Torque's Proportional Pricing
From the $200 Billion coffee industry, less than 10% remains in coffee producing countries & often less than 5% is paid to the actual coffee producers. That’s broken.
At Torque we believe that coffee producers deserve a greater equity share. So we created a model where Coffee Producers get equity in the full retail value of coffee.
In the Torque Farmer Equity model Coffee Producers are pre-paid based on the retail price of their coffee beans. This more than doubles their equity share of the value of their coffee.
It's ridiculously simple. Farmers get the first cut. Instead of letting the commodity green coffee market set a low floor price, Torque simply pre-pays coffee producers 20% of the retail price of our roasted coffee. The higher the price you pay the more they get paid. The transparent 20% ratio means both you and the farmers know exactly how much of the value they receive.
Commodity market sets coffee value at lowest point
Consumer market sets the true value of coffee at retail point.
20% of the price of every coffee is paid to Coffee ProducersFarmers First
Reverse Engineering Value
All of us in Specialty Coffee agree that coffee producers are valuable, but we haven't agreed on how to assign that value, who assigns it, or how to convey it through the supply chain.
At Torque we believe that the way forward is to reverse engineer the coffee value equation & go from value received to price paid. Proportional Pricing means simply that the value of a coffee is relative to the value it generates for the roaster. Based on that premise, Torque applied a Proportional Pricing equation in which the producers receive 20% of the retail value of every bag of roasted coffee.
We call it Proportional Pricing© because it automatically adjusts to the price the bag of coffee is sold at. Proportional Pricing changes the value equation of the coffee supply chain. Instead of the commodity market deciding what a coffee farmer's coffee is worth, you the customer decide its value. Proportional Pricing means that a preset percentage of that value is due the coffee producer. You know the exact impact your purchase has on the coffee producer. No complex math, no 50 page reports, no long explanations, sob stories or strings attached. It's just the Producer's Portion.
Our vision is that all craft coffee roasters will embrace Proportional Pricing so that we can harness our collective super power to make coffee better. The exact percentage can vary, it is the direct action of valuing a producer's coffee based on a preset value equation that brings the coffee supply chain a little closer to equilibrium.
We would love to talk with any interested roaster, producer, exporter or importer and share how we make it work and how it changed our entire approach to coffee buying. This kind of radical approach is not for everyone, but it works for us and it works for coffee producers. We think it can work for others as well.