By Camila Khalifé, Impact & Communications Lead at The Chain Collaborative
October 2026
A lot of what makes coffee valuable is created prior to it even leaving the farm, and its price goes up as it moves through the value stream from one actor to the next. A green coffee lot can be sold several times before it becomes a roasted product, and a cup of coffee can be sold for many times the amount that was paid for the coffee that goes into it. It is tempting to read this progression as a simple reflection of value being added at every stage, but sale price in itself does not really tell us who contributed most to what consumers value, who carried the greatest risk or who ultimately benefitted from that final sale.
This is important because so many efforts to improve coffee farmers’ livelihoods are based on a familiar promise of the specialty coffee industry: if farmers can grow better coffee, they will create more value and, therefore, make more money. There are certainly instances where this is the case, but it is by no means the outcome for the majority of farmers.
In our previous article on colonial legacies in coffee we looked at the way those legacies continue to be visible in the structure of land ownership and in the patterns of trade. The same legacies are evident in the way economic value flows through the sector. Coffee is cultivated primarily in countries in the Global South, while many of the activities with the highest financial returns remain concentrated in wealthier importing markets. To understand this imbalance, we have to look beyond the price of the product and consider how value is recognized, how it moves, and how it is negotiated along the chain.
What do we mean by value?
In order to understand how value is created, delivered, and captured along the coffee value stream, let’s start by defining it. In coffee economics, value is understood not only as the price itself, but also as the overall benefit or satisfaction that a product or service provides to the consumer.
Cliff Bowman and Véronique Ambrosini make a useful distinction between use value and exchange value, as discussed by Karl Marx in relation to the dual nature of commodities. In simple terms, use value are the qualities that make a product useful or desirable to someone, while exchange value refers to what that product or service can be sold for or, in short, its price. Specialty coffee may have a very high use value in terms of flavor, consistency and so on, but that doesn’t mean that it will determine how much the producer will actually get. Exchange value is generated through the transaction and in the coffee business, as in any other business, the transaction is a product of the relationship between buyer and seller.
The concepts of value creation, delivery and capture are often used in business model research to describe how a product or service that people value is produced and made available to them, and how the resulting economic benefit is retained. In coffee, this framework reveals an important limitation: coffee is not created by one business operating in isolation, but is the result of work performed by farmers, processors, dry mills, logistics companies, salespeople, roasters and ultimately cafés. The value recognized by the final consumer is therefore collective, although the distribution of income along the chain does not simply measure each actor’s contribution.
Value creation begins at origin
Coffee’s fundamental value is created in agriculture. The farmer determines what to grow and how to grow it. They respond to the weather, manage the soil, the shade and the health of the plant over a number of years before a harvest of any significance is achieved. The harvesting, processing and drying all have an effect on the quality of the raw material and a great deal of that work is dependent on the knowledge that a farmer has of that particular place. It then goes through sorting, selection and packaging before it can be exported to the non-producing importing countries where it will be roasted and made available for retail in the form of either packed beans or grounds or as a drink. All of those steps add to the value of the coffee.
The problem begins when the value created through farming is treated as an interchangeable input, while value created later is understood as distinctive and worthy of a higher return. A farmer may make decisions that result in an extraordinary coffee, but the market does not directly compensate for effort, knowledge or risk; instead, it compensates what buyers can identify and are willing to pay for under the conditions of a particular transaction.
So quality alone cannot guarantee a secure income. A coffee’s potential must be preserved through storage and transportation. It must reach a buyer who recognizes its attributes and has access to customers willing to pay for them, and if that connection does not happen, qualities created at farm level may never become exchange value for the producer.
Delivering value means more than delivering coffee
Value delivery is generally thought of as getting a product to market. In specialty coffee, it includes the act of moving green coffee and making it available in consuming markets, but it also involves making it desirable to buyers so they are willing to pay the differentiated price it carries.
The name of the farm and farmers, the variety, the processing method, and even a longer story behind the coffee, as well as cupping scores and certifications, can shape buyers’ perceptions of quality and, therefore, their willingness to value one coffee over another. The work of identifying and communicating all these extrinsic attributes that contribute to the distinctiveness of a coffee in a market has economic value, but it raises a difficult question: when the identity, knowledge or story of a producing community increases the price of a coffee, how much of that additional value returns to the people whose work and experience made the story possible?
The question becomes even more important when visibility requires producers to meet certain expectations. Traceability systems, certifications, and buyer protocols can create access to differentiated markets, but they can also shift new costs toward producers and their organizations. Keeping records, taking photos, making videos, sharing stories, and complying with certification requirements require resources and may even require changes in infrastructure or additional staff. If the commercial reward is uncertain, producers can invest in delivering value that someone else is better positioned to capture.
Value capture is shaped by power
Value capture refers to the economic benefit an actor is able to retain. In coffee, every stage has associated costs, so the difference between the farmgate price and the retail price cannot be interpreted as pure profit for everyone in between; it is therefore important to distinguish value capture from revenue. Recognizing those costs is essential, but it does not resolve the question of distribution. Two actors can both contribute to a product while having very different power to negotiate what they receive. Bowman and Ambrosini argue that value capture is shaped by the power relationship between buyers and sellers. In coffee, that power depends a lot on who has alternatives. A buyer who can choose among many suppliers enters a negotiation differently from a farmer who needs to sell a perishable harvest, repay credit or cover immediate household expenses.
Ownership is also important. The actors that own brands and maintain direct access to consumers can decide how a product is positioned and adjust what they charge. Producers usually sell much earlier, often before the final market value is known, so they may receive more for higher quality, but they do not automatically participate in the additional value generated when that same coffee is roasted, packaged, and sold as a premium product.
The specialty coffee promise
As we so frequently hear, specialty coffee appears to offer a way out of the constraints of commodity trading. Producers may receive premiums for sensory quality, a distinct origin or particular production practices, and the assumption is that as specialty coffee is the ‘premium’ segment of the coffee consumer market, then specialty coffee producers must be capturing a greater share of the value. Karl Wienhold and Peter W. Roberts looked at this in their 2025 study of specialty coffee value chains. They found that the additional value created when producers upgrade coffees for differentiated specialty markets is mainly, though unevenly, captured by downstream actors. Their analysis does not suggest that producers get nothing from the specialty markets, since higher-priced coffees can produce more favorable outcomes at origin. It shows, however, that increases in retail value do not translate automatically or proportionately into improved economic outcomes for the producer, particularly when you take into account the additional costs of producing the more differentiated coffee.
This is an updated expression of what Benoît Daviron and Stefano Ponte called the coffee paradox. Coffee can become more valuable to consumers because of quality, service, and the symbolic meaning attached to it, while the people who cultivate it continue to struggle. What farmers sell and what consumers buy are connected, but they are not valued in the same way.
From adding value to sharing power
The phrase “value addition” often directs attention toward what producers should do next. They are encouraged to improve processing, pursue certifications or take on activities farther along the chain. While these strategies may be useful, the problem is that they start from the assumption that the issue is an insufficient contribution from origin.
Maybe a better starting point would be to recognize how much value is already being created where coffee is produced and examine why it is not consistently captured. This changes the questions we ask: Does a higher quality requirement come with a price that covers the additional work and risk? Do commercial relationships give producer organizations enough stability to invest on their own terms? Can they participate in defining the attributes that the market rewards? When producers have stronger alternatives and more control over market information, they are surely better positioned to negotiate.
The central question is therefore not only how the coffee sector can create more value, since coffee already generates enormous value through the work performed across its global chain, but also how the people whose land, labor and knowledge make coffee possible can gain greater power over how that value is recognized and distributed. Until value creation is connected to meaningful value capture, a more expensive cup will not necessarily produce a more sustainable sector.
References
Bowman, Cliff, and Véronique Ambrosini. “Value Creation Versus Value Capture: Towards a Coherent Definition of Value in Strategy.” British Journal of Management, vol. 11, no. 1, 2000, pp. 1–15.
Daviron, Benoît, and Stefano Ponte. The Coffee Paradox: Global Markets, Commodity Trade and the Elusive Promise of Development. Zed Books, 2005.
International Coffee Organization. The Value of Coffee: Sustainability, Inclusiveness and Resilience of the Coffee Global Value Chain. Coffee Development Report 2020, 2020.
Wienhold, Karl, and Peter W. Roberts. “Is the Rising Tide of Specialty Coffee Lifting All Boats?.” World Development, vol. 195, 2025, article 107103.
If you would like to explore these concepts more deeply and understand how value and power shape the coffee sector, take a look at our Coffee Economics course.