Farm Cost

The subject of paying for green coffee is inherently complicated. While the amount paid is very important, the payment terms and type of contract negotiated during the purchase are also paramount. Paying $5/lb of coffee can be a great price, but could be detrimental to a producer if the payment terms exceed that of their needs. Here we will dive into not only what was paid for the coffee, but how the coffee was purchased. There is a glossary of terms to be found below which will aid in your understanding of industry terms.

Farm Gate - This reflects what is paid to the producer of the coffee at the farm level. Oftentimes in terms of our relationship coffees, FOB is fairly close to the farm gate price, except for countries like Ethiopia and Kenya, when it is very difficult to trace back all the way to the producer.

FOB - Free on Board. This means that the seller is responsible for any overland fees that happen before the coffee is on board the ship. This is our most frequently listed green cost, as it is the most simple way to present what we pay a seller, but it does not reflect what the person growing the coffee was paid.

EXW- This most often reflects the 'spot' price that we paid for a coffee. All of the cost is paid by the importer, and more often than not the FOB price as well as the transport costs are unknown.

$3.50

Transportation

This number represents the cost incurred while the tea was moved from the producing country to Onyx Coffee Lab in Arkansas. The price listed below is the cost we incurred per kilogram of tea via designated express micro-lot shipping by air transport. It varies for each tea based on the overall volume and density of the shipment. The price of express air shipping was $45/kg of tea.

$1.00

Production Cost

The following list includes many of the costs associated with producing this tea. We have always maintained transparency as a principle but have often lumped these things under the label of “production costs” in the past without going into detail.

There is an inherent difference in handling tea versus coffee, where most teas are fully processed at a processing facility in the region or at the tea farm itself. There is intensely skilled labor that comes with the drying, oxidation, rolling, steaming and packing processes. Tea is also physically very delicate, and extra care is taken in handling each dried leaf or bud to maintain the structural integrity of tea.

While the following list isn’t exhaustive, hopefully, it gives you a picture of the work, expense, and investment involved in executing tea at the level that we do. At this time we are listing our cost of production for each pound of tea at around $3.40. There are obviously many other aspects of running a business such as breakage, mistakes, new equipment and maintenance, but this works as an arbitrary cost associated with making one box of tea.

Fixed Costs
These are costs associated with simply having a business. Things like utilities of internet, natural gas, phones, rent, business licenses, fees, etc. These things increase every year. For example, most commercial leases increase by 2% every year. We periodically look at these costs and try to reduce expenses, but work in this area are small moves of the needle as these are mostly the same and usually increase every year.

Packaging
This is all the things that go into packaging the tea to get it safely to your home. There’s the biodegradable bag, the recyclable box, the compostable mailer, different boxes for bulk shipping, the paper that pads the tea, tape, and a few odds and ends. (Read about our new retail packaging HERE). These costs are separate from the tea, but a part of the cost of producing tea that is packed well and ready to ship and consume. We want our teas to arrive in a secure fashion, looking like it did when it left Onyx: with style and design but also keeping the environment in mind. Shipping packages inevitably have waste associated and we’re working towards sustainability at each step.

Labor
At Onyx, we work to make jobs both sustainable and celebrated, and we pay salaries, provide health insurance, and give regular raises to our staff. Often we have a handful of staff that get celebrated, but everyone on our team contributes and is valuable. Likewise, we wish to pay our tea partner, Hugo Tea Co, for all their skilled labor in tea handling (from hand massaging oils to create phenomenal Earl Grey or the careful packaging of each tea box). Onyx is not just a brand or a design or a café, we are truly made by every person we work with.

We all know it takes work to make anything. Hugo’s sourcing approach echoes our own, which has more labor involved than you may think. Because we visit every Relationship Coffee producer, that means our green buying team of Jon and Dakota typically spend a total of six months traveling. We’re committed to visiting and cupping on the ground, this inevitably is an investment of time, of money, of long layovers, of encountering government coupes and protests, and forging some of the greatest friendships and seeing some of the most beautiful landscapes imaginable. We appreciate that in working with the Hugo Tea team, Tyler and Logan, put equal dedication into sourcing these teas.

We have a creative team that helps create all things visible, digital, and print. These folks are very talented and have really helped push the dream of Onyx to the next level. We believe that tea can inherently be great, but having something that looks and feels good helps inform expectations, helps bring value, and tells the stories in this way has tangible and important value.

These are a few of the jobs we feel really have more involvement than might be imagined, but throughout Onyx there are touch points of intentionally positioned team members to help create the best possible beverage experiences.

Taxes
We all know what this is. We set aside and submit money every quarter for taxes along with paying all of the weekly and monthly taxes we are obligated to pay. This can be tough for a small business as there are ebbs and flows in cash flow, and taxes are often not paid in conjunction with the sales season.

$3.40

Fair Trade Min.

$0.00

C Market

$0.00

Cup Score

Lot Size

Lot size informs us of one thing: the size of that lot. Forming a single farm lot can often take just as much labor and experience as the large regional blends, depending on the level of labor or quality standards applied to each day or week’s pickings.

A great example of this would be matcha powder, which is often a carefully constructed sum of processed green teas that are often grown in different sections of a farm to create a balanced and intentional matcha experience. It may be built up of many different farms. This often signifies that the lot was built to reflect the flavor characteristics or unique cultivars of the region. Meanwhile, a larger lot size of a Yunnan black tea may end up being used in a variety of different teas, based on the final processing and any additional treatments before packaging.

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Transparency Grade