffee or ground supermarket coffee. This meant our pricing (despite our costs of production being significantly higher) could not be too out there. When we started, our house blend The Docks (called Dark Arches in those days) was available for a price of £5/250g. Since 2013, we have increased the price just once to £5.50/250g.
In the last 5 years, we have had the pleasure of seeing our local industry develop to encompass more and more coffee shops and more roasteries. This has been wonderful for us as it has seen the development of a community we can be part of and has genuinely made what we do seem much more like the norm which is what we need if we want specialty coffee to grow as an industry. However, it has also meant that those new roasteries have been able to come into the market and set their pricing at a level they need to as a result of the groundwork we put in during those early days. As stated above, we have come a long way in 7 years but it’s safe to say that maintaining our ethical/impact lead approach costs us more in 2020 than it did in 2013.
So yes, we are having to put our prices up to bring them more in line with our costs and to ensure we can continue meeting our commitments with our producing partners in the challenging years that are to come. We are absolutely not interested in growing for the sake of growing but we are excited by what we might be able to achieve if we make this change now. We already have some exciting plans for the first half of next year around our packaging as we make a move to an even better solution than what we currently have in place…which will cost us more BUT significantly improve our impact. We are also dedicated to formalising all of what we do so you, our #northstarfamily, are fully informed about what your support is helping us achieve. I am hopeful that our online offering for all of those who have so strongly supported us through lockdown will improve as we are able to invest more into supporting you.
Apologies this is a long read (classic me!) but hopefully you get a sense of how eager we are to explain the absolute why behind this decision. We do appreciate so much that many of you have bought these coffees for many years and that this will seem like a bit of a steep hike. We assure you we are not trying to capitalise on the growing market for coffee at home. We probably should have done this a long time ago and ultimately we are moving these coffees to a price level that more accurately reflects their quality but also the lengths we go to with our sourcing and approach to try and change the way things are done for the better bit by bit. Your support and enthusiasm for what we do is honestly all that has kept us going in the lowest points of this year and we are so grateful to have a business that benefits from such an amazing tribe of customers. We appreciate and love every single one of you and really hope you can continue to show your love for these coffees and the hero producers we work with, we promise we will throw a little love your way every once in a while too.