SPECIALTY VS. COMMODITY
COMMODITY COFFEE
When coffee is viewed as a commodity, it is characterised as a consistent product that may be substituted for another coffee of the same type. This accounts for the vast bulk of coffee drunk worldwide. Bigger corporation trades commodity coffee and the price is determined by the global market, regardless of the coffee's intrinsic quality.
This means the farmer gets paid the same for their coffee regardless of the quality of the coffee or the way in which it was produced. In a lot of cases and countries, the commodity price is below the cost of production so — so it is impossible for the farmer to make money. Farmers are unable to plan for the future due to volatile pricing.
Commodity coffee has no provenance and has neutral or negative flavour qualities, so customers will go with the lowest price offer without committing to a long-term relationship.