2015 TRANSPARENCY REPORT

2015 was a big year for NEAT. As most of you probably know, we started sourcing and
roasting our own coffees beginning in December of 2013. Therefore, the end of 2015 marks
our second full calendar year as a coffee roasting company and the second year in a row we
are releasing a transparency report. The purpose of this report is to shed some light on from
where our coffee comes as well as to put on display our buying practices so you, as the
customers, can have a more full understanding of the supply chain; so you can know every
hand that touches our coffees and how well everyone was treated along the way. We believe
it is important for folks to know exactly what they are consuming and whose efforts made
that possible. We believe this transparency report is a good first step.

TOTAL VOLUMES
In the year 2015, NEAT Coffee roasted 13,140.31 pounds of green coffee! This
represents about a 65% increase in total volume over last year (7,949.9 lbs) and we are
already projecting to hit 16,000 for 2016. We have been so grateful to Steve Mierisch and the
Pulley Collective in Red Hook, Brooklyn for allowing us to continue to be a part of their
unique coffee roasting community.
Of all the coffee we purchased in 2015, 66.7% was purchased via Direct Trade
relationships. This means that over 10,000 lbs of green coffee was bought from coffee
farmers with whom we have a personal and long-term relationship.
Our most longstanding relationship is with a family of producers in southwest
Honduras, a region called Marcala. Marysabel Caballero and her husband, Moises Herrera,
are some of the most well-known coffee farmers in the world. They have spent many years
cultivating relationships with coffee importers and roasters and now have an outstanding
client list that includes Intelligentsia, Stumptown, Counter Culture, Tim Wendelboe and
Tobys Estate. Needless to say, NEAT is not one of their high-volume clients, yet they are
quick to give us the same amount of care and attention. Keep an eye out for some very
special projects we are working on with these wonderful folks!
In late 2014, our coffee buyer, Kyle Bellinger, traveled to Colombia for the first time
with the hope of cultivating a new direct relationship. With the help of Alejandro Renjifo of
Fairfield Trading, an exporting firm based in Portland, OR and Colombia, Kyle was able to
do just thatand more. In early 2015 we saw the first lots from Finca el Mirador land in our
roasting facility. El Miradors proprietor, Jose Jadir Losada Vargas, is an intelligent,
passionate and kind man. We bought these first lots in good faith that we would return and
help develop quality in subsequent harvests. The lots far and away outperformed hopes and
expectations.
During Kyles second trip to Finca el Mirador, Jose offered Kyle the opportunity to
purchase a percentage of the farm with the hope that a true partnership would not only
solidify our ties but create a platform for experimentation and envelope-pushing. In
November, Kyle and Jose signed the papers for Kyle to become 25% owner of el Mirador and,
as a team, immediately began planning for bigger and better things. We are currently
awaiting lots from both the minor and main harvests.
The remainder of the coffee we purchased in 2015 came through various importers
with whom we have longstanding relationships. As a small company, our volumes and
therefore our resulting revenue, do not allow us to source all of our coffees directly. In this
case, we rely on our importing partners to do the heavy lifting at origin. Wed like to give

special recognition to Cafe Imports in Minneapolis, MN, Collaborative Coffee Source in

Oslo, Norway, Olam Specialty with offices in Rhode Island, California, New York and abroad
and Red Fox Coffee Merchants in Oakland, CA. Some wonderful coffees have come by way of
these channels including the Kenya Gachatha ( from Collaborative Coffee Source) which is
now a 2016 Good Food Awards Finalist!!

BUYING PR AC TICES
When discussing price paid for coffee one must consider all the different hands that
touch it. First comes the farmer. As is often the case, these people are the ones who come
from rural communities in countries where regulations do not necessarily protect their
livelihoods. There are differences from country to country and family to family but
generally speaking, we make every effort to make sure the grower is the first person who is
compensated well for their hard work.
Before green coffee lands on our doorstep, it also often goes through the hands of a
cooperative or farmers society, an exporter, an importer and a freight company and each
must make a few dollars along the way for their services, all of which are crucial. For the
purposes of this report though, we will focus primarily on farm gate prices (the money that
goes right to the farmer).
One of the major determining factors in coffee pricing is the fluctuation of the
commodity market. While these numbers do not directly effect prices we pay to producers, it
can indirectly effect the producers perception of the premium we pay. For example, if we
pay a producer $3/lb. for green coffee and the market price is $1.90/lb. (as it was in Jan 15),
the premium will not be perceived as significant as it would be when the market price is
below $1.20 (as it was in Nov 15). Despite these fluctuations, the end goal is to incentivize
farmers to continue to produce as high a quality as possible and the only way to do that is to
make sure that their business is not only sustainable but profitable.
For all of the coffees in 2015 for which we could access fully transparent pricing (this
includes all coffees sourced directly and indirectly), we paid, on average, $3.10/lb. farm gate.
That means, for these coffees which represent about 75% of everything we bought last year,
the farmers, on average received over $3/lb. Of all the coffees that we sourced directly, we
paid, on average, (coincidentally) $3.10/lb., with $3 being the low end and $3.35, the top end.
This comes at a time when the market is volatile and commodity pricing even over
the last 12 months has fluctuated greatly. We continue to pay, for the most part,
approximately twice the market price. We do this not only to ensure the quality of life of our
producing partners but also for the sake of maintaining top quality.
In addition to the cost incurred for just the raw materials, we also pay top dollar to
ensure the coffees arrive safely and on time. There are many risks involved in overseas
shipping that could negatively impact the coffees quality. First, you must have a good
exporter and importer who are incentivized to move the coffee quickly so that the products
will be fresh upon arrival. In addition to this, NEAT has begun to pay extra for better
packaging in order to maintain freshness. Most specialty coffee is packaged in the
traditional jute (burlap) sacks with a protective plastic lining called Grain Pro. This is
usually adequate protection. However, we have been presented with the opportunity to have
some of our coffees vacuum-packed. Vacuum-packaged coffees simply do not age as quickly

as those packed in Grain Pro. If we intend to use the coffee for more than a couple months, it
is likely we will pay up for better packaging to ensure freshness.

2016
As was mentioned previously, we have big plans for 2016. We are predicting an
increase in total coffee purchased and roasted. In addition to our Darien and Westport
locations seeing increased traffic, we hope to open new locations. With that we continue to
slowly build a small portfolio of high-quality wholesale accounts. These accounts include
Joe Pro Shop in lower Manhattan, Cookshop Plus in West Hartford, CT and Paramount
Coffee Project in northwest Los Angeles. Another goal we have for 2016 is to streamline
direct-to-customer ordering and shipping of retail coffee.
With an increase in sales, we will see new opportunities to source coffees more
directly and responsibly. First, we hope to visit, for the first time, the Pea family in
southern Ecuador, whose coffee we have purchased two years running. The coffee from
Hacienda la Papaya has been among our most popular. Second, we hope to begin sourcing
our coffees directly from certain African countries like Ethiopia and Kenya. These are some
of the most exciting coffees in the world and to be more hands on at the source (not to
mention the birthplace of coffee) would be hugely important for NEAT.
We thank you for you continued support of this business. Without you, the
customers, we would not be afforded the opportunity to source and roast coffee on our terms;
responsibly and uncompromising in quality. We hope you have a happy and healthy new
year and we look forward to serving you in 2016.
Cheers,

NE AT