2 December 2009
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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 2010, we carry the legacy of 2009, a year that demonstrated just how dynamic, and volatile, coffee can be.
Kerri and I are privileged to watch the sweep of events
during 2009 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 roasters and retailers. 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 2010. We hope you enjoy, and we look forward to next year.
Miles Small Editor, CoffeeTalk Magazine
Š copyright CoffeeTalk magazine 2009
4 December 2009
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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 ‘flipbook’ format allows you to turn the pages from either the side arrows, hovering over the corners, or through the index. The report is also printable as a PDF and is email-able to yourself or others.
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.
© copyright CoffeeTalk magazine 2009
6 December 2009
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Table of Contents and Contributors Welcome............................................................................................................................................................2 How to use this document..................................................................................................................................4 Editor’s Prologue..............................................................................................................................................10 Sponsor’s Index................................................................................................................................................16 The State of the Industry – SCAA...................................................................................................................18
By Ric Rhinehart
Executive Director of the Specialty Coffee Association of America
CQI Moving Forward.......................................................................................................................................20
By Tracy Ging
U.S. Organic Coffee Market Continues to Grown Despite the Recession..........................................................24
By Sandra Marquard
Sales of Smithsonian’s Bird Friendly® Organic Coffee Grow to $3.5 million......................................................28
from 2000-2008
By Robert Rice, Ph.D.
State of the Industry at Starbuck’s....................................................................................................................32
By Dub Hay
Challenges Continue in Coffee-Farming Communities......................................................................................34
By Carolyn Fairman, Executive Director of Coffee Kids
Lilia ...............................................................................................................................................................38
By Rick Peyser
Cost vs Quality in Specialty “Blended Iced Coffees”.........................................................................................42
By Michael Rubin continued... © copyright CoffeeTalk magazine 2009
8 December 2009
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...continued
SOI at the International Women’s Coffee Alliance............................................................................................46
By Launtia Taylor, Director of Sales & Marketing, Probat-Burns, Inc
and President, International Women’s Coffee Alliance
The Millennium Development Goals and Specialty Coffee................................................................................50
By Al Liu
Integrating Sustainability: A Green Revolution for Coffee................................................................................54
By Gianluca Gondolini, Manager of Sustainable Agriculture Projects in Latin America, Rainforest Alliance
Specialty Coffee Industry Raises Nearly $100,000 for Grounds for Health.......................................................58 Left the Station?..............................................................................................................................................62
By Judith Ganes-Chase, President of J. Ganes Consulting, LLC
A time of opportunity for equipment manufacturers.........................................................................................66
By Greg Fisher, BUNN Senior Vice President, Commercial Sales
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© copyright CoffeeTalk magazine 2009
10 December 2009
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Editor’s Prologue By Miles Small, Editor- CoffeeTalk Magazine
W
elcome to the “10’s.” And just speaking for me, I am really glad to see the “00’s” go. Folks are having a hard
time figuring out what to call the “00’s,” are they the ‘aughts?’ the ‘zeros?’ Lately I have been thinking that we ought to call the last decade the ‘ought nots,’ as in ‘we ought not to have done a lot of the things that we did.’
Although it probably is worthy of a round of applause
that we managed to emerge from one of the most missmanaged decades in world history without being annihilated,
•
A free market, allowed to run with no government
stripped naked, and genetically mutated, I would like to believe
oversight will be, by definition, ethically and morally
that is all behind us now, but…well, one can hope.
responsible as it behaves out of necessary self
preservation.
It is a little hard to believe that is was only 10 years ago
that we all rushed into 2000 with the firm belief that all our
computers, clocks, nuclear missiles, cars, phones, televisions,
of individuals within large organizations became more
and whatever would suddenly snap back to the year 1900 and
compelling than the goal of maximizing return to shareholders
decide that they did not yet exist and therefore self-destruct.
while operating a sustainable business model. Where once,
This apocalyptic vision of the new world of 2000 may not
when General Motors sneezed, the nation caught cold, now
have been the best way of entering the 3rd millennium. This
when Goldman-Sachs sneezed General Motors almost died of
entrance did however set the tone for all that was to come
starvation.
cascading down later. After all, if we are so able to accept that
•
In the ‘ought nots’ the salaries, opportunities, and bonuses
The assumption of the entitlement of authority is
senior citizens will be allowed to starve in the streets because
attainable through force and does not have to be earned
banks will not be able to open their time-lock safes, then the
through respectful deeds.
rest of the decade seems relatively easy to swallow.
imposition of philosophical and physical force upon an unwilling
So many of the assumptions we held in 2000 have gone
away by 2010, such as…
The United States learned early in the decade that the
world leads to active opposition. Never have we had so many enemies from such diverse backgrounds plotting to witness the continued... © copyright CoffeeTalk magazine 2009
12 December 2009
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CoffeeTalk
...continued death of our country within their lifetimes. And what is their
size worldwide since the turn of the century. (A uniquely weird
primary beef with us? – It is that we are so unconsciously self-
thing to say) Yet the supply of coffee available to support this
righteous in our international relations.
growth has risen very little. The result of this is that everyone
This attitude passed to our society as well. The ‘ought nots’
involved in specialty coffee EXCEPT those whose livelihood is
marked the growth of the bully mentality in America; the belief
directly associated with specialty retailing have had a pretty
in personal entitlement as the reason for behaving badly. Ask
good year.
not how Bernie Madoff could have happened for ‘he’ is ‘us.’
•
Our leaders will lie about just about everything, but they
on specialty retailing could be flawed. It is true that there has
would never lie to intentionally lead us into an unprovoked
been little growth in retailing in the US, Europe, and Japan,
war.
but the rest of the world has seen explosive growth in retailing
Americans were brought up to believe that we were the
operations as more countries enter the coffee culture.
In fact, even the notion that the year may have been hard
good guys; the cavalry coming to the rescue of oppressed
Mexico, Brazil, India, and others are beginning to consume so
peoples under attack from vicious and brutal tyrants; That we
much product internally that very little coffee is left for export,
will only shed the precious blood of American soldiers in the
shorting international supply.
cause of freedom and peace.
After Iran, does anyone still believe this? I admit that I was
with mature markets? Probably, and inevitably. We were due
duped by our country’s leaders into believing in weapons of
for a market correction. Starbuck’s famous downsizing was a
mass destruction. For this I am truly ashamed but, I am not
natural outcome of rapid expansion and tightening financial
alone in this. I believe that there is an undercurrent of national
markets. When sales start to flatten, low-profit stores are closed
shame and a sincere desire to make things right again.
and staff is reduced to raise P/E ratios. This is Finance 101, and is
So is the recession only affecting retailing in the countries
highly recommended for all operations. That Starbuck’s chose
And, of course…
to do this just prior to the economic crash is frankly, simply bad luck. The impact this action had on the industry as a whole has
•
Coffee is recession-proof
Well,
okay…this
one
more to do with terrified analysts is
on Wall Street that it does on the
kind of hard. Coffee is, after all,
fundamentals of the industry.
recession-proof; it is specialty
coffee retailing that isn’t. Too bad
by-the-cup market is, in my
that it took a recession, primarily
opinion, the direct result of
hitting the middle class, to find
misguided and sensationalist
this out. Of course one reason
journalism. In a media circus
that we didn’t see this downturn
dependent
The downturn in the coffee-
on
the
perfect
coming is that specialty coffee really wasn’t that big a factor in
metaphoric example to visualize the economic downturn, the
2000. Specialty coffee retailing has more than quadrupled in
US press focused on the so-called “$5 latte.” continued... © copyright CoffeeTalk magazine 2009
14 December 2009
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CoffeeTalk
...continued Ignoring for the moment that the “$5 latte” is chicken-feed
Ethiopian coffee. The inevitable result was that the unique and
compared to $3000 car stereos, or $1500 spinner wheels, or
extraordinary coffees of Ethiopia might no longer be special
$400 spa treatments, the “$5 latte” became the poster child
and farmers would continue in absolute poverty, unrewarded
for luxury excess and irresponsible use of money. Every media
for their labors.
outlet was chiding us for wasting money on coffee when we
should be saving it up.
trading window’ and will begin to ensure fair and honest
trading directly with the growers of Ethiopia.
With over 300,000 people making their living directly
The process has started in Ethiopia to open a ‘second
from the sale of coffee-by-the-cup in the United States, and
the millions who make their living from coffee worldwide,
the test of the past economic downturn. In the following pages
this seems amazingly short-sighted. Imagine if the media had
you will read first person accounts from some of the most
instead told us that we were stupid not to save our money on
influential leaders in our industry. We have presented a rich
new cars and that no one should purchase a new car this year.
cross-section of ideas from every corner of Specialty Coffee.
I just do not see that happening.
These articles give us a sense of how we have done this past
I have had the good fortune to witness the daily struggles
year and what we will do in the future. In reading these articles
and successes of our industry through producing and editing
I am struck by the honesty and integrity of the opinions and I
CoffeeTalk’s Daily Dose. I have seen the extraordinary resilience
am humbled to be part of this industry, and in the company of
and courage of our industry. Many have dropped out of business
these leaders.
but, in truth that is a very common occurrence in coffee retailing,
many more have opened up; thrown their hats into the ring and
questions that have needed to be answered were finally
taken a shot at the great success and satisfaction that can be
addressed. We are stronger, smarter, and wiser for the
found in the coffee industry.
experience and still healthy. We have shown that there is more
to this coffee thing than just a fad. After 500 years of serving
Coffee has proven itself to be faithful to the goal of justice
and fair dealing with all peoples in the supply chain. A great
Coffee’s future is bright and all the more ensured following
These times have not been easy for coffee, and a lot of
coffee, I guess we are here to stay.
example of this is the intensive effort on the part of the SCAA and the CQI, along with interested NGO’s, the United Nations and the Ethiopian Coffee Exchange to correct substantial issues and challenges with the way Ethiopian Coffees are traded internationally. A system which was not sustainable and was corrupted by individuals in the Ethiopian ruling party was keeping Ethiopian growers from receiving a fair price for their coffees. Through possible market manipulation and regulatory monetary practices, along with control of export licenses and logistics, the Ethiopian Government through a private corporation, the TPLF, was seemingly snatching control of © copyright CoffeeTalk magazine 2009
16 December 2009
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Sponsor’s Index America’s Food Technologies, Inc./AMFOTEK........ 708.532.1222
www.amfotek.com
3
ANACAFE/Guatemalan Coffees
www.guatemalancoffees.com
65
Baratza LLC................................................................. 877.701.2021
www.baratza.com
9
BriteVision.................................................................. 877.479.7777
www.britevision.com
11
Bunn-O-Matic Corporation........................................ 800.637.8606
www.bunn.com
55
Cablevey Conveyors.................................................. 641.673.8451
www.cablevey.com
47
Cafe de El Salvador................................................... 503.2267.6600
www.salvadorancoffees.com
13
Capitol Cups............................................................... 334.321.3322
www.capitolcups.com
37
Cappuccine................................................................. 800.511.3127
www.cappuccine.net
35
Club Coffee lp............................................................. 800.387.4367
www.clubcoffee.ca
45
Coffee Holding Company.......................................... 800.458.2233
www.coffeeholding.com
15
Component Design Northwest, Inc. (CDN).............. 800.338.5594
www.cdn-timeandtemp.com
29
DaVinci Gourmet/Oregon Chai/Jet........................... 800.640.6779
www.davincigourmet.com
49
Everpure..................................................................... 800.323.7873
www.everpure.com
57
F. Gavina & Sons........................................................ 800.428.4627
www.gavina.com
5
Fabbri North America, LLC....................................... 718.764.8311
www.fabbrinorthamerica.com
19
Georgia Pacific-Dixie................................................. 866.435.5647
www.dixiefoodservice.com
41
International Paper Foodservice Business.............. 800.537.4141
www.ipfoodservice.com
51
Java Jacket................................................................. 800.208.4128
www.javajacket.com
21
Nucoffee..................................................................... 551.156.432082
www.nutrade.com.br
17
Probat Burns, Inc....................................................... 901.363.5331
www.probatburns.com
61
PureVia/Whole Earth Sweetener.............................. 888.658.1948
www.purevia.com
43
SCAA........................................................................... 562.624.4100
www.scaa.org
31
Scolari Engineering S.p.A......................................... 856.988.5533
www.scolarieng.com
7, 68
Smoothie Essentials Supplement-Boosts............... 415.382.6535
www.smoothieessentials.com
67
Sonofresco LLC.......................................................... 360.757.2800
www.sonofresco.com
53
SweetBird................................................................... 866.575.6901
www.heysweetbird.com
39
The Barista Box.......................................................... info@baristabox.com
www.baristabox.com
33
TightVac...................................................................... 888.428.4448
www.tightvac.com
59
Torn Ranch................................................................. 800.721.1688
www.tornranch.com
23
Weldon Flavorings..................................................... 502.797.2937
www.WeldonFlavorings.com
27
Wilbur Curtis.............................................................. 800.421.6150
www.wilburcurtis.com
63
WMF of America, Inc................................................. 888.496.3435
www.wmfamericas.com
25
© copyright CoffeeTalk magazine 2009
18 December 2009
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The State of the Industry - SCAA By Ric Rhinehart Executive Director of the Specialty Coffee Association of America
A
s the year draws to a close, we can look back at 2009
brand.
and for the most part find ourselves celebrating its
Ethiopia, progress
passing. From the outset it was a challenging year
continues
In to
be
with much of the economic turmoil of the prior year just
made on restoring
beginning to have an impact on businesses large and small
transparency
all over the world. The shock of the financial crisis of late
traceability
2008 had a profound impact on decisions about spending
specialty sector. In the rest of
and investment for individuals, institutions, and businesses
East Africa numerous projects dedicated
alike. The economic stresses were further exacerbated by
to increasing production and stabilizing
concerns over climate change, continued political instability
supply continue, funded by western governments and large
and, in the coffee world, by shifting patterns of production
NGOs. Central America continues to struggle with land use
and consumption.
pressures, political and economic issues and an uncertain
dollar but coffee production continues to be a source of
The year saw much of our fundamental thinking around
and to
the
coffee challenged. Large specialty coffee chains stumbled
currency and hope for many.
as consumers retrenched, quality-focused providers grew
concerned about buyers trading down on price and the entire
present many challenges. Consumers are actively seeking
coffee world shuddered as Colombian prices skyrocketed on
good values as they balance lowered spending with a move
short supply. Brazil, India, and Mexico combined to consume
towards more interest in the origins of food and beverages
over thirty percent of their own production. In the birthplace
they purchase. The most successful retailers have been able
of coffee, Ethiopia struggled to come to grips with balancing
to blend highly differentiated product quality with a detailed
economic necessities with internal demand.
exposure of the supply chain and the very human faces
Here at home the retail specialty market continues to
In spite of all of this, the year in coffee did not turn out
involved in it. The challenge to maintain high levels of product
to be nearly as disastrous as it might have been. Worldwide
differentiation at the top end of the quality spectrum will
coffee consumption remained strong with an overall growth
undoubtedly remain as a key issue in the coming year. New
of 1.5-2%. Supply and demand were very nearly in balance
store openings have been largely stifled by the lack of accessible
despite very tight supplies of Colombian and Central American
credit and this will likely continue into next year. Meanwhile
coffees. In the US, consumers switched from out of the home
suppliers to the trade from equipment manufacturers to trade
consumption to more in-home brewing in the early part
shows have had to adapt to this changing market reality.
of the year. This gave a major boost to single cup brewing
technologies and some previously stagnant grocery shelf
promoting, recognizing, and developing specialty coffee. We
players. Nonetheless, specialty consumption stayed strong
have closely examined our own offering to the community
and there is some evidence that consumers have taken much
and are creating exciting new educational programs that focus
of their specialty coffee brand preference home with them.
on professional development. We continue to increase our
The SCAA continues to focus on its core mission of
On the producing side, Colombia still faces major
accessibility to the international community and have taken
challenges to regain the lost production capacity of prior years
an active role in representing the specialty coffee market to
but the Colombian government and the entire coffee sector
producers and emerging consumers alike. Like most of the
are committed to renewing their efforts towards increasing
industry, we find ourselves looking forward hopefully rather
production of high quality coffees. Most encouragingly,
than backward wistfully.
consumers have by and large remained loyal to the Colombian Š copyright CoffeeTalk magazine 2009
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20 December 2009
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CQI Moving Forward By Tracy Ging Improving Coffee Quality and the lives of the people who produce it.
O
ne of the drivers of CQI’s mission is a concern
way and collectively build a strong future for quality coffee.
about the long-term supply of quality coffee.
Events in 2009, especially the high prices for
ongoing projects, expanding its reach in Central and South
Colombian coffee resulting from erratic weather patterns,
America, establishing a presence in Indonesia, and increasing
and lowered production forecasts for the crop year 2009/2010,
the number of Q Graders worldwide to over 800. But the most
we see further evidence of a threatened supply. In Colombia,
significant strides toward a strengthened supply chain were in
production isn’t expected to return to normal levels until 2014.
Eastern Africa.
In 2009, CQI continued work on a number of new and
In Kenya and Ethiopia, droughts this year have curtailed their estimates
Ethiopia.
significantly.
Central
After newly enacted legislation and
America, economics and land use
the introduction of the Ethiopian
pressures severely limit their ability
Commodity Exchange (ECX), there
to increase production back to
was a great deal of uncertainty
historic levels…ever.
about the fate of specialty coffee
In the rest of the world, there
from Ethiopia.
is
varying
absorb
with ECX on solutions to address
demand. The market seems to find
the needs of the sector and after a
ways around the problem, short-
series of training and concordance
And
capacity
in
to
CQI began working
term solutions, but this is an issue that needs longer-term
exercises, certified more than thirty ECX cuppers as Licensed
vision. In order for our industry to grow and thrive, we need
Q Graders and integrated the SCAA standards and protocols
a sustainable supply of high quality coffee, just as coffee
into their arrival grading system.
growers need sustainable livelihoods.
CQI’s model in this regard has remained largely
into their internal system and should lead to better identification
unchanged—provide education and technical assistance to
and separation of specialty lots from Ethiopia. These lots will
elevate quality (primary through Coffee Corps), create the
be identified as “Arrival Q,” signifying they’ve gone through
infrastructure and systems to identify and separate quality
a preliminary assessment and show the potential to pass the
coffee at origin (The Q), and build strong coffee communities
SCAA standard for green coffee quality. Moving forward, CQI
through appropriately managed reinvestments (the reason for
will continue to train cuppers, monitor calibration, and help
our Women in Coffee Leadership Program). But our rationale
ECX expand the system into their planned regional facilities.
and approach are just a small part of the equation, it’s the
Since all of the coffee lots arriving from the mills will be
work on the ground, the individual projects, which pave the
This is the first origin country to incorporate the processes
continued... © copyright CoffeeTalk magazine 2009
22 December 2009
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CoffeeTalk
...continued cupped, the embedded Q program within ECX will be a great
assessment, training and technical assistance, field lab
discovery vehicle for identifying all of the outstanding coffees
expansion, and implementation of the Q Coffee System region-
from this country.
wide. While the work is just beginning, it’s worth mentioning now as it represents an enormous opportunity for CQI to
The Robusta Symposium.
have a significant impact in the global coffee supply chain.
That doesn’t mean the rest of the world is less important, or
Comprising over 40% of world production, yet valued coffees,
that our work elsewhere will stop, but
advances in Robusta coffee quality
it does provide a focus for the next few
would have an enormous impact on
years and an opportunity to advance our
the lives of millions of producers.
mission more deeply.
significantly
under
Arabica
In
August of 2009, CQI, in partnership with the Ugandan Coffee Development
Partnership with SCAJ.
Authority, hosted a Robusta Symposium
for delegates from eleven different
origin only gains meaning when it is
countries to begin working on quality
recognized and supported by consuming
standards and grading protocols for
countries. One of the most significant
Robusta coffees, with the purpose of
demonstrations of that commitment of
identifying and elevating quality in this
supporting CQI’s mission occurred this
category of coffee. An initial draft of the
year in Japan. In October, CQI signed
protocols was developed and further
a memorandum of understanding with
workshops are being held to refine the
the Specialty Coffee Association of
documents before an expected release
Japan (SCAJ) outlining their intention to
in late 2010.
grow the Q program, including further
Of course the work we do at
training, calibration, and promoting the Expansion in Eastern Africa.
Q standard of quality.
In October, CQI secured a grant
This type of partnership is what
and
creates traction toward the long-term
Trade Expansion Program (COMPETE)
goal of building a sustainable supply
funded by the United States Agency
of high quality coffees, and with this
for International Development (USAID).
agreement in place, I except we’ll have
This multi-year project covers a variety
even more significant accomplishments
of interventions including a competitive
to report next year.
through
the
Competitiveness
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. © copyright CoffeeTalk magazine 2009
24 December 2009
www.CoffeeTalk.com
CoffeeTalk
U.S. Organic Coffee Market Continues to Grow Despite the Recession By Sandra Marquardt on the Mark Public Relations and Coordinator, Organic Coffee Collaboration, a project of the Organic Trade Association.
M
any in the coffee industry expected that sales of
coffee industry. Currently, 40 countries account for the organic
certified coffees would decline precipitously in a
supply, with Brazil, Ethiopia, Mexico and Peru, among the
recession market given their somewhat higher
leaders.
prices. However, according to The North American Organic
Coffee Industry Survey 2009 by Daniele Giovannucci, the
any other certified coffee, other sustainably certified coffees,
North American organic coffee market topped 1.3 billion
including organic and those certified to standards such as
dollars in 2008, making it the single most valuable organic
Fair Trade Certified™, Rainforest Alliance Certified™, Bird
product imported into North America.
While organic coffees are far more widely distributed than
Friendly®, Starbucks’ C.A.F.E. Practices and
The data were released July 21 at a
UTZ CERTIFIED™, are the brightest stars
sampling event hosted by the Organic
of the North American coffee industry,
Coffee Collaboration, a project of the
according to Giovannucci. Together, they
Organic Trade Association (OTA), featuring
account for nearly one-fifth of the total value
new crop organic coffees from leading U.S.
in the U.S. coffee market. Approximately
roasters including Caffe Ibis, Chiapas Farms,
two-thirds of all North American organic
Crimson Cup, Equator Estate Coffees & Teas,
coffee imports were certified by at least
Green Mountain Coffee, S&D Coffee, and
one other certification, with Fair Trade
True Origin Organics. Other Collaboration
certification the most popular. Fifty nine
participants include Elan Organic Coffee,
percent, or 51,971,672 million pounds, of
Maximus Coffee Group, and Swiss Water
the Fair Trade Certified coffee imported
Decaffeinated Coffee Company.
into the United States in 2008 was certified
organic in 2008, according to Transfair
According to the study, approximately
89 million pounds of organic
USA.
coffee were imported into the
United States and Canada in
continues to be an important
2008, a 12 percent increase
part of the coffee industry,
from 2007, with most of the
particularly for those customers
sales taking place in the United
who love the taste of coffee but
States. The 29 percent annual
need to reduce their caffeine
average growth rate for the
intake. Maximus Coffee Group
organic category documented
in
by Giovannucci between 2000
decaffeination company located
and 2008 dwarfs the estimated
in the U.S. to gain certification
Decaffeinated
2008
coffee
became
the
first
1.5 percent projected annual growth rate of the conventional
continued... © copyright CoffeeTalk magazine 2009
?
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2009
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26 December 2009
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CoffeeTalk
...continued as an organic decaffeinator (C02). Swiss Water Decaffeinated
expanding into college food services nationwide by providing
Coffee Co. continues its strong presence serving the U.S.
organic coffee to Feel Good World (www.FeelGoodWorld.org),
coffee market using its Swiss Water Process.
a student-run social venture to raise money and consciousness
about world hunger and sustainability at campuses across the
®
College campuses continue to see growth of the organic
coffee sector, according to participants in the Collaboration,
country.
whether a result of bottom-up pressure from students or top-
down decision-making from proactive faculty and food service
and universities nationwide, Green Mountain Coffee has
administrators.
seen these sales triple over the past two years. Key locations
For example, Caffe Ibis has seen sales of its triple-certified
Selling its Fair Trade organic coffee to over 175 colleges
include Wesleyan University, Indiana University, the University
(organic, Fair Trade Certified , and Bird Friendly ) coffees
of Massachusetts, and, of course, the University of Vermont.
increase dramatically over last year at the University of Utah
(Salt Lake City, UT), and Utah State University (Logan, UT),
supplies organic, Fair Trade, and Rain Forest Alliance certified
the result of both expanded availability and, in the case of
coffees to over 400 colleges and universities.
the University of Utah, benefactors, faculty and students alike
urging the food service to “green” its offerings.
market are more cautious than in any of the past nine years
but still indicate continued growth in this market segment.
™
®
Equator Estate Coffees & Teas has provided organic
Through several brand initiatives, S&D Coffee currently
Giovannucci’s projections for the 2009 organic coffee
coffees to the City College of San Francisco since 2007 and is
Left to right: Nishi Whitely, Chiapas Farms; Laura Petersen, Green Mountain Coffee; Sandra Marquardt, On the Mark Public Relations; Stephen Schulman, S&D Coffee; Silvia Covelli, True Origin Organics; Maria Cleaveland, Equator Estate Coffees & Teas; Brooke McDonnell, Equator Estate Coffees & Teas; and Ed Wakeham, Maximus Coffee Group.
The North American Organic Coffee Industry Report -2009 is available through the Organic Trade Association at: http://ota.com/ bookstore/2.html. More information about the Collaboration is available at http://www.ota.com/organic_and_you/coffee_collaboration.html. © copyright CoffeeTalk magazine 2009
28 December 2009
www.CoffeeTalk.com
CoffeeTalk
Sales of Smithsonian’s Bird Friendly® Organic Coffee Grow to $3.5 million from 2000-2008 By Robert Rice, Ph.D.
O
ver the years, consumers have paid increased
Bird Friendly® criteria include: a minimum canopy height
attention to the methods under which their
of 12 meters; a species list of at least 10 trees in addition to
coffees are grown, frequently searching out
the major or “backbone” species; at least 40% foliage density;
coffees certified to organic, Fair Trade, or other standards to
and three strata or layers of vegetation that provide structural
try to do the right thing for the environment via the simple
diversity. Criteria apply to the coffee production area itself and
act of drinking a cup of coffee. Tangled up in this heightened
are considered by industry and certification specialists to be
awareness of coffee’s origins and production methods are
the strictest shade standards in the world
often unsubstantiated claims of coffees being “shade-grown,”
with some companies developing their own standards, while
Friendly® standard soared to nearly $3.5 million from 2000 to
others use standards that do not require organic certification.
2008. The majority (61%) of all Bird Friendly coffee roasted
Fearing “greenwashing” and recognizing the importance
was consumed in the US, with Japan in second place (36%)
of rigorous standards that ensure consumers get what they
and Canada a small but expanding 3%. Sales in Europe
think they are paying for, the Smithsonian Migratory Bird
launched in the Netherlands in June, 2009, offering the first
Center (SMBC) of the Smithsonian National Zoological Park
Bird Friendly® to coffee connoisseurs on the continent.
in 1997 developed strict criteria for Bird Friendly® coffee
that specify what truly constitutes a “shade grown” coffee
eat and coffee they drink are grown and processed in ways
that provides quality habitat for birds and offers a refuge for
that are healthy for farmers and the environment,” says Dr.
biodiversity in general.1
Robert Rice, who coordinates the Bird Friendly® certification
“Bird Friendly®” refers to certified organic coffee produced
program at the SMBC. “By choosing to drink Bird Friendly®
on farms with a shade cover that provides substantial and vital
coffee to kick-start their morning, consumers can help protect
habitat for migratory and resident birds in tropical landscapes
quality habitat for birds and other wildlife.”
increasingly threatened by deforestation globally at an
unprecedented rate. Migratory birds, including the popular
and large coffee farms in Central and South America with the
Baltimore Oriole, are not only beautiful with vibrant songs,
remainder coming from Africa. Specifically, more than 95% of
but are integral to tropical and temperate ecosystems alike,
BFC comes from small and large coffee farms in Central and
providing flower pollination, seed dispersal, insect control,
South America. Producing countries include (in alphabetical
among other roles.
order) Colombia, Ecuador, El Salvador, Guatemala, Mexico,
Sales of organic, shade-grown coffee grown to the Bird
“Consumers increasingly want to know that the food they
More than 95% of Bird Friendly® coffee comes from small
continued... © copyright CoffeeTalk magazine 2009
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30 December 2009
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CoffeeTalk
...continued Peru, and Venezuela. Since
the next year or so should see
2007, BFC has also come
some BF Sumatran coffee on
from Ethiopia, the birthplace
the market.
of coffee.2
With
Some 1,400 producers
interest in taking viable actions
currently manage more than
to protecting migratory birds
12,000 acres (5,000 hectares)
and with roasters interested in
of
farms
providing coffees with double
than
or triple certification to attract
6 million pounds of BFC in
a range of consumers, SMBC
the 2007/2008 harvest year.
estimates that sales of Bird
Peru ranks #1 in production,
Friendly® coffee will continue
with 39% of all BFC, and with
to grow dramatically in 2010
Guatemala and Mexico, the
and beyond.
three account for 77% of all
To put its certification where
the BFC certified.
its coffee is sold, the Zoo also
The volume of BFC sold
announced a partnership with
in the US between 2000 and
coffee roaster Golden Valley
BFC
and
area/coffee
produced
more
growing
consumer
2008 increased more than 100-fold (averaging a 145% annual
Farms (West Chester, PA) which will offer its Bird Friendly-
increase), from fewer than 2,000 pounds to 200,400 pounds.
certified organic coffee in the Zoo’s three restaurants as of
There are 44 roasters in the U.S., Canada, The Netherlands,
December, 2009.
and Japan that carry Bird Friendly® coffee imported by 16 companies.
The Latin American focus of the Bird Friendly program
flows out of the SMBC’s mission to focus on migratory birds
As an agricultural land use, the right shade conditions in coffee can provide supplemental habitat for a number of organisms. It cannot and should not be touted as a substitute for protected areas. 2 As farms’ certifications lapse and get renewed, these countries of origin change, as does the total volume certified. 1
of the Western Hemisphere. The criteria, however, being biophysical in nature, can be applied to other regions. Efforts to explore and expand BFC’s reach into Indonesia and Papua New Guinea, as well as other African countries, are part of the long-range goals of the program. Initial forays into Sumatra’s Aceh region produced promising results for a BFC there, and
Dr. Robert Rice, coordinator of the Smithsonian Migratory Bird Center’s Bird Friendly
®
202-633-4209.
program, can be reached at ricer@si.edu or
© copyright CoffeeTalk magazine 2009
32 December 2009
www.CoffeeTalk.com
CoffeeTalk
State of the Industry at Starbuck’s By Dub Hay, Senior Vice-President, Coffee and Global Procurement – Starbuck’s Coffee Company
I
t is an understatement to say a lot has changed in the last year. As we all know, consumer priorities have shifted with the economy, prompting many to make changes across our industry. While change is essential, at Starbucks, we know some things must remain constant. We continue to listen to our customers and focus on the innovations our customers demand. Pushing the limits of what others think will work is nothing new for Starbucks. We have a long history of innovation, beginning in 1984 when Starbucks served its first latte following Howard Schultz’s trip to Italy. That latte introduced many Americans to espresso drinks, and a whole new coffee culture was born. In 1987, our FlavorLock™ technology allowed Starbucks to ship freshly roasted coffee to customers as far away as Canada, opening Starbucks up to its first international market. In 1996, we again transformed the industry by taking the popular Frappuccino® blended beverage from our stores and created a new ready-to-drink line available globally where groceries are sold. This year we reinvented the coffee category yet again with the introduction of Starbucks VIA™ Ready Brew, a breakthrough in instant coffee that delivers the same great taste and quality of Starbucks® coffee in a convenient and easy-to-carry single-use pack. Getting to Starbucks VIA™ was a two decade-long journey that began with Don Valencia, the creator of the coffee extract that makes Starbucks® bottled Frappuccino® coffee drink and many other products possible. The development of Starbucks VIA™ resulted from years of research and thousands of cups of coffee. We tried many different avenues to achieve brewed parity that it was like solving a Rubik’s cube. Despite feeling like we were almost there countless times, we knew we could not introduce a soluble coffee until we were certain we had it right. At times, it didn’t seem like we would be able to get there. When Howard returned as CEO in 2007, he asked the Coffee team to refocus
our efforts on cracking the “instant” code – and with renewed energy behind our efforts, crack it we did. We believe the proof is in the cup for Starbucks VIA™ Ready Brew, just as it is for all of our coffee beverages. After nearly twenty years of research and the development of a patent-pending process, we had the pleasure of sitting down together over a steaming cup of Starbucks™ VIA that perfectly replicated freshly brewed Starbucks® coffee. Starbucks VIA™ is 100 percent natural roasted coffee, with no by-products or chemicals, and is made from responsiblygrown and ethically-sourced Starbucks-quality arabica beans. With Starbucks VIA™ all you have to do is add hot or cold water to your cup to brew bold, delicious Starbucks® coffee in an instant. Customers are beginning to make Starbucks VIA™ a part of their lives at the office, at home and on the road. We’ve received rave reviews from consumers and influencers alike. This year we introduced Starbucks VIA™ Colombia and Italian Roast to customers in the U.S., Canada and select stores in London. Decaf Italian Roast was soon introduced in the U.S. this fall. Early indicators show that Starbucks VIA™ is exceeding expectations, reinforcing the significant potential business opportunity for this product. In 2008, the global soluble coffee market was worth $21 billion and accounted for 40 percent of total coffee sales. We believe that Starbucks VIA™ is the kind of innovation that will further drive growth for our business, both in the instant and brewed categories – and we’ve only just begun. In the coming year, you will see Starbucks VIA™ introduced to additional markets around the globe. While the less-than-a-dollar a cup price point seems to answer the world’s cry for quality and savings, two decades of research suggests Starbucks VIA™ will answer long term needs for an increasingly value-conscious and mobile society eager for simpler ways to indulge without sacrificing quality. At Starbucks, we believe the market is ripe for this innovation – we will continue our journey of listening to consumers needs, and providing them with great-tasting solutions.
Dub Hay
Willard (Dub) Hay joined Starbucks Coffee Company in November 2002 as senior vice president, Coffee. Hay is responsible for ensuring that Starbucks serves only the best coffees the world has to offer, overseeing green coffee purchasing, roasting, blending, recipe development and coffee education of Starbucks partners (employees). In May 2005, Hay broadened his scope of responsibility within the Supply Chain Organization to include all Starbucks Global Procurement. In addition to his role as senior vice president, Coffee, and his leadership role in Tea, he has integrated the Global Procurement teams to include dairy, food, beverage, print/packaging, store development, capitol and Information Technology, merchandise and services.
© copyright CoffeeTalk magazine 2009
34 December 2009
www.CoffeeTalk.com
CoffeeTalk
Challenges Continue in Coffee-Farming Communities By Carolyn Fairman, Executive Director of Coffee Kids
A
s the global financial crisis ravages our economy, our
care, and better food security. Our approach works. With your
businesses and our communities in the developed
help we can work with even more communities that are in
world, we have gained a deeper appreciation of the
need.
perils of narrowly-focused economic dependence.
Just as every coffee community is unique; each Coffee
The collapse of the financial infrastructure, which seemed
Kids project is unique, tailored to the specific needs of the
unshakeable, has created a desire
communities. The Coffee Kids approach
for
economic
allows people to develop their own
independence. The current situation
projects and to refine their efforts as they
highlights the interdependence of
learn what works best for them. Rather
our global community, especially in
than use a “one size fits all” approach,
the world of coffee where many of us
Coffee Kids takes the time to listen and
depend on the hard work of coffee-
customize efforts, ensuring outcomes
farming families halfway around the
that are embraced by the community
world. As we see signs of recovery,
long after we are gone.
we must remember these lessons
long after the recession has past.
partner
Self-Managed
Development
(AUGE)
in
Mexico,
more
individual
It seems a good time to reflect
on the mission of Coffee Kids and why it was founded over 20 years ago. For generations, coffee-farming
The microcredit and savings project managed by Coffee Kids partner, AUGE, in Veracruz, Mexico, has even attracted children interested in saving for their future.
Thanks to Coffee Kids’ support, our
Veracruz,
has
worked in microcredit since 1995. The organization began with a group of 100 women who gathered together each
families have been trapped in a cycle
week to deposit their savings and learn
of grinding poverty, primarily due to
about managing finances. Over time,
their overwhelming dependence on coffee for income.
their savings grew until they could provide small loans for
members and expand their work.
Until the stranglehold of economic dependence on
coffee is broken, these communities are destined to ride the
economic roller coaster of the commodities market. Families
over 4,000 women, men and children who in 2009 saved over
need alternatives to coffee, alternatives that provide for
$400,000 and distributed more than $240,000 in low interest
more consistent income, so they can continue farming coffee
loans. The microloans are used to buy supplies and medicine,
without worrying for their survival.
open small businesses, and pay for school costs.
Our work with 15 locally-based partners, who manage 24
Since their beginnings, the organization has swelled to
We are also proud to announce a ‘graduation’ process
projects in over 200 communities in Latin America has shown
for our partner in Costa Rica. The Rural Children’s Education
us that this cycle of economic dependence can be broken. Time
Foundation (FHC) has been a Coffee Kids partner since 1996
after time, we see communities of coffee-farming families –
when they began providing scholarships for the children of
that were living in poverty – become more financially secure
coffee farmers and grants for schools in coffee areas. FHC
with better training and education, improved access to health
continued... © copyright CoffeeTalk magazine 2009
36 December 2009
www.CoffeeTalk.com
CoffeeTalk
...continued has created an endowment
subsequent ability to provide
to
grants to partners have been
guarantee
government
scholarships for students and
severely impacted.
the organization is completely
self-sustaining, the ultimate
to recover, we hope that we
goal for Coffee Kids-supported
can count on our members and
projects.
donors from the industry to renew
This
a
lesson
year,
we
about
dependence.
learned
support for our mission. With a
economic
20-year track record of success
Coffee
Kids
relies heavily on donations and grants from the coffee industry.
Every
As the economy begins
year
in improving the quality of life Over 4,000 women, men and children take part in a Coffee Kidssupported microcredit project in the state of Veracruz, Mexico.
in coffee-farming communities and successful partnerships like
the
AUGE and FHC, you can be sure
support of the industry has
that your donation will directly
grown and allowed us to expand the scope of our work. This
impact the lives of the people with whom we work.
past year, however, many of our long time supporters had to
make choices between meeting their commitment to Coffee
and how you can help, visit http://www.coffeekids.org or call
Kids or meeting payroll. As a result, our income and our
505-820-1443.
To learn more about the 24 projects Coffee Kids supports
The Coffee Kids-supported education project managed by FHC in Costa Rica provides children of coffee farmers with the opportunity to continue their education and gain valuable job experience in local cooperatives.
Carolyn Fairman is executive director of Coffee Kids, a nonprofit organization dedicated to helping coffee-farming families improve their quality of life. She works with Coffee Kids staff to implement grassroots programs in Latin America and nurtures relationships with many in the coffee industry allowing Coffee Kids to continue its mission. Š copyright CoffeeTalk magazine 2009
38 December 2009
www.CoffeeTalk.com
CoffeeTalk
Lilia By Rick Peyser
I
first in
met
Somoza, and she had enjoyed many advantages in life that
of
were unavailable to most people her age, including attending
I
good schools. When the Sandinistas came to power a few
with
years later, her father and her family lost everything they
from
owned.
August
2007,
was
Lilia
when
working
researchers CIAT
(International
Center
for
Tropical
unemployed, and was struggling to survive on the streets of
Agriculture)
who
Managua. To feed herself and her child she rummaged through
were conducting one-
garbage dumps and searched for small toys for her children
on-one
interviews
that were either reparable or could be cleaned up and reused.
small-scale
After making the necessary repairs to these items, she went
farmers
door to door in Managua offering them to parents who took
communities
pity on her and offered her and her child food or money in
in northern Nicaragua. She lived in a modest home on
exchange for a toy. Gradually, through perseverance and self-
the outskirts of El Cua, a 3-hour pick-up truck ride from
discipline, she saved enough to move to the country where
Matagalpa. During the interview with Lilia, she was quick to
she bought a small parcel of land on the outskirts of El Cua, a
share the challenges she and other coffee farmers faced, and
town that hugs the single dirt and brick road that runs through
questioned whether her participation in this interview was
it.
going to lead anywhere. She said that researchers regularly
visited, extracted information, and then left, usually never to
entrepreneurial spirit provided her with an abundance of
be heard from again. I explained to Lilia that we were there
dreams to pursue. Unfortunately, like her neighbors, she did
to gather information to understand the quality of life in her
not have the resources to convert many of them to reality.
community, and promised that we would return to share
the results of the interviews with her and others who were
with the interviewees to share and confirm the CIAT results
interviewed. Together we would then look at next steps.
with them. They were no surprise to the 20 farmers who
During our conversation she told me her story, which I share
gathered that day. The most significant finding was that nearly
with you while protecting her identity.
all families in the area were unable to maintain their “normal”
diet between 3-4 months a year during the rainy season
with coffee in
When Lilia was 15 she was living the good life in Managua,
Nicaragua. Her father had a successful career under President
At this same time she had a new baby to support, was
Unlike many of her neighbors, her education and
Months after the interviews, I returned to El Cua to meet
continued... © copyright CoffeeTalk magazine 2009
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Coffee Talk State of the Industr1 1
20/11/09 12:14:25 pm
40 December 2009
www.CoffeeTalk.com
CoffeeTalk
...continued that arrives in June and departs in September. The farmers
explained that by late May, their earnings from coffee are
and store basic grains. From this summit emerged a project,
largely depleted, and the prices of their basic staples, beans
and subsequently funding to support it.
and corn, increase until the new harvest arrives in the autumn.
During this time, families either maintain their normal diet but
of El Cua. She proudly gave me a tour. Since the inception of
eat less (consume fewer calories), eat less expensive foods, or
the food security project Lilia has started a bee project and is
borrow money to eat.
gathering and selling honey. She started a small restaurant
During the meeting, I asked the farmers if there were
under the eaves along one side of her modest home, and she
solutions to this challenge. Lilia quickly rattled off a list,
is diversifying another small-holding of land that she owns
including a farmers’ market that could be set-up at the co-
for food and additional income. She told me that she is going
op’s building on the main street of El Cua. She explained
to participate in the co-op’s eco-tourism project and showed
that farmers, in addition to producing coffee, could diversify and grow some food crops for family consumption and sell the
2) Those farmers with larger land holdings would grow
In May of 2009, I visited Lilia at her home on the outskirts
me where she is going to add a room to her home to host paying guests. She is planning to buy more land to grow more coffee
rest at this market for additional
and additional crops.
income. Other ideas, like growing
cacao, selling bananas, and more
dreams. Since this time she has
began to bubble up from the group of farmers.
A month later, in March of 2008, a “strategic summit”
Two years ago Lilia had
accomplished a lot, and her dreams have continued to grow. She now knows that with hard work her dreams can come true. When
was held in Matagalpa. CIAT interviewees, the co-op’s
financial resources supplement dreams and an entrepreneurial
management and technical teams, local NGO’s all participated.
spirit, a recipe for sustainable success emerges that bodes
Together they developed two strategies to tackle this seasonal
well for the future in El Cua and beyond.
food insecurity.
1) In addition to coffee, they would diversify their
production and grow food crops for family consumption and to sell at local markets for additional income.
Rick Peyser is Director of Social Advocacy and Coffee Community Outreach for Green Mountain Coffee Roasters where he has worked for over 22 years. He served six years on the Board of Directors of the Fair Trade Labeling Organizations International (FLO) which sets the standards for Fair Trade that benefit over 1,000,000 small-scale farmers around the world, and is a past President of the Specialty Coffee Association of America. Currently Rick also serves on the Coffee Kids™ Board of Directors, the Coffeelands Trust Advisory Board, and is a member of the Board of Directors for Fundacion Ixil, which is working to improve the quality of life in Ixil coffee communities in El Quiche, Guatemala. © copyright CoffeeTalk magazine 2009
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42 December 2009
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CoffeeTalk
Cost vs Quality in Specialty “Blended Iced Coffees” Lower cost of goods equals savings – Serving quality products equals customer loyalty. Which holds more importance in your quest for profitability? By Michael Rubin
E
very day, specialty retailers sit at a crossroad where
mixes that are coffee free at the lower prices, or have coffee
the decisions they make can either make or break their
and other special ingredients at the higher cost level. Also
businesses. The debate has existed since man started
included in the cost range is varying degrees of quality. Some
trading thousands of years ago, “Do I serve my customers
companies offer ok products at low prices and others offer
products that cost less, or do I offer them higher priced,
higher quality products at higher prices. The above costs
higher quality products?” That question is made even more
include a cup, straw and lid. You can sell the 16 oz serving
relevant in this down economy. Historically, retailers in this
for $3.75 to $4.00, and your gross profit is between $2.65 and
economic climate take the “low cost route,” an understandable
$3.10 and is a really great return on a per drink basis.
reaction to a problem that needs deeper analysis to get to the bottom-line. Your decision on this one important point will
Low cost
directly translate into what kind of beverage experience your
customers will have, and whether they come back to repeat
customers successfully for years. But, things have slowed due
that experience with you or with a competitor?
to the down economy and he wonders what he can do to build
A coffeehouse owner has a product that he has served his
up his bottom line. A supplier comes to him and says I can Who are you?
sell you blended iced coffees for $15 a case less than what you
If you already know what your overall business
currently pay. Now that kind of talk can get the juices flowing.
philosophy is, it will be your guide through every difficult
$15 a case is quite a savings. Before the economy went South
challenge you come up against.
If not, take some time to
he may have told the new supplier he’s happy with what he’s
determine what your philosophy is by asking yourself how
been is using. After all, his customers are happy with what he
you feel about honesty, integrity, merchandising, location,
serves. But he decides to check it out.
product quality, product offering, ambiance, marketing, cash
flow, and employees vs. owner operated. You business plan
week from his current supplier; using the $15 a case savings
will help you determine “your truth” on all these concepts.
this totals $780.00 per year.
Let’s see what the math tells us. He purchases one case a
You should have a philosophy on each mentioned above and all other components of your business. Know and understand
Cost per serving
why you choose to do what you do.
Using our $15.00 as a case study, let’s assume that each
case has 95 servings. One case cost $100.00 and the other High Profit in frappes and smoothies
$85.00. The cost per serving difference is about $.15 per drink.
Specialty frappes and smoothies have the single highest
Again it seems a significant savings.
dollar return per drink sold in a coffeehouse. At a cost range
between $.75 and $1.25 per 16 oz serving this range represents
your costs so far.
Keep in mind this important note. You can only lower continued... © copyright CoffeeTalk magazine 2009
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44 December 2009
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CoffeeTalk
...continued Repeat customers
How can some suppliers sell at a lower price?
Your customer comes in five days a week and orders a
Why can’t your supplier sell at a low price? There are
drink each day at $3.75. Multiply that by 260 days and it equals
many reasons for price variations. The quality of ingredients
$975.00 per year. That’s just what this one loyal customer
used, location of manufacturing, shipping costs, the size
represents. Compare this to the savings of $790.00 per year.
of a company, their purchasing power/volume purchasing
Does this mean that if my customers don’t like the $15 a case
of ingredients, and the quality and wisdom of a company’s
lower product, the savings I was going to get is wiped out if I
management team to make sure they have sustainable
lose one customer? Yes it does! And does it mean conversely
pricing. All of this and more can play a part in explaining why
that if I get one more customer with my current product I
a company’s prices are higher or lower than the competition.
make $975.00 more? Yes it does, in gross profit.
Not only
At times, there are suppliers who are latecomers into a
that, but this brings us back to the question which has more
crowded category such as ours, and the only way they can
real value to me a specialty coffeehouse owner, low price, or
gain market share is to offer extremely low prices. Historically,
high quality? You can be the judge. In my book, getting new
a short time later they raise prices back to standard industry
customers and keeping loyal customers far outweighs getting
pricing because they cannot afford to sustain the artificially
a lower price, even if it appears to represent a huge savings.
reduced prices. Be careful not to get caught as a pawn in
this strategy. Make sure their prices are sustainable before
If you were in another industry and not running a Specialty
Retail Coffee store it might change the value equation. But as
switching to another product.
long as you are selling Specialty Coffee the value holds. Serving quality is the only road to sustained customer Quality and consistent attention to detail is a must
loyalty
If getting and keeping customers is the key to your
I believe that the coffeehouse that serves the best tasting
success then here are some important procedures you must
drinks will win in the marketplace and create customer
follow.
Making sure that your customers receive the same
loyalty. This is just my opinion, but after 20 years of watching
each and every drink every time they visit your location is so
consumer behavior and thinking long and hard about what
important. One badly made drink and you might be saying
the specialty coffee market represents to consumers, I can’t
good bye to your hard earned customer. Ask yourself about
imagine it any other way.
your own behavior as a consumer. What do you do when you
go someplace you have enjoyed a great dining or beverage
there waiting to get your customers with their offer of low
experience, how did you feel when you went back and it
price and consistent mediocrity. If you try to compete on
wasn’t up to par? It’s disappointing. In fact, you may not go
price with them, there is no way to win. You’re a specialty
out of your way, and spend your valuable time and gas money
coffeehouse, do everything you can to set yourself above the
to go there again. Do you agree? That is why it is imperative
masses by differentiating yourself in the very best sense.
Remember there are large National Chains just sitting
you take steps to ensure your customers experience is a good one. Ongoing training of your staff to make absolutely sure that they make the drinks you serve exactly the same can’t ever be taken for granted.
Michael Rubin is Founder and CEO of Cappuccine. Michael continues to run his multi-award-winning company and is the recognized creator of the Blended Iced Coffee Mix category in 1991.
© copyright CoffeeTalk magazine 2009
46 December 2009
www.CoffeeTalk.com
CoffeeTalk
SOI at the International Women’s Coffee Alliance By Launtia Taylor, Director of Sales & Marketing, Probat-Burns, Inc and President, International Women’s Coffee Alliance
T
his has been a very exciting year for the IWCA. Our
part of this program, and to be a major part of the Conference’s Social Sustainability segment
motto is Promoting Possibilities, and we are
which will focus on maintaining rural
very confident that we have done just that
during a very busy and successful 2009.
development and stable coffee-growing
communities.
Throughout the year, the IWCA has been
focused on furthering our goal of giving
Another very exciting and promising
project we undertook in 2009 was an
women independence by empowering them with the knowledge and monetary support that will
educational workshop held in Uganda this past
help shift the role of women in coffee growing
November. Several of our members traveled to Uganda to conduct a workshop focused on
communities Chapter
helping women coffee farmers market their
Development and funding, mentorship and
coffee. The success of the workshop was
training programs, and networking, the IWCA
realized immediately in the enthusiasm of the
Through
International
continues to acknowledge, elevate and connect women in coffee around the world.
One of the most exciting developments for the
IWCA this year was the invitation to participate in the upcoming World Coffee Conference held in
women. Several projects under way in Uganda include turning one acre of a woman farmer’s coffee/banana plantation into a demonstration plot that will eventually become the base for a Farmer Field School.
Guatemala in February 2010. With a focus on
Coffee for the Future: Towards a Sustainable
beneficial to teach other women, but it will
Coffee Sector, the Conference will welcome
benefit Janet, the woman who owns the plot, as
delegates of the ICO to cover a range of
well. Her coffee has a coffee leaf rust problem,
topics focusing on Economic Sustainability: the economics of production; Economic Sustainability: the economics of demand; Environmental Sustainability and Social Sustainability. We are extremely excited to be
The demonstration plot will not only be
therefore, her participation in the demo program will provide her with free inputs and education as how to help manage the problem. They are confident that within a year or two her yields will at least double. continued... © copyright CoffeeTalk magazine 2009
48 December 2009
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CoffeeTalk
...continued
Also, as a part of the efforts to help the women farmers
businesses and strengthen the communities in which they
learn how to market their coffee, CoffeeTalk will be creating
live.
free web pages for those women who send their farm
information.
our announcement that the IWCA has signed a letter of
This successful workshop in Uganda proved to be
understanding with Nicaragua for the formation of a new
inspirational for all the women involved. As a result, the
chapter. This is a very exciting and important development for
Director of CafĂŠ Africa Uganda, is working on bringing women
the IWCA, as it broadens our reach into the origin countries.
together in Uganda to discuss their vision for building their
own IWCA chapter.
Guatemala, El Salvador, and Costa Rica have been very active
In Ethiopia, the women have also made gains in forming a
this year n their efforts to help women achieve leadership
chapter. After identifying women in the coffee sector, several
positions as they participate in all facets of coffee production.
women who participated in the recent workshop spoke with
We are in the process of developing chapters in Japan, and as
those women in various sectors of coffee about the IWCA and
a result of a recent trip to Uganda, there are efforts to create
its objectives, and have set a date for all to meet to further
an International Chapter within that country.
discuss the formation of the chapter. The meeting is scheduled
to take place the first week in January.
with several projects underway in Peru, Mexico, Dominican
Republic, Nicaragua, Guatemala and Costa Rica.
Finally, in Liberia, after returning to their villages following
Another highlight of the Annual Breakfast included
Our other existing International Chapters, located in
In addition to all this, our Grants program is flourishing,
the workshop in Uganda, women are actively working with
the IWCA and the minister to set up their chapter within the
Neumann Kaffee Gruppe, at the $25,000 level. The Founding
next few months.
Partners will help fund various projects at origin that will
make a significant difference in the lives of coffee producer
All in all, the workshop was a wonderful success, and we
Finally, the IWCA welcomes a new founding partner, the
look forward to welcoming several new international chapters
families.
in the coming year.
Earlier in the year, during our Annual Breakfast held at the
dedicated to reducing barriers for women in coffee producing
SCAA Conference and Exhibition in April, the IWCA highlighted
countries by providing them access to resources, while
several recent success stories including projects on which we
creating a forum in which to connect with other women
have focused. Esperanza Castillo, agronomist and general
throughout the coffee chain, from seed to cup. We are very
manager of CAC Pangoa Ltda, San Martin de Pangoa, Peru;
excited about our future and our efforts towards Promoting
and Vilma Ruiz Scop, director of social development projects,
Possibilities in 2010.
As we wrap up this very busy year, the IWCA remains
Finca Los Andes, in Guatemala, both shared their stories of how support from the IWCA has enabled them to further their
Š copyright CoffeeTalk magazine 2009
50 December 2009
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CoffeeTalk
The Millennium Development Goals and Specialty Coffee By Al Liu
I
n his keynote speech at the 2004 annual conference in Atlanta, British author and business & sustainability expert John Elkington challenged SCAA members to
examine themselves within the large context of international development. Millions of people around the world rely on
Environment
coffee as their primary source of income, and as evidenced
Principle 7:
by the commodity crisis in 2001 and 2002 shifts in the market can have detrimental impacts on their livelihoods. Elkington
approach to environmental challenges; Principle 8:
also called on the SCAA to endorse the Global Compact, a United Nations program that encourages the private sector to
Principle 9:
environmentally friendly technologies.
Anti-Corruption Principle 10:
Human Rights
Businesses should work against corruption in all its forms, including extortion and bribery.
Businesses should support and respect the protection
Principle 2:
encourage the development and diffusion of
The ten
Global Compact principles are:
Principle 1:
undertake initiatives to promote greater environmental responsibility; and
participate in solving some of the challenges of globalization by promoting responsible corporate citizenship.
Businesses should support a precautionary
of
internationally
proclaimed
Former SCAA Executive Director Ted Lingle and former
human rights; and
SCAA President Rick Peyser officially signed on to the Global
make sure that they are not complicit in
Compact in mid-2005, thereby joining the ranks of other
human rights abuses.
business associations, companies, NGOs, labor organizations, and academic institutions committed to implementing and
Labor Standards Principle 3:
advancing the principles. The Global Compact standards are Businesses should uphold the freedom of
not particularly ambitious in the context of specialty coffee,
association and the effective recognition of
however, since the industry has embraced many of these
the right to collective bargaining;
objectives since its founding. Therefore the SCAA board of
the elimination of all forms of forced and
directors took the additional step of using the Millennium
compulsory labor;
Development Goals (MDGs) as a framework to guide the
Principle 5:
the effective abolition of child labor; and
Association’s work in the area of sustainability.
Principle 6:
the elimination of discrimination in respect
Principle 4:
of employment and occupation.
continued... Š copyright CoffeeTalk magazine 2009
52 December 2009
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CoffeeTalk
...continued
The MDGs are a separate United Nations initiative that
As a way to help SCAA members participate meaningfully
focuses on reducing poverty, improving quality of life, ensuring
with the MDGs and the Association’s commitment to
environmental sustainability, and building partnerships to
sustainability, the MDGs Task Force – formerly part of the
benefit marginalized people in the developing world. They are
Sustainability Committee and now affiliated with the Statistics
the product of the Millennium Declaration, which 185 heads of
& Standards Committee – is proposing the development of a
state signed following a summit in 2000. Accompanied by
Web-based data management system. This easy-to-access
indicators and targets to achieve by 2015, the eight MDGs
portal will be designed for users to record their sustainability-
are:
related activities, track their progress based on a series of indicators, and generate concise reports for internal and
1) Eradicate extreme poverty and hunger
external use.
The proposal also includes functions that
2) Achieve universal primary education
would allow users to produce more detailed reports as well
3) Promote gender equality and empower women
as post and view development-related projects that require
4) Reduce child mortality
financial and/or in-kind assistance.
5) Improve maternal health
database would generate data about the Association’s impact
6) Combat HIV/AIDS, malaria and other diseases
on the MDGs and global sustainability for reports to its own
7) Ensure environmental sustainability
members, the media, and consumers. In early 2010, the Task
8) Develop a global partnership for development
Force will conduct a survey of SCAA members to present
On a wider level, the
the concept and determine interest in participating in the
The SCAA board tasked the Sustainability Committee –
implementation.
now officially the Sustainability Council – with determining
the Association’s response to the MDGs. In considering the
coffee-growing regions in many countries have some of the
broad, somewhat vague goals, the committee realized that
highest levels of economic poverty in the world. It is in these
many of the Association’s members already were working
countries that the MDGs are intended to have the greatest
on these issues either directly or indirectly.
impact and where the specialty coffee industry can continue
By sourcing
coffee through either certified or direct relationship channels,
According to a 2006 UN Development Program study,
to make a significant contribution to those efforts.
importers, roasters, and retailers can help to raise the standard of living for those involved in coffee production, whether at a small scale or on a larger farm. Donations made to organizations, such as Coffee Kids and Grounds for Health, also go towards addressing the MDGs through the projects designed, implemented, and monitored by these groups. What has been missing, however, is a comprehensive survey of all of the efforts promoting sustainability not just at origin but on the consuming side as well.
© copyright CoffeeTalk magazine 2009
54 December 2009
www.CoffeeTalk.com
CoffeeTalk
Integrating Sustainability: A Green Revolution for Coffee By Gianluca Gondolini, Manager of Sustainable Agriculture Projects in Latin America, Rainforest Alliance
N
ot
only
climate
does change
c o n t r i b u t e
to
biodiversity
often willing to pay a premium to do so.
SAN criteria protect forests in a number of other ways
loss,
as well. Farmers are prohibited from clearing their forestland
desertification, forced human
to plant crops. Where regionally appropriate, the criteria
migrations, water shortages
require that coffee be cultivated beneath the shade of the
and poverty, but unstable
forest canopy. Because shaded coffee farms require minimal
weather severely impacts the
fertilization, they do not need agrichemicals made from
world’s farmers, leading to
fossil fuels, the production of which increases greenhouse
failed harvests and fluctuating
gas emissions.
prices.
and the well-being of workers through purchases – and are
From Ecuador to Ethiopia, coffee farmers are already
Minimising the use of agrochemicals is a
requirement for certification, and by creating a plan to monitor and reduce pesticide use, farmers can track the greenhouse
feeling the effects of a warming climate. Because the clearing
gases released as a result.
of forests -- particularly in the tropics -- accounts for roughly
20 percent of carbon emissions worldwide (more than all
prepared to deal with the effects of a changing climate. Unlike
the world’s cars, trucks, planes, trains and ships combined),
industrial-style farms where coffee grows as a mono-crop in
farmers can play an important role in climate change mitigation
the full sun, shaded farms – because they are part of a healthy
by maintaining and increasing forest cover on their lands.
and intact forest ecosystem – are more resilient to extreme
weather events and temperatures, and protect soils from
Through certification, the Rainforest Alliance gives
Farms that implement the SAN standards are also better
farmers an incentive to keep their carbon-storing forests
erosion in heavy rainfall.
standing. Rainforest Alliance certification is awarded to farms
that meet the criteria of the Sustainable Agriculture Network
Corporation, EFICO, the NGO Pronatura Sur in Mexico and
(SAN), a coalition of leading conservation groups. These
coffee farmers in Nicaragua and Mexico, the Rainforest
criteria ensure good farm practices, conserve biodiversity and
Alliance adapted an existing methodology for verifying
promote the decent treatment of workers, their families and
carbon storage on coffee and cocoa farms so that it can be
communities. Once a farm has been awarded certification, the
used in conjunction with the Sustainable Agriculture Network
Rainforest Alliance acts as a marketing advocate, promoting
standard. This will allow farmers to develop and sell carbon
the Rainforest Alliance Certified™ products (including coffee,
credits, therefore supporting reforestation efforts.
chocolate and tea) to consumers who support the environment
With support from the World Bank’s International Finance
continued... © copyright CoffeeTalk magazine 2009
WHY BUNN?
A Partner You Can Count On Back when Abe Lincoln trudged the streets of Springfield, we were there ‌ and we are still here today. Wherever you serve customers around the world, count on us to help you with profitable, reliable beverage equipment and great service.
www.bunn.com
56 December 2009
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CoffeeTalk
...continued Not all farmers have space to plant trees and thus may
change pilot initiatives, respectively in Guatemala and Kenya.
not be able to take advantage of the carbon credit market.
GTZ is developing the initiative to improve the Kenyan coffee
Through the Rainforest Alliance’s new “Climate Friendly
sector’s ability to adapt to climate change and sequester
Farming” program, Rainforest Alliance Certified farmers
carbon. The project will work to develop an add-on module
may be compensated for the carbon storage and other
for certification systems like the 4-C standard and the SAN
“environmental services” that properly managed and forested
standard.
An
participating
parties
include
Commodities
farms can provide.
Other
additional
climate
Sangana
Limited,
the
Kenyan subsidiary of the ECOM
module composed by criteria
Agroindustrial
and
low-
Ltd.; a coffee trader; the World
carbon farming and climate-
Bank; the 4C Association; and
friendly techniques will soon
the KOMOTHAI Coffee Farmers
complement
enhance
Cooperative Society Ltd., a
the sustainable agriculture
coffee producer cooperative
standards already in wide
located in the Kiambu District
use. A project in Guatemala
of Kenya. The project’s entire
that
mid-2009
duration is for 10 years during
partnership
which carbon credits will be
Foundation,
purchased by the WB Biocarbon
indicators
and
began
conducted with
in in
Efico
ANACAFE the
for
(in
National
English, Guatemalan
Corporation
Fund.
The new set of criteria
and
will help farmers reduce their
Valle
carbon footprint and mitigate
is serving as a model for
the impact of agriculture to
climate-friendly
coffee
climate change. By enabling
farming. With the support of
them to earn compensation
the Rockefeller Foundation,
for
Coffee the
Association)
Universidad
del
the
greenhouse
gases
it will be expanded to other crops and countries in Latin
sequestered on their sustainably managed lands, it will also
America, Africa and Asia.
allow them to benefit economically and provide them with
additional incentives to conserve their forested farmlands.
In addition, Rainforest Alliance and GTZ, the German
International Development Agency, have recently signed a cooperation agreement to implement coffee and climate
The Rainforest Alliance works to conserve biodiversity and ensure sustainable livelihoods by transforming land-use practices, business practices, and consumer behavior. Learn more by visiting the Rainforest Alliance’s Web site: www.rainforest-alliance.org/climate. © copyright CoffeeTalk magazine 2009
.
58 December 2009
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CoffeeTalk
Specialty Coffee Industry Raises Nearly $100,000 for Grounds for Health with Inaugural Green Coffee Auction Second Auction Planned for June, 2010
I
n many countries where coffee is grown, cervical cancer rates are among the highest in the world. However, this disease is both preventable and, when caught early, one of the most treatable cancers. Grounds for Health partners with coffee co-operatives to bring effective cervical cancer screening and treatment to women in coffee-growing communities. Using an innovative, affordable and community-appropriate method called the Single Visit Screen & Treat Approach, endorsed by the World Health Organization, Grounds for Health’s works to build sustainable, community-managed cancer preventions programs for women at the heart of coffee. This life-saving work is made possible through partnerships with local coffee co-operatives, national and regional ministries of health – and members of the specialty coffee industry. In April and June 2009, specialty coffee helped Grounds for Health move to a new level, when producers, importers, roasters and retailers came together to donate and bid on over 250 bags of green coffees in the inaugural GFH Auction. The result? $100,000 in additional funding for Grounds for Health’s cervical cancer prevention programs in Latin America and Tanzania. This was truly an amazing line up of coffees, and a wonderful sign of the respect that producers, co-ops, importers and exporters have for Grounds for Health’s focus on better health for women at origin. Bob Fulmer, President of Royal Coffee came up with the idea for the auction, and was one of the main drivers, along with Atlantic Specialty Coffee, Stoneworks, Royal Coffee NY and Café Imports. “This project began with the intent and expectation that many players throughout the industry would get involved – and the support and excitement for the project has been truly remarkable. There are so many good examples of generosity in our industry, and this auction has given us another opportunity to go the extra mile. It’s our hope that eventually, this auction will belong to all in the Specialty Coffee Industry,” Fulmer said. “We also hoped that once roasters purchased coffees through the auction, they would take advantage of the opportunity to project a positive image to consumers and
continue multiplying the revenue for Grounds for Health by doing their own fundraising promotions with the coffees they bought,” he added. Batdorf & Bronson, Hobo Ed’s and Noble Coffee Roasters did just that, all creating their own promotions with purchased auction coffees. Jim Reynolds, roaster emeritus of Peet’s Coffee & Tea, noted, “This is one of the best ideas I’ve ever heard of for helping a very worthy cause. All we roasters have to do is buy some fine coffee, and the proceeds will improve many lives in our coffee-growing communities. I hope this initiative will become a fixture in the coffee trade.”
This photo captures the spirit of the auction – producers giving back the fruits of their labor to support Grounds for Health’s projects at origin. When Dietrich Eppe of E&H Sucafe heard about the auction, he coordinated with several continued... © copyright CoffeeTalk magazine 2009
60 December 2009
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CoffeeTalk
...continued cooperatives, who all enthusiastically agreed to donate 5 bags each to the auction. In the photo above you can see Mr. Eppe and Jose Angel (of Coopepalmares) with the 35 bags of Costa Rican micro lots before they were loaded onto a container and shipped to Oakland, CA. Aida Batlle, of El Salvador, donated coffee from her 3 farms, Finca Kilimanjaro, Finca Los Alpes, and Finca Mauritania. It was the first time that coffees from all three of Aida Battle’s farms were available together – and Aida even created a special GFH logo for the coffee bags! Sponsors and lead donors for the 2009 event included Atlantic Specialty, Inc., Atlas Coffee Importers, Cafe Imports, Elan Organic Coffees, Roast Magazine, Royal Coffee, Royal Coffee NY, and Stoneworks. You can see final auction results from our 2009 event, including the lots auctioned and winning bidders, at: http://auction.stoneworks.com/gfh0609/final_ results.html Inspired by the success of the inaugural 2009 auction, Grounds for Health will hold its Second Annual Coffee Auction on June 2-4, 2010. Roasters will once again have the opportunity to bid on some of the world’s best green coffees through the Stoneworks Auction system, with 100% of the proceeds going to Grounds for Health – putting these resources to work in origin communities in the form of sustainable, communitymanaged cervical cancer screening and treatment programs that will improve women’s health and save lives.
© copyright CoffeeTalk magazine 2009
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62 December 2009
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CoffeeTalk
Left the Station? By Judith Ganes-Chase, President of J. Ganes Consulting, LLC
F
ears of a supply crunch
suffering from adverse weather, reduced inputs but also well
have
crept
back
into
above the usual rate of infestation of broca, a pest that bores
market
with
the
through the coffee cherries and the beans inside rendering
realization that supplies of finer
them unfit for export and is most prevalent when moisture
quality coffees could be even
levels are as they have been with too few days of sunshine
tighter in 2010 than they were in
and plenty of cherries that have dropped to the ground, letting
2009. The New York Arabica futures
broca thrive. Colombia will remain short of supply well into
market has pushed higher and
next quarter. Differentials will probably firm further to reflect
seems primed to continue to rise,
this back to back scarcity.
the
but even more telling that problems are amiss in the pipeline
While the Colombian situation alone is sufficient to propel
is the firming differentials for cash prices of various coffees,
cash prices higher, the problem is further complicated by the
especially of better grades. Climbing differentials are generally
lowered quality of the Brazilian 2009-10 harvest. Unusual rains
a strong bell-weather indicator that availability is beginning to
during the harvest of the crop severely impacted the quality
tighten up through the supply chain and in this case reflects
and has left the market without Brazil as a back stop to fill in
reduced export availability from the world’s leading suppliers
the supply gap of better grades of coffee as they were this past
of finer Arabica coffee. Initially, it was expected that more
season. Brazilian cash quotes for finer coffees have already
coffee would be available this season from Colombia and any
risen to reflect the shortfall, but as the crop woes in Colombia
remaining shipments or deferments from 2008-09 would be
are being recognized for being more serious than originally
made up once new crop supplies started flowing. This will no
believed, Brazilian cash quotes should also keep escalating.
longer be the case and Colombian coffee is now expected to
Central American producers haven’t fared much better with
remain in short supply as main crop prospects diminish.
production not expected to show a dramatic recovery this
The final tally for 2008-09 October-September production
year over last. The weather is only partly to blame; high
was only 8.7 million bags against early expectations for a
fertilizer prices, rising labor costs, and a weak dollar have not
crop in excess of 12 million bags. For calendar year 2009,
given the typical producer sufficient reason to reinvest in their
production may not even reach 8.0 million bags, due to a poor
plantations let alone expand output.
start to the 2009-10 main crop harvest which seems to be continued... © copyright CoffeeTalk magazine 2009
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64 December 2009
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CoffeeTalk
...continued As troubling as the current
to be uneven, harvesting of
situation is, the real driver in
the crop will be challenging
the months ahead will continue
due to the heavy reliance on
to be expectations on the size
mechanized
of the next Brazilian crop. A
than by hand as is traditionally
clearer picture will emerge
done in most countries.
in the next two months as to
With premiums rising for
whether the persistent rains and lack of a single major
Colombian October Production Lowest in 30 Years Source: FNC
pickers
rather
Mild coffees, the amount of coffee that will be tendered
flowering will prevent 2010-11
for delivery against the New
output from meeting its fullest
York market should continue
potential.
While currently it
to drop. As it is there is
does not seem like the crop will
already little to no Colombian,
be a “disaster” the reality is
Guatemalan, or Costa Rican
that the market was expecting
coffee available. Other coffees
and needed a perfect crop to
will also disappear from stock
help replenish supplies. The
Differentials Could Start to Climb Again Source: Dow Jones, Reuters
as premiums escalate and
market has grown dependent
roasters are forced to draw
on Brazil being a ready supplier.
down this supply to cover
A crop of less than 50 million bags will be insufficient to satisfy
demand. This should also provide continued underpinning to
growing domestic use and international market demand next
the New York market.
year, let alone allow for any rebuilding of stocks to cover for the 2011-12 season when Brazilian production will show a cyclical drop. In addition, with the Brazilian 2009-10 crop being less than stellar due to the quality issues, there was even more of a need for the 2010-11 crop to be bountiful. Expectations had been high that Brazil would produce a bumper crop of 55 million bags next year with some believing even 60 million would be possible under ideal conditions. There are many that still believe the crop has been spared based on present field conditions, but with the expected maturation of the crop © copyright CoffeeTalk magazine 2009
66 December 2009
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CoffeeTalk
A time of opportunity for equipment manufacturers By Greg Fisher, BUNN Senior Vice President, Commercial Sales
T
he ups and downs of the past year have had some unexpected results for equipment manufacturers. However, I like to think these challenging times have also resulted in benefits to those who are actively pursuing ways to build their beverage programs. First, most manufacturers have become introspective. Not introspective in a navel-gazing, look-at-how-enlightened-weare way, but instead examining ourselves, figuring out our core competencies, and then looking at key financial indicators that drive our businesses. At BUNN, we have thoroughly examined our processes to make sure we are operating as efficiently as possible. We are doing everything we can to control costs, while still delivering value to our customers. What this means to you is a better product containing more features for (sometimes) less money. We are constantly examining how to do things better and more efficiently, increasing the value of our products to our customers. It is a buyer’s market, and that means you can expect superior product for your investment. Economic conditions have also forced us to be more focused in our selling approach and this benefits our customers. Now more than ever, we are concentrating on the sale, and that means making sure that current and potential customers will profit from investing in beverage equipment. Across all channels, from coffee shops to convenience stores to college cafeterias to cruise ships, and everything in between, we are ready to help you make money on dispensed beverages, and you can expect to meet or exceed your customers’ expectations. We are more competitive so that you can be, too. The economy has also helped us enhance our efforts to create innovative new designs to benefit our customers. Equipment manufacturers can no longer afford to assume a long-established product line will meet every customer need. Interestingly, the explosion of social marketing use indicates a desire for individuality and personal expression. Translated into beverage marketing, we have seen a growing desire for consumers to create a unique, customized beverage for
themselves and we are continuing to develop equipment that will satisfy this consumer need. It is important that customers be able to produce a beverage that is not only convenient and cost-effective but also customized. Social media venues such as Facebook and Twitter offer us an exciting opportunity to get input from consumers about what beverages they would buy. It is all about the voice of the customer and, fortunately, we can hear it better than ever now. Measuring the degree of engagement of a consumer with our company is a better gauge than the old “Return on Investment” measures to show the involvement of customers with our company. We can use social media to communicate directly with consumers about beverage and equipment trends, new developments, and technical information. It is a new day for communicating, thanks to the Internet and social networking, and we are fully invested in this exciting dialogue. Customers are concerned about reducing their costs, and we have answered that concern by building beverage equipment that features an energy-saver mode on most beverage equipment. So a customer can justify a large investment in energy efficient equipment, because the cost savings may help pay for it in a matter of months. Sustainability is a universal standard: to beverage equipment manufacturers, this means both manufacturing in the most sustainable way possible and producing equipment that saves energy. A wise man once said, “A man always has a nickel for a cup of coffee.” (Of course, women are also equally likely to drink coffee.) I believe that, while consumers often deny themselves luxuries such as alcoholic beverages and eating out, coffee is one of the affordable pleasures in life. According to the National Coffee Association, coffee consumption continued to increase with 17% of the adult population consuming gourmet coffee beverage on a daily basis in 2008 compared with 14% in 2007. Consumption of iced and ice/frozen blended coffee is also up and, significantly, in 2007, consumption of coffee surpassed that of soft drinks for the first time. That means more people are reaching for a cup of coffee than for a soda. Of course, an economic downturn is not a pleasant thing, and it is a difficult time for businesses and consumers alike. However, we will emerge with heightened efficiency, better able to address the wants and needs of consumers. Lean times have helped us to function better, and consumers will benefit from this.
© copyright CoffeeTalk magazine 2009
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