HOT DRINKS IN UAE, EGYPT&ITALY TAKING CARE OF THE PRESENT, THINKING ABOUT THE FUTURE WHAT DO WE KNOW ABOUT COFFEE AND HEALTH? MYTHS AND LEGENDS COFFEE AND VIENNA SPELL PLEASURE # 2 (82) 2010
# 2 (82) 2010 Establisher ZAO INTERNATIONAL TEA HOUSE Publisher ZAO INTERNATIONAL TEA HOUSE Chief Editor RAMAZ CHANTURIYA Deputy Chief Editor SVETLANA BELIKOVA Computer aided makeup VALENTINA GUSKOVA Advertising Director JULIA CHANTURIYA Advertising Manager ELENA TREGUB Circulation manager MARINA FOMINA Technical maintenance JULIA MARKOVA
THE EDITORIAL BOARD Chairman of the Editorial Board R.O. CHANTURIYA, general director of «Rusteacoffee» Association
Members of the Editorial Board
The world is changing rapidly. Globalization is shrinking the planet to the size of a soccer ball, climate and demographic changes force us to revise our estimates of crops and consumption trends, and the technological progress is transforming our everyday life, giving rise to new technologies and equipment to satisfy the emergent, fashionable and non-standard needs of society. What will the world – and, more specifically, the world of tea and coffee, – look like in 30 or 40 years? This question is asked more and more frequently by global market participants, because it is becoming obvious that the current business models are obsolete and we are facing a revolution! Are we ready to go through a paradigm shift? Unlikely. Can we at least foresee the direction of the change? Possibly. Contemporary science can provide us with a list of possibilities, and we all would certainly love to get a glimpse of the day after tomorrow. I am confident that the coming generation will offer us an interesting solution to this problem! In the meantime, we shall monitor the current situation, analyzing the events that are happening today. Here is an example of a news item that has spread all over the web-world in only a few hours: the “icon of the coffee world”, “barista to all continents”, transnational conglomerate Starbucks has betrayed its beloved coffee and took up with a beverage from a completely different dimension – alcohol. What will come out of this? Will the image of coffee suffer? Will Starbucks retain the moral right to be the leader of the youth subculture? The consequences of this decision are far from clear. You can find out how global market participants view this unexpected development under our Pressing Issue rubric. Taking into account the fact that this issue will be distributed at the Trieste Expo, we decided to translate into Italian a survey article about this southern European country’s hot beverages market. Also, because our magazine is increasingly widely distributed, in the coming issues we will strive to make Coffee & Tea International more accessible to our readers all over the world. By the way, visitors to our website can now read the magazine online. Enjoy! Best regards,
S.G. BELIKOVA,
Ramaz Chanturiya Chief Editor
deputy editor in chief of «Coffee&Tea in Russia» magazine, PhD of Philology, Editorial Board Secretary
S.V. KASIANENKO, chairman of the board of directors of «Orimi Trade» company
A. MALCHIC, chief executive of «Montana kofe» company
R.D. PANZHAVA, Georgian Tea Producers Association
CONTENTS
MANUDZHA PEYRIS, International Tea Committee
V.A. TUTELIAN, Head of the Institute of Nutrition of Russian Academy of Medical Sciences, Member of the Academy
G.V. SMIRNOV, general director of «SDC FOODS» company
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EDITORIAL
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CALENDAR OF EVENTS
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2-nd Moscow International Tea Symposium, 7th of February 2011
ANDREY ELSON, general director of KLD Coffee Importers
Photo on a cover: Coffee bean sculpture at the entrance to Coffee Plaza - a new complex owned by Neumann Kaffe Gruppe
Editorial Address: Russia, 123060, Moscow, Berzarina str., 36, building 2, of. 214 tel./fax: +7 495 935-87-06; +7 495 935-87-07 E mail: magazine@coffeetea.ru, design@coffeetea.ru www.coffeetea.ru
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Printed in Union Print, Nizhny Novgorod Distributed worldwide among coffee and tea producers, wholesale companies, shops, and restaurants. Printed in Russia. According to the registration certificate of mass media П И №77 7213 from 30th January, 2001. Reprinting of materials is allowed only by permission of the magazine. The reference to the magazine «Coffee and tea in Russia» is obligatory. The editors don't bear any responsibility for reliability of data placed in advertising blocks or announcements. The editor's point of view may not coincide with the author's point of view. All provided materials will not be returned or reviewed. Coffee&Tea International magazine has been included in the VINITI (All Russian Institute of Scientific and Technical Information of the Academy of Sciences Vserossiisky Institut Nauchnoi i Tekhnicheskoi Informatsii (VINITI)) list of synopsis journals and the institute's data base. Information about the magazine will be annually pub lished in the «Ulrich's Periodicals Directory», international handbook of periodic magazines and ongoing publications. Coffee&Tea International is an appendix to the Coffee&Tea in Russia magazine.
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PRESSING ISSUE Who will win the game: coffee or alcohol? NEWS Incredible Coffee Days COTECA Hamburg celebrates a successful premiere Deja-vu in Vienna Coffee&Tea International meets Caffe Culture 2010 German anti-trust agency imposes fines on eight coffee producers A rivalry between tea and coffee Clothing from coffee Orimi Trade is a partner of the St. Petersburg International Economic Forum Nestle recalls several kinds of coffee products in Russia The most expensive coffee sold at an auction The best place to drink tea in London Prague has welcomed back the cafe with blind waiters Brouhaha brewing in world of tea Earth-friendly alternative to paper coffee cup Tea fights nicotine Acomo will become the largest tea trader
14 “Coffee rings” may help biosensors detect diseases REVIEW&STATISTICS Hot drinks in UAE Hot drinks in Egypt Hot drinks in Italy Study of TEA Retail Sales in Russian Cities with the Population over 10,000. Data for February–May 2010 21 Study of COFFEE Retail Sales in Russian Cities with the Population over 10,000. Data for February–May 2010 21 Import of Tea and Coffee to the Russian Federation for 2009 24 Coffee Consumption in Russia, 20052014 15 16 17 20
ECONOMICS 26 I ssues facing the coffee market 28 Taking Care of the Present, Thinking About the Future 30 C offee Has an Aroma of Hope WHO IS WHO? 32 Glatfelter SCIENCE 36 What Do We Know About Coffee and Health? Myths and legends NEW HISTORY 42 Coffee and Vienna spell pleasure 44 ADVERTISER INDEX
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CALENDAR OF EVENTS September 2010 – May 2011
All materials are provided by support of WWW.COFFEETEA.RU
08–11 September 2010
17–21 October 2010
9–12 December 2010
RIGA FOOD 2010
SIAL 2010
FOODIST
Country: Latvia City: Riga Company Page: www.bt1.lv/bt1/rigafood/
Country: France City: Paris Company Page: www.sial.fr
Country: Turkey City: Istanbul Company Page: www.foodistfuari.com
25–28 January 2011 28–30 October 2010
13–16 September 2010
POLAGRA-FOOD 2010 Country: Poland City: Poznan Company Page: www.polagra-food.pl
14–17 September 2010
WORLD FOOD MOSCOW Country: Russia City: Moscow Company Page: www.world-food.ru
TRIESTESPRESSO EXPO Country: Italy City: Trieste Company Page: www.triestespresso.it
28–30 October 2010
TALLINN FOODFEST 2010 Country: Estonia City: Tallinn Company Page: www.profexpo.ee/foodfest/
10–13 November 2010 26–29 September 2010
PIR. HOSPITALITY INDUSTRY Country: Russia City: Moscow Company Page: www.pir.ru
11–15 October 2010
AGROPRODMASH Country: Russia City: Moscow Company Page: www.agroprodmash-expo.ru
Country: Bulgaria City: Sofia Company Page: http://www.bulgarreklama.com/
12–14 November 2010
SINTERCAFE 23th EDITION Country: Costa Rica City: Guanacaste Company Page: www.sintercafe.com
12–14 October 2010
23–26 November 2010
MIDDLE EAST COFFEE & TEA CONVENTION
FOOD INGREDIENTS, ADDITIVES AND FLAVOURINGS
Country: OAE City: Dubai Company Page: www.coffeeandteaconvention.com
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INTERFOOD & DRINK
Country: Russia City: Moscow Company Page: www.ingred.ru/eng
COFFEE&TEA INTERNATIONAL # 2/2010
UPAKOVKA/ UPAK ITALIA Country: Russia City: Moscow Company Page: www.upakowka.ru
7th of February 2011
2ND MOSCOW INTERNATIONAL TEA SYMPOSIUM Country: Russia City: Moscow Company Page: www.coffeetea.ru/forum_tea.html
7–11 February 2011
PRODEXPO Country: Russia City: Moscow Company Page: www.prod-expo.ru/en
15–17 March 2011
INTERNATIONAL FAST FOOD FAIR MOSCOW Country: Russia City: Moscow Company Page: www.fastfoodexpo.ru
21–23 March 2011
TEA&COFFEE WORLD CUP ASIA Country: Singapore City: Singapore Company Page: www.tcworlscup.com
12–18 May 2011
INTERPACK – 2011 Country: Germany City: Dusseldorf Company Page: www.interpack.com
Contract – Application for participation at the second Moscow International Tea Symposium on the 7th of February 2011 Moscow
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Contractor: ZAO International Tea House, Legal address: Academica Anochina str. 6, building1, 119602 Moscow, Russia Post address: Bersarina str. 36, building 2, office 214, 123060 Moscow, Russia Bank: IRS-BANK, Moscow Bank address: Timiriazevskaya str. 26, Moscow, Russia SWIFT: IRS BRUMM Account # 40702840500012000840 Tel. /fax + 7 (495) 935-87-06, 935-87-07 Customer: Name of company: Address: Bank: Bank address: The contact is signer by (title): Contact person: Post Address: Tel.:
Fax:
E-mail.:
Symposium participants: №
Name
Job title:
E-mail.:
Contact phone
1. Customer orders and undertakes to pay, and a contractor undertakes to provide the following services to ensure the participation of the Symposium participants listed by the Customer at the Moscow International Tea Symposium, such as: 1.1. Participation in the business program of the Symposium, 07 February 2011 (conference, seminars, in any other activities of the Symposium). 1.2. Participation in the Gala Dinner, 07 February 2011. 2. The participation cost in the Symposium is calculated at the rate of 59 (fifty-nine) Euro, including VAT 18% - 9 (nine) euro per one participant of the Symposium. 3. All applications form will be accepted till the 29th of January 2011. 4. The compensation of the services to the Customer: 4.1. The customer pays the total cost of the services, indicated in the paragraph 2. of this contract in the following way: 100% prepay within 5 banking days from the date specified in the invoice for payment. 4.2. Payments under this contract will be made in Euro or in rubles at a fixed rate of 40 rubles for 1 Euro. 4.3. If the official rate of ruble to the euro set by the Central Bank of the Russian Federation on the date of the invoice issue exceeds the fixed rate indicated in the paragraph 4.2 of this contact, customer commitments are recalculated into rubles at the official rate of Central Bank of the Russian Federation. 5. Acceptance procedure for delivery of cervices performed under the contract 4.1. When the services under this contract has been delivered, the Customer represents to the Contractor act of acceptance of the services provided by the Contactor in accordance with its obligations under this contact within (five) working days. When the Customer don’t return a signed act or don’t provide a motivated in written form rejection from its signature to the Contractor within 10 (ten) banking days from its receipt, the listed services and their costs are considered to be accepted by the Customer in full and the act is considered signed by the Customer. 6. Other conditions: 6.1. The Contract will enter into force upon signature. When a customer has faxed a signed Contact to the Contactor it is considered as an acceptance of the offer. As confirmation of parties entry into relations parties’ further exchange with the Contacts originally signed and sealed. A faxed copy has validity until exchanging of originally signed copies. 6.2. Acceptance of this Contract by the Customer, that is full and unconditional acceptance by the Customer the terms of this Contract, in accordance with the article 438 of the Civil Code of the Russian Federation, is also the payment of an invoice for services, issued in accordance with the conditions of the sec. 4 of the Contract. 6.3. Moving the dates of the Symposium conduction the term of the Contract validity is extended for the period of the Symposium transfer. At a canceling of the Symposium under circumstances independent from the Contractor the treaty obligations with the Customer stop, and the participation fee transferred to the Contactor bank account will be returned to the Customer. The contractor is not responsible for the customer losses in case of cancellation or transfer of the Symposium, which occurred not on fault of the Contactor. 6.4. In the case of either absence of the Customer representative at the Symposium, or not providing a rejection to participate at the Symposium in a written form at least three days before the Symposium starts, the Customer prepayment is not returned, as well as the Contract is considered by the Contactor to be executed in full. 6.5. All claims for services fulfilled by the Contractor will be taken within five banking days starting from the end of the Symposium. 6.6. In case of occurrence of force major circumstances validity of the Contract is extended for the duration of the force major. 6.7. The Customer gives his or her approval to the placement by the Contractor in open sources information about his or her participation of the Symposium including information about the delegates attending the Symposium. Personal data of delegates needed for full and proper implementation of the Contract are provided with a mandatory to comply with the regime of personal data privacy. The Contractor ensures that personal data will be used solely for the purpose for which they are communicated to the Customer.
Signatures: Customer: (Title)
Contractor: General Director /
Stamp
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COFFEE&TEA INTERNATIONAL # 2/2010
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/Chanturiya D.O./
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PRESSING ISSUE
Pressing issue:
WHO WILL WIN THE GAME: coffee or alcohol?
Polling by Alena Velichko
What will future bring us: COFFEE-houses that will change the world or the WORLD that will change the image of coffee-houses? A coffee-house has been for a long time the place filled with aroma of coffee and bakery and a gathering place for many coffee amateurs who came both at breakfast and dinner time to keep up with the spirit of time. But this idea is gradually fading being replaced with the shield “a place for coffee and anything else your soul may wish”. The soul of customers is becoming more and more demanding as well as the purses of advertisers and leasers. And gradually the number of traditional coffee-houses is reducing by turning into cafes or pubs where all kind of alcohol is served as well as meals. This is the wind of change that is strong even for the most traditional coffee-houses and they give up by opening their menus for all kind of beverages and food. One of the brightest examples is Starbucks, that has been for many years the main ideologist in coffee philosophy part of which was rejecting alcohol being served in the coffee houses. But even they announced this spring that they will sell in their coffee houses strong alcohol drinks. Should the coffee houses be traditional and a bit old-fashioned, without alcohol or there is no other way for the coffeehouses to survive but to serve alcohol and meals? When the leader becomes "just like everybody else" in a long queue of the others offering "whatever you want: coffee, alcohol and dance", then what is the leadership about? What remains special? Does this decision mean just admitting own incapability to keep own values or does it mean being flexible in the changing world which is much stronger than smth we want to preserve?
VINCENZO SANDALJ, President, Sandalj Trading Company spa: – From my own experience there are 2 major world markets regarding the use of alcohol in coffee bars. In countries like Italy, France, Spain and others coffee bars have always served all kind of beverages including alcohol. Out of home coffee consumption in these markets is quite high, so there was no harm but, on the contrary, a wider range of products to serve all kind of customer. In these countries alcohol consumption is mainly focused on wine, so heavy drunkenness is very rare to be seen. Different is the situation in AngloSaxon and Northern European countries, where coffee shops and alcohol serving shops are completely separated, due probably to the very different profile of the 2 groups of customers. I don't think that this is an unmovable obstacle, since the coffee shop owners have many other means (style, prices etc) to point to the chosen market target and keep the unwanted customers out. This is something that requires a precise marketing decision and is to be executed smoothly by the owner. In Italy, for example, the bars are divided between the ones that serve mainly coffee and the ones that serve mainly alcohol drinks, but the division may be taken within the same place just based on different hours of the day. In any case it means a boost for the sales of any bar, which nowadays couldn't survive in Italy by selling only coffee.
ERHAN YUKSEL, director of coffeehouse, Gloria Jean’s Coffees:
WILL MCNAUGHT, trader, Sucafina Ingredients SA: – Personally, I think there's always a clear division between a bar and a cafй where one can buy good coffee. In my experience, restaurants and bars rarely serve high quality coffee. But, whenever I have travelled to Italy - a country with the strongest cafй culture that I am aware of - I note that good food, coffee and alcohol are often served together. So, I suppose that I don't really have a problem with the concept of being able to buy both in the same establishment but I think it's effect on cafe culture will depend on that society's attitude to alcohol in general. For example, in the UK (where I'm from), a cafe which served alcohol would quickly become 'just another bar'. Something tells me that the ambiance created by a mixture of beer drinkers and coffee drinkers might not special. Whereas, in somewhere like Geneva (where I live now) people are pretty responsible in the way they drink (most of the time at least) I think it would be possible to serve all types of drinks in the same cafй but retain the good coffee culture elements. Once again, I can only comment from the perspective of someone who has travelled a bit. But my professional experience doesn't really qualify me to comment about cafes.
– We don’t’ think it is a good idea to use in coffeehouses such alcoholic drinks as beer or vodka. But what we think is good – just a bit of cognac that people often order together with coffee here, in the Ukraine. But our franchising contract doesn’t allow us to use alcohol as this is the policy of Gloria Jeans Coffees. So economically absence of alcohol reduces the profit a lot. But for the atmosphere when people can come with children and spend time together as a family or come with friends and enjoy conversation this is good when there is no alcohol. But I guess there should be a compromise – like small portions of noble alcohol as part of coffee drinks. As we are here to serve our customers.
VICTORIYA BEREZUYK, manager, Double Coffee: – We have a large variety of alcoholic drinks here and this is what people expect when they come to us. The fact that we have a coffee name doesn’t mean we have only coffee. We have everything – meals, alcohol, different soda and of course coffee and tea. But to survive just on coffee and tea it is impossible nowadays economically. Besides very many people they visit us to have proper meal or spend good time with friends and this is usually with alcohol. And we are here to satisfy the needs of our customers. If they need it – we have it!
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Photo: ITH
Photo: ITH
The splendid Coffee Days by BuhlerPetroncini will be hard to forget. Outstanding organization, friendly people, good timing, attractive locations, perfect weather and… professionally prepared presentations full of useful information about new technologies and equipment.
he time for Coffee Days was not selected randomly: at the end of June coffee professionals were going to immerse into the world of coffee culture at the annual exhibition CaffÙ Culture 2010 in London. A few days before that event, the Buhler-Petroncini company organized a unique live presentation of new types of industrial roasting equipment at one of its facilities in Bologna. The company had something to show in London as well: a cutting-edge facility producing optical sorting systems for bulk foods, used extensively in the coffee industry. Such a fortunate coincidence resulted in a three-day trip packed with productive and informative events: a business conference in Bologna, a visit to the Julius Meinl coffee factory, a memorable excursion to Venice, an introduction to the ultramodern facility Buhler Sortex in the capital of Great Britain and, last but not least, a meeting of colleagues at one of the largest and most attended exhibitions in the coffee industry. The Coffee Days saw the total of 30 visitors from the Ukraine (Monomakh, B.O.Barabash; Wiener Kaffee, S.K.Zadvorniak; Paradise, V.Mutkivsyi), Russia (Coffee House, A.Sergeev; Rusteacoffee, R.Chanturiya), Slovakia (Inovus, Ludek Bernard), Germany (HACO, Tchibo), Switzerland, Japan. The participants were all in agreement that this great idea was made into reality at the highest level of expertise. The conference participants, gathered in Sant’Agostino, not far from Bologna, were going not only to hear about the new achievements of the Italians in the field of high-quality coffee roasting, but also to try out various types of equipment set up right there in the conference hall. I must admit that after a packed workday it was a real treat to take an evening stroll through Bologna and experience the true Italian hospitality at a restaurant visited by almost all the stars of the world soccer (Zidane, Beckham, Totti, Del Piero, Shevchenko, Maldini, Nedved and many others). During the second day, the participants had an opportunity to see modern industrial coffee roasting equipment in action. Everyone was interested to visit the Julius Meinl facility – it’s not every day that a competitor invites you “behind the scenes”! And since the event took place in Venice, it would have been inexcusable not to take an excursion around this fairy-tale city… and that’s exactly what everyone did with great pleasure. The only thing capable of cutting short our cultural program was a British Airways jet that carried us North, towards new coffee experiences. The next morning our group visited one of the cutting edge industrial facilities of the Buhler Sortex company in London, where we studied optical systems that allow the sorting of coffee beans by color as well as by size. After that we all moved on to the Caffe Culture exhibition (see the following pages for a report) and became a part of the crowds walking its halls. The Coffee Days were a great success! I would like to express my deep gratitude to the people who made this event possible: Thomas Bishoff, Andreas Wetzel, Luca Gilberti, Zhanna Zhehet, Marina Sediki and other Buhler-Petroncini team members.
Photo: ITH
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Photo: ITH
Photo: ITH
Photo: ITH
Photo: ITH
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Photo: BŃŒhler AG, Rep
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Photo: ITH
Incredible Coffee Days Ramaz Chanturiya
e had barely unpacked our suitcases after the exhibition in Vienna when it was time to pack them again. This time the destination was Hamburg, the host of the First International Trade Show for the Coffee, Tea and Cocoa business (COTECA). Immediately upon arrival, you become immersed in the life and the atmosphere of this hospitable city. The first thing that strikes you in Hamburg – one of the biggest industrial centers and the second biggest city in Germany – is its parks and gardens. An amazingly green city! Many people also call Hamburg “a sea gate of Germany”. Not surprising: Hamburg is the biggest port in Germany and the second biggest
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through Hamburg in one form or another. It is not by accident, then, that Hamburg is home to the headquarters of one of the biggest coffee wholesalers: Neumann Kaffe Gruppe. The headquarters are located in a company-owned, recently constructed impressive office park, whose scale model could be seen at the company’s exhibit. The first coffee shop in the city appeared as far back as 1687, and 200 years later a coffee exchange opened in the Speicherstadt warehouse complex. It is here that the internationally known chains Tchibo and Darboven, who are forming the tastes of millions of consumers today, got their start. Even in our hotel everything seemed to be soaked in cof-
COTECA Hamburg celebrates a successful premiere Julia Chanturiya
The composition is made up of coffee cups
The Model of a new complex of Neumann Kaffee Gruppe – International Coffee Plaza The winners of the German Coffee Olympics
in Europe. More than 13,000 vessels travel along the Elba river, astonishing the locals and the visitors by their size. Early in the morning, breathing in the aromas of the freshly roasted coffee coming from the port warehouses, we went to the exhibition, which featured various businesses in the tea, coffee and cacao industries, covering everything from raw ingredients to the finished products. The three days of the exhibition were attended by more than 3000 visitors from more than 25 countries. In addition to the exhibits, the event featured a conference where one could hear reports about innovations and developments in the coffee, tea and cacao industries. The exhibition was also host to the German Coffee Olympiad, whose winners went on to compete in an international competition in London. The port of Hamburg is known not only for its freight volume. It turns out that three quarters of all coffee consumed in Germany flows
fee. It turned out that the owner of the hotel was a passionate lover and collector of all things coffee: from rare coffee cans and hand-operated coffee grinders to maps of coffee plantations. Since this was the first exhibition of this kind, we’d like to note several factors that contributed to its success. First, Hamburg is one of the largest logistical centers in Europe, and can rightly be called “the capital of the tea-coffee industry”. Second, we need to mention the high quality of visitors to the exhibition. And, of course, we need to thank the organizers for their hard work during the whole event. An ideal location plus great organization make it very likely that this exhibition will become one of the central events in the tea/coffee/cacao industry. Next COTECA event will also take place in Hamburg in June of 2012. More information about the exhibition, the conference and the Coffee Olympiad can be found at www.coteca-hamburg.de
Jessica Bonns, Probat
Darjeeling teas. The Chairman of the Indian Tea Council B. Banerjee is signing sold auction lots
Julia Chanturiya
Deja-vu in Vienna
That’s our expo!
Team Teamac is ready
Disposable envelopes for used tea bags: brilliance in simplicity
am sure that everyone was looking forward to this exhibition, remembering fondly the very first events organized by the Tea & Coffee Trade Journal right here in Vienna, the heart of Austria. And this is not only because this is a central location in Europe, easily accessible to exhibitors and visitors alike, but also because Vienna is a city of luxurious palaces and parks, grand squares, architectural monuments, picturesque medieval streets and famous Viennese cafes, a city to which one wants to keep coming back. Despite the big scare delivered right before the event by the Icelandic volcano Eyjafjallajokull, the guests of the exhibition arrived on time. This year, it was decided to run two exhibitions into one: the tea/coffee expo Tea & Coffee World Cup Europe (organized by the Tea & Coffee Trade Journal) which attracts mainly businesses that work in the tea and coffee industry, and the annual Austrian Gast-Wien, comparable in terms of its size and the number of exhibitors to the Russian Hospitality Industry Expo (PIR). It is likely because of this fact that the exhibition attracted new visitors, who stopped by our exhibit to take a look at our publication Coffee & Tea International (a free electronic version is available online at www.coffeetea.ru). It is true that during the last few years no company has offered any radically new solutions, so the exhibits were pretty familiar to everyone. Nonetheless, we managed to pick up a couple of new ideas,
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which we are eager to share with you. The first thing that caught our eye was disposable envelopes for used tea bags. The brilliance of simplicity! Two problems solved in one shot: you gain additional advertising space and you answer the perennial question of what to do with the used tea bag. We also liked green tea-flavored ice-cream: tasty and good for you! Another surprise came when we looked at the visitors. It seemed as if half of Eastern Europe had arrived at the exhibition. We were constantly and pleasantly surprised that many of the Eastern Europeans not only hadn’t forgotten their Russian but were still actively using it. A Symposium was organized during the exhibition; one of its main events was a charitable tea auction that offered Darjeeling teas. We haste to remind you that this unique way of presenting tea was first proposed to the Indian Tea Council by none other than the magazine Coffee and Tea in Russia; this format is now used quite successfully in other countries. Three days of the exhibition flew by fast. After spending a little extra time in this breathtakingly beautiful and green city, we went home. But not empty-handed: we took along a few coffee beans. We will plant them; but to find out whether any of the beans take root, you’ll have to wait till next year, till after we return from the next exhibition organized by the Tea & Coffee Trade Journal, this time in Singapore.
Jan Mirburg is presenting rooibos from the heart of Africa
See you soon in Singapore!
Coffee&Tea International
Marina Fomina, Yulia Markova
ondon is a city that charges you with positive energy, raises your spirits, smiles at you and helps to you find new friends. Everything around you stimulates interaction, especially the abundance of cafes that crop up every step of the way. Interestingly, although restaurants and pubs also abound, people prefer cafes as places of relaxation. Could it be that the English tea tradition is giving up ground to a new preference for coffee among English people in general, and Londoners in particular? Probably not. English tea traditions and customs are secure. Coffee and tea industries peacefully coexist, although experts are noticing a rapid growth of the number of cafes. The leaders are Caffe Nero, Starbucks, Costa Coffee, Caffe Ritazza; the number of coffee drinkers is growing accordingly. One gets the impression that English people have to have not only their tea, but also their latte, cappuccino and espresso. You see lots of people everywhere carrying paper coffee cups. Delicious aromas of coffee, friendly waiters, small and cozy outdoor tables pull you inside; it is impossible not to taste the unforgettable English coffee. It is not surprising that such global coffee event as the annual Caffe Culture exhibition is taking place for the fifth year in England, the country with a strong tea tradition. This year 300 companies participated in the three-day exhibition and around 10,000 guests visited the Olympia exhibition center in Kensington, where the 11th annual World Barista Championship also took place. London met us with unfriendly cold weather, like a haughty Englishman suspicious of foreigners. But then, completely unexpectedly, this same “haughty Englishman� showed us a dif-
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meets Caffe
Culture
2010 ferent side, warming us up under a hot summer sun and creating perfect conditions for the whole duration of the exhibition, from June 23 to June 25. Our magazine, Coffee&Tea International, generated great interest among the exhibitors and the guests. The events of the exhibition targeted both coffee industry professionals and coffee aficionados. Participants included not only such famous brands as Ahmad Tea Co., Buhler AG, Probat-Werke and others, but also representatives of new and emergent brands. Russian coffee business was represented by L. Akopov (Lebo Coffee), A. Malchik (Montana Coffee), A. Bredikhin (Safari Coffee), G. Neveikin (Coffeemania), K. Tara-Brown (Traveler’s Coffee), K. Spears (Northwest Coffee Company) and A. Savinov (SFT Trading) with their staff.
NEWS
German anti-trust agency imposes fines on eight coffee producers The German Federal Anti-trust Agency (Bundeskartellamt) has imposed fines totaling 30 million Euros on eight German coffee producers as well as the German Coffee Association (Deutscher Kaffeeeverband e.V., DKV). The eight companies punished are Kraft Foods Au8er Haus Service GmbH, Bremen, Tchibo GmbH, Hamburg, J.J. Darboven GmbH & Co. KG, Hamburg, Melitta SystemService GmbH & Co. Kommanditgesellschaft, Minden, Luigi Lavazza Deutschland GmbH, Frankfurt, Seeberger KG, Ulm, Segafredo Zanetti Deutschland GmbH, Munich and Gebr. Westhoff GmbH & Co. KG, Bremen. The companies are accused of conspiring to illegally raise the prices of coffee for their wholesale customers during the period from 1997 to mid-2008. According to the Agency, the producers are responsible for at least two price increases that were approved by the German Coffee Association. bundeskartellamt.de
A rivalry between tea and coffee Dutch scientists are trying to determine what has more health benefits – tea or coffee. One 13-yearlong study of the positive effects of coffee and tea on the heart tracked 40,000 subjects. Scientists have established that those who drink up to 4 cups of coffee or tea a day significantly lower their risk of dying from a heart attack. The effect is attributed to the cholesterol-reducing properties of caffeine. vkonline.ru
The most expensive coffee sold at an auction The price of geisha coffee, the most expensive coffee in the world, reached the record $170.20 per pound during an online auction. The coffee was grown on the Hacienda La Esmeralda plantation, high in the western mountains of Panama. It was bought by the Japanese company Saza Coffee for more than 100 times the average price of coffee, now hovering around $1.30 a pound on New York futures markets. Daniel Peterson, the representative of the plantation, admitted that the final auction price for 400 pounds of coffee – $68,080 – surprised even the owners themselves. forexyard.com
The best place to drink tea in London The Park Room and the Library at the Grosvenor House Hotel in London have been recognized by the UK Tea Council Award of Excellence for Afternoon Tea Service for the third year in a row for their outstanding quality and consistently high standards of tea service. Overlooking Hyde Park, the Park Room offers welcome respite from the bustling West End. Its afternoon tea menu is designed to appeal to a wide audience and features the traditional Anna’s Tea including a selection of delicate finger sandwiches, buttermilk scones, Devonshire clotted cream, Cornish Strawberry Jam, as well as seasonal cakes and pastries. Alternatively guests can request the a la carte menu and choose exactly what they want. travel.ru
Prague has welcomed back the cafe with blind waiters For one week in June the Czech capital hosted the traveling cafÙ Potme (“In the dark”). Here customers were able to immerse themselves in the world of blind people – a complete darkness. Potme, conceived in 2002, is a creation of the Czech Radio National Fund's project Sv tluÓka (“firefly”) that raises money for the visually impaired. But the idea of such a cafÙ first appeared in Switzerland, where a restaurant called “Blindekuh” (“The Blind Cow”) opened its doors in 1999. novoya.com
euronews.net & news.uwa.edu.au
Brouhaha brewing in world of tea raudulently labeling tea as expensive Darjeeling is a worldwide problem: Darjeeling tea is among the world’s finest and tea drinkers often pay too much for an inferior product without realizing it. Professor John Watling at the University of Western Australia is developing a solution: a way of tracing tea back to its roots. Methods pioneered at the University can link the tea plant back to its original growing region, within a few kilometers, anywhere in the world.
F
Clothing from coffee The clothing company Northland announced the launch of a new sportswear line that uses coffee grounds to neutralize odors. The new sportswear will be cooler and more comfortable. The company’s polo shirts and t-shirts will even come in pleasant “coffee” colors Mocca and Latte. Northland's fabric supplier has a contract with a major coffee company to supply the grounds. Northland’s owner declined to name the coffee company. kachestvo.ru
Orimi Trade – a partner of the St. Petersburg International Economic Forum For the fourth time the tea “Greenfield” and the coffee “Jardin” produced by Orimi Trade became the official hot beverages of the Forum-2010, which ran on June 17-19 and focused on key issues facing emerging markets and the world. The Forum was attended by more than 2,500 individual participants and more than 52 foreign delegations. orimitrade.ru
Nestle recalled several kinds of coffee products in Russia According to the company’s website, Nestle has voluntarily recalled several coffee products because of possible presence of small pieces of glass. The products recalled are instant coffee brands Alta Rica, Cap Colombie, Estet, Kenjara and Espresso, all packaged in special 100-gram glass jars with a plastic cover. Some of these jars, according to Nestle, can crack during transportation, releasing small pieces of glass into the coffee. This recall does not include other products from the Nescafe product line sold in Russia. lenta.ru
14
COFFEE&TEA INTERNATIONAL # 2/2010
Earth-friendly alternative to paper coffee cup
Acomo will become the largest tea trader
The Betacup project, aimed at creating an earthfriendly alternative to disposable paper cups, and Starbucks Coffee announced the winners of their “green ideas” contest. 430 entries were submitted, including presentations, videos and illustrations, on the topic of “coffee ecology”. The proposals ranged from biodegradable disposable cups to community programs aimed at promoting reusable tableware, from edible “coffee balls” to cups that can be used as sporting equipment. The first prize went to the team that presented Karma Cup, a system of using reusable coffee cups. jovoto.com
“Coffee rings” may help biosensors detect diseases
Tea fights nicotine A team of researchers at the Chinese Academy of Sciences headed by Zao Baolu has developed a tea filter that can help smokers treat their addiction. The first study involved 100 male smokers. The researchers found that the participants’ average daily cigarette consumption decreased by about 43% after using the tea filters for one month and 56.5% after two months. In the second trial, smokers decreased their smoking 48%, 83% and 91% after using the tea filters for one month, two months and three months respectively. Toxicology studies revealed that tea filters help reduce the amount of tar, free radicals, nitrosamine, benzopyrene, chrysene and polycyclic aromatic hydrocarbons in cigarette smoke. watermarket.ru
The Dutch company Amsterdam Commodities N.V. (Acomo) has signed an agreement with N.V. Deli Maatschappij (Deli) to buy its tea and seeds businesses for a total of about 100 million Euros. Deli’s tea division – Van Rees Group – is one of the largest independent tea traders in the world with facilities in The Netherlands, Sri Lanka, Kenya, Malawi, Indonesia, Vietnam and Russia. The company works with tea producers in all major tea exporting countries. Last year’s sales are estimated at $182 million. The acquisition will allow Acomo to significantly strengthen its market position. acomo.nl
The field of biosensing has recently found an unlikely partner in the quest for increased sensitivity: coffee rings. The next time you spill your coffee on a table, look at the spot left after the liquid has evaporated, and you'll notice a darker ring around its perimeter that contains a much higher concentration of particles than the center. Because this "coffee ring" phenomenon occurs with many liquids after they have evaporated, scientists have suggested that such rings can be used for examining blood or other fluids for disease markers by using biosensing devices. But a better understanding of how these rings behave at the micro- and nano-scale would probably be needed for practical biosensors. The researchers are currently optimizing the ring formation parameters and will then explore the application of this approach toward biosensing technologies that are being developed. universityofcalifornia.edu
The article is prepared by Euromonitor International Research Analyst Gayatri Bhasin
HOT DRINKS
REVIEW&STATISTICS
The hot drinks market in the UAE achieved healthy growth in 2009 despite the recent financial crisis that has hit consumer spending. With a burgeoning cafй culture and a traditional tea drinking culture hot drinks are placed to appeal to all segments of society in the UAE both in terms of the wide array of nationalities living there and the different income groups. It is this widespread appeal and accessibility of hot drinks that led to volume growth of 12% for the entire category in 2009 and major factors affecting this growth were the financial crisis, health awareness and the recently ubiquitous cafй culture. It is these factors that have shaped the market for hot drinks in the UAE and had a unique effect on tea, coffee and other hot drinks (flavoured powder drinks, malt-based drinks). Increasing health awareness in the UAE, encouraged by the government due to the increasing incidence of obesity, heart disease and diabetes in the country has had a considerable impact on sales of hot drinks in the UAE as it has on most categories of food and beverages. Health concerns have boosted sales of tea in the UAE, particularly green tea and fruit and herbal tea, the former for its antioxidant properties and the latter with several purported benefits such as digestive aid, calming and cleansing effects depending on the flavour. This pushed overall volume growth of tea to 7.5% in 2009 which was higher than average growth achieved between 2003 and 2008. Concern about children’s health due to soaring childhood obesity rates and awareness campaigns organised by the government have also had an impact on sales of other hot drinks, particularly chocolate flavoured powder drinks which are usually favoured by children. Surprisingly the health trend has worked in favour of these drinks, because they are a convenient way to get children to drink milk and have less artificial flavours and colours than carbonates. Coffee too has seen the impact of the health trend, particularly in the on trade – at cafйs where many consumers opt for skim milk or ‘skinny’ versions of their favourite coffee drinks. Starbucks has been particularly successful with its Light Frappaccino, a lower calorie version of the popular iced coffee drink. It is this response to the health trend offered by cafÙs that has boosted growth of on trade volume sales of coffee to 23% whereas off trade sales only grew by 9%. The worsening financial situation in the UAE has also taken a toll on sales of hot drinks though not as dramatically as expected. This is largely because at the beginning of the financial crisis, people chose to cut back on non grocery purchases and continued to spend, albeit slightly more cautiously on food and drinks. Instant coffee, however, has benefited to a certain extent from the pressures placed on household budgets in the UAE, achieving volume growth similar to that of fresh ground coffee, at 9% whereas in previous years it always seemed to lag behind. In general, instant coffee has a lower unit price than fresh coffee and sales have been bolstered by the increasing popularity of speciality coffee mixes such as NestlÙ’s Cappuccino and Latte, purchased by those trying to recreate the cafÙ experience at home. Like instant coffee, Loose Black Standard Tea also benefited from its low retail price which ensured that consumers at all income levels continued to buy these products and volume growth at 6.3% in 2009 was higher than the average growth achieved over the previous five years. While these sectors may have benefited against the backdrop of a volatile financial situation, in general volume sales of hot drinks remained promising in 2009 and look set to continue in the same vein in the future. CafÙ Culture is an essential aspect of the hot drinks market in the UAE, particularly for coffee. It is a recent phenomenon in the UAE, only about ten years old but today a cafÙ (usually chained) is around every corner in every shopping mall and in most neighbourhoods. International chains such as Starbucks, Costa, Coffee Bean & Tea Leaf, Seattle’s Best Coffee and CafÙ Nero, to name a few are ubiquitous in the UAE and particularly in Dubai and Abu Dhabi. It is the widespread presence of these
in UAE
international coffee shops coupled with smaller local chains like Blends & Brews that is fuelling the double digit on trade volume growth of fresh coffee. Consumers have become accustomed to stopping at these places while shopping and especially as a proportion of the population does not dink alcoholic drinks, speciality coffee drinks and teas are often a popular Hot Drinks Market Growth in UAE alternative. Total Volume – Tonnes These cafÙs have also been instrumental in slowly converting traditional tea drinkers in to occasional if not habitual coffee drinkers further boosting sales. Despite the recent financial crisis on trade Source: Euromonitor International, 2010 coffee has continued to growth, though possibly not at as high a rate as previously expected. While consumers cut down on the frequency of buying coffee on trade, they have not cut it out of their lives entirely and consider it an affordable and often necessary indulgence. Nevertheless cafÙ culture remains one of the defining features of the hot drinks market in the UAE along with the financial situation within the Hot Drinks Market Size in UAE country and inRetail Value – US$ mn creasing health awareness. As for the future, these trends are likely to continue to have an impact on sales of hot drinks in the UAE at least until 2012 and sales of hot drinks are exSource: Euromonitor International, 2010 pected to achieve 10% volume growth over the next five years, very similar to that achieved in between 2003 and 2009. On trade outlets will perform better than the off trade as chained cafÙs will continue to attract locals and tourists alike. It is possible that once the economy recovers hot drinks will see a revival of the premiumisation trend that was seen in the mid to early 2000’s, however the Foodserve vs. Retail in UAE general landmn cups scape of hot drinks in the UAE is unlikely to change drastically though sales will continue to increase rapidly fuelled by product innovation and effective marketing. Source: Euromonitor International, 2010
15
REVIEW&STATISTICS
Strong development in modern retail, a changing foodservice environment and a youthful population are the three key factors driving the Egyptian hot drinks market, where the popularity of tea-drinking (90% of retail volume sales) is counteracted by impressive gains made by products such as instant coffee and chocolate-flavoured other hot drinks. Traditionally loose black tea and Turkish coffee have dominated the Egyptian hot drinks landscape. Tea is seen as a refreshing drink throughout the day and is affordable to even poor consumers, whilst coffee has a place in traditional cafÙ culture.
in Egypt
Over 50% of the Egyptian population is under 19 years of age, and are changing this dynamic. The emergence of Arabic-language satellite TV channels and modern advertising, together with increasing number of tourists have driven these trends. NescafÙ is a typical example; it appeals strongly to affluent young Egyptians, through television advertising and promotional campaigns, featuring the ubiquitous red mug. NestlÙ Egypt SAE also introduced instant coffee in single-serve sachet into schools and universities across Cairo and Alexandria which led to a boost in retail sales for standard instant coffee, which grew by almost 5% in volume terms in 2009. Younger consumer are shifting the focus in tea, where Unilever launched two new flavours, Hibiscus and Forest Fruits, of fruit/herbal tea. Foodservice trends have also driven consumer tastes, especially those of the young, with modern outlets like McDonalds, KFC and Starbucks enjoying pride of place in new retail developments, and taking custom from traditional Egyptian foul (fava beans) and grills. Specialist coffee outlets, such as Starbucks, Gloria Jeans and Costa Coffee, are having a significant impact on the dynamics of the coffee category in Egypt, grew by 14% between 2008/2009. Children are becoming more influential as consumers, as seen by the strong performance of chocolateflavoured hot drinks, the best performer in 2009 with 6% off-trade volume growth. It is particularly popular in summer as a cold drink, and mothers like to know their children are drinking milk. ‘Pester-power’ is becoming more important as going to new shopping-centre retail outlets has become Hot drinks market in Egypt an experience for the whole Total Volume – '000 Tonnes family. Children have more impact upon purchasing decisions, and retailers have reacted. Spinney’s supermarket now offers private label hot chocolate powder at just E£ 1.00 per 100g. Egypt is witnessing dramatic change in its retail landscape. Traditionally sales of hot drinks were dominated by markets and small grocery retailers, where black tea Source: Euromonitor International, 2010 and Turkish coffee, the most important products, were sold, often unpackaged. However, the share of hot drinks sales taken by supermarkets/hypermarkets has increased by 10 percentage points over the past ten years, and now sits at 52% in retail volume terms. The local chain supermarket chain Metro had doubled its presence to 36 outlets over the past five years, and Carrefour is planning five new outlets in 2010/11. This has had two main effects: the increasing popularity of international brands; and secondly, a strong decline in unit prices as competition increases. Furthermore, retailers have introduced private label products at much cheaper prices. For example, Carrefour has marketed private label packs of 200 black standard teabags for EЈ19.00 compared to the equivalent Lipton product selling in packs of 100 bags for EЈ15.50. Even local retailers are getting in on the act, such as Mansour Groups Kher Zamman grocery, which introduced loose black standard tea at EЈ1.25 for 250g. Sales of hot drinks are expected to do well between 2009/2014, with a retail volume CAGR of 2.3% only marginally down on a strong historic performance. Other hot drinks will be the clear leader with a CAGR of (8.1% AGR), followed by coffee (4.6%), with the growth in tea of 2% largely following population growth and forming 87% of volume sales in 2014. Value sales are anticipated to be far weaker, indicating that trends seen historically will continue; private label success and higher competition in retail will see unit prices continue to fall. New product development will continue in more niche areas to attract younger consumers: Unilever is reported to be planning Egyptian launch of their Lipton Tea Latte brand, already a success in the Gulf. To conclude, the Egyptian hot drinks market is in rude health, with strong demand for both traditional products enjoyed by the majority of the population, and more niche products that attract younger, more affluent consumers. Retail and foodservice trends will boost interest in niche products over the forecast period. Manufacturers and retailers are expected to continue pushing volumes over value sales and thus reducing prices, which may limit opportunities for smaller players.
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COFFEE&TEA INTERNATIONAL # 2/2010
HOT The article is prepared by Euromonitor International Research Manager Tim Foulds
REVIEW&STATISTICS
DRINKS English
ECONOMIC DOWNTURN WEAKENS ON-TRADE SALES
The article is prepared by Euromonitor International experts Questo articolo Ù stato preparato dagli esperti della Euromonitor International
in Italy Italiano
RECESSO ECONOMICO COMPORTA LA RIDUZIONE DELLE VENDITE ON-TRADE
Gli indici bassi dell’economia Italiana e i segni evidenti del recesso hanno costretto i consumatori a risparmiare i soldi sui bar nel 2009. Questa tendenza ha avuto un forte impatto sul volume delle vendite on-trade nel 2009. Il settore off-trade Ù stato influenzato di meno dalla crisi economica, siccome i consumatori avevano una buona scelta dei vari prodotti, fra quali le bevande calde di livello alto, medio, basso e "private label". Secondo la Euromonitor International, il consumo del caffÙ nel 2009 era rimasto abbastanza stabile, mentre il recesso in generale aveva fatto effetto in questo settore dal punto di vista dei bar che hanno avuto meno visite da parte dei consumatori che cercavano di limitare la loro spesa fuori casa. Quindi, il volume delle vendite Ù aumentato del 1% nel settore off-trade nel 2009 ed Ù diminuito del 4% nel settore on trade. Perdipi×, siccome il settore del caffÙ in Italia Ù molto sviluppato, il fattore chiave della crescita nel 2009 Ù stata l’innovazione. L’innovazione si Ù dimostrata di pi× nel settore del caffÙ macinato fresco dove i giocatori di mercato hanno fatto dei seri investimenti nel caffÙ a cialde Coffee Market in Italy / Mercato di caffeÙ in Italia avviando nuove linee di Foodservice vs. Retail volume Growth, % / prodotti e completando Ristorazione vs.Vendite al pubblico, crescita del volume, % quelle gi× esistenti.
The weak performance of Italian economy and the clear signs of recession led consumers to save money on spending in cafÙs/bars in 2009. This trend had a strong negative impact on ontrade volume sales in 2009. The off-trade channel was less affected by the economic crisis, as consumers were able to find a good range of selections, including premium, standard, economy and private label hot drinks. According to Euromonitor International, coffee consumption remained quite stable in 2009, with the recession mainly impacting the category in terms of fewer visits to bars by consumers looking to limit their out-of-home spending. Thus, volume sales grew by 1% in the off-trade channel in 2009, but decreased by 4% in the on-trade channel. Moreover, as coffee is a very mature category in Italy, innovation was a key driver of growth in 2009. Innovation was mainly visible in fresh ground coffee, with players investing heavily in coffee pods, launching new lines and extending existing ones.
GIL ANNI D’ORO DEL CAFFØ IN CIALDE IN ITALIA Nel 2009 il caffÙ in cialde continua a essere la meta principale per i produttori. Siccome i consumatori visitavano meno spesso i bar loro sempre di pi× apprezzavano il caffÙ in cialde come alternativa al consumo dell’espresso Source: Euromonitor International, 2010 nei bar. CaffÙ in cialde ha GOLDEN TIME FOR COFFEE PODS IN continuato la sua espansione in Italia nel 2009 sembrando la pi× eccitante innovazione nel setITALY tore delle bevande calde. Le forte crescita del Coffee pods continued to be the main focus caffÙ in cialde Ù stata dovuta alla recente introof manufacturers in 2009. As consumers visited duzione di alcune linee di prodotti nuove come cafÙs/bars less often, they increasingly appreciIperespresso della IllycaffÙ SpA, A Modo Mio e ate coffee pods as alternatives to consuming BlueDue della Luigi Lavazza SpA, e Nespresso e espresso in bars. Coffee pods continued to NescafÙ Dolce Gusto della NestlÙ Italiana SpA. expand in Italy in 2009, appearing as the most PerciË nei prossimi cinque anni possiamo exciting innovation in hot drinks. The strong aspettare uno sviluppo impressionante del caffÙ in growth of coffee pods was due to the introduccialde e di quello solubile. Ø prevista la crescita del tion of several new recent lines such as volume e del fatturato delle vendite al minuto del Iperespresso by IllycaffÙ SpA, A Modo Mio and caffÙ predosato (sia in cialde di carta che in capBlueDue by Luigi Lavazza SpA, and Nespresso sule di plastica o di alluminio) espressa con un and NescafÙ Dolce Gusto by NestlÙ Italiana SpA. numero di due cifre. CiË significa una forte The impressive performance of coffee pods evoluzione del mercato delle bevande calde, dalla and instant coffee mixes is hence expected to convenzionale materia greggia ai convenienti continue over the next five years. Pre-dosed cofprodotti pronti per bere. fee (both paper pods and plastic or aluminium Anche il caffÙ solubile dimostra la tendenza di capsules) is expected to maintain double-digit avere successo nel periodo 2010-2015, Ù prevista la retail volume and value growth. This represents crescita delle vendite pari al 3% all’anno. Questa the very strong evolution of hot drinks, from tracrescita Ù legata al sempre pi× noto successo delle ditional raw material commodities to convenient, specialit× italiane del caffÙ solubile, per esempio il ready-to-drink products.
17
REVIEW&STATISTICS
Instant coffee is also set to perform well over the 2010-2015 year period, with sales predicted to grow by a 3% annualy. This growth is linked to the growing success of instant speciality Italian coffee, for example flavoured coffees, cappuccino and moccaccino, and new functional products may enter the category in the medium term.
Tea market growth in Italy, mn/ Crescita del mercato del tÙ in Italia, min
HEALTHY HOT DRINKS MORE AND MORE APPRECIATED Italians are increasingly embracing the health and wellness trend, which is steadily affecting the hot drinks industry. Hot drinks are increasingly seen as important components of this consumer wellness movement, as more people learn about and understand the connection between a healthy daily diet and physical well-being. This trend benefits, in particular, green tea and fruit/herbal tea. Consumers are expected to continue to move away from unhealthy hot drinks such as tea containing caffeine. More people will choose to consume green tea, fruit/herbal tea and malt-based hot drinks, which are targeted as coffee substitutes, for example, coffee and barley mixes. The coffee category may also be extended by the launch of new functional offers in the long term. Although Italian consumers are unlikely to be ready to welcome functional hot drinks in the short-tomedium term, they can be expected to start to react positively to such products in the longer term. For instance, NestlÙ SA could introduce NescafÙ Body Partner, which is already present in other countries, to Italy. This line includes two low fat 3-in-1 instant coffee mix references, one with hi-calcium and the other with collagen.
caffÙ ai vari gusti, cappuccino e moccaccino, e a termine medio i nuovi prodotti funzionali potranno entrare in questa categoria.
LE BEVANDE CALDE SALUTARI SONO APPREZZATI SEMPRE DI PI×
Gli italiani sempre pi× spesso scelgono la salute e la vita sana e questa scelta fa un effetto sempre pi× significante sull’industria delle bevande calde. Le bevande calde stanno diventando un componente sempre pi× importante di questo trend dei consumatori verso la vita sana, siccome sempre pi× gente legge gli articoli di questo genere e comprende il legame fra una dieta salutare quoSource: Euromonitor International, 2010 tidiana e lo stato di salute buono. In particolar modo questa tendenza coinvolge il tÙ verde e il tÙ alla frutta e alle erbe. Si presume che i consumatori continueranno a cambiare le loro preferenze dalle bevande poco salutari come il tÙ con caffeina. Sempre pi× gente si rivolger× al consumo del tÙ verde, tÙ alla frutta/alle erbe e le bevande calde a base di malto che sono visti come sostituzione, per esempio, del caffÙ e delle miscele all'orzo. La categoria del caffÙ puË anche essere estesa grazie alla promozione di nuove offerte funzionali di lungo termine. Nonostante che Ù poco probabile che i consumatori italiani accetteranno le bevande calde funzionali a breve o medio termine, si puË pensare che a lungo termine loro inizieranno a reagire positivamente ai prodotti del genere. Per esempio, la NestlÙ SA potrebbe introdurre in Italia un prodotto che si chiama NescafÙ Body Partner che Ù gi× presente in altri paesi. Questa linea comprende due miscele 3-in-1 a base di caffÙ solubile con basso contenuto dei grassi, una con alto contenuto di calcio e altra con collagene.
LA DOMANDA DIVENTA SEMPRE PI× POLARIZZATA
Quei consumatori italiani che sono stati influenzati meno dalla crisi economica continuano a mirare ai prodotti di fascia alta come per esempio caffÙ Arabica 100%, caffÙ in cialde, tÙ bianco e rosso DEMAND BECOMES oppure le specialit× del tÙ nero. INCREASINGLY POLARISED Questi prodotti erano considerati Italian consumers less affect- Hot drinks sales in Italy, 2009. Retail Value RSP - mn/ dai consumatori come piccole Crescita del mercato del te in Italia, min ed by the economic crisis contindelizie o ricompenso per il ued to look for premium prodrisparmio dei soldi o del tempo ucts, such as 100% Arabica cofnei bar. Ciononostante i prezzi in fee, coffee pods, white and red crescita e l'economia debole tea or black speciality tea. These hanno spinto molti italiani a rivolproducts were regarded by congersi ai prodotti molto economici sumers as small treats or recomo "private label". Quindi c'Ù stata pense for spending less money or una certa polarizzazione nei tertime in cafÙs/bars. However, rismini di domanda che ha favorito i ing prices and the weak economy marchi di fascia alta, di fascia forced many Italians to turn to bassa e "private label" a discapito Source: Euromonitor International, 2010 very cheap or private label proddei marchi standard. ucts. Thus, there was some polarisation in terms of demand which benefited premium, economy and private label brands at the expense PROBLEMATICHE AMBIENTALI ED ETICHE CORRELATE of standard brands. ALLE BEVANDE CALDE
ENVIRONMENTAL AND ETHICAL ISSUES IN HOT DRINKS Consumers are increasingly considering environmentally-friendly products and ethical practices employed by hot drinks players. Recognising the growing sensitivity towards environmental and ethical issues, companies are more active in communicating their long-term and firm commitment to sustainable production. This is already impacting hot drinks and is likely to have an even stronger impact, especially among young consumers, in the medium term. According to Euromonitor International, the next five years period may see a change in the attitude of young consumers towards coffee. The range of coffee available in specialist coffee shops includes cappuccino and coffee flavoured with cocoa and cinnamon, as well as creams, liqueurs and other unusual flavours. With the introduction of innovative products and the opening of new specialist coffee shop chains, young consumers are set to become more familiar with and open-minded towards speciality coffee options.
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COFFEE&TEA INTERNATIONAL # 2/2010
I consumatori iniziano sempre pi× spesso a prendere in considerazione i prodotti eco-friendly e le pratiche etiche usate dai giocatori del mercato di bevande calde. Riconoscuita la sempre pi× marcata sensibilit× verso le problematiche ambientali ed etiche le compagnie sono diventate pi× attive nel comunicare le loro ferme intenzioni di lungo termine di avere la produzione ecologica. Questo fattore sta gi× influenzando le bevande calde e sembra di avere un effetto anche pi× forte a breve termine, specialmente sui consumatori giovani. Secondo la Euromonitor International nei prossimi cinque anni potremo vedere il cambiamento dell'atteggiamento verso il caffÙ da parte dei consumatori giovani. Le variet× del caffÙ che si possono trovare nei bar specializzati includono il cappuccino e i caffÙ aromatizzati con cioccolato o cannella, nonchÙ le creme, liquori ed altri gusti strani. In seguito alla promozione dei prodotti innovativi e l'apertura delle nuove catene dei bar specializzati i giovani consumatori sono pronti a diventare pi× familiari e pi× aperti alle nuove variet× speciali del caffÙ.
REVIEW&STATISTICS
Study of TEA Retail Sales in Russian Cities with the Population over 10,000. Data for February–May 2010 Distribution of TEA Sales in Terms of Money Percent Source February-March 2010
April-May 2010
by urban type population of 10 000 – 49 000 population of 50 000 – 249 000 population of 250,000 – 999 000 population over 1 million by distribution channel supermarkets mini-markets grocery stores kiosks and pavilions, open markets
FOR SUBSCRIBERS ONLY Source: Nielsen Russia
Share of Leaf, Granulated & Mixed Tea in Total Sales Volume of TEA sales volume,% February-March 2010
April-May 2010
FOR SUBSCRIBERS ONLY
Main cities with the Population over 10,000 Tea in teabags Granulated Leaf Mixed (leaf + granulated)
Source: Nielsen Russia
Share of Packed Tea in Total Sales Volume of TEA Physical sales volume, percent February-March 2010
Monetary sales volume, percent
April-May 2010
February-March 2010
April-May 2010
FOR SUBSCRIBERS ONLY
Tea in teabags Packed tea
Source: Nielsen Russia
Share of Each Category in Total Sales Volume Physical sales volume, percent February-March 2009
black black flavored mixed: Hedbal&Frui green green flavored red white black & green
Monetary sales volume, percent
April-May 2009
February-March 2009
April-May 2009
FOR SUBSCRIBERS ONLY Source: Nielsen Russia
REVIEW&STATISTICS
Study of COFFEE Retail Sales in Russian Cities with the Population over 10,000. Data for February–May 2010 Share in Total Sales Volume Physical sales volume, percent February-March 2010
Sublimated instant Granulated instant Powdered instant Coffee mixes Ground coffee and coffee beans
April-May 2010
Monetary sales volume, percent February-March 2010
April-May 2010
FOR SUBSCRIBERS ONLY
Source: Nielsen Russia
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COFFEE&TEA INTERNATIONAL # 2/2010
REVIEW&STATISTICS
Distribution of COFFEE Sales in Terms of Money. Percent February-March 2010
by region Central Northwestern Volga Ural Siberia Far East by urban type Population of 10,000 – 50,000 population of 50,000 – 250,000 population of 250,000 – 1 million population over 1 million by distribution channel supermarkets mini-markets grocery stores kiosks and pavilions open markets
April-May 2010
FOR SUBSCRIBERS ONLY FOR SUBSCRIBERS ONLY FOR SUBSCRIBERS ONLY Source: Nielsen Russia
Share of Various Packaging Types in Total Sales Volume of Instant Coffee
metal can glass jar brick packet other
Physical sales volume, percent
Monetary sales volume, percent
February-March 2010
February-March 2010
FOR SUBSCRIBERS ONLY Source: Nielsen Russia
IMPORT OF TEA AND COFFEE TO THE RUSSIAN FEDERATION FOR 2009 Description
Custom Code
Import/Export tons
Coffee, green or roasted, with or without coffeine
%
thousand USD
%
0901 EXPORT
FOR SUBSCRIBERS ONLY IMPORT
FOR SUBSCRIBERS ONLY Source: Federal Agency of the state statistics
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REVIEW&STATISTICS
Description
Custom Code
Import/Export tons
%
thousand USD
%
FOR SUBSCRIBERS ONLY
Extractes or concentrates of coffee, tea or mate; ready products based on them
2101 EXPORT
FOR SUBSCRIBERS ONLY
REVIEW&STATISTICS
IMPORT
FOR SUBSCRIBERS ONLY Source: Federal Agency of the state statistics
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COFFEE&TEA INTERNATIONAL # 2/2010
REVIEW&STATISTICS
Description
Custom Code
Import/Export tons
%
thousand USD
%
FOR SUBSCRIBERS ONLY
Tea pure or aromated
0902 EXPORT
FOR SUBSCRIBERS ONLY
IMPORT
FOR SUBSCRIBERS ONLY
Mate
0903 EXPORT
IMPORT
FOR SUBSCRIBERS ONLY Source: Federal Agency of the state statistics
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REVIEW&STATISTICS
Coffee Consumption in Russia, 2005-2014 This article is prepared by BusinesStat1 using the data from the study Analysis of the coffee market in Russia in 2005-2010, with a forecast for 2010-2014 conducted by the company in April 2010
According to the data collected, there has been a sharp increase in
profitability brought about by the economic crisis. The demand for
consumption of coffee in Russia in 2005-2009, from 65 to 113 thou-
coffee itself hasn’t flattened, though, and there has been no sharp
sand tons. This is due both to an increase in the number of consumers
increase in the wholesale prices.
and to an increase in per capita consumption. Factors contributing to the increase include the proliferation of coffee vending machines and
Consumption of coffee in Russia is described in the following tables (Table 1, 2). It is apparent that the number of coffee consumers in Russia is
the development of fast-food industry. During the last 5-6 years the average retail price of coffee has 2 increased by 60% from 546 to 906 rubles/kilogram . Ground coffee
constantly increasing, despite the fact that the total population is
price is growing faster than that of instant coffee: the latter has
normally drink coffee at home have begun using coffee vending
increased 1.5 times, from 320 to 467 rubles/kilogram, while the for-
machines or eating at fast-food restaurants. There has been a sharp
mer has almost doubled, from 638 to 1119 rubles/kilogram.
increase in coffee consumption among children and teenagers. In
Last year the retail price of coffee jumped 21.4%, which is explained by the need to compensate for a general decrease of retail
declining. During the last few years, many individuals who do not
addition, the country has received several million immigrants many of whom are active consumers of instant coffee (Table 3, 4).
The number of coffee consumers, Russia, 2005-2009 (in millions) Value
The number of coffee consumers (in millions) Percentage change from the previous year
Table 1
2005
2006
2007
2008
2009
87,3 -
88,8 1,80
89,7 0,94
90,5 0,89
91,3 0,93
Source: BusinesStat, standardized annual survey of food and beverage consumers in Russia, a selection of 4200 respondents
Estimated number of coffee consumers, Russia, 2010-2014 (in millions) Value
The number of coffee consumers (in millions) Percentage change from the previous year
Table 2
2010
2011
2012
2013
2014
92,2 0,93
93,5 1,43
94,6 1,26
96,1 1,52
96,7 0,63
Source: BusinesStat, standardized annual survey of food and beverage consumers in Russia, a selection of 4200 respondents
The percentage of coffee consumers among the Russian population, 2005-2009. Value
Total population (including foreigners) of The Russian Federation (in millions) The number of coffee consumers (in millions) The percentage of coffee consumers among the Russian population
Table 3
2005
2006
2007
2008
2009
146,8 87,3 59,6
146,3 88,8 60,8
145,9 89,7 61,5
145,5 90,5 62,2
144,7 91,3 63,0
Source: Rosstat, BusinesStat
Estimated percentage of coffee consumers among the Russian population, 2010-2014.
REVIEW&STATISTICS
Value
Total population (including foreigners) of The Russian Federation (in millions) The number of coffee consumers (in millions) The percentage of coffee consumers among the Russian population
Table 4
2010
2011
2012
2013
2014
143,8 92,2 64,1
143,4 93,5 65,2
143,0 94,6 66,2
142,6 96,1 67,4
142,2 96,7 68,0
Source: Rosstat, BusinesStat
1 BusinesStat was created in 2005. The company specializes in conducting market analysis and forecasting development trends for various branches of world and Russian economy. The company offers complete analytical surveys of industrial and consumer markets. The surveys include data for the past several years, analysis of the current situation and a short-term forecast. All surveys are updated annually. 2
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The exchange rate as of 16-22 August 2010 is 30.426 rubles to a dollar.
COFFEE&TEA INTERNATIONAL # 2/2010
REVIEW&STATISTICS
During 2010-2014 the percentage of coffee consumers will continue to increase, reaching about 68% of the total population by 2014 (Table 5, 6).
coffee consumption in the country (Table 9, 10). On the basis of the data shown, it can be concluded that during 2009-2014 consumer expenditures on coffee will more than double,
During 2005-2009 the per capita coffee consumption in Russia
without slowing consumption growth. Coffee consumers exhibit
has increased 1.5 times. The growth in average consumption is due to
strong loyalty to the product and will maintain consumption levels
habituation (Table 7, 8).
despite growing prices (up to a critical point determined by each indi-
The trend in per capita consumption also shows a sharp increase in
vidual’s budget).
The percentage of coffee consumers among the Russian population, 2005-2009. Value
Per consumer coffee consumption (kilograms annually) Per consumer coffee consumption (cups annually) Per consumer coffee consumption (cups daily)
Table 5
2005
2006
2007
2008
2009
0,74 212,8 0,58
0,84 241,2 0,66
1,08 309,1 0,85
1,16 331,6 0,91
1,24 353,6 0,97
Source: BusinesStat, integrated analysis of market data
Estimated per consumer coffee consumption, Russia, 2010-2014 (kilograms annually; cups annually; cups daily). Value
Per consumer coffee consumption (kilograms annually) Per consumer coffee consumption (cups annually) Per consumer coffee consumption (cups daily)
Table 6
2010
2011
2012
2013
2014
1,45 390,6 1,07
1,54 416,1 1,14
1,61 434,4 1,19
1,72 463,6 1,27
1,81 489,1 1,34
Source: BusinesStat, integrated analysis of market data
Per capita coffee consumption, Russia, 2005-2009 (kilograms annually; cups annually; cups daily). Value
Per capita coffee consumption (kilograms annually) Per capita coffee consumption (cups annually) Per capita coffee consumption (cups daily)
Table 7
2005
2006
2007
2008
2009
0,45 137,6 0,38
0,53 159,4 0,44
0,68 206,8 0,57
0,74 224,2 0,61
0,80 241,7 0,66
Source: BusinesStat, integrated analysis of market data
Estimated per capita coffee consumption, Russia, 2010-2014 (kilograms annually; cups annually; cups daily). Value
Per capita coffee consumption (kilograms annually) Per capita coffee consumption (cups annually) Per capita coffee consumption (cups daily)
Table 8
2010
2011
2012
2013
2014
0,95 287,4 1,07
1,03 311,7 1,14
1,09 330,6 1,19
1,19 359,4 1,27
1,26 382,9 1,34
Source: BusinesStat, integrated analysis of market data
Expenditures on coffee, Russia, 2005-2009 (rubles annually; rubles monthly). Value
Expenditure per consumer (rubles annually) Expenditure per consumer (rubles monthly)
Table 9
2005
2006
2007
2008
2009
407,0 33,9
500,3 41,7
702,4 58,5
866,7 72,2
1121,9 93,5
Source: BusinesStat, integrated analysis of market data
Estimated expenditures on coffee, Russia, 2010-2014 (rubles annually; rubles monthly). Value
Expenditure per consumer (rubles annually) Expenditure per consumer (rubles monthly)
2010
1393,6 116,1
2011
1622,6 135,2
Table 10 2012
1841,0 153,4
2013
2014
2140,3 178,4
2447,8 204,0
Source: BusinesStat, integrated analysis of market data
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ECONOMICS
In his publications during the last year and a half, Andrei Elson (KLD Coffee Importers) has repeatedly addressed the issues around the production of washed Arabica, analyzed the current situation and discussed possible strategies for various market participants. This time, he is turning his attention to a different problem, just as pressing and interesting for all those who strive to run their coffee business profitably and knowledgeably.
I
ssues facing
the coffee market
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LOOKING AT THE ROOT OF THE PROBLEM…
LET’S USE OUR IMAGINATION:
I think it’s time to put the day-to-day concerns aside and look at the root of the problem, to see what grows from what. Grows, quite literally. Exactly 10 years ago, in 2000, the coffee world was faced with a price crisis caused by overproduction of coffee. Around the same time we saw the beginning of campaigns aimed at increasing coffee consumption in non-traditional markets. It is impossible to deny the effect of those campaigns; in particular, coffee consumption in Russia reached 3.7 million bags, and the country has become one of the top ten coffee consumers in the world. Someone may object that the per capita consumption of coffee in our country is still very low, and 70% of all coffee consumed is instant coffee. I will have to agree, but…
Suppose that coffee consumption continues to increase. Coffee will become more and more popular among young people. Consumption of coffee outside the home will also increase in popularity and will continue to grow at the same rate it has been growing during the last 10 years. At a certain point we will see consumption at the level of 150 thousand tons of the finished product, including 100 thousand tons of instant coffee and 50 thousand tons of roasted and ground. This means that every single person drinks 1 cup of coffee a day – not bad, right? These numbers also mean that coffee consumption in the country will reach 5.3 million bags, 1.6 million more than the current level. Who’s complaining? Certainly, not I. But let me ask you one question:
COFFEE&TEA INTERNATIONAL # 2/2010
Coffee Plantation in Hawaii
WHAT KINDS OF COFFEE ARE YOU PLANNING TO PUT ON THE MARKET? If you do not mind the blend of Brazilian Santos and Robusta, then you will not have any problems. I doubt that anyone expects any issues when it comes to the production of these types of coffee. The only problem you will encounter is a brutal price competition. Whether we like it or not, the whole mass market will be forced to shift to these varieties; we can already see this happening today. The shift in consumption has begun all over the world. But this does not mean that every single consumer will embrace the mass-produced fare. There is a sizable segment of the world population that is not willing to give up their preferred flavor or is trying to consume foods of a higher quality. Furthermore, I hope that this segment is growing and will
ECONOMICS
continue to do so. Certainly, those consumers have the right to the product of their choice. And if you are interested in offering this product to them, you will have to continue buying higher quality green coffee. Now you are faced with the problem of ensuring adequate supply.
HERE’S THE MOST INTERESTING PART: By the year 2020 we are expecting to see a deficit of green coffee at the level of 12-14 million bags, virtually all of it – washed Arabica. Already today we are facing a severe shortage of washed coffee. This problem will only be getting worse. Clearly, no one can buy a product that is not on the
characteristics present in coffee varieties grown in America, Africa and Asia. And in those regions the possibilities for increasing production through extensive means are severely limited. The only way to go is to increase crop yields, which requires significant investments and a rise in operating expenses. Do you know what an average African coffee plantation looks like? It’s a half a hectare of land that yields from 0.5 to 1.5 tons of coffee annually. The farmer must use the revenue to survive for the whole year and to do all the work necessary to ensure the next year’s harvest. Needless to say, a serious investment is out of the question. We can talk all we want about the high price on the
Coffee plantation in Brazil
market. Where will this ingredient come from, then? As I have mentioned earlier, the composition of coffee blends will get more and more simplified, and the mass market will minimize the consumption of washed coffee. This will reduce demand and, consequently, alleviate the deficit. But if we want to have enough product to meet the demand, we have to start addressing production problems today.
WHERE AND HOW CAN WE INCREASE PRODUCTION? The only country that is capable of significantly increasing the production of washed Arabica is Brazil. At this time, serious discussions are under way concerning the possibility of including Brazilian washed Arabica in the list of varieties allowed for trading on the exchange. If this happens, we will see a significant restructuring of coffee production in Brazil. The producers will get a strong incentive to invest in creating and expanding their production facilities. But even washed Brazilian Arabica will not give you the flavor
TRUST IS NECESSARY FOR MOVING FORWARD It is not enough to tell the farmer that he can double his yield. You have to show him how to do it. You have to create the necessary infrastructure and supply the knowhow. And this requires foresight and a great degree of enthusiasm. The producer and the consumer must realize that they are in the same boat and cannot exist without each other. They have to develop mutual trust, and this trust will give both sides a sense of security. This will not happen in a day. This is a long and complicated process, but if we do not start now, the outcome can be negative. Traders and roasters have an important role to play: they are intermediate stops on the road from the producer to the consumer. And
Coffee plantations in Colombia
exchange, exorbitant profit margins and farmers growing rich by the hour. The absolute majority of farmers earn a meager $1000 (!!!) a year. Tops. And that’s for the whole family…
WHO CAN DO IT? There certainly exist “showcase” plantations, several thousand hectares each. They are the ones visited by tourists, prospective buyers and official delegations. But in the majority of countries the share of such plantations in the total production is 10%. Such plantations, for the most part, use all the latest technologies and produce high quality coffee. But it is the absolute majority of small and medium-size farmers that hold the key to increasing production and ensuring stable quality of our desired product. These same farmers, though, could easily find a more profitable crop to grow on their land and cut down all the coffee trees tomorrow. The outcome of this is obvious, and it is an outcome we all want to avoid. This process is extremely difficult.
here we come to the question: are we ready to get the consumer involved in this process, to explain to him that quality and flavor do not come cheap? After all, our efforts are aimed at satisfying the demand of a more “sophisticated” consumer. Are we ready to invest in quality? Are we ready to stop worrying about the price and the sales volume, and focus instead on the quality and the future of the product?
A FOUNDATION, NOT A FAD Sustainable development, which is so widely discussed, is not a new fad in the coffee industry. It is a foundation for ensuring access to raw ingredients several years down the road. For each producer of a premium brand, the issue of reliable supply of quality ingredients is crucial. The sales volume of the brand doesn’t matter: it could be 1 ton a month, it could be 1,000. You still need to find the raw ingredients somewhere. And the only source is the farmer. I think – I am certain, rather, - that the sooner we turn towards the farmer and face the problems he is facing, the sooner we will see results.
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ECONOMICS
Taking Care of the Present, THINKING ABOUT THE FUTURE Prepared by Alena Velichko
Michael Opitz became interested in sustainable development 25 years ago. When he was studying agricultural economy in tropical regions, looking for ways to improve production mechanisms and market connections, he became familiar with the life of regular farmers who grew rice and manioc. Michael saw how crucial it was for these people to sell more of their produce at a higher price: their ability to educate their children and give them a future depended on it. Exposure to this reality set the course for his subsequent professional life.
n coffee circles Michael is known as an active promoter of the idea of sustainable development. His entire career, from earning a MSc degree in agricultural economics to his present position as Chairman of the Executive Board of Hanns R. Neumann Stiftung, has been focused on the ideas and values of sustainable development. Michael gained a lot of valuable practical experience by working successfully on various agricultural projects in Brazil, Dominican Republic and Ethiopia. Now he puts his efforts into developing and strengthening coffee-growing communities, building the business according to the principles of long-term stability. He is absolutely convinced that humanity will not survive for long without taking care of the natural resources. To offer help to the poor and hungry, to promote economic development guided by contemporary environmental standards – these are not just slogans, but a blueprint for action, which Michael follows methodically, but without going to extremes. Everyday he makes a small contribution to the sustainable development of the planet: he saves gasoline and electricity, he supports producers who care about their ecological footprint, he discusses with members of his family the problems of poverty in African and Latin American countries and his children are growing up with the recognition of their responsibility for the future. In the coffee world, sustainable development means that people who work in the industry can achieve economic prosperity, receive decent wages for their work and have access to education and healthcare. People must be able
I
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to see a future, and the proposed approach allows this: thoughtful use of natural resources for production and processing allows not only to preserve these resources, but to increase them for the benefit of the future generations. As the process of globalization speeds up, the problem of resource depletion becomes more and more pressing. Every player in the coffee industry – especially coffee roasters – has begun to worry about ensuring a stable long-term supply of coffee. We should not be concerned only about the size and quality of the crop, but also about the stability of the supply necessary to meet the constantly growing demand. A steady growth in the last 5 years of the amount of coffee grown using methods of sustainable development is our best incentive for going forward. Companies such as Starbucks and Nespresso have established special production management standards for their suppliers: C.A.F.E. Practices in the case of Starbucks and AAA Sustainable Quality in the case of Nespresso. Kraft, Tchibo and Sara Lee, among others, have decided to increase their purchases of coffee certified by the Rainforest Alliance and Utz Certified, and verified to conform to the 4C Code of Conduct. But much work remains to be done in the producing countries: small farmers need support in order to ensure that their products meet the standards. Producers need to have an opportunity to modernize their production facilities in order to make the whole process more economically efficient. We must also spread the knowledge necessary for improving production and management, giving farm-
COFFEE&TEA INTERNATIONAL # 2/2010
ers easier access to market information, helping them get integrated into the market structure and widening their access to credit. The most active support for the principle of sustainable development in the world of coffee can be found in Europe (including certification of coffee as Fair Trade, Rainforest Alliance, Utz Certified, 4C and others). The leaders here are Great Britain, Germany, Switzerland, the Netherlands and the Scandinavian countries. We can also note North America, especially the USA and Canada. In my opinion, this principle finds support primarily in countries where consumers expect their brands to be responsible about improving living and working conditions in coffee-exporting countries. Today small farmers are facing several main difficulties. First of all, their land is limited in size. Second, they encounter problems in securing credit. As a result, they lack the means for improving the production process. And this means that the technologies they are using are harmful for the environment, productivity is low and revenues uncertain. This is especially true during periods when the market price of coffee falls and stays low for a while: poverty, like the plague, spreads among coffee farmers. During the coffee crisis of 1999-2002, people in Nicaragua starved to death. Many community organizations attempted to put this problem in the spotlight. And now we are starting to see consumers asking coffee companies about the conditions under which their coffee was produced. Farmers suffer because of a lack of access to modern technologies and information. As a rule, information about prices comes to them from the
ECONOMICS
buyers, and this often leads to unfair bargains. The market prices for coffee are established on commodity exchanges in New York (for Arabica) and London (for Robusta) and conveyed to various commercial entities in the coffee industry. Of course, quality affects the market price of certain varieties of coffee. And farmers can get a better price for their product if they improve its quality and secure additional advantages by pooling their coffee into larger batches and processing the coffee themselves. The use of ecologically backward technologies in production leads to low yields. On top of this, farmers are not interested in changing the set order of things: for example, they often do not separate coffee by quality, do not process green coffee beans and do not seek certification. Under these circumstances it is difficult to achieve stability, especially if the farmers are not very well organized. Progress begins as soon as farmers organize and begin learning together, including learning from each other. Such cooperatives allow them to pool their coffee into bigger batches and sell it in bulk directly to their partners, and also to be more vocal about their own needs. Besides, organizing allows farmers to have better control over product quality and gives them greater influence on the general functioning of the coffee market. Through coordinated efforts farmers become better partners and improve their access to information. My favorite example is the story about the organizing of coffee farmers in Uganda. In this case, the farmers have achieved their highest potential with a little bit of help from the outside. And today they are very protective of their natural resources and pay close attention to every aspect of the production process, starting with Kiboko (dried beans) to FAQ (unsorted green coffee), exercising strict control over quality up to the point of export or retail. Because of this internal and external control, the whole process is open and transparent. Such radical changes allow farmers to make more money and, consequently, provide better education to their children and even put some money into savings. The very idea of organizing can push coffee farmers of Uganda to rethink their approach to growing, processing and selling coffee and to develop their communities into professional organizations capable of providing various services to their members. Such organizations will be reliable commercial partners and will make great contributions to the development of the coffee industry. The most important and relevant aspect of sustainable development for me is the fact that this principle benefits everyone. Farmers can preserve and increase natural resources and improve their income. Businesses will always have access to coffee in necessary quantities and of desired quality and will benefit from a greater professionalism of the farmers and more secure commercial ties. Consumers, in turn, will be able to enjoy a cup of good coffee, knowing that people who grow it get living wages for their work, can afford to educate their children and care about the preservation of natural resources.
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ECONOMICS
C
A Personal Point of View 20 years ago I had zero knowledge of organic coffee. It was explained to me that if the coffee grown in Peru were to be certified as organic, there was a chance that something could be done. As a result, I spent a year and a half learning about organic coffee, and we were the first ones to succeed in getting Peruvian coffee certified. This was difficult for many reasons, but most of all because the local population was illiterate. But the effort was worth it: for the first time in my life I, and the people around me, felt that we were doing something important for the planet, for the farmers and for the producers. We were in the right place at the right time. Still, it was very difficult to talk about the lives of coffee farmers. Coffee business at that time had little transparency: I got the impression that coffee suppliers did not want people to know where the coffee was coming from. They did not lose sleep over the fact that those who harvested the coffee were paid as little as 10 cents a day. But when some of the suppliers finally saw with their own eyes what the life of coffee farmers was like, they pledged to increase the share of organic coffee. But such people were still only a small minority. And then I thought, “What if I start working with women?” In 2003 I brought together 17 women who worked in the coffee industry, and we traveled to Nicaragua. We were shocked by the poverty we encountered there. The lack of electricity, the absence of men in families, widespread hunger… After visiting the only school in the area – no floor, no windows, no doors – we immediately decided to raise $500 to fix it up. In addition to the repairs, the money we collected was enough to pay a teacher’s salary.
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»
offee Has an Aroma of Hope
COFFEE&TEA INTERNATIONAL # 1/2010
This friendly American woman instantly imparts to you her energy and faith in her work. Besides holding the honorable title of the founder and CEO of Elan Organic Coffees, she has organized or participated in a large number of events and competitions. We drank coffee together, and her stories struck a chord deep in my heart. These stories are about the love for coffee, for the planet and for the people; they show the desire to change this world for the better, not an idealistic and naпve desire, but one that is realistic and practical, sober with the knowledge of all the obstacles along the way. Karen is changing people’s lives, and it is hard to remain indifferent to what she does. 20 years ago she herself couldn’t remain indifferent to what she witnessed in Peru, where she came simply to visit her relatives. When she saw the poverty and exploitation of the coffee farmers, she and her relatives became convinced that the international community had to become aware of this problem. Back then Karen Cebreros was far removed from the world of coffee; but she decided that by taking pictures of the coffee farmers, documenting their lives and presenting the materials to a wider audience she could attract some supporters back in the US. During one such meeting someone asked her, “Is this coffee organic?” This, says Karen, is how it all got started. Alena Velichko
ECONOMICS
We asked ourselves, “How can we strengthen poor families and the coffee industry by supporting women?” Through conversations with African women we discovered that 65% of urban women are beaten by their husbands; in rural areas, this number was as high as 85%. We decided to do something about it. Our next step was a discussion meeting in Boston, with 70 women in attendance. Then we went on to organize the first conference devoted to the issues of women involved in the African coffee industry. This conference was attended by representatives from 10 African countries. The only man who participated was Nestor Osorio, who represented the International Coffee Organization (ICO). He was very supportive. During many years working with African women I have witnessed their propensity to take the smallest opportunity to improve their seemingly hopeless situation. As soon as they begin to feel that their life and their work with coffee are regaining stability, they immediately start helping other poor women. I have met many women in various African countries: they all strive to start their own small businesses. I think, in general, that women have an inner strength that allows them to get their business going, in order to help themselves and their families. It is precisely for this reason that the program of giving microloans to African women has turned out to be such a success, for the women themselves and for the coffee industry as a whole. This program and consumers’ conscious choice to buy products grown by African women are small steps that are helping to improve the current state of affairs, when 3 billion people are making just $1 a day. When you realize that when you buy organic coffee, a portion of your money is helping those who harvested it, you see your purchases in a totally different light. Business is, in my view, a very effective tool for bringing about a change in the world. In the coffee business, there are plenty of those who talk about
sustainable development, many more than in any other industry. It is very important to find those who are willing to take risks and
promote organic coffee, to see this product as having a potential. It may start with just one bag of organic coffee; then there will be more. In time, people will make a conscious choice to buy organic coffee. For example, in 2008 we had the greatest sales volume of this kind of coffee. It is increasingly in demand; people are learning to vote with their dollars, realizing that every single coffee bean matters to the stability of the planet. When the very first Mexican farmer who started growing organic coffee was asked why he was doing it, he replied, “We need organic coffee because our rivers are polluted, our soils are depleted and our children are getting sick and dying. We have no choice – we must farm in harmony with nature”. Everything we do is based on our core values. Our mission is to establish connections between people, businesses and countries. The most important thing is education: we need to tell people about the long chain of events leading up to the cup of coffee on their table, and about ways of supporting those who are at the beginning of this chain. Then there will be hope that a vast multitude of people in this world will see significant improvements in their lives.
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WHO IS WHO?
N E W S
R E L E A S E Corporate Headquarters 96 South George Street York, Pennsylvania 17401 U.S.A. www.glatfelter.com
CONTACTS: Investors: John P. Jacunski (717) 225-2794 john.jacunski@glatfelter.com
Media: William T. Yanavitch (717) 225-2747 william.yanavitch@glatfelter.com
GLATFELTER ANNOUNCES EXECUTIVE SUCCESSION PLAN • •
Current Chairman and CEO George H. Glatfelter II to retire as CEO effective December 31, 2010 and will remain on the Board as Non-Executive Chairman for a brief transitional period Dante C. Parrini, currently Executive Vice President and Chief Operating Officer, to succeed Mr. Glatfelter as President and CEO and will join the Board of Directors
YORK, Pennsylvania – (June 3, 2010) – Glatfelter (NYSE: GLT), a global manufacturer of specialty papers and fiber-based engineered products, today announced an executive succession plan under which Chairman and Chief Executive Officer George H. Glatfelter II will retire as CEO on December 31, 2010, and Dante C. Parrini, the company’s Executive Vice President and Chief Operating Officer, will be promoted to President and Chief Executive Officer concurrent with Mr. Glatfelter’s retirement. Mr. Parrini also will join the company’s Board of Directors effective immediately. Mr. Glatfelter (58), who has been Chairman since 2000 and CEO since 1998, will remain on the company’s Board of Directors as its Non-Executive Chairman for a brief transitional period, after which time a new Chairman will be elected. Mr. Parrini (45) has been with the company for 12 years. “Over the last 12 years, we have made significant progress in repositioning our company to benefit our shareholders by creating a dynamic market-facing business model based on nimbleness, innovation, global reach and solid execution,” Mr. Glatfelter said. “We’ve also built a talented senior executive team that has generated an impressive track record of results. My personal interest has always been to retire at an age when I retain the ability to pursue other challenges and opportunities that life has to offer. I believe the time is now right – when the company is strong – for a seamless, orderly and progressive leadership transition within the company. Dante Parrini is a proven leader with the vision, energy and drive needed to capitalize on the growth opportunities before us. I have absolute confidence in his abilities. He is the right person to lead this company forward.” “I am honored that George and the Board of Directors are entrusting me with the responsibility to lead Glatfelter into this next chapter of its storied corporate history,” Mr. Parrini said. “Over the years, George has set a high standard for all of us in terms of his knowledge of the company, its culture and the industry, as well as his appreciation and respect for customers and Glatfelter PEOPLE around the world. As I look to the future, I am committed to accelerating our progress in our specialization, globalization and continuous improvement initiatives. I believe that all three of our business units have the ability to continue to gain market share and increase their specialization focus. As Glatfelter continues to expand in scale and develop new lines of business, it will be important for us to leverage organic growth as a key driver of future earnings while maintaining a strong balance sheet in order to provide financial flexibility.” Glatfelter’s Board of Directors has been actively involved in the succession planning process since first advised by Mr. Glatfelter of his retirement interest. The Board’s succession planning capabilities were augmented by external consultants engaged by the Board’s Nominating and Corporate Governance Committee to facilitate the process and ensure best practices in the succession planning process. After a thorough and deliberate process, the Board unanimously elected Mr. Parrini as the successor to Mr. Glatfelter.
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COFFEE&TEA INTERNATIONAL # 2/2010
WHO IS WHO?
Mr. Lee Stewart, Chairman of the Nominating and Corporate Governance Committee, commented, “Mr. Glatfelter and Mr. Parrini have been key architects of the company’s growth strategy, including overseeing four acquisitions in the United States, Canada and Europe that nearly tripled the company’s revenues since 2005 while diversifying its business portfolio and expanding its global footprint. In addition to growth through acquisitions, the company’s other ongoing priorities include driving organic growth through product innovation and customer collaboration, realizing the company’s international growth potential, and continuing to translate top-line growth into bottom-line results. The Board deeply appreciates the contributions of Mr. Glatfelter over the years and is confident in Mr. Parrini’s ability to lead the business forward to achieve new levels of shareholder value.” After his appointment to CEO in 1998, Mr. Glatfelter was instrumental in codifying the company’s Core Values. These values, coupled with the Vision of the company to “become the global supplier of choice in specialty papers and engineered products,” helped guide Glatfelter through a comprehensive transformation of its business during a difficult period in the history of the paper industry to become a world leader in the production of technically sophisticated specialized papers. Earlier this year, in another signature event during Mr. Glatfelter’s tenure, the company completed its largest acquisition, the purchase of Concert Industries Corporation, the leading global producer of advanced airlaid materials for the growing global feminine hygiene and adult incontinence markets. Mr. Glatfelter represents the fifth generation of the Glatfelter family to lead the company, which was founded by his great-greatgrandfather, Philip H. Glatfelter, in 1864. Prior to serving as Chairman and CEO of Glatfelter, Mr. Glatfelter was the company’s President and, before that, Senior Vice President. During his 34 years with the company, Mr. Glatfelter has held positions in human resources, maintenance and engineering, operations, planning, and sales and marketing. Mr. Glatfelter has more than 15 years of experience as a director of public companies, including serving as a director of Met-Pro Corp. since 2004. He is also a trustee of York College of Pennsylvania, the American Forest and Paper Association, The National Council for Air and Stream Improvement, and The Alliance for the Chesapeake Bay. Mr. Parrini started his career with Glatfelter in 1997 and has been Glatfelter’s Executive Vice President and Chief Operating Officer since 2005. With full global P&L responsibility in his EVP and COO capacity, Mr. Parrini has been charged with leading worldwide operations, international and domestic sales, marketing, new product development, global supply chain, information technology and corporate program management. A native of Erie, Pennsylvania, Mr. Parrini holds a bachelor’s degree in marketing from Gannon University, an executive MBA from the University of New Hampshire, and is a graduate of Harvard Business School’s Advanced Management Program. In October 2009, he received Gannon University’s Distinguished Alumnus Award for the School of Business & Engineering.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS Any statements included in this press release which pertain to future financial and business matters, are “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and are subject to numerous risks, uncertainties and other unpredictable or uncontrollable factors which may cause actual results or performance to differ materially from the Company’s expectations. Various risks and factors that could cause future results to differ materially from those expressed in the forwardlooking statements include, but are not limited to: changes in industry, business, market, political and economic conditions in the U.S. and other countries in which Glatfelter does business, demand for or pricing of its products, changes in tax legislation, governmental laws, regulations and policies, initiatives of regulatory authorities, acquisition integration risks, technological changes and innovations, market growth rates, cost reduction initiatives, finalization of the allocation of the Concert purchase price, and other factors. In light of these risks, uncertainties and other factors, the forward-looking events discussed in this press release may not occur and readers are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements speak only as of the date of this press release and Glatfelter undertakes no obligation, and does not intend, to update these forward-looking statements to reflect events or circumstances occurring after the date of this press release. More information about these factors is contained in Glatfelter’s filings with the U.S. Securities and Exchange Commission, which are available at www.glatfelter.com.
ABOUT GLATFELTER Headquartered in York, PA, Glatfelter is a global manufacturer of specialty papers and fiber-based engineered products, offering over a century of experience, technical expertise and world-class service. U.S. operations include facilities in Spring Grove, PA and Chillicothe and Fremont, OH. International operations include facilities in Canada, Germany, France, the United Kingdom and the Philippines, a representative office in China and a sales and distribution office in Russia. Glatfelter’s sales approximate $1.4 billion annually and its common stock is traded on the New York Stock Exchange under the ticker symbol GLT. Additional information may be found at http://www.glatfelter.com/.
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COFFEE&TEA INTERNATIONAL # 2/2010
SCIENCE
What Do We Know About Coffee and Health?
MYTHS AND LEGENDS This was the title of the presentation given at the 2-nd Moscow International Coffee Forum 2010 by Astrid Nehlig, a research director at the French National Institute for Health and Medical Research. The topic Coffee and Health is of interest not only to consumers, but also to many people involved in the growing coffee industry in Russia who lack education in this area. This is why the RosTeaCoffee Association, as a leading industry organization, took the initiative in organizing this seminar. The French scientist’s report, which generated great interest among the guests of the Forum, was made possible by the Orimi Trade company, the leader in the roasted and ground coffee market segment, a company that pays close attention to scientific research on coffee and tea and provides financial support to such research in Russia. offee is one of the most complex beverages, containing more than 2000 different substances. The most well-known of them is caffeine, but there are many others: proteins, vitamins, calcium, etc. Another important component of coffee is antioxidants, such as polyphenols and diterpenes, that scavenge free radicals and detoxify cells. Let’s look at Slide 1. If we look at the total daily food and fluid intake, measured in milliliters, we can see that the most common fluid consumed is coffee. Slide 2 shows us
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the daily amount of antioxidants consumed in various beverages; coffee is at the top here as well. It delivers three times as many antioxidants as tea, four times as many as chocolate and far more than any other food. Slide 3 shows how tea and coffee compare to other beverages in terms of their antioxidant content; coffee is once again the leader, containing 2.5 times more antioxidants than tea. The caffeine content of one cup of coffee – 150 milliliters – can be seen on Slide 1. We should remember that contemporary science defines the high level
COFFEE&TEA INTERNATIONAL # 2/2010
of coffee consumption as 5 or more cups a day, and low to moderate level as 1 to 3 cups a day.
LET’S LOOK AT THE GENERAL EFFECTS OF COFFEE AND CAFFEINE ON THE HUMAN BODY
We are interested primarily in the level of consumption classified as low to medium – from 50 to 250 milligrams in one sitting (one small cup to two large cups). At this level the effects of coffee are positive: we feel refreshed and relaxed, our mood improves,
SCIENCE
our energy increases, as well as our alertness, reaction speed and the ability to concentrate. At high and very high levels of consumption, i.e. 400 to 800 milligrams in one sitting (4 to 8 large cups), negative effects become more pronounced: nervousness, irritability, aggressiveness, insomnia, tachycardia and tremor. We can see that the moderate level of coffee consumption is optimal and does not carry any health risks.
THE IMPACT ON THE CENTRAL NERVOUS SYSTEM
It is widely believed that sleep is the function that is the most sensitive to the effects of coffee and caffeine. Many people avoid drinking coffee in the afternoon, after 3 or 4 PM, or do not drink it at all. If you ingest 100 to 200 milligrams of caffeine (1 to 2 cups of coffee) at bedtime, you will experience the characteristic effects of a delay in the onset of sleep and a reduced quality of sleep. The most significant impact is during the deep sleep phase, while the REM sleep remains largely unaffected. The effects can last 3 to
4 hours, sometimes even longer. It has to be noted that sensitivity to coffee varies depending on the subject: some people can drink coffee before bedtime and still have a deep and restful sleep. It has been shown that sensitivity to caffeine, regardless of its degree, is linked to the polymorphism of the adenosine receptor A2A.
WHAT ARE THE TYPES OF EFFECTS OF COFFEE AND CAFFEINE ON OUR MOOD, PRODUCTIVITY AND ALERTNESS? Numerous studies have shown that low doses of caffeine (20 to 200 milligrams in one sitting) have a strongly positive effect on our mood, reaction speed and overall well-being, because of the improvements in the ability to concentrate, the ability to perform intellectual tasks and self-confidence. The effects of this type are the most pronounced during times when the overall alertness is low, such as after dinner, when our senses are not as sharp, during a cold, during the performance of a repetitive, monotonous task or during a night shift.
It has also been proven that there is a positive effect on visual perception. Drivers, for example, get better at noticing road signs and reacting to them, and improve their reaction times during breaking and accelerating. If a driver becomes drowsy on the road, a cup of coffee will have the same positive effect as a 15-minute nap. Another common belief is that coffee and caffeine help with memorization. Students who study late at night count on this. However, there is no direct link here: caffeine does not have a direct effect on memory and productivity. Rather, caffeine lessens fatigue, increases reaction speed and the ability to concentrate and, as a consequence – the ability to manage information.
COFFEE AND CAFFEINE HELP RELIEVE HEADACHES AND MIGRAINES Studies have repeatedly shown that caffeine in coffee can help relieve headache and migraine. At the same time we need to remember that at high levels of consump-
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SCIENCE
tion, many times greater than average, coffee and caffeine can indeed cause the feelings of anxiety. Some people, however, can get the feeling of anxiety even after consuming small amounts of coffee. These are people who are generally very sensitive, they are a small minority; this reaction is linked to the polymorphism of the adenosine receptor A2A that was mentioned earlier. Usually, people who have high sensitivity get the feeling of anxiety immediately, so they stop drinking coffee right away.
RECENTLY THERE HAS BEEN A LOT OF RESEARCH ON THE EFFECTS OF COFFEE ON AGE-RELATED DECLINE IN COGNITIVE FUNCTION Let’s see some examples. One of them is a 10-year study of a group of 676 healthy men who were born between 1900 and 1920. This study took place in Finland, Italy and the Netherlands. The subjects had their cognitive function tested by means of a standard state examination. The results of the study were interesting: those who drank 1-2 cups of coffee a day saw their cognitive function score decline from 2.5 to 1, those who consumed 3 cups had a smaller decline, while those who
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drank 4 or more cups experienced no decline at all. The study has shown that coffee intake is inversely proportional to the decline in cognitive function in elderly European men. Two other recent studies, which looked at gender-related differences, also found a link between coffee and the improvement of cognitive function. However, the positive effect was limited to women only; no improvement has been observed in men. Moreover, the effect was greater in women over 80 years old, compared to women who were 60 to 75 years old. Thus, it looks like there are gender-related differences in the effect of coffee on the cognitive function; the cause of these differences will need to be clarified. Also, the protective effects on cognitive function in the elderly seem to be mainly due to caffeine; the possible role of antioxidants will require further study.
COFFEE, CAFFEINE AND PARKINSON’S DISEASE
Recent studies in men have shown that those who consume 3-4 cups of coffee a day show are 2 to 5 times less likely to develop Parkinson’s disease than those who do not drink coffee at all.
COFFEE&TEA INTERNATIONAL # 2/2010
For women, the situation is much more complicated. The same reduction in the risk of developing Parkinson’s is observed in women who had no hormone therapy; but in those women who were treated with hormones the risk is increased, and the mechanism of interaction with caffeine is still unknown.
THE EFFECT OF COFFEE AND CAFFEINE ON ALZHEIMER’S DISEASE
According to recent studies, people who consume 3 to 4 cups of coffee a day reduce their risk of developing Alzheimer’s disease by 27% compared to those who do not drink coffee at all. One study in Finland found that people who drink 3 to 5 cups of coffee a day reduce their risk by 64% compared to moderate coffee drinkers. It was also shown that the interaction of ferulic acid and antioxidants found in coffee has a significant positive effect on the cognitive function. In this area of research much remains unclear; first of all, the database is limited in size, second, the studies include few subjects and, finally, there haven’t been any longterm studies. The mechanism by which coffee produces its effects is still unclear. It has
SCIENCE
been shown that both caffeine and ferulic acid can slow down the onset of the Alzheimer’s disease and reduce its symptoms; but in order to prove this conclusively, many more studies are needed.
COFFEE AND CARDIOVASCULAR SYSTEM This topic deserves special attention, because there has been a lot of debate about possible negative effects of caffeine on the heart. Recent studies have not found any connection between low to moderate coffee consumption (up to 5 cups a day) and the incidence of myocardial infarction (heart attack) and coronary disease. On the contrary, it was found that those who drink 1 to 5 cups of coffee a day reduce their risk of dying from heart disease by 13-53%. Also, no connection has been established between low to moderate coffee consumption and arythmia in studies both on healthy subjects and on patients with arythmia.
TWO MORE CONTROVERSIAL TOPICS: BLOOD PRESSURE AND CHOLESTEROL Normal coffee consumption causes a very moderate increase in blood pressure: the systolic pressure goes up 1.2 mm and the diastolic pressure rises 0.5 mm. This rise is comparable to the one that takes place dur-
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ing a normal conversation. When caffeine is ingested in pure form, i.e. not as a component in coffee, the corresponding numbers are 4.2 mm and 2.4 mm. What’s interesting is that the effect of coffee is not greater in patients with hypertension. The connection between coffee and cholesterol has been debated since old Scandinavian studies found a positive correlation. But this connection was due to the particular way of preparing coffee: the coffee was unfiltered and boiled. The effect is indeed typical in countries where this method of preparing coffee is used. The shift to filtered coffee eliminated the correlation, since all the lipids contained in the coffee bean are retained by the filter. The correlation between high levels of cholesterol and coffee consumption can still be observed in countries where people drink Turkish coffee. Two of the lipids in the coffee bean – caffeol and cafestol – have been found responsible for raising cholesterol levels.
NOW WE TURN TO THE CONNECTION BETWEEN COFFEE AND TYPE 2 DIABETES
A meta-study (a survey of published studies) published in 2002 found that coffee prevents type 2 diabetes, which is not caused by the lack of insulin in the pancreas, but rather by bad nutrition and
COFFEE&TEA INTERNATIONAL # 2/2010
sedentary lifestyle. Studies conducted in America, Europe and Asia have discovered that moderate to high coffee consumption – 3 to 7 cups a day – reduces the risk of type 2 diabetes by 20-60%. The results were similar for men and for women, regardless of the level of obesity; also, decaffeinated coffee is as effective as regular coffee. It has been established that antioxidants found in coffee help reduce metabolic stress and regulate glucose metabolism. The mechanism behind this effect has not been fully understood; it has been suggested that it is due to magnesium, one of the substances found in coffee (7 milligrams per cup).
COFFEE AND CANCER
First of all, no connection has been found between coffee and cancer in reproductive system (breast, ovarian and prostate) and cancer of kidney and urinary tract. A weak possibility of a connection has been found in studies on coffee and pancreatic cancer. But the evidence is not conclusive because of the presence of other factors such as smoking. In fact, a recent review of the subject has shown that low to moderate consumption of coffee (1 to 4 cups a day) reduces the risk of pancreatic cancer, while high consumption (more than 4 cups) as well as no consumption at all may increase the risk.
SCIENCE
Sometimes a weak correlation exists between coffee and bladder cancer; but again, there are many other factors present that make it difficult to get a clear picture. Among those factors are smoking, a patient’s diet and also a large increase in liquid intake during the last phase of the disease. A strong protective effect of coffee has been noted for cancers of the digestive tract: mouth, throat, esophagus and stomach. In the case of colorectal cancer, there is a strong inverse correlation between coffee consumption and the risk of developing the disease; maximal protection is achieved at high levels of consumption (over 4 cups a day). Concerning possible mechanisms behind the effects of coffee on cancer, we know that coffee contains polyphenols and diterpenes, which have antioxidant and antimutagenic properties. It is also important to note that coffee and caffeine stimulate colon motility and thus reduce the time of contact of mutagenic substances with the intestinal mucosa. A lot of studies have been done recently on the effects of coffee on the liver. All these studies confirm that there is a strong inverse correlation between coffee consumption and the development of cirrhosis and liver cancer, with the effect becoming pronounced at the level of 3 or more cups a day. Again, we are not exactly sure which components of coffee are responsible for the effect; most likely, it is the antioxidants.
CONSUMPTION OF COFFEE AND CAFFEINE BY PREGNANT WOMEN Our conclusions are based on the latest studies in which pregnant women gave detailed answers to daily questionnaires about the exact amounts of coffee and caffeine they consume. In addition, ultrasound imaging was used to monitor the development of the fetus during pregnancy. These studies have shown that caffeine consumption has no effect whatsoever on fertility, risk of miscarriage, growth and development of the fetus, premature birth, birth weight, birth defects and postnatal development, provided that the level of consumption is medium, i.e. no greater than 2-3 cups a day, which amounts to the total caffeine
intake of 200-300 milligrams from all sources.
IN CONCLUSION, SOME PRACTICAL ADVICE. It is very important to reduce caffeine consumption during the final stages of pregnancy, because during the third trimester the biological halflife of caffeine increases to 10.5 hours from 2.4 to 4.5 hours prior. This number is even higher in the fetus – about 100 hours. High coffee consumption during the last stages of pregnancy can result in irritability and nervousness in the newborn, because by the time of birth the concentration of caffeine in the mother’s milk becomes very high. Here we need to mention the second piece of advice: since caffeine enters the mother’s milk, lactating mothers should drink their coffee after feeding the baby and not before, because of the long half-life of caffeine in the newborn.
SUMMARY: WHAT ARE THE EFFECTS OF COFFEE ON THE HUMAN BODY? Coffee increases the sense of well-being and productivity, helps increase alertness
and reaction speed, but can lead to sleep problems. Next, we know that coffee can prevent and lessen the symptoms of agerelated decline in cognitive function, especially in women. Coffee helps prevent Parkinson’s disease and Alzheimer’s disease and also stomach and intestinal cancer, colorectal cancer, cancer of the liver and type 2 diabetes. Coffee has no negative effect on the functioning of the cardiovascular system and can be safely consumed in moderate amounts during pregnancy; however, excessive consumption of coffee can be harmful. The research on the various effects of caffeine on the human body needs to continue. At this point, though, we can conclude that moderate levels of coffee and caffeine consumption can have a pronounced positive effect on health and well-being and that coffee can be a part of a healthy and balanced diet.
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COFFEE THE TOURIST WAY…
… THE FASHIONABLE WAY…
The long parade of cafes is opened by CafÙ Griensteidl, located near the exit from the Hofburg Palace. Your first-day architectural impressions must be immediately reinforced by an apple strudel and a cappuccino. The first coffee in Vienna cannot be forgettable, just as Viennese coffee, in general, cannot be “just coffee”. It’s Viennese! So, for 3 Euros plus change you get your first impression of Vienna.
Coffee machines in shop windows pull you in stronger than brand-name shops nearby, and chain stores seem to be selling coffee by the kilo. Bu here’s the problem: if you stop at a Tchibo to buy coffee, you will leave with rolls, pastries and, ideally, with stencils for cappuccino decoration, slippers, a tie and an iron. Such packages are easy to put together, but you’ll have to wait in line to buy: the number of visitors here can easily rival the crowds in souvenir shops.
C
d n a e e f f o
Elena Tregub
… THE PARLIAMENTARY WAY…
spe
Cafй Landtmann is worth visiting not only because it is famous for its history as a political club, located not far from the luxurious Parliament building, and not only because it is famous for its selection of newspapers in many languages of the world. The main reason is that few other places can count as many ways of preparing coffee. Needless to say, failing to pay a visit would have been inexcusable. After you walk in, you realize that making a selection is a hopeless affair. You decide on a Maria Therezia for 6.5 Euros, seduced by its intriguingly feminine name. This beverage, which turns out to be a double espresso with orange liqueur,
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a n n e i
Every square meter of Vienna contains so much coffee that even the most die-hard coffee lover would be intimidated by the number of cups he will have to drink. Thus, in order not to miss anything, you should plan your route not only around castles, cathedrals and museums. You must also visit some of the numerous cafes, pastry shops and restaurants. This will ensure that the true feeling of Vienna will stay with you for a very long time…
e r u s a e l p ll
whipped cream and curly orange zest, leaves you absolutely certain that life is worth living. The same effect can be achieved by tasting a Mozart Kaffee with the namesake liqueur and almonds, or a Franz Landtmann Kaffee with brandy, coffee liqueur and cinnamon, or a Kaffee Sobieski, which is basically a double espresso with vodka and honey served separately, or a Fiaker with Kirsch (a potent alcoholic beverage made from cherries), and, of course, an Irish Coffee with Irish whiskey and sugar. The foundation of all these works of art is a double espresso with the mandatory cloud of whipped cream. Alcohol-free coffee and hot chocolate boast just as many varieties as “fortified” coffees. In all, life is good for those who work nearby, at the local Parliament…
COFFEE THE CONFECTIONARY WAY… Just a few steps from the first coffee stop is the second one, just as significant – Demel. You do not need to know the address – you won’t be able to miss mountains of mouth-watering creations in the shop windows. To use words like “pastry”, “cake” and “candy” to describe all this confectionary whirlwind seems inappropriate. Even before a waiter arrives, a coffee aroma announces the main attraction. For only 4 Euros you can have a cup of cappuccino with an enormous cap of milk foam all to yourself, to drink or simply to look at as you please. The main thing to note: every cafй in Vienna will serve you a glass of water with your coffee, without even asking whether you want it or not. You very quickly learn the “proper” Viennese way of drinking coffee: a sip of water after a sip of coffee allows not only to cleanse the palate, but also to extend the pleasure. Isn’t this what our stroll is all about?
… THE TRADITIONAL WAY… The only place to taste an authentic Sacher-torte, with a 175-year history and a chocolate seal, is the cafй with the same name, located near the Vienna State Opera; be sure to complement it with Wiener Melange. The coffee that appears on your table is a
… AND THE «NORMAL» WAY
true work of art; but it is hard to muster the will-power to admire it for too long. After you have settled down at a
What’s familiar is not so much the coffee itself as the atmosphere. The same menus, displays, couches and cups as you see in a Starbucks in any other country. It doesn’t seem to matter what language you speak when you order coffee. The only difference between a Viennese and a Moscow latte is the price of 3.9 Euros. This is the only place where they will not bring you a glass of water with coffee, lest you forget that the Kingdom of Starbucks lives by its own law!
table on a hedged terrace with a huge beautiful cup of Melange in front of you (4.4 Euros), you can’t resist the desire to remain hidden from the hectic life outside for a couple of hours. It seems that people here do not know how to hurry. They simply drink coffee and admire great Baroque architecture across the street.
IN VIENNA IT IS BAD MANNERS TO EAT AT HOME. At least, you cannot help thinking this if you look at the number of restaurants. Even in the most crowded places, which are not that common in the imperially calm Vienna, you can always find a seat for breakfast, lunch, dinner or a meditation with a cup of coffee. No one is ever in a hurry here. It is simply unnatural. If you happen to see someone working behind a notebook with a cup of coffee, you are certainly not in Vienna anymore. Here pleasure is never mixed with business. The most difficult task you can allow yourself to undertake is to read about where the famous candied violets are sold, to learn that properly prepared dough for an Apfelstrudel (apple strudel) is so thin you can read a newspaper through it, that the number of versions of the origin of the tradition to serve a glass of water with coffee obscure the fact that the water must be straight from the faucet (not bottled or filtered – the people of Vienna are enormously proud of the quality of their water) and, finally, that during the times when coffee was an unimaginable luxury it used to be ordered by color, using a special chart brought by the waiter. Vienna is not Vienna without coffee, believe me. And if you have an opportunity, go and see for yourself.
ADVERTISER INDEX
MAI S.A.
AHMAD TEA LTD.
MARTIN BAUER GROUP
ELISENTAL
MAI S.A. SOLIS 8250 B7608FLR - Mar del Plata, Argentina Tel.: (54-223) 482-1817 Fax: (54-223) 481-0234 mdp@maisa.com.ar, www.maisa.com.ar
AHMAD TEA LTD. Tel: +44(0)23 8027 8900 Fax: +44(0)23 8025 5867 www.ahmadtea.com Official distributor in Russia: «SDC-FOODS» Ltd. www.ahmadtea.ru report@ahmadtea.ru Moscow: Tel: +7(495) 234 69 91 Fax: +7 (495) 234 69 95
ORIMI TRADE, Llc.
KLD COFFEE IMPORTERS
Martin Bauer GmbH & Co. KG Worldwide Contact: Tel.: +49 9163 88-0 welcome@martin-bauer.com www.martin-bauer-group.com Russian Contact: Tel.: +7 (495) 777 5429 welcome@martin-bauer.ru www.martin-bauer.ru
GLATFELTER COMPOSITE FIBERS BUSINESS UNIT
KLD COFFEE IMPORTERS 9 Pushkarev Pereulok Moscow, 107045, Russia Tel.: +7 (495) 223 0347 Fax: +7 (495) 223 0349 office@kld-coffee.ru www.kld-coffee.ru
ZWIRNEREI A.D. WUTACH GmbH
Worldwide contact: GLATFELTER Gernsbach GmbH & Co. KG Phone: +49 7224 66 0 composite.fibers@glatfelter.com Russian contact: GLATFELTER Russia Phone: +7 495 775 69 22 service.russia@glatfelter.com www.glatfelter.com
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COFFEE&TEA INTERNATIONAL # 2/2010
DRAHTWERK ELISENTAL W. Erdmann GmbH & Co Werdohler Str. 40, 58809 Neuenrade P.O. Box 1260, 58804, Neuenrade, Germany Phone: +49 2392 697-31 Fax: +49 2392 697-39 teabag@elisental.de, www. elisental.de
Zwirnerei a. d. Wutach GmbH ..
P.O. Box 1163, 79780 Stuhlingen/ Germany Phone +49 7744 9396-0 Fax +49 7744 9396-20 info@zwirnerei-wutach.com www.zwirnerei-wutach.com
ORIMI TRADE, Llc. 3, Tobolskaya str., St. Petersburg, 194044, Russia Tel: (812) 346 82 40 Fax: (812) 542 15 01 market@orimitrade.ru www.orimitrade.ru