December 2007 by CoffeeTalk Magazine

2 December 2007

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Welcome W

e are proud to bring you this compilation of articles from some of the brightest and most influential leaders

in Coffee. As our industry moves into 2008, we carry the legacy of 2007, a year that demonstrated just how dynamic, and volatile, coffee can be.

Kerri and I are privileged to watch the sweep of events during

2007 and, in small ways, to also play a part. We exist in a global village predicated on mutual understanding. The challenges of agriculture in underdeveloped countries does not exist exclusively from the challenges of the specialty, financial, and commodity markets, nor do these operate independently of retailers and consumers. We are all locked together in a circle of dependency.

In this publication, we present you with views from many

different perspectives, each with unique and very personal opinions on the course of our industry. Taken as a complete piece, these articles will provide you with a broad view of the direction and purpose of the coffee industry during 2008. We hope you enjoy, and we look forward to next year.

Miles Small Editor, CoffeeTalk Magazine

ps. If you would like to add your opinions to the discussion, please contact us. We are eager to hear from you.

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How to use this document T

his State of the Industry Report is a document of exceptional value if viewed as a whole idea. Each article is a unique perspective by an industry leader. Their topics address key qualities and challenges they, or their companies, professionally face. If you decide to cherry pick a few articles to read then you will be greatly enriched. However, we recommend that you read the entire document. If you do, you will find a deep three-dimensional view of our Global Industry and gain insights into the interactions and shared responsibilities we all play in continuing the success of specialty coffee. Maneuvering around the document is easy. The report is in .PDF format and is easy to download to any computer. You will require Acrobat Reader to view it on your computer. If you do not have Acrobat Reader by Adobe, you can download a copy from Adobe free at http://www.adobe.com/. The Table of Content pages are hyperlinked to their matching stories. Move the hand cursor over the title of a story, when the hand turns into a finger, click your mouse and you will pop to the article. At the bottom of each article is a navigation tool that, when clicked with you mouse, returns you to the Table of Contents. Of course, you can also scroll through the document using your scroll bar or the ‘pages’ tab on the PDF desktop. You can easily print any or all pages of the document. Simply go to ‘File’ click print, and follow the prompts.

Our Sponsors T

his extraordinary document would not have been possible without the support and encouragement of the companies that sponsored advertising to cover the report’s costs. We appreciate their support of this report and encourage readers to support these sponsors too.

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5 December 2007

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6 December 2007

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Table of Contents and Contributors 2- Welcome 4-How to use this document 8-Sponsor’s Index 10- The State of the Industry – 2008

By Donald N. Schoenholt SCAA 2007 Lifetime Achievement Laureate

16- Report From the Executive Director Desk at The SCAA 18- CQI

By Ted Lingle What has CQI accomplished in 2007 and what does 2008 promise for CQI?

20- Runnin’ with Dunkin’

34- Big year for TransFairUSA

By Paul Rice, CEO, TransFair USA

36- Organic Coffee Market Continues It’s Dramatic Growth

By Sandra Marquardt, President of On the Mark Public Relations.

37- State of the Industry – an equipment company’s view

By Ric Martin, Vice President, Espresso

38- Taking the Higher Road, Guatemala’s commitment to quality pays off

By Mr. Christian Rasch, President – Guatemalan National Coffee Association

39- The State of the Industry – a growers view

By Dr. Maria Ruiz

By John Luther

22- Quality endures

By Ellen Jordan Reidy

24- Commodity Primer - Why it is imperative for Specialty Retailers to understand commodity markets ?

Mail:

Phone:

By Judith Ganes-Chase

26- Cup of Excellence® - 2007

By Rick Peyser

30- Investing in the Future:

Coffee Kids and a Changing Industry By Bill Fishbein, Founder of Coffee Kids

32- 11 years, 12,000 lives: Reflections on a decade with Grounds for Health

Since 1988

By Susie Spindler

28- Los Meses Flacos

By Dan Cox, co- founder

HNCT, LLC, 23712 49th Ave SW Vashon, WA 98070 206.686.7378 Fax: 206.463.0090 www.coffeetalk.com

Publisher/CEO

Kerri Goodman-Small, ext 22

Kerri@coffeetalk.com

Editorial Editor-in-Chief

Miles Small, ext 27

Miles@coffeetalk.com

Editorial Coordinator Marketing Partner

Libby Smith, ext 251

Libby@coffeetalk.com

Advertising Marketing Partner Marketing Partner

Darcie Guyer, ext 243 Tamera Schultz, ext 245

Darcie@coffeetalk.com Tamera@coffeetalk.com

Production Daily Dose and Ad Production Production Manager Production

Justin Goodman, ext 264 Marcus Fellbaum, ext 261 Rene Eggert, ext 262

Justin@coffeetalk.com Marcus@coffeetalk.com Rene@coffeetalk.com

Founder Founder/CEO (Emeritus) retired

Ed Sanders, ext 23 Linda Sanders, ext 241

EdS@coffeetalk.com LindaS@coffeetalk.com

Hospitality News does not assume the responsibility for validity of claims made for advertised products and services. We reserve the right to reject any advertising. Although we support copyrights and trademarks, we generally do not include copyright and trademark symbols in our news stories and columns. Circulation: Hospitality News (ISSN 1084-2551) is mailed monthly (10 times per year) with combined June/July and November/December issues, also bonus mailing/ distribution for Education Guides and foodservice/hospitality and coffee conventions/shows throughout the year. Postmaster: Send address changes to HNCT, LLC, 23712 49th Ave SW, Vashon, WA 98070 Subscription: The cost of a subscription in the U.S. is $47.50 per year; in Canada, the cost is $72.00. Free to qualified industry professionals. Non-qualified requests may be rejected. Publisher reserves the right to limit the number of free subscriptions. For subscription inquiries, please call 206.686.7378 x51 or subscribe online at www.HospNews.com. Copyright © 2006, Hospitality News, All Rights Reserved.

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Sponsor’s Index Company.........................................Phone.............................. Web Page.................................... Page # “America’s Food Technologies, Inc./AMFOTEK”........708.532.1222..................................................www.amfotek.com.........................................................13 Big Train Inc..............................................................................800.BigTrain..................................................www.bigtrain.com..........................................................9 Boyd Coffee Company..........................................................800.545.4077..................................................www.boyds.com.............................................................15 BriteVision.................................................................................877.479.7777..................................................www.britevision.com.....................................................27 Bunn-O-Matic Corporation.................................................800.637.8606..................................................www.bunn.com...............................................................19 Cafe de El Salvador................................................................503.2267.6600...............................................www.salvadorancoffees.com....................................33 Coffee Holding Company.....................................................800.458.2233..................................................www.coffeeholding.com..............................................25 Everpure....................................................................................800.323.7873..................................................www.everpure.com.......................................................31 F. Gavina & Sons.....................................................................800.428.4627..................................................www.gavina.com............................................................5 Frey-Moss Structures...........................................................800.366.6385..................................................www.frey-moss.com.....................................................17 Java Jacket..............................................................................800.208.4128..................................................www.javajacket.com.....................................................21 Millrock......................................................................................800.645.7625..................................................www.millrock.com..........................................................11 Monin Gourmet Flavorings..................................................800.966.5225..................................................www.monin.com.............................................................3 S&D Coffee Inc........................................................................800.933.2210..................................................www.sndcoffee.com.....................................................35 School of Coffee......................................................................802.244.6176..................................................www.coffeelab.com/courses.....................................29 Torn Ranch................................................................................800-721-1688................................................www.tornranch.com......................................................23 Vita-Mix Corporation.............................................................800.437.4654..................................................www.vitamix.com/foodservice..................................7

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The State of the Industry – 2008 By Donald N. Schoenholt 2007 SCAA 2007 Lifetime Achievement Laureate

here is reason for people with a special interest in coffee to rejoice. The trade is moving past several years in which it was beset with challenges, and toward a new consumer consciousness, and continued, though hard earned, growth for the specialty coffee category. Green Arabica coffees have advanced in value by about 18% since May 1st and, according to the International Coffee Organization (ICO), the value of Colombian Milds in New York has advanced 3% in the 13 trading days from December 3rd to December 19th alone. It is anticipated by some, that world coffee consumption will rise by 9% in the coming year. That would put stress on world supplies, requiring the discovery of another coffee producing country with a crop the size of Colombia’s to maintain current values. Alternately, a continued advance in the value of current and nearby supplies can be anticipated, should the prediction of a 9% increase in demand be correct. The coffee price crisis of 2000-2005 is not forgotten in the institutional memory of the trade. New ways to source green coffee are becoming more commonplace among the fresh exciting roasters who identify themselves as the Third Wave. These mostly small boutique roasteries are investing in buying trips and educational visits to origin countries, and reporting back that they are more confident in their purchases, and their relationships after having built personal bonds with the folks on the farm that supply their green beans. There is also a perception that “relationship coffees” cut layers from sourcing which cleanses the process of additional costs, guaranteeing the farmer more money, while guaranteeing the roaster more value for his/her dollar. The effort of trying to separate the best grade coffees from the values represented by the Intercontinental Exchange Inc. (ICE) New York Board of Trade (NYBOT) Coffee “C” has taken deep root in the psyche of US specialty roasters and those who toil for coffee in origin lands. The Cup of Excellence (http://www.cupofexcellence.org/ ) is a competition that chooses the best coffee from each participating coffee producing nation each year. The winning product is offered to the highest bidder in an internet auction open to interested buyers throughout the world. Begun as an idea in the mind of US specialty coffee master George Howell, while working in a coffee development project for the Brazilian government, today the Cup of Excellence® program, owned and managed by the Alliance for Coffee Excellence, Inc. (ACE) a US based nonprofit organization with offices in Missoula MT runs programs in Brazil, as well as Bolivia, Colombia, El Salvador, Costa Rica, Guatemala, Honduras, and Nicaragua. Lead by the Peterson family’s Hacienda Esmeralda (http:// www.haciendaesmeralda.com/) Geisha variety Arabica La Esmeralda Special set a new record for coffee at a COE auction fetching $130 per pound (about $15 per serving at retail in the US). One of the US judges scored the Esmeralda a perfect 100 in this year’s Best of Panama competition. It seems remarkable that we now have fine coffees from several origins regularly competing at price levels that only a few years ago were unobtainable by

even the fabled products of the Jamaica Blue Mountains, and USA Hawaii Kona. Ethiopia, supported by Oxfam, the UK based organization that advocates for the poor in third-world nations, has stepped forward to register international trademarks for the names of several of its coffee regions. This lead to a vigorous discussion about registering a place name as a trademark within the US, and accusations of unsportsmanlike behavior against Starbucks for having the temerity to suggest that the registration of Yirgacheffe and other coffee place names was not a good idea. Colombia, long a defender of the 100% Colombian® brand began to charge roasters for the privilege of using the Juan Valdez® logo on their packaging. Kenya took the step to open the “Second Window’ for coffee exports. Over 90% of Kenya farmers continue to sell through the Nairobi auction system to obtain the best price for their produce. The lack of interest may be for lack of published rules for Second Window trades, and the interest in the alternate form of sales and exports may take hold when the bureaucratic system for the Second Window is known and understood. US Hawaii Kona farmers, frustrated in their efforts to defend the integrity of Kona coffee, even in their home state, withdrew from the Kona Coffee Council (the traditional trade association for Kona coffee interests) and founded The Kona Coffee Farmers Association (http://www.konacoffeefarmers.org/). The past year has not been a landmark year for books that are about coffee technology, history, geography and lore, but it was a good year for books with coffee related and socially responsible coffee themes. The best of these is Javatrekker: Dispatches from the World of Fair Trade Coffee (Chelsea Green Publishing) a narrative by sustainable coffee pioneer, advocate, and roaster Dean Cycon. If you have a deep interest in the effects of social activism as personified by the fair trade movement in coffee consider, Brewing Justice: Fair Trade Coffee, Sustainability, and Survival (University of California Press) by Daniel Jaffee, and Fair Trade Coffee: The Prospects and Pitfalls of Market-Driven Social Justice (Studies in Comparative Political Economy and Public Policy) (University of Toronto Press) by Gavin Fridell. For beverage aficionados, baristas, and coffee executives with a love of puttering with coffeemakers Coffee: Scrumptious Drinks and Treats (Chronicla Books) by Betty Rosbottom (Author), Lara Hata (Photographer) is an answer, along with two offerings by coffee cook book author Susan Zimmer, I Love Coffee!: Over 100 Easy and Delicious Coffee Drinks, and Cappuccino Cocktails Specialty Coffee Recipes, both published by Andrews McMeel Publishing. A new book on entering the retail coffee beverage business is out, Start & Run a Coffee Bar (Self-Counsel Press) by Tom Matzen, and Marybeth Harrison. Celebrating the Bean: The Ultimate Coffee Lover’s Book for Ultimate Coffee Lovers (Tate Publishing & Enterprises) by David Stockdale continued... © copyright CoffeeTalk magazine 2007

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...continued is a primer for the uninitiated consumer, which may be of interest as merchandise for the coffee book section of a coffee & tea shop or department. For the Starbucks follower in all of us there have been several recently published books that should get our attention including Starbucks Experience - 5 Principles For Turning Ordinary Into Extraordinary (Mcgraw-hill Book Company) by Joseph A. Michelli, How Starbucks Saved My Life: A Son of Privilege Learns to Live Like Everyone Else (Gothom) by Michael Gates, and It’s Not About the Coffee: Leadership Principles from a Life at Starbucks (Portfolio) by Howard Behar. Starbucked: A Double Tall Tale of Caffeine, Commerce, and Culture, (Little, Brown and Company) by Taylor Clark, and Wrestling with Starbucks: Conscience, Capital, Cappuccino (Rutgers University Press) by Kim Fellner, a labor movement advocate, make for a diversity of views on the company that personifies America’s specialty coffee gifts to the world. The best current gift book with a coffee theme is For the Love of Coffee by Tara Reed, (Sourcebooks Inc.) it is 64 illustrated pages of coffeeisms we all can buy into, as “work before pleasure, but coffee before work”, and “Life is too short to drink bad coffee.” A nice little corporate gift for the trade friends with whom you want to share a moment of warmth. Lastly, a new printing of All About Coffee (Hardcover) by William Harrison Ukers, 2nd Ed. (1935) has been issued by Martino Publishing. It does not appear to be as well bound as the facsimile 2nd edition offered by SCAA, (Member price $85.00) but it is out there for folks who are interested. All About Coffee is also available as a free internet download from Google Books at: http://books.google.com/books ?id=Y5tXt7aoLNoC&pg=PA43&lpg=PA4 3&dq=1616+dutch+coffee+aden&source=we b&ots=Lm8gmDzn2B&sig=xcLB0g6HGCw8aSSj k_4Cj43IXSE#PPP1,M1 The Coffee Science Information Center (CoSIC) (http:// www.cosic.org ) (UK) was established by the Institute for Scientific Information on Coffee (ISIC) in 1990. It monitors current scientific information on coffee and diet related health issues, and provides information to Europeans who have an interest in coffee, caffeine, and health. Checking in with these folks every once in a while will keep you current on scientific and medical related coffee information. Innovation in espresso equipment is still making news. Jet Steam Espresso, Inc. (http://jet-steam.com/) a new face in the coffee hardware business, has come up with something really new. As the carbonated beverage people did generations before, Jet Stream has designed an espresso delivery system that is integrated into the counter of an espresso bar, with the massive part of the machinery out of the consumer’s line of sight, providing a cleaner/clearer counter top for the barista to work his/her charms

CoffeeTalk

with each beverage. The machine has garnered some good early revues. Starbucks Serina Espresso machine hit stores just in time for holiday shoppers with deep pockets ($600) a taste for espresso, and a love for European design. Three of the more interesting new product launches of the year have been in the ready to drink (RTD) category. Java Monster is a brand extension of the Monster uncarbonated energy drink line. Three blends are being offered: Big Black (regular coffee), Loca Mocha (coffee/chocolate), and Mean Bean (coffee/ vanilla). (http://www.monsterenergy.com/ ). I do not know the caffeine content of the new items, but a 16 ounce can of regular Monster is said to contain 160 milligrams of caffeine. New York Coffee Co. a marketing firm in New York, NY (www. nycoffeeco.com) introduced Iced Spresso, a four-flavor line of Splenda® sweetened low calorie alternative beverages to Starbucks Frappuccino® available now in New York area retail outlets, with aspirations of wider distribution. Java Pop (www. javapop.com) Woodstock, VT has introduced Espresso flavored Certified Organic coffee soda made with Fair Trade coffee in five flavors, Espresso, hazelnut, Caramel, Vanilla and Mocha all in 12 oz bottles with handsome graphics. Coffee is once again the most popular beverage in the United States after water, with a generational acceptance, particularly among the youth that is continuing to be strong. Coffee Drinking Trends, published annually by the National Coffee Association, reports daily coffee drinking up for the fourth year, with young coffee drinkers leading the increased use of coffee, and more consumers drinking coffee at home. You can order a copy of the report at http://www.ncausa.org/i4a/pages/index. cfm?pageid=38 Sustainability continues to be a growing sector and interest, and innovative ideas are being implemented to keep alternate market coffee products in front of the consumer, particularly the upscale and socially conscious consumer. An ecologically important piece of the Atlantic Forest in Brazil will be reforested and protected as part of a partnership between Rainforest Alliance, the ecologically and people friendly raw food certifying agency, and the international sailing yacht race, Transat Jacques Vabre, sponsored by the French coffee brand Jacque Vabre owned by US based Kraft Foods. The race, run every two years since 1933, also known as La Route Café, transverses the old sailing course for early coffee transports from Le Havre (France) to Salvador de Bahia (Brazil). Rainforest Alliance certifies almost 15,000 small family farms, plantations, farm estates, and cooperatives in 14 countries, supporting the sustainability of 1.5 million residents, many continued... © copyright CoffeeTalk magazine 2007

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...continued earning their living with coffee. RA has also about 750 thousand acres under sustainable management. The RA forestry program has certified 104 million acres of forest. A group of 678 coffee farmers in Ethiopia became the first in Africa. This certification is the first awarded by the Rainforest Alliance to a coffee farm outside Latin America, and indicates the possibilities for Ethiopia, Africa and other regions in the possibilities of sustainable agriculture through the Rainforest Alliance green frog trademark. Caribou and Gloria Jeans are consumer-recognized brands that offer Rainforest Alliance mark coffee. Holiday Inn hospitality includes RA coffee as do McDonalds outlets in the UK. Kraft Foods’ Yuban (www.yuban.com/) is the largest supporter of the RA mark. In March 2007, Fair Trade Labeling Organization International (FLO) approved an increase in the premium Fair Trade coffees. The minimum price for non-organic Fair Trade coffee became US$1.31 LB. The minimum price for organic certified Fair Trade coffee, is now US$1.51 LB. Fair Trade continues to grow its importance as a mark looked for by socially conscious consumers, as illustrated by Bill Clinton’s recent mention of the brand while talking about making a difference in everyday choices, like buying Fair Trade Certified coffee, when a guest on the Martha Stewart show in September 2007. Small quality roasters as Mr Espresso (www.mrespresso. com) and Carpe Diem Coffee Roasting Company (www. carpediemcoffee.com) and Coffee Express (www.coffeeexpressco. com) helped the fair trade movement reach American consumers during the last decade. Consumer interest in alternative coffee products has reached the decision makers at large coffee roasting and beverage retailing companies and consumers can now find some fair trade coffees at Dunkin’ Donuts, McDonald’s, and Starbucks. UTZ Certified (formerly UTZ Kapeh) headquartered in The Netherlands, and currently chaired by SCAA Past President, Christian Wolthers (www.woltherscoffee.com/) is the youngest and least known certifying organization in the US, but is well known and respected by European coffee drinkers, and has a respected place in the coffee culture of coffee lands particularly Central America, where the organization has had an office since 1999 (three years prior to the first UTZ Certified coffee was introduced to world markets). UTZ Certified, with a core belief that only transparency and traceability lead to a healthy industry, UTZ currently certifies 3.5% of the world coffee production is, grown by around 100.000 growers (both cooperatives and estate farms) in 18 countries according to the organization’s website. Sara Lee Corporation is the largest roaster committed to the UTZ mark, with a commitment of 20,000 tons of UTZ Certified coffees for 2008. The specialty trade is not monolithic. It is diverse, multidimensional, layered, and complex. It proves, every day, there is room within the specialty tent for Bunn, Marzocca, and Clover; for old brown Javas, and Ethiopia Geshas. It learns from the sense of history, that our luminaries bring to it experienced, and its newest stars contribute youth, energy, and a will to learn and achieve. Best quality coffee is as the sea, relentless in its strength; for almost forty years, and for as far as we can dream the future it will reshape the coffee coastline to fit its own everchanging image of the perfect cup.

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There are issues of survival in the coffee world. Oddly, they are among the largest, not the smallest, competitors. Big coffee has performance issues. The biggest players and the most successful consolidators of famous coffee brands of the last century may be making additional decisions to vacate the coffee business that they dominated as recently as a decade ago; turning over to others the fortunes of some of the most recognized consumer brands. Interestingly the new franchise holders in two important cases are coffee businesses of other than US origin. Sara Lee has gotten out of the supermarket canned coffee business, which they had believed was an uncomfortable fit for them from the early days after their acquisition of the brands. They sold their Chock full o’ Nuts, Hills Bros., Chase & Sanborn, and MJB brands to Massimo Zanetti (Segafredo). They retain their foodservice coffee business (the largest in the US) the Senseo coffee pod business, along with the Douwe Egbert brand and another 40 international nameplates. It has been said that Kraft would like to sell its coffee brands including Maxwell House (various labels), Sanka, and International brand flavored instant coffee. It is unknown if a sale were to take place if it would include Kraft’s Tassimo pod coffee brand, or its international brands including Gevalia, Jacobs and Café Hag serving Germany, Switzerland and Eastern Europe, Nabob, and Melrose in Canada, Kenco in the UK, Jacques Vabre and Carte Noir in France, and Blendy & Maxim in Asia and others. It is rumored that Proctor & Gamble would like to divest itself of its Folgers and Millstone brands, which are underachievers. For those with an understanding of coffee history there is a certain symmetry to all this. Still, big business and big coffee companies will continue to provide the bulk of the coffee American’s drink. As managements acclimatize themselves to the new coffee business environment, we should see some significant changes in products and marketing that reflect consumer interests more closely. We may also see roasting production, and not just brand ownership, moving off-shore to help realize easier earned profits by moving industrial production closer to agricultural production, while avoiding higher costs associated with US worker costs, environmental, and other regulation in the United States. This would follow the pattern of earlier coffee industries as soluble coffee production. A half century ago, soluble coffee production was big coffee business in the US. There is little of that coffee production in the US today outside bottling and labeling facilities adjacent to the Mexican border where the finished bulk powder crosses from the producing country and is assembled prior to US and Canadian distribution. Forty years ago the conventional food industry wisdom was that coffee was a moribund food type, there being a seemingly apathetic consumer base, stagnant category growth, and no potential for innovation in product design, delivery system, or packaging and there appeared to be no price point flexibility. With the exception of the innovation of the “All Method Grind” in the 1950’s, nothing much had changed except the acceptance of soluble (instant) coffee in the two post WWII decades. The pundits were wrong then, and I doubt that anyone who has a sense of how far coffee has come in the past four decades would suggest that an equally vibrant future does not lie ahead. -DNS © copyright CoffeeTalk magazine 2007

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Report From the Executive Director Desk at The SCAA By Ric Rhinehart, Executive Director Specialty Coffee Association of America

want to take this wonderful opportunity in CoffeeTalk to provide you with a report on the Specialty Coffee Association of America. While many of you reading this issue of Coffee Talk are already members of the Specialty Coffee Association of America, I also want to address the significant number of you who are not members. This report should provide insight on the progress and challenges of the last 12 months for the Association. I am hopeful that after reading this report, current members will be inspired to continue and non-members will strongly consider joining our Association. I am personally grateful to Kerri and Miles for making this forum available to the SCAA, and want to thank them on behalf of our current and future members, directors and staff. In the last year, the SCAA has faced a number of significant challenges. The financial recovery from the embezzlement suffered by the Association was ongoing, with a vigorous program of fiscal restraint and the implementation of a number of new checks and balances designed to protect us from any future fraudulent activity. We had to search for and select an executive director to replace the only ED in our history. Many long-term staffers moved on to new opportunities, and the recently hired executive director ultimately left the organization as well. The Board of Directors was challenged to quickly and effectively implement a solution for providing ongoing leadership and management for the Association. In the midst of these challenges, we have still managed to deliver value to our members. In May, we held our 19th Annual Conference and Exhibition in Long Beach and welcomed more than 8,000 attendees and exhibitors to what has become the greatest coffee show on earth. We organized seven regional barista competitions, held our sixth national barista championship, and sent our first two- time national champion to the World Barista Championship where she became the highest American finisher in the eventâ&#x20AC;&#x2122;s history by placing second. The Roasters Guild presented two origin tours, this time to Costa Rica and Colombia, and held their sixth annual retreat, a program packed with education and spirited competition. The training committee embarked on a new program of regional skill-building workshops, and delivered 21 training sessions in four cities. The technical standards committee completed work on their lab certification project, and have inspected and certified five labs around the world, and provided Certified Cupper training for dozens of SCAA Judges. In a working partnership with CQI, SCAA members have helped to train and certify over one hundred new licensed Q graders and disseminate our cupping standards all over the world. Currently, our conference committee is planning and organizing

w h a t promises to be an incredible show for our 20th annual conference and exhibition in Minneapolis next year. They, along with SCAA staff, have designed and launched our conference Website, a project that will be the basis for our new Association Web efforts. New challenges and opportunities for the association will continue to arise during the next twelve months. A major challenge is redefining the benefits we offer to our growing membership as the world of technology continues to change at a rapid pace. The association is seeking new ways to add value to membership for all segments, including the newest entrants into our industry. We will continue to expand and define our regional offerings, with a goal of presenting events that include a blend of competition, education and networking delivered locally and affordably. Our development of new and creative content delivery systems will continue with a focus on Web-based platforms. We will continue to pursue linkages between consumers and producers, and to drive the implementation of quality standards in coffee selection, roasting, brewing and delivery. The coming year promises to be an exciting one, with many new initiatives and a renewed commitment to defining and delivering value to our members. We will not lose sight of our roots and core values, and will continue to promote quality, collegiality, education and sustainability. Look for new tools addressing water quality, roasting practices and brewing standards to arrive. Plan on being sought out for your thoughts and concerns for our association and industry. Join us at our annual conference, at a regional event or online for an opportunity to interact with your industry peers. Help us continue pursuing our efforts towards realizing the U.N.â&#x20AC;&#x2122;s Millennium Development Goals and ever greater sustainability practices within our industry. Once again, please join us during this exciting time in our history as we work to improve our value to you, our current and future members and industry constituents. For more information, or to join the SCAA or renew your membership, visit us at www.scaa.org or call us at 562.624.4100. ÂŠ copyright CoffeeTalk magazine 2007

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CQI

What has CQI accomplished in 2007 and what does 2008 promise for CQI? By Ted Lingle

n 2007 CQI continued to focus on our primary objective: “Ensure the structure of an internationally respected grading system for quality coffee, eventually becoming an electronic marketplace, and provide technical assistance to producers to access this approach.” In practical terms for 2007, this meant completing the first step, which was the expansion of the number of licensed “Q” graders in all of the primary specialty coffee origin countries. In addition, it also meant expanding the number of “In-CountryPartners,” who form the foundation of the grading system. We began the year with 45 licensed “Q” graders in seven countries; by the end of the year, we will have over 275 licensed “Q” graders in 15 countries. (Note: a list of licensed “Q” graders by country of origin can be found on CQI’s Website www.coffeeinstitute.org) The funding for this effort came from a variety of sources: 1) USAID through their Colombia and Ethiopia coffee programs; 2) International Finance Corporation (IFC), a branch of the World Bank, through an Eastern Africa pilot program in Kenya; 3) the Government of Mexico; and 4) various private sector sources in Brazil and Japan. The bulk of the training was done by several key individuals including Mane Alves, Willem Boot, Craig Holt, Kelly Peltier, Christine Garces, Sunalini Menon, and Manuel Diaz. To date over 22,000 bags from five separate countries have been tendered and graded by licensed “Q” graders. While this represents a modest beginning, we feel it foretells a great future for the Q Market System in the future, as exporters learn how to use the system as a marketing tool, and most important, coffee growers learn from the Q Certificate, or Technical Report for those coffees not earning a Q Certificate, where and how to improve their coffee quality to increase its acceptability and value in the specialty coffee market. The country in which the Q Market System is likely to have the greatest impact in the near future is Kenya. Up until last year, all of Kenya’s coffees were graded by bean size and sold through a central auction in Nairobi. As the result of growing dissatisfaction with this centralized system by the Kenya farmers, the Kenya laws were amended to create a decentralized system of marketing agents who were licensed to export Kenya coffees directly. This “second window,” as it has come to be known in Kenya, will be augmented by the Q Market System, in which these lots, in addition to bean size, AA’s, AB’s etc, will be sold with a Q Certificate or Technical Report along with more detailed information on where it was grown and how it was processed.

Specialty roasters can now look for 25 to 50 bag lots of 90+ Q grade coffees from a number of different regions within Kenya. These regions include Kiambu, Murang’a, Thika and Machakos surrounding Nairobi; Nyeri, Kirinyaga, Embu and Meru at the foot of Mount Kenya; Mount Elgon, Trans-Nzoia, Bungoma and Nandi on the western border near Uganda; Kisii, Kericho and Nakuru near Ksumu adjacent to Lake Victoria; and even the Taita Taveta region near the shipping port of Mombasa. On February 11-12, 2007, the IFC will be hosting the very first regional cupping of Kenya’s fine coffees, with coffees that have received Q Certificates (80+ scores) made available for cupping by interested specialty roasters, as a prelude to the EAFCA conference in Kampala, Uganda. Imagine the delight in finding a low acid, natural processed Kenya coffee to round out the “perfect” espresso blend. The goal for CQI in 2008 is to further strengthen the Q Market System by increasing the number of In-Country-Partners who manage the administration of receiving samples, scheduling graders, recording results, and issuing grading certificates for Q Certified coffees. Our goal by the end of 2008 is to have more than 300,000 bags move through this system. Inherent in this goal is to expand the number of coffee roasters who understand and take advantage of this new tool for identifying and marketing specialty coffees. For some it will be using the electronic grading certificate to assist in their decision making process as to which coffee samples to request and cup prior to purchasing. For others, it will be identifying for their consumers, through use of the Q logo mark on their packages, the coffees they are offering are true specialty coffees selected at origin on the basis of their quality by trained and licensed cuppers. As 2007 draws to a close, we are greatly pleased by the progress we are making in moving specialty coffees into an electronic market place built on 21st Century technology.

Sunalini Menon, Craig Holt EAFCA Training 05

About the Coffee Quality Institute

The Coffee Quality Institute is a non-profit 501(c)3 organization dedicated to improving the quality of coffee and the lives of the people who produce it. CQI has successfully managed a number of development projects at coffee origin. CQI is a highly efficient organization with more than 90% of revenue going directly into programs. Its board and staff have more than 450 years of combined experience and its database of more than 400 coffee experts provide countless more. As the only organization in the world doing the work to measure quality, CQI is committed to working with industry to create market-based approach to sustainability. continued... © copyright CoffeeTalk magazine 2007

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Runnin’ with Dunkin’ By John Luther

hen we launched “America Runs on Dunkin’” in April 2006, the campaign tagline was ambitious, considering we did not yet have a significant presence west of the Mississippi River. Less than two years later, Dunkin’ Donuts is robustly pushing westward – in 2007, we entered Nashville, Indianapolis, Las Vegas, Dallas and announced area development agreements in Dallas and Pittsburgh. “America Runs on Dunkin’” is such a well-recognized campaign that when we enter new markets we hit the ground running. “America Runs on Dunkin’” is all about fueling America – we fuel the hard-working people who keep this country running. Our brand speaks to a broad range of busy consumers and we strive to help get them on their way. We were confident the “America Runs on Dunkin’” campaign would position the brand in a way that would resonate with our consumers, present and future – it has and continues to do so. Another reward of the pent-up demand for Dunkin’ Donuts is due to so many of our devoted Dunkin’ disciples who have emigrated from the northeast and other Dunkin’ established territory to other parts of the country. When I travel one of the things I invariably hear from northeastern transplants is “I miss my Dunkin’.” And the first thing many of these people do when they come back East to visit their families is get their Dunkin’ coffee. As a result this great loyalty and emotional attachment toward our brand transcends into new markets. People gravitate toward our brand because we’re already familiar to them, even before they try our coffee, which is our greatest asset. Contrary to our brand name, we are a coffee company disguised as a donut shop. The original Dunkin’ Donuts experience was a single cup of coffee with a donut – today we offer a wide range of coffee and coffee-related beverages, not to mention an expanding all-day menu. At Dunkin’ Donuts, coffee is our perennial MVP. With coffee leading the charge, beverages accounted for nearly 63 percent of our 2006 sales. The basic Dunkin’ platform is, and has always been, about coffee. Today’s consumer expects the same high-quality Dunkin’ Donuts coffee that has been brewed for more than five decades, only now they expect a wide array of options. Whether it’s an iced latte or a flavored-shot coffee, Dunkin’s coffee platform is designed to meet the needs of the

consumer because we know America runs on choice. More Americans choose to drink good coffee every year – coffee as a segment continues to grow at a compounded rate of 6 or 7 percent. So the effort we put behind the quality of the bean selection, the quality of the farmers, and the quality of our roasters enables us to have this level of excellence that people have come to trust. The essence of coffee is so much a part of our store sales and our franchisee success that we have to deliver the highest quality. Quality means everything to us. We’re the DDQ on the Growers’ Guide – that’s Dunkin’ Donuts Quality – once you get north of that quality-level category, you are in premium territory. That’s the essence of our product. We think of our brand as the quality-value coffee player. Along with plenty of room to expand within the footprint of our national geography, Dunkin’ Donuts is increasing its reach through coffee in a variety of non-traditional strategic alliances. We partnered with JetBlue, so Dunkin’ Donuts coffee is in the air. We partnered with Procter & Gamble for retail sales. Sara Lee places Dunkin’ Donuts in office buildings and college campuses, among other venues with large foodservice operations, with self-serve coffee kiosks – it’s like having 10,000 billboards across the country. Our online coffee sales are brisk – even in markets where we have not arrived yet. California, for example – a state without a Dunkin’ Donuts store presence, is consistently a top 5 market for online coffee sales. Thanks to all these means of distribution, our coffee is enjoyed nationwide, well in advance of our goal of nationwide expansion. We have a long runway in the United States – these alliances build brand awareness in markets where we plan to expand, seeding the market ahead of our arrival. And we’re also on the march internationally, with international system-wide sales crossing the $1 billion. Only about five years ago, we were a regional donut chain that served great coffee. Today, we are a robust, international brand. The first Dunkin’ Donuts Las Vegas store opening last October set a company opening week sales record. That Las Vegas store had the most successful opening in Dunkin’ Donuts 57-year-history. Las Vegas may geographically be far away from our original store in Quincy, Mass., but the quality of coffee is the same. America knows we offer quality food and beverages that are priced affordably and served fast. And for those Americans who have yet to Run on Dunkin’? We’re coming!

Jon L. Luther was named chief executive officer of Dunkin’ Brands in January 2003 and chairman in March 2006.

A leading figure within the foodservice industry, Luther has built his career by transforming and reinvigorating brands such as Popeyes Chicken & Biscuits and airport concessionaire CA One Services.

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21 December 2007

22 December 2007

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Quality endures By Ellen Jordan Reidy

“Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skillful execution; it represents the wise choice of many alternatives.”

hese words written by William Foster have hung on my office wall for over 25 years. Granted at the outset they were largely reflective of the embryonic aspirations of an industry newbie. But over the past quarter of a century, these words have taken on increased significance and validation as our industry has burgeoned. Increased significance because, not surprisingly, central to our success has been a laser focus that places quality center stage. And this emphasis is no accident. Some would argue that quality is an elusive term. I think not. To others, quality is seen in absolutes and would submit that there is an uncompromising, if not self evident, absolute of quality. A principle with which there can be no compromise. Rather than try to define a single notion of quality, I prefer to contemplate the interrelated ways in which the focus on quality has advanced our industry. Central to this has been our ability to speak a common language of cup characteristics and to quantify these attributes on a numeric scale, identifying and minimizing the defects that diminish the customer’s ultimate enjoyment. These are the very underpinnings of coffee’s quality metrics. I firmly ascribe to the tenet that you cannot improve what

you don’t measure. Over the past four years the Coffee Quality Institute ® (CQI) has worked intensively in concert with producers, exporters and consuming country partners to instruct and certify cuppers and graders the world over on this common score card. The Q Grader™ examination (arguably the most arduous and comprehensive certification our industry has ever seen), has to date conferred Licensed Q Graders™ certifications on 276 individuals across the globe who possess these in-depth skill sets. This certification is an accomplishment in which these individuals should take enormous pride as they themselves epitomize the very essence of quality through this achievement! I was recently asked if I felt that the term “quality” has been diluted or is losing its power. I can say unequivocally that I have no such nagging concern. In fact, I have every confidence that the annals of history shall reflect that the inflection point upon which our industry’s growth and success has been based-- and most importantly is sustained-- was in our awakening to the promise of “doing it right” at each and every stage. In those conscious decisions and skillful executions in practices and processes that reduce defects and enhance cup quality. Henry Ford said that “Quality means doing it right when no one else is looking.” That commitment to excellence is pervasive across our industry. I would be remiss if I did not recognize two other essential roles played in coffee quality’s success story. First, to roasters for the passionate pursuit of their craft; it is their skillful development that brings to life the inherent cup characteristics so enjoyed by the customer. And secondly a debt of gratitude is also owed to our brewer partners for their technical prowess and adroit execution of the final step in the process. They too have played an integral role in achieving our ultimate goal-- a great cup of coffee!! Quality democratizes – and it endures. It is truly that which sustains. To paraphrase Aristotle: Quality is not an act, it is a habit. We are what we repeatedly do.

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23 December 2007

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24 December 2007

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Commodity Primer

Why it is Imperative for Specialty Retailers to understand Commodity Markets ? By Judith Ganes-Chase, Commodity Specialist and President of J. Ganes Consulting, LLC

t is a common misconception that just because you are paying a hefty premium for a bag or lot of an especially fine estate grown coffee that the price of those beans are not in any manner related to coffee that is more commoditized and of uniform standards and grades. Be it at the top of the quality pyramid or the bottom all coffee is inextricably linked together. The further up the scale and differentiated the beans you are purchasing the less obvious the connection is to the underlying futures market but this thread as thin as it may seem should not be overlooked. The ICE (formerly New York Board of Trade or NYBOT) futures contract is based on a contract of 37,500 bags of washed Arabica coffee with certain standards and delivery terms as regards to the quality of the coffee. Many Mild coffees trade at a premium to the futures contract reflecting fewer defects and a better grade. Buyers will pay a specified premium above the futures price and so the actual price of the underlying coffee, which is currently hovering around $1.25 per pound, shouldn’t really matter in terms of the contract, just the price differential between the “C” contract and the coffee purchased. However, when futures prices firm, buyers sometimes become hesitant to pay as steep a premium as they would when prices were softer. The spread between the underlying futures and quality premiums tends to shrink. This tendency is especially evident when examining the premiums being paid for Fair Trade or other coffees that have certifications. When prices were severely depressed, there was a hefty premium being received for these coffees. For example, at 70 cents per pound for futures, “premium” coffee had a 10 cent to 25 cent quality premium added to it and an additional 10-25 cents certification premium. Top end or Specialty coffee had an 80+ cent premium but the certification premium was minimal between 0-10 cents. The total purchase price for specialty was about $1.50 or more per pound compared to premium coffee with an F.O.B. price of 90 cents to $1.20. Now the underlying futures price has advanced 45 cents, however, the F.O.B price being paid for premium coffee is only $1.40-$1.55 per pound, a gain of 25 cents. Both the quality premium and certification premium roasters are willing to pay was lowered as futures rallied. For Specialty coffee, the F.O.B. price is only marginally better with the quality premium shrinking from around 80 cents to only 30 or 35 cents.

Having an understanding of the global fundamental factors (supply and demand) that influence the price of coffee will lead to more informed purchasing decisions. Coffee prices in general are extremely cyclical with long periods of depressed values punctuated usually by a brief period of sharply higher prices, generally brought on by weather related production difficulties in top producer Brazil or second ranked Vietnam. A surplus or shortfall in one country will influence the price of coffee amongst all producers. Other supply influencing factors are the value of the US dollar relative to local currency, labor and input costs as well as any subsidies or financing offered to producers which enables them to store coffee for longer periods of time. The futures market can also be used as a hedge or insurance policy to minimize your price exposure, especially in times of extreme volatility. The ability to use the market as a price risk tool will depend on the quantity of coffee being purchased (since there is a minimum contract size) and the terms in which you are purchasing the beans. Trading in futures and options is not without risk and users of these contracts should be well informed on their mechanics. Generally speaking, if you are concerned that prices are going to continue to escalate and you want to have some protection from this by locking in the present price of coffee, you would buy a futures contract or a call option. If prices do go up, the higher price you paid in the cash market for your coffee will be offset by an increase in value in your futures or options account.

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Cup of Excellence® - 2007 By Susie Spindler

007 seemed to be the year that Cup of Excellence® (COE) came of age. The program hit critical mass as roasters from around the globe signed up in 2007 regardless of whether they had been on an international jury, had been present at a COE seminar, cupping or stopped at the booth during a conference. While it is still necessary to explain the complexities of the program and its benefits to the specialty industry the quality of the coffee is becoming pretty famous. Cup of Excellence coffees show up in wedding receptions, 5 star restaurants, upscale London retail stores, expensive gift baskets and are talked about in blogs by consumers around the world. In fact even more interesting is the fact that roasters and importers who have embraced the Cup of Excellence program with its high quality relationship building approach seem to be doing very well economically as though they are in sync with an idea whose time has come. COE executed 5 back-to-back programs for the Central American countries in the spring and early summer and yet the average prices still provided high average prices and positive reinforcement the farmers were hoping for- thus proving that demand remains very strong. Nicaragua’s coffee took top price and scoring honors in 2007 for their #1, but Bolivian winners took home the highest overall average purse. We watched in amazement as many small-unknown farmers from undiscovered coffee areas won in almost every country and we are absolutely certain that there are more flavor surprises in the future. We were thrilled to finally bring Costa Rica into the COE family and embraced the return of the small Bolivian farmers to the worldwide exemplary landscape after national politics prevented the program from being executed in 2006. We were saddened to lose Brazil as a partner country especially since this was the birthplace of Cup of Excellence but given the response of the Brazilian farmers and their overwhelming support it is an almost certainty that this program suspension will only be temporary. In 2008 we plan to finally move into Africa with a program in Rwanda. 2007 saw a very successful “dry run” utilizing the Cup of Excellence resources and cupping protocols but without the traditional Internet auction or standard lot sizes and transparency. Rwanda will be very different as the farmers are so small and transparency is applicable only back to the washing stations in some cases. We are working very hard to develop a protocol that

is both logical and fair but that still adheres to one of the major principals of the program- that of transparent chain of custody and a reward to the individual farmer. 2008 will once again be a year of changes as The Alliance for Coffee Excellence, Inc (ACE) focuses on adding another aspect of sustainability to its program even though the competition and auction have already proven that quality is economically sustainable. All of the COE family believes that taking care of the environment is critical, not just to long-term quality and to the health of the farmers and their workers but to our very future. However we are extremely sensitive about burdening the farmers unfairly with the costs. So with this in mind the sustainability task force of ACE is carefully designing a program that focuses on making a positive impact on environmental sustainability within the high quality coffee industry. The ACE structure for Cup of Excellence has also changed and will be in full effect for the 2008 program. The details management of the program from the producing countryside will now be coordinated by an operations manager based in Nicaragua. This change will not only help the buyers with shipping and other logistics but will also support the organizing committees as they execute the increasingly complex protocols of the program. As always the hope for Cup of Excellence in 2008 will be the discovery and reward of great coffees that will continue to lift the level of excitement and anticipation for the consumer anxiously awaiting the next winner. The long term personal relationships that roasters have and will continue to build with winning farmers are by far the most fulfilling outcome of the program but the overall increased premiums for and appreciation of exemplary coffees worldwide is still the vision.

Susie Spindler

Executive Director-The Alliance for Coffee Excellence, Inc. Susie is manager and co-creator of the International Cup of Excellence® (COE) competition–auction program. She has years of producer and consumer marketing related experience having worked for the ICO and on several consulting projects at origin before co-creating the COE. She also has a unique understanding of environmental sustainability having been director of an endangered wildlife facility and holds a graduate degree from The Thunderbird Graduate School of International Management. © copyright CoffeeTalk magazine 2007

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27 December 2007

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Los Meses Flacos By Rick Peyser

s an industry, we have recognized and incorporated sustainable initiatives and practices in our businesses for many years. In the mid-90’s the SCAA formed an Environment Committee (now known as the Sustainability Committee), which helped bring needed attention to many pressing environmental and social issues, from tree to cup. This dedicated group organized Sustainable Coffee Conferences that were held in conjunction with the SCAA Annual Conferences in Denver (1998) and San Francisco (2000). These conferences provided a forum for speakers who addressed many issues related to sustainability and shared new approaches in dealing with them. Our industry has been a leader in these endeavors, far ahead of many other industries that are just now taking steps to deal with their own issues often under the auspices of recently formed Corporate Social Responsibility departments. A number of organizations and initiatives formed to focus on specific challenges that are critical to coffee growers and their families, and continue to address many issues that are central to sustainability and sustainable livelihoods. Some of these organizations are well known within our industry like Coffee Kids, Transfair USA, Grounds For Health, Cup for Education, and the International Women’s Coffee Alliance, among others. Are these organizations and initiatives needed? You bet.

While our industry has come a long way, we still have miles to go. While coffee prices have tracked within a relatively moderate and narrow band over the past 6 months, the US dollar has not. The dollar’s decreasing value has the potential to have a severe impact on the income of coffee growers and the health of their communities. The challenges that these industry organizations have been focused on are not going away anytime soon. Even in times of moderate prices, many coffee growing families continue to suffer from months of what is known in parts of Central America as “los meses flacos” (the thin months). These are the months of June, July, and August, when funds from the recent coffee crop are nearly depleted, and the market price of food staples, like beans and corn are high, as these crops aren’t harvested until late summer. This leaves many families with three options relating to their diet: consume less food overall, consume less expensive foods, or borrow against earnings from the coming coffee crop to feed their family. “Los meses flacos” and food security are issues rarely discussed within our industry and deserve to be. How can something so important and so commonplace in many communities that grow our coffees, remain relatively unknown and rarely spoken of in the halls of our industry? The roots of this problem have many causes (over-dependence on a single crop for income, lack of economic alternatives to coffee, unstable market prices, decreasing yields, and more). Inadequate nutrition has serious, and often irreversible effects, particularly during childhood. Like other issues we have addressed over the years, the solutions to this problem are not simple, however I know of no other industry in the world more disposed to accept this challenge.

Rick Peyser

is Director of Social Advocacy and Coffee Community Outreach at Green Mountain Coffee Roasters where he has worked for over 19 years. He is a Past President of the SCAA, Past President of the Coffee Kids Board of Directors, and is a member of the FLO (Fair Trade Labeling Organizations International) Board of Directors. © copyright CoffeeTalk magazine 2007

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29 December 2007

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Investing in the Future: Coffee Kids and a Changing Industry By Bill Fishbein, Founder of Coffee Kids

he year 2008 marks an important time for Coffee Kids. It marks 20 years of helping coffee-farming families improve the quality of their lives and 20 years of dedicated service to farmers and the industry. I was reminded of how far our industry has come when I read an article in the New York Times titled “To Burundi and Beyond for Coffee’s Holy Grail.” (http://www.nytimes. com/2007/09/12/dining/12coff.html?_ r=2&n=Top/Reference/Times%20Topics/Subjects/C/Coffee&oref=slog in%2529&oref=slogin) It chronicles the new frontier in the specialty coffee industry and follows a number of important players in our industry as they move beyond fair trade to a more direct model. It is not just about providing a more just price anymore, the new model focuses on building relationships. Coffee is not enough; in order to make a real difference in the lives of coffee-farming families, we need to reach out and build bridges. This bridge building is our specialty. Coffee Kids works with coffeefarming communities to find solutions that will improve their quality of life, solutions that create strong, vibrant communities independent of the volatile coffee market. We believe that strong coffee comes from strong communities. Coffee Kids was founded in 1988 as an answer to the crushing poverty I witnessed on my first trip to origin in Guatemala. But hidden in the poverty I saw hope in the people who wanted and needed alternatives to coffee. In so many coffee-farming communities, coffee is all they have. Entire communities are held in the grip of the C-market prices. If we truly want to make a difference for coffee farmers and their families, we need to provide them with alternatives to coffee. Only then will they be able to continue working in coffee without being dependent on the annual harvest. The key to our model is our close relationship with local organizations. Coffee Kids does not foist programs on communities, we help facilitate and fund programs that come from the community. We do not structure timelines into our partnerships, we support long-term projects that change perception and help communities devise their own ways to address poverty. In 2007, we worked with 11 partners in over 250 communities supporting real change for coffeef a r m i n g Doña Aida Cruz Ramirez and her husband participate in families. The ICSUR programs that help them improve the quality of life past year for their family. ICSUR is a Coffee Kids partner. also marked

our first foray into South America with our partner, the Organization of Agrarian Coffee Cooperatives (COCLA), (http:// www.coffeekids.org/aboutus/ programs/#cocla) in Peru. The communities served by COCLA suffer from poverty, marginalization and limited access to health services. COCLA has been operating a health project with limited support for several years. Now with Coffee Kids support, the organization is expanding the program. In 2007, COCLA carried out health care, nutrition and hygiene workshops in nine communities, Doña Aida Cruz Ramirez is began training 19 health participates in ICSUR’s chickenpromoters to increase community raising project. She began with participation and outreach, and seven hens, and now has 67. In provided breast and cervical the community near Chiapas, cancer lessons to 32 participants. Mexico, there are another 14 women As the group moves forward, they dedicated to this project. will focus on increasing awareness and access to government-sponsored health services, preventive health care, and knowledge of general hygiene and health care. Our partner, the Association for Research and Training of Southeastern Mexico (ICSUR) (http://www.coffeekids.org/aboutus/ programs/#icsur) in Chiapas, Mexico, made dramatic strides with their edible mushroom project. ICSUR has been working with community members to cultivate edible mushrooms that will provide an important food source for families and supplemental income through the sale of surplus mushrooms. The groups involved in the program completed nine successful harvests and have identified local markets where they will begin selling their mushrooms. The project has reached a self-sustaining level this year and ICSUR will begin working with communities on a chicken-raising project, which will provide local women and families with another food source and a product to sell in local markets. All of our partners made significant strides during the past year, from the burgeoning biodiesel program run by our partner in Nueva Alianza, Guatemala, to our partners providing small, low-interest loans to community members in Matagalpa, Nicaragua, and Oaxaca and Veracruz, Mexico. As we move into our 20th year, Coffee Kids looks forward to supporting more programs throughout the coffee-growing world. In 2008, we will begin working with a new partner in Chajul, Guatemala. The organization is working to increase opportunities for women in their community through adult literacy and business development programs. An investment in Coffee Kids is an investment in a sustainable future for coffee-farming families. Your investment helps to strengthen coffee-farming communities. Your investment helps improve and ensure the quality and sustainability of the supply for generations to come.

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31 December 2007

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32 December 2007

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11 years, 12,000 lives: Reflections on a decade with Grounds for Health By Dan Cox, co- founder

rounds for Health started with the idea that a concerned group of coffee friends might be able to help a small community in the mountains of Mexico. At the time, I have to admit, I never dreamed that this idea would grow into such an impressive vehicle for change. Eleven years ago, on a whim, I took a retired doctor friend with me on a buying trip. While I went up to the mountains to meet with coffee producers, he made himself at home in the local health clinic. When I was gone, Doc Fote learned that cervical cancer was the number one cause of death for women in the communities where I was buying coffee. The Doc assured me these were unnecessary deaths, that children were losing their mothers in the prime of life to a disease that in our country is almost 100% preventable. Fast forward to now, when we can proudly say that Grounds for Health, a robust nonprofit organization, has become a leader in the fight against this silent, but deadly disease. It is no secret that few developing countries have been able to create effective and efficient Pap screening programs. The obstacles are universal; women rarely know that cervical cancer is a threat and there are always more pressing family needs for the few resources available. Poor health infrastructure makes Pap reliability low, long waiting times for results leads to poor follow-up, and too often the needed treatment is expensive, far away, or non-existent. At a time when there is a growing global awareness of the impact of cervical cancer on women´s lives, Grounds for Health has developed an effective model that addresses these barriers. The keys to Grounds for Health’s success are the links we have forged with the cooperative farm families that grow the coffee and with our funders in the specialty coffee industry. Luckily, in our industry, there is a real connection from bean to cup. From day one, we have worked hand-in-hand with our cooperative partners to create a program that works for their community. The cooperative model provides a natural web of communication, allowing us to provide cervical cancer screening and necessary follow-up services for up to 1,000 women in a week. Over time,

ours has proven to be a model that is efficient, effective, and reproducible for everyone involved. Sustainability is critical to our model. We are committed to ensuring that a viable prevention program will continue long after Grounds for Health leaves a community. Education is an integral part of our model. Grounds for Health offers specific training related to cervical cancer awareness and prevention for local health promoters and medical practitioners. As competition for the best producers’ coffees has increased among cooperatives, our program, and the health services that develop as a result, have served as a tangible benefit that is used to attract and retain members. In one instance, our program even inspired a self-insurance program that now covers basic health expenses for cooperative members. Our narrow focus has proven to be one of our greatest assets. We are able to set clear goals and mark our progress toward them. I am often asked why we do not expand to include more general health services, and my response is that with our current model we are able to give attention to and expand slowly to match the needs and interests of each cooperative. This focus allows us to be nimble in applying new technologies and piloting the latest advances in the fight against cervical cancer, and once we have established a reputation and trust builds between Grounds for Health and the communities where we work, our scope often expands to include other health issues. It seems like the only logical trajectory to me. So where will we go on the next ten years? Our numbers have already passed the 12,000 mark, and we have just completed our first campaign in Nicaragua where we introduced a new model that includes low-cost technology for same day screening and treatment. We are heartened by the success of this pilot project and look forward to bringing it to Chiapas, Mexico in early December. All of it feels like a blink in time, since that first conversation with Doc Fote in Oaxaca, but it has been the most satisfying journey I can imagine being part of. I am humbled by the consistent support from friends in the specialty coffee industry, and can´t wait to see what the next ten years will bring. It is amazing what a small group of committed people can achieve.

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33 December 2007

34 December 2007

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Big year for TransFairUSA By Paul Rice, CEO, TransFair USA

007 will go on record for TransFair USA as the year that mainstream America truly embraced Fair Trade Certified™. The success of Fair Trade Certified product sales ultimately benefits small family farmers in developing countries around the world more than ever before. To date, Fair Trade Certified products sales have amounted to more than $100 million in additional income that has gone back to farmers and producer organizations, benefiting more than 1.4 million farming families. This revenue has translated to community and business development projects ranging from scholarship programs to health care centers to potable water projects to transportation improvements. Large-scale, national partners such as Starbucks, Green Mountain Coffee Roasters, and Dunkin’ Donuts, who became the first national brand to sell espresso beverages made exclusively with Fair Trade Certified coffee in 2003, have enabled Fair Trade Certified coffee to become recognized nationally by the mainstream consumer. In addition, retailers from Whole Foods Market to Trader Joe’s and from Sam’s Club to Costco have adopted Fair Trade Certified. The mainstreaming of Fair Trade Certified coffee does not only happen with large roasters. When we look at overall consumer exposure and conversion to the Fair Trade Certified label, our small and midsized partners do a tremendous job. We now have nearly 400 coffee partners across the United States, from A&E Custom Coffee Roastery in New Hampshire to Zephyr Green Coffee in New Orleans; from Treehugger’s Coffee in California to Millstone Coffee in Cincinnati; from Equal Exchange to Pura Vida to Café Bom Dia, we are truly building a “big tent” fair trade movement. The National Coffee Association’s 2007 National Coffee Drinking Trends report further echoes the increasing awareness of Fair Trade Certified coffee: consumer awareness of Fair Trade Certified now stands at 27%, up from 7% in 2003. According to Datamonitor, the continued growth of cause coffee “has meant that (Fair Trade Certified coffee) is no longer a niche area, but is firmly part of the mainstream coffee market. (It)… has benefited from the premiumization trend as well

as greater consumer and ethical awareness.” And Dow Jones reported on July 18, 2007 that U.S. companies are selling more “coffee with a conscience.” Fair Trade Certified coffee has seen consistent growth since its U.S. debut in 1998. More than 64 million pounds of coffee were certified Fair Trade in 2006, up 45% from 2005. National retailers made deep commitments to Fair Trade Certified coffee in 2007, with Sam’s Club’s commitment being perhaps the most dramatic. On October 1, Sam’s Club converted their private label Member’s Mark Premium Ground Coffee to Fair Trade Certified, the first nationally available, private-label Fair Trade Certified ground coffee developed to appeal to mainstream customers at all 586 Sam’s Club locations in the United States. Who would have guessed a few years ago that Fair Trade Certified coffee would be available to the American consumer on the same shelf as Folger’s and Maxwell House? Sam’s Club expects Member’s Mark Premium Ground to become a leader in national sales of Fair Trade coffee. On the West Coast, Tully’s Coffee announced on October 1 that all espresso beverages served in its stores are now made exclusively with Fair Trade Certified and organic coffee. More than 90 company-owned stores now serve the new espresso blend. Many mid-sized roaster partners have made gains: Tony’s of Seattle had an increased retail presence, and Alterra Coffee in Milwaukee continues to increase their overall amount of Fair Trade coffee and is growing with new cafe retail locations. And partners like Gorilla Coffee in Brooklyn are selling more Fair Trade coffee than ever. The success of Fair Trade Certified coffee has motivated U.S. retailers to request additional product categories. In recent years, TransFair has added tea, cocoa, sugar, bananas, rice, and vanilla to the product line. Our newest product category, Fair Trade Certified flowers, is currently in rollout phase at U.S. supermarkets and consumers can expect to see national distribution by January 2007. We owe these advances to our original and largest category, specialty coffee. Thanks to the inroads made by Fair Trade Certified coffee, we have seen an incredible expansion in other Fair Trade products. Our partners are instrumental in helping us develop an emerging Fair Trade lifestyle choice for the consumer. By choosing Fair Trade Certified, we are choosing to vote with our dollars for the farmers and farm workers in the developing world.

ABOUT TransFair USA

TransFair USA is the only independent, third-party certifier of Fair Trade Certified products in the United States. TransFair USA audits and certifies transactions between U.S. companies offering Fair Trade Certified products and their international suppliers to guarantee that the farmers and workers producing Fair Trade Certified goods were paid fair prices and wages. For more information, visit www. FairTradeCertified.org.

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35 December 2007

36 December 2007

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Organic Coffee Market Continues Its Dramatic Growth By Sandra Marquardt, President of On the Mark Public Relations.

Marquardt is coordinator of the Organic Coffee Collaboration – a project of the Organic Trade Association.

.S. retail sales of organic coffee in 2006 increased more than 24 percent to 110 million dollars, according to the Organic Trade Association’s (OTA’s) 2007 Organic Manufacturer Survey. Sales of organic coffee in 2007 and 2008 will likely continue to reflect this growth trend. The dramatic increase in organic coffee sales mirrors the continuing growth in the overall organic sector, which grew 21 percent to reach $17.7 billion in 2006, according to OTA’s Manufacturer Survey. Organic coffee is grown in more than 30 countries, including the United States, using methods and materials that have a low impact on the environment. Organic production systems replenish and maintain soil fertility, avoid the use of toxic and persistent pesticides and fertilizers, and build biologically diverse agriculture. Third-party certification organizations verify that organic farmers use only methods and materials allowed in organic production. Some estimates indicate organic coffee sales could be even higher than reported in the OTA survey. According to the Transfair USA Fair Trade Almanac 1998-2006, U.S. imports of organic Fair Trade Certified™ coffee grew 94 percent in 2006, to 50,398,223 pounds, which equals roughly 498 million dollars at retail (estimating $11 per pound based on information from participants in the Organic Coffee Collaboration – a project of OTA, and assuming 20 percent loss during the roasting process). In addition, a recent study by Daniele Giovannucci and Andres Villalobos of the Sustainable Markets Intelligence Center (CIMS) estimated that approximately 65 million pounds of organic coffee were imported into the United States in 2006 (which equals approximately 572 million dollars using the above assumptions). The authors estimate the budding organic coffee sector represents 2.5 percent of the total U.S. coffee market. While still a small number, the 33 percent annual average growth rate documented by the researchers between 2000 and 2006 dwarfs the estimated 1.5-2 percent projected annual growth rate of the conventional coffee industry. Participants in the Organic Coffee Collaboration are driving much of the increase in retail sales. Consisting of a leading broker, a leading decaffeinator, and roasters across the United States, the companies provide much of the organic decaffeinated and caffeinated coffees widely available at retail outlets nationwide and direct from roasters via the Internet. Collaboration participants in 2007 included: Café Bom Dia, DaSilva Fine Brazilian Coffee®, Dallis Coffee, Elan Organic Coffee, Equal Exchange, F. Gaviña & Sons, Fresh Harvest Products, Green Mountain Coffee Roasters, and Swiss Water Decaffeinated Coffee Company.

The organic coffee market is increasing for a number of reasons: Quality: Numerous organic coffees from farms in both Bolivia and Nicaragua have won the Cup of Excellence competitions in those countries in 2007. The prestigious award program, managed by the U.S.-based Alliance for Coffee Excellence, selects the best coffees produced in a particular country in a particular year. Coffee connoisseurs appreciate the high quality and wide number of varieties. Availability: Organic coffee is available at retail outlets ranging from co-ops and specialty retail stores such as Trader Joe’s and Whole Foods to Big Box stores and supermarkets such as Wal-Mart, Costco, Sam’s Club, ShopRite, Safeway, and others. It is also popular on university campuses and high-end restaurants. In addition, organic coffee is sold extensively via the Internet. Consumer awareness: The organic coffee industry has gotten better at educating coffee drinkers about organic coffees in general and making the products readily available in a wide variety of venues. Environmental protection: Consumers are becoming increasingly concerned about food production and environmental protection and want to support production practices that protect the environment. More and more coffee buffs choose to purchase organic over conventional coffee as a way of ensuring environmental protection. Social Awareness: More and more companies are getting dual certification with Fair Trade to support farm workers and farm communities. Transfair estimates that 78 percent of the Fair Trade Certified™ coffee entering the U.S. is certified organic. Several companies also provide “fairly traded” organic coffees, for which growers are paid prices higher than the conventional market. This is a common practice particularly with companies purchasing coffee from a single estate as FairTrade Certified™ coffee may only be purchased from cooperatives of small-scale farmers. Whatever the reason, it is clear that sales of organic coffee are going nowhere but up. Participants in the Organic Coffee Collaboration – a project of OTA will be there to help fuel that growth for many years to come. Note: You can find further information on the Collaboration, including recipes, purchase locations, and fact sheets, at http://www.ota.com/ organic_and_you/coffee_collaboration.html.

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37 December 2007

State of the Industry – an equipment company’s view Superautomatics fuel espresso expansion By Ric Martin, Vice President, Espresso

n extraordinary trend is taking place in the coffee industry: the consumption of espresso-based beverages is increasing – and in some markets it’s skyrocketing. Besides this trend, sales of espresso-based beverages are continuing to rise across a variety of demographics. Since BUNN has been a central player in the beverage arena for the last half-century, we decided to respond to this trend by introducing an exciting line of superautomatic espresso machines, the BUNN Espress® Tiger. The expanding espresso wave “Perception vs. Reality” was the theme of a popular ad campaign in the 1980s. My perception, based on visits to specialty coffee shops around the nation, is that espresso drinks are becoming the beverage of choice for young people who are going a step further than ordering drinks from a menu board. Standing in line one day, I heard a young man order a “latte with six shots” and a stylishly dressed girl ask for a “dirty iced chai” – translation: an iced chai with a shot of espresso. The research findings backed up this perception showing that more and younger consumers are ordering espresso-based beverages than ever before. Our culture has changed and one element of that change has been the increasing popularity of espresso-based beverages. More markets, more variety Consumers are demanding a wide variety of espresso beverages – especially cold or iced beverages – in environments like quick serve restaurants, institutions, even c-stores. These consumers are used to having their iced lattes and they want them wherever they happen to be. The BUNN Espress Tiger superautomatic espresso machines work in a variety of service environments, dispensing both hot and cold espresso beverages at the touch of a button. One of the key benefits of the superautomatic is that less staff training is required for producing coffee-house quality espresso-based drinks. Of course, there will always be a need for skilled baristas to craft fine espresso; however, there are a host of locations where it’s not feasible to employ one. With the Tiger, quick-service restaurants, hospital cafeterias, and many other locations can offer espresso-based beverages to meet consumer demand.

Superautomatic espresso machines are now capable of producing high-quality, delicious, hot or cold espresso beverages. An intelligent modular brewing chamber adjusts espresso strength and flavor automatically, so there’s consistency in every espresso beverage. Superautomatic espresso machines boast grinders that can be adjusted to individual or regional taste preferences. In addition, superautomatics contain a tamping mechanism that polishes the grounds for uniform extraction and some can brew from espresso pods, providing a decaf option. Improved milk heating and foaming systems provide fresh dairy or soy milk to top off a drink. Small and easy to use, a superautomatic prepares premium beverages at the touch of a button so that even new servers can prepare high-quality espresso beverages. Added beverages, added profit By adding high-end espresso-based beverages to the menu, an operator can see increased beverage profits almost immediately. As I noted, customers are asking for the beverages they’ve grown accustomed to ordering. They may not patronize your establishment if they can’t get their favorite iced vanilla soy latte with a shot of espresso. Espresso-based beverages can also command a higher price than regular drip coffee. You can cover your costs if you sell just ten espresso-based beverages a day. Here’s an example: Assume you sell twenty espresso-based beverages per day: five espressos, ten cappuccinos and ten lattes. These could be hot or cold, but either way, at the end of one year at one location, you have made almost $23,000 in profit. That’s enough to cover the investment you made in a superautomatic espresso machine and have some left over. The perception that the espresso market is expanding is a reality. Just check out the nearest coffee shop, fast food restaurant, or white tablecloth establishment. There’s a good chance you’ll see espresso-based beverages on the menu. Espresso is here, and now superautomatics create an opportunity for many more markets to offer this premium beverage.

Ric Martin is BUNN’s Vice President, Espresso, a position he has held since 2006. Martin has spent his entire working career in the coffee business and has a deep background in espresso. In 1983, he joined the Bunn-O-Matic Corporation, living and working in many western locations, including in Denver, Oakland and Phoenix. In 1995, he became Director of Sales for Mountanos Bros. Coffee Company, rejoining BUNN in 1998. Martin uses his considerable knowledge of drip and espresso coffee applications in the beverage equipment business to support key clients in the national chain account segment. © copyright CoffeeTalk magazine 2007

38 December 2007

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Taking the Higher Road Guatemala’s commitment to quality pays off By Mr. Christian Rasch, President – Guatemalan National Coffee Association

uatemala’s coffee exports have been moving in one direction – up. Not just in production numbers but in quality. Today, the country produces 60 percent more washed Arabica coffee than it did thirty years ago. And the type of coffee has shifted away from primes towards higher quality hard bean (HB) and strictly hard beans (SHB). This is hardly what one would expect from a country that in the last decade has passed through a price crisis, extreme climate and increased worldwide competition. But the figures don’t lie. What has spurred on this evolution towards better coffee? – A chain reaction resulting from the strategic choice to focus on quality. In the 1990’s as the coffee industry transitioned away from commodity to premium quality, Guatemala’s producers, in order to receive better premiums, began to cultivate coffee at higher altitudes and improve processing practices. For producers to compete in the competitive specialty market, cup profiles had to exhibit defined acidity, body and aroma. The resulting crops yielded superior coffee and higher prices. Increased revenues also had an additional benefit in the field. Producers could now afford to spend more on fertilizers and processing, ensuring better harvests into the future. This positive cause and effect continues today as farmers invest in improved cultivation practices. As the coffee market moved towards quality, however, it demanded something more-transparent and traceable. Coffee buyers rightfully wanted to know where their coffee came from and if the premiums they paid went to the producer. In the beginning of the 1990’s, Guatemala led a pioneering effort to define the coffee producing regions based on climate, soil, altitude and cup characteristics. With the help of GPS technology and site visits by technicians, the Guatemala Coffee Association (ANACAFE) has mapped more than 3500 farms and 95 percent of cooperatives. This extensive process, which continues today, permits buyers to identify the origin of their coffee. It has also facilitated the Antigua region to gather technical data to solicit a Denomination of Origin for its coffee, with several other regions ready to follow suit. Another important factor in improved traceability has been the relationship coffee model which fosters communication between the grower and buyer. For small producers, particularly, the relationship model has translated into access to niche markets, increased revenues and long-term contracts. Tastes homegrown With all this good coffee being produced, it is only natural that the Guatemalans themselves should want to drink it. And that is exactly what has happened. Domestic consumption has increased significantly in the past ten years spurred on by access

to better quality coffees, new coffee shops and more disposable income. Today approximately 10 percent of Guatemala’s production is consumed locally. Guatemala has also been keen to promote local consumption after witnessing the positive effects this strategy had on Brazil, which in just five years has grown to be one of the world’s leading consumers of Brazilian coffee. Where the coffee is really green Increased high-grown coffee production in Guatemala has reforested many regions, as farmers switch from sun-grown crops to coffee. Today, ninety-eight percent of Guatemalan coffee is grown under shade, creating a forest that covers more than 270,000 hectares. The environmental impact of this coffee forest can not be understated, especially given Guatemala’s vulnerable and steep mountain topography. Without these forests, Guatemala would quickly suffer from erosion, dry soils and extreme landslides. Instead, with increasing coffee production, soil and water resources are protected, carbon is absorbed and stored and countless species of tropical flora and fauna find a habitat, including more than ninety species of migratory birds. Guatemala’s coffee future looks positive indeed. Increased training for producers on growing and processing practices has resulted in improved quality and higher yields. Proof of this is seen each year at the Cup of Excellence auction where previously unknown coffees receive record breaking prices for their product. On the environmental front, emphasis on the role of ecology and coffee has spurred many a producer to create Private Natural Reserves (PNR). The PNR model offers the possibility to grow coffee within a diverse agroforestry system that includes alternative crops, energy production and eco-tourism. On a global scale, Guatemala is making a presence in emerging markets such as China, Russia and Eastern Europe as they transition from tea to coffee. All the while continuing to provide countries like Canada, Japan and the United States with the levels of quality coffee they have come to expect from Guatemala. As the Guatemalan coffee industry has proven, when taking the higher road of quality, the sky is the limit. But the years ahead will also bring new challenges to Guatemala’s coffee industry. Production costs, from oil to fertilizer, have risen. Labor has become not only expensive but difficult to find. And like many other regions of the world, climatic changes have brought stronger storms and irregular rains. But as they have done for over two hundred years, Guatemala’s coffee farmers will respond and adapt, producing quality coffee into the future.

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39 December 2007

The State of the Industry – a growers view By Dr. Maria Ruiz

hallenges of the 21st century provide the right frame of reference for innovation and creativity in the coffee industry. Just thirty-five years ago, I experienced the movement toward what I call “homogenization.” In the Central American countries near Boquete, Panama, where I live, programs were created to promote the production of coffees. There was a great impetus on providing growers with financial support. The aim was to move them from the traditional manner of growing coffee to a more “progressive one:” higher density of coffee trees per area, the use of high yielding “better” coffee varieties or cultivars,” and, the balancing of the agro system with available fertilizers, insecticides, herbicides, and others chemicals. I do not know if this movement was to improve the coffee growers’ economic situation, if it was a response to market needs, or if it was for some less obvious reason. Enthusiasm for what seemed to be a bright future for high quality coffee growers, swept the area. By the beginning of the 80s, with the now higher production of better quality coffees, pressures were put on the international market structure – then under the International Coffee Agreement (ICA) – to liberate it so that consumers could get, and pay for, quality. The ICA was no longer in use after 1989. The wave of the gourmet and specialty coffee took off. The coffee-shop segment grew at an impressive and consistent rate, and economic figures seem to have risen to an expected and desirable place. In this type of industry, where there are many players throughout the value chain and where there are elements foreign to the industry with a direct effect on the industry’s movement, surprises should not occur that often. My personal belief is that quality prevails in spite of market movements. All the participants in the value chain possess the kind of interaction today due to technological advances. However, as a grower, I have a couple more reasons. In the early 1990’s, I ran into Mr. Alfred Peet who, with a very serious face, told me never to stop growing Arabica Typicas. I told him we still had some of those great trees. He did not expand on the subject, nor did I ask him what were the reasons for that advice. A few years after that incident, I was taken by surprise by the steep drop of coffee prices. As a grower, I believed that the quality of the coffee we offered to the market was going to protect us from the hit. I was wrong. On this part of the world, we growers were hit hard. Looking back, I can see that, at that time, the coffee industry suffered two major structural changes. One was Vietnam becoming the second largest coffee producer in the world. The second was a technological change at the after – green coffee processing segment of the industry. In regards to the first structural change, I wondered how so many of us coffee growers were not ready for it; we know how long it takes to build a coffee farm, we know what happens when, in an open market, supply increases. My © copyright CoffeeTalk magazine 2007

only explanation for not preparing ourselves for the change had to do with the idea that quality was the best card – still is the best card – but not for a change as the double one we had. The second structural change had to do with the creation of the vapo-process. It arrived almost at the same time as the first one took place. For the second one, growers could not be prepared. Technological development plays in a different arena due to intellectual property rights. Therefore, for a while, we could only see how the prices to the consumers generally dropped due to the trade off of quality for a drinkable coffee due to the new vapo-process. The process allowed some lower quality coffees to move up, filling “spaces” in the roasting segment of the market, thus increasing the offer to the market and keeping general prices down. Structural changes mean not turning back. The world is anew. Responses to the new coffee world came along with other realizations such as the global environmental state. This macro state involves a series of complex systems that basically represent a revision of the individual’s life style. It brings out questions about how we use energy and how much everyone is doing to promote the right path toward the future. It is not a surprise that sustainability is the right, although often elusive, path. At the coffee growers’ level, what thirty years ago was the deal of the day – sun dried coffee and all its systemic implications – today seems to be not so sustainable, especially if the change was at the expense of friendlier natural systems. Planting coffee cultivars that have great agronomic capacity but with little consumers’ palate desirability while at the same time, coming to the market with extremely limited amounts of the found “geisha cup” from the geisha variety grown in Boquete, Panama. In sum, growers are faced with the challenges of making longterm decisions regarding what to plant today in order to keep their farms as successful economic entities and still sustainable, while providing the market with a product it wants to acquire and consume. Will a new ICA be the answer to a complex industry as the coffee one? Will the industry as a whole take advantage of the new 21st century communication structures and technology to improve the lives of so many people in it? Can all the different levels of organizations, private, public, for profit, or not-for profit, etc. be able to participate in the process of sustainable – longterm – perspective? At the end, everyone is also responsible for the kind of decisions made at her/his own level of influence. The only way to really contribute in a positive manner to a sustainable process is to learn from history. All present structures were created by decisions made in the past. The structures of the tomorrow’s world will be created today. So, interaction in conversation is a path we must keep open in all available forums.