Welcome
C
offeeTalk Media is proud to bring you this compilation of the most influential thought leaders in the coffee, vending, and foodservice related industries. Each article falls under at least one of the following editorial categories of particular interest to our readers: — — — — — — — — —
Roasters Retailers International Supplies/Sustainability Special Interest OCS/Vending Technology/Social Media Business Coffee Knowledge
Rubinstein, Paul Friel, Heather A. Bailey, Bill Fishbein, Keith Flury, Shaun Steiman, PhD, Ashley Prentice, Jane S. Dale, Joan Uphoff, Andrew Dun, Rocky Rhodes, Andreza Mazarão, Greg Fisher, Thomas G. Martin, Buzz Chandler, Sandra Marquardt, Dave Hesketh, Melanie Corey-Ferrini, Kevin Curtis, Alfredo Rodriguez, Bruno Souza, Marty Curtis, Roger Stewart, Karen Cebreros, Heather Perry, Erez Toker, Jason Richelson, Karl Seidel, and Joseph Ferrara. We hope you find the articles thoughtful, provocative, and useful! Cheers and wishing you all an extremely successful 2013!
Each article was written with our reader’s success in 2013 as the guiding light. A huge thanks to our luminary writers: Rick Peyser, Donald N. Schoenholt, Robert F. Nelson, Fred Steiner, Ric Rhinehart, Alexis January 2012 Vol. XXV No. 1
www.CoffeeTalk.com
Miles Small & Kerri Goodman-Small owners CoffeeTalk Media
February 2012 Vol. XXV No. 2
March 2012 Vol. XXV No. 3
April 2012 Vol. XXV No. 4
www.CoffeeTalk.com
www.CoffeeTalk.com
www.CoffeeTalk.com
Thailand
Do we still need Certifications?
and the Doi Chaang Coffee Co
Four guest writers wade into the debate
page 10
page 8
This Month: 7 See page 4 for instructions on how your company can be in the next Buyers Guide
The Catastrophe of Rain on Central American Coffee page 10
This Month: 6
This Month:
NCA show listings
16
Kosher Coffee
14
The Mysteries of Chai Revealed
14
Coffee Cups – What’s your message?
18
Clustomer Service
16
2012 Trends for Frozen Beverages
16
Retailer Profile
30
On Sustainability and Social Responsibility
20
Retailer Profile
18
Rocky Rhodes RU11 “Roots”
34
SCAA Advertiser Show Listings
Coffee Fest-NY show listings
May 2012 Vol. XXV No. 5
June 2012 Vol. XXV No. 6
www.CoffeeTalk.com
www.CoffeeTalk.com
August 2012 Vol. XXV No. 8
Vol. XXV No. 7
www.CoffeeTalk.com
Coffee Fest Listings page 30
“Kick the Can” – Coffee Packaging Innovations
Brewing Systems -
Peru
Showcasing the Finest in Single Serve
The New Gold of the Andes
page 10
page 10
page 16
This Month:
This Month:
16
Conveyors in the Roasterie
16
Saving Lives at Origin
18
Tea Trends 2012
18
Do I need a Water System?
20
Café Profile – MadCap Coffee Co
22
Retailer Tips
22
Roaster Profile – Nossa Familia Coffee
28
Hedging 101 for Roasters
This Month:
Making a Difference
14
Roasting Accessories
14
Colombia
22
Rocky Rhodes
October 2012 Vol. XXV No. 10
November 2012 Vol. XXV No. 11
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www.CoffeeTalk.com
www.CoffeeTalk.com
See NCA Exhibitor Listings Page 24
Building Healthy Profits
Top Roaster Concerns
page 10
page 10
Victrola Coffee Roasters page 20
This Month:
This Month:
This Month:
14
Jumpstart Your Café in 10 Successful Steps
12
Coffee Packaging Freshness
10
The Green Guide
16
Degassing Valve Advancements Cut Coffee Processing Time
14
Expanding into Grocery
14
When Water Is the Enemy
Retailer Profile
18
Technology to Improve Your Bottom Line
16
Cafe Jumpstart – A Tip a Month
Rocky Rhodes
22
Rocky Rhodes
18
International Food and the Café
22
Roaster Insights
September 2012 Vol. XXV No. 9
See Coffee Fest Exhibitor Listings Page 18
20
10
See NAMA Exhibitor Listings Page 24
速
Contents
16 18 20 22
Juana, Cesar, and Hope by Rick Peyser
The Natural State of Coffee A Contemplation of Grounds, Leaves & Fertizer. by Donald N. Schoenholt
Science and Law: A Toxic Mix by Robert F. Nelson
What it Takes Lessons from an OCS Legend by Fred Steiner
24
Quality and Supply Driven Markets
26
Tips and Tools to Manage Risk for Roasters
28
Digital Latte: Drinking Coffee with my Smart Phone
30
Employment Law 2012 Review and the Employer Landmines To Avoid
32
Feelin’ Groovy
34
Coffee Outlook for 2013 from Rabobank
36 38
The Future of Washed Arabica Coffee by Ric Rhinehart
by Alexis Rubinstein
New Mobile Platforms Enabling Coffee Shops to go Digital by Paul Friel
by Heather A. Bailey
by Bill Fishbein
by Keith Flury
Specialty Robusta A Revolution or a Tragic Mistake? by Shawn Steiman
Connecting at Origin Approaching Sustainability from a Holistic Perspective by Ashley Prentice
40
Coffee Partnerships Save Lives
42
For 2013, Quality is still the Key
44
Five Steps to Building Long-Term Customer Loyalty
46
My Shop is Circling the Drain! What Do I Do?
by Jane S. Dale
by Joan Uphoff with Rocky Rhodes
by Andrew Dun
by Rocky Rhodes
Contents
48 50 52
Gender Equality and Education as a Sustainable Future by Andreza Mazar達o
Strategic Beverage Menu Management in the New Year by Greg Fisher
2013 ... The Huge Opportunity! How to Be Successful in Whatever Economy. by Thomas G. Martin
54
Composting is Coming
56
Fair Trade, Shade Grown, Organic Coffee Sales Continue to be Hot!
58
Roaster Issues - Selecting Material Handling Equipment
Whether You Like It or Not! by Buzz Chandler
by Sandra Marquardt
by Dave Hesketh
60
Tips for Building Profitable Strategies
62
Wired for the Future The Influence of Technology on Commercial Coffee Service
64
Bridging the Chemistry Knowledge of Coffee to the Sensory Knowledge of Food
66
Refreshment Services 2013
68
Erasing the Pornography of Poverty
70
Peanut Butter and Jelly
72
The State of the Industry as Related with Merchandising and Branding
74
Six Reasons Why Coffee Shop Owners Are Switching to iPad POS Systems
76
Time to Reflect - and Plan for the Future?
78
The Benefits of Technology Through Consistency and Success
by Melanie Corey-Ferrini
by Kevin Curtis
by Alfredo Rodriguez, Bruno Souza and Marty Curtis
by Roger Stewart
by Karen Cebreros
by Heather Perry
by Erez Toker
by Jason Richelson
The Next 10 Years by Karl Seidel
by Joseph Ferrara
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Germany. For the last three decades, the firm has focused its activity on the
includes stylish and highly qualitative drink ware in combination with unique
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meets the contemporary minds of design oriented and health-conscious
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Editor’s Prologue Kerri Goodman-Small & Miles Small by Miles Small, Editor- CoffeeTalk Magazine
F
irst a little housekeeping,
see that as a huge positive – just
that we at CoffeeTalk have been
the articles in this
saying.
shouting about it for well over seven years. Finally, the impact
issue are the ideas and
opinions of the writers and do
During this past year, several
on coffee and the supply chain
no NECESSARILY represent the
festering issues have finally
has become so obvious that even
opinions of CoffeeTalk and the
broken through into the limelight.
those who think that the idea of
Daily Dose or its employee –
The foremost of these are, in my
climate change being dangerous to
including me! I would have thought
opinion and in no special order…
our well being is so much bologna have come to believe that there is
that this was pretty obvious but apparently not. Maybe we all have become so jaded to the way news is presented and manipulated that the idea that we might print an opinion from someone that
• The acceptance of the reality of Climate Change • Emerging Latin consumer power in the US market • Market acceptance of the OMG
the accumulation of devastating natural weather disasters coupled with crop failures in Colombia, Central America, and Africa as
disagrees with our own editorial
factor regarding the health
well as drought and political
view just doesn’t seem possible to
benefits of coffee
instability caused by food inequity, finally woke decision makers up.
some. We at CoffeeTalk take the idea of fair and balanced seriously
Others of course will have their
Unfortunately in the scientific
and so we print opposing ideas to
own lists, but these are my
coffee community, the general
our own – weird, huh?
favorites. During this coming
opinion is that it is too late to fix
year, I see these items expanding
the climate and instead we must
and redefining our approach to
hurry to mitigate the disastrous
so many factors of the coffee
effects of climate change.
There, that is out of the way! Editor’s Prologue December 21, 2012 As 2012 draws to a close, I would
business including; supply, marketing, flavor profiles, new
At ASIC (Association for Science
product development, store
and Information on Coffee)
design, and other essential
this year, Climate Change and
business elements.
Sustainability were the primary subject lines throughout the entire
like to just say that I for one am
8
something going on. I think that
extremely grateful that a giant
Climate change has been one of
conference. The wide consensus
fireball thrown off by the sun did
those subjects that have lingered
was that talk of avoidance is long
not cremate the entire earth. I
in the issue bag for years. I know
past; the industry’s only choice continued on page 10
December 2012
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now is to respond to the effects.
to caffeinated sodas is so foreign
Wide pest and disease infestation,
a concept that many in coffee
drought or, equally bad, excessive
are skeptical of our own facts.
moisture, nature’s impact on
Taken in moderation, less than 5
infrastructure, temperature
cups per day, coffee reduces the
changes, loss of optimum
risk of Type 2 diabetes, cancer
farmlands and other impacts can
of the pancreas, colon, prostrate,
no longer be halted by behavioral
liver, and other organs, onset and
and industrial changes, we can
deepening of Alzheimer’s, onset of
only mitigate the effects.
Parkinson’s disease, and so many other maladies. It is the golden age
Emerging Latin Consumer power in
of coffee and health. Hurrah!
the US market. If there is one takeaway from the recent elections
In the coming year, we expect that
in the US, it is that the power is
nutraceutical products derived
no longer held exclusively by old
from green coffee will flood the
white males. The same is true for
market with expansion into beauty
consumerism. Rapidly expanding
products, nutrition supplements,
middle class populations that
and preventative medicines.
have not been traditional consumers of specialty coffee are
These are just some of our takes
rapidly emerging as important
on the past, and the coming year.
demographic leaders – key to
In this issue, you will read the
this is the Latin Community. How
ideas and thoughts of over 35
can we as an industry continue to
other contributors from a wide
ignore Latin consumers when we
representation of our industry.
know they embrace the specialty
These represent some of the most
coffee culture, just look at Mexico,
important leaders of both private
Colombia, and Brazil for examples?
and non-profit organizations
Look no further than the Latin
weighing in on the important
consumer in America if you are
issues of our business. We hope
hoping to expand market share!
that you enjoy this year’s portfolio of writers and they provoke
Second on the list of major
thoughts about your own business
changes this year has to be
and your role in our wider global
the extraordinary story of the
community.
emergence of coffee as a healthy beverage. After spending the
Thank you for your ongoing loyalty,
better part of the last century
constant readers, and we look
justifying the consumption of
forward to continuing to bring you
coffee as a kind of sinful pleasure,
closer to the issues that matter
what a surprise it is to be able to
to you most during the coming
honestly talk about the remarkable
year. And thank you to our writers
preventative health benefits of
and contributors who braved the
brewed coffee. We are purveyors
possibility of the destruction of the
of the elixir of life, the cure for
world and still made our deadlines
cancer, and the keys to the Land of
to bring you these stories.
OZ. Coffee as a healthy alternative
10 December 2012
Sponsors Index Company
Phone
Web Page
Agtron
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775.850.4600 67
Bridge Brand Chocolates
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415.677.9194
BriteVision
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415.374.8119 31
Cablevey Conveyors
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641.673.8451
Cafe de Costa Rica
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5.062.243-7863
39
Canterbury Coffee Corp.
www.canterburycoffee.com
888.273.8684
49
Coffee and Tea Festival NYC
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631.940.7290
51
Coffee Fest
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800.232.0083
65
Costellini’s
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877.889.1866 21
Cup of Excellence
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406.542.3509
57
Curtis
www.wilburcurtis.com/goldcupbrewer/coffeetalk 800.421.6150
23
Daterra Coffee
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330.941.2555
29
Descafeinadores Mexicanos SA de CV
www.descamex.com
522.717.127.066
67
Diedrich Manufacturing, Inc.
www.diedrichroasters.com
208.263.1276
35
Ekobrew
www.ekobrew.com
206.571.0289 53
Espresso Me Services
www.espressomeservice.com
360.213.0715
67 5
47, 67
Finum by Riensch & Held GmbH & Co. KG www.finum.com
49.407.34240
7
Fres-co System USA, Inc.
www.fresco.com
215.721.4600
27
Global Customized Water
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805.484.1589
67
GoodDrinks
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800.877.3811 17
Grounds for Health
www.groundsforhealth.org
802.241.4146
67
International Coffee Consulting Group
www.intlcoffeeconsulting.com
818.347.1378
55
INTL FCStone/ CoffeeNetwork
www.coffeenetwork.com
212.485.3500
75
Java Jacket
www.javajacket.com
800.208.4128
11, 67
Knutsen Coffees, Ltd.
www.knutsencoffees.com
800.231.7764
67
National Coffee Association of the U.S.A. www.ncausa.org
212.766.4007
77
Orleans Coffee Exchange
www.orleanscoffee.com
800.344.7922
59
Pacific Bag, Inc.
www.pacificbag.com
800.562.2247
33
Pack Plus Converting
www.packplus.com
909.902.9929
41
Plastic Parameters Inc.
www.plasticparameters.com
877.594.0805
73
Pod Pack International, LTD.
www.podpack.com
225.752.1160
45
SCAA / Specialty Coffee Association of America www.scaa.org
562.624.4100
61
Scolari Engineering S.p.A.
www.scolarieng.com
856.988.5533
79
Service Ideas, Inc.
www.serviceideas.com
800.328.4493
67
ShopKeep POS
www.shopkeep.com
800.820.9814
15
Smoothie Essentials Supplement-Boosts
www.smoothieessentials.com
415.382.6535
37
12 December 2012
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Spiroflow Systems, Inc.
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704.291.9595
63
Stalkmarket Products Asean Corporation) www.stalkmarketproducts.com
503.295.4977
3, 67
The Dynamik Group
www.dynamikspace.com
206.686.2525
43
Tightpac America inc.
www.tightvac.com
888.428.4448
67
Tipu’s Chai, Inc
www.tipuschai.com
406.883.4500
67
Track the Impact
www.tracktheimpact.com
619.889.1997
71, 67
uVu Lid Company
www.uvulid.com
561.982.7770
69
Vessel Drinkware
www.vesseldrinkware.com
855.883.7735
13
Visstun
www.visstuncups.com
800.401.2910 19
Vita-Mix Corporation
www.vitamix.com/thequietone
800.437.4654
Weldon Flavorings
www.WeldonFlavorings.com
502.797.2937
25
White Coffee Corp.
www.whitecoffee.com
800.221.0140
67
Who We are Owners
CEO/Publisher/Advertising Director Kerri Goodman-Small, ext 1 | 877.426.6410 | 206.795.4471 kerri@coffeetalk.com Editor-in-Chief Miles Small, ext 2 | 206.795.2835 miles@coffeetalk.com
International Development Rocky Rhodes, 818.347.1378 rocky@coffeetalk.com
Design
Print Design Marcus Fellbaum, ext 5 marcus@coffeetalk.com Web Design Justin Goodman, ext 6 justin@coffeetalk.com
Administrative
Administrative Director, Accounting, Subscriptions Sandra Hundacker, ext 4 sandra@coffeetalk.com
Mailing Info
Mail: HNCT, LLC, 25525 77th Ave SW Vashon, WA 98070 Phone: 206.686.7378 Fax: 866.373.0392 Web: www.coffeetalk.com
Disclaimer
CoffeeTalk does not assume the responsibility for validity of claims made for advertised products and services. We reserve the right to reject any advertising. Although we support copyrights and trademarks, we generally do not include copyright and trademark symbols in our news stories and columns. Circulation: CoffeeTalk (ISSN 1084-2551) is mailed monthly (10 times per year) with combined June/July and November/December issues, also bonus mailing/ distribution for Education Guides and foodservice/hospitality and coffee conventions/shows throughout the year. Postmaster: Send address changes to HNCT, LLC, 25525 77th Ave SW, Vashon, WA 98070 Subscription: The cost of a subscription in the U.S. is $47.50 per year; in Canada, the cost is $72.00. Free to qualified industry professionals. Non-qualified requests may be rejected. Publisher reserves the right to limit the number of free subscriptions. For subscription inquiries, please call 206.686.7378 x1 or subscribe online at www.CoffeeTalk.com. Copyright Š 2012, HNCT, LLC, All Rights Reserved
14 December 2012
Professional Memberships
9, 67
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Juana, Cesar, and Hope Supply / Sustainability
I
first met Juana and Cesar at their home in El Coyolar, Nicaragua in 2008. I was traveling with Santiago Dolmus, Director of Social Programs for CECOCAFEN, a large Fair Trade cooperative based in Matagalpa. We planned to spend the day visiting co-op members who were participating in the food security project GMCR was sponsoring. After an hour we turned off the heavily pot-holed road, and started the climb to El Coyolar on a “bricked” road that eventually turned to dirt. After another 30 minutes we came to the end of the road where our Toyota pick-up stopped in front of a small home, constructed of rough lumber and a metal roof, with a cement floor. As we were introduced, I learned that Cesar had lost his left arm in the war fighting the Contras. Both Juana and Cesar were in their early 40’s, and were happy to give me a tour of their 3 hectare farm. We passed about 1 ½ hectares of coffee, sparsely shaded by a handful of tall native trees and a few banana trees. Much of their coffee was struggling in the sun, and needed more shade. Other parts of their parcel were long overdue for some pruning. Other than coffee and bananas, there were just a few fruit trees visible. Like so many families in the region, Juana and Cesar experienced 3 to 4 months of extreme scarcity of food every year. With Santiago and CECOCAFEN’s technical team, they had developed a plan to improve their coffee parcel, to devote part of their land to producing food products for their own consumption, and to sell in the local markets. While the plans sounded promising, to me the greatest reason for hope was Juana’s “can do” approach. On this first visit, I could not tell if her attitude was real, or whether she was simply trying to impress me. A year later, in 2009 I returned to El Coyolar and visited Juana and Cesar. Things were starting to change on their farm. They had developed a coffee nursery to renovate their parcel, and had planted malanga (a root crop) and a variety of fruit trees that they proudly showed me as we again toured their farm. In September of 2010, with the help of Santiago, we returned, to produce the film “After the Harvest.” Santiago had asked Juana and Cesar if they would be willing to be in the film.
16
by Rick Peyser Fortunately they were. After filming, we toured the farm. The fruit trees that were planted the year before were now towering over the coffee and were producing their first yield. Juana had started making marmalades from the fruit to sell at the local market as another source of income. Even their coffee looked healthier and more productive. Before leaving, Cesar gave me a gift - a homemade Sandinista flag that had been nailed to the outside of their home. In August of this year, I returned to Nicaragua to conduct “Most Significant Change” interviews. While CECOCAFEN had provided good quantitative information about the project in their reports (i.e. how many families benefited from the project, how many training sessions had been held, etc.), this information largely reported on activities, not the impact these activities were having in the household. Michael Sheridan, from Catholic Relief Services (CRS), shared the “Most Significant Change” technique with me a couple of years ago, that is designed to elicit responses through interviews with project participants relating to the project’s impact. Now we had the chance to give this a try. In Aguas Amarillas, a small community nestled in the mountains not far from Tuma la Dalia, Nicaragua, I interviewed Cresencio Pao, a coffee farmer, and asked him, “What has been the most significant change in your family’s diet since this project began 4 years ago?” Cresencio told me, “The window of 3-4 months of food scarcity has been closed. My family now has more than enough to eat all year long. This has had an impact beyond my family’s home. It has affected our local cooperative. People now believe that positive change is possible. And it has gone beyond the co-op and has brought the entire community an air of hope that just didn’t exist a few years ago.” Later that day, we drove to visit Juana and Cesar. They both appeared to be doing well. Remembering the flag, I brought them a glass flask of Vermont maple syrup. What a difference two years can make! As we walked around their farm, the fruit trees that we filmed in 2010 had grown significantly in the tropical climate. The young coffee plants had also grown, matured, and now appeared to be healthy and very productive. Juana told me that she was still selling marmalades in the local market, and then she said, “Come with me. I want to show you something.” We followed a path through the coffee parcel and through a heavily forested area where we came out to an open field of approximately 1 ½ hectares. I was stunned. This field that had been fallow for years was now planted in passion fruit. Large 6 ½ ft. tall, 6” x 6” wooden stakes had been driven into the ground in nice even rows, separated by about 10 ft. Overhead, heavy gauge wire had been run between the stakes and connecting supports. The passion fruit vines had been trained on the wire and were now producing fruit that was ripening in
December 2012
the sun, hanging from the wire, and waiting to be harvested, packed, and shipped. Juana and Cesar had been earning approximately $4,000 from their coffee. Now, according to Juana, even with the “low” market price for passion fruit, they will hire a few people to help run and manage this project. Yet even at current market prices Juana told me she expects that she and Cesar will earn over $700 per month (at least $8,400 per year) from passion fruit after expenses. This, combined with improved earnings from their coffee, and their own food production, will “put food scarcity behind us forever,” according to Juana. In addition, this new enterprise will start to provide new employment opportunities in this isolated rural hamlet. When I first learned of “los meses flacos” (the thin months) of extreme food scarcity five years ago, I was stunned and felt powerless given the scope of this challenge. I wondered if change would be possible for families like Cesar and Juana. They, and many other families, are demonstrating that given the will, the necessary resources, and the technical support, hunger can be a thing of the past. It all starts with hope and a little of Juana’s “can-do” optimism.
Rick Peyser is Director of Social Advocacy and Supply Chain Community Outreach for Green Mountain Coffee Roasters where he has worked for over 24 years. He is a past President of the Specialty Coffee Association of America, the world’s largest coffee trade association, and 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 1,500,000 small-scale farmers around the world. Currently Rick serves on the Coffee Kids Board of Directors, the Food For Farmers Board of Directors, and the Board of Directors of Fundacion Ixil which is working to improve the quality of life in Ixil coffee communities in El Quiche, Guatemala.
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The Natural State of Coffee
A Contemplation of Grounds, Leaves & Fertilizer. Roaster
I
’m getting older. I paid $1.25 for a “nickel” Hershey Bar the other day. Things change. On the other hand, the $4.50 latte appears to be here to stay. Even in these hard times consumers, particularly the young, have determined that they are willing to reach into their pockets for a beverage that brings them joy. That too, is a harbinger of good things to come for the roasting retailer and independent roaster, for our future is cheek-by-jowl linked to the consumers’ interest in the goods we make and sell. The economy is still rough, and I keep finding myself remembering my Dad talking about the coffee business during the Great Depression when coffee sold for 25¢ a pound; 5¢ cup. The plain old nickel cup from the corner news stand is now a buck. The Old Man would have found that funny. A 36% decline in green coffee prices over the last 12 months has buoyed the spirits of small independent roasters as the cost of raw goods has come back to earth, and accounts payables have come out of the stratosphere to more manageable levels. As I write, the Exchange price for March 2013 is hovering at levels that most farmers and most roasters can accept as livable. The free flow of cash from inventory permits investment in equipment, new products, advertising and personnel that was unthinkable during the last 2 ½ years. It is a well-met asset thaw that bodes well for the future of the community. There are new roasting businesses in every nook and cranny of the country. Recently an old coffee curmudgeon of my acquaintance mentioned that if you turn over a rock with your shoe there is a decent chance you will find a new roaster beneath it. There are many new entrants for sure, and this is a good and healthy thing. It indicates that there are folks who have the faith, nascent ability, dedication, and strength of purpose to make a place for themselves in coffee. Where there is new blood, there is hope for the future of this stuff we love.
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More and more technology is creeping into the roastery. The roasting man is seen more and more often checking the progress of his roast on his iPad. Environmental management of roasting bi-product appears to be taken seriously by a growing number of small roasters who have felt ambivalent in the past about the smoke, ash, and smells that are the byproduct of coffee roasting. This is as much a result of peer pressure, and consumer interests as it
by Donald N. Schoenholt is the result of municipal codes. It is good business to run a clean, environmentally sensitive business, and we are learning that year-by-year, which is a good thing. Espresso is an everyday thing in most parts of the USA now, and it is a rare roaster that does not blend and roast at least one item for espresso use. In an interesting development Robusta, shunned twenty years ago by any specialty roaster worth his salt, has a growing acceptance now in Italian style espresso blends. Interestingly, the American style espressos are identified with pure Arabica blends. There was some talk a while back about the acceptance of Robusta beans as specialty coffee. That conversation will continue, and probably get louder. The marketing of environmental sensitivity is seen in the choices many roasters are taking in the way they present themselves to their customers. Kraft paper and handcrafted looking laminated valve bags and packing material has grown in use, as it gives the impression of corporate environmental sensitivity, small company hand-crafted goods, and down-home neighborliness. Many of these efforts are successful. Sadly, few are more than window-dressing to improve the public acceptance of goods offered for sale. Still, awareness of the public’s desire to seek out the goods of environmentally sensitive businesses is a big step away from a callus profit-driven interest and toward a higher plane of coffee consciousness. The development of green coffee extract as an ingredient in food supplements and beverages will be of continuing interest. This phenomenon of a weight loss ingredient hit the weight watching scene back in April, when Dr. Oz introduced millions of viewers to it on his television show. Green coffee bean extract, which seems to be primarily chlorogenic acid and caffeine, is now being marketed as a dietary supplement by many food supplement and natural vitamin companies. So far Starbucks is the only prominent roaster to have added coffee bean extract to its product mix. It is an ingredient in Starbucks’ new Refreshers beverages and in complimentary VIA instant beverage packets. Roasters will be watching more than their shades this coming year. Leaves are much on their minds also since Starbucks, owner of the Tazo tea brand since 1998, has opened a Tazo tea store in Seattle’s
December 2012
University Village shopping area. They followed this concept store with the announcement that Starbucks will acquire Teavana, Teavana’s 300 small shops specialize in tea leafs, tea beverages, and tea accessories. The chain, sprinkled in mostly mall locations throughout much of the country, expected to make $220-230 million dollars this fiscal year. Nobody’s betting like Mitt Romney on this, but my nickel is on Teavana outlets becoming Tazo-branded stores before long. Some roasters have been offering loose teas for years, while others offer only tea bags to their wholesale customers. It is a fair guess that we are all going to be more interested in teas of every type and description in the coming year than we have been in the past year. Among the rare and exotic items that may find its way into North American blends this year is Kopi Luwak, the stercoraceous Indonesian coffee delicacy that has been imitated in Peru and Vietnam after production was juiced in recent years since being featured in the 2007 film The Bucket List. The Indonesian item has taken a public relations hit from the UK newspaper The Guardian, which reported on allegations of animal rights abuses at civet farms in Indonesia. Likewise, the Associated Press has made us aware of Thailand’s Black Ivory coffee (cultivated from elephant dung) that hits the fan this year. At $500 a pound, this exotic adds considerably to the available volume of this type of item which may put downward pressure on the pound price of this class of goods. I have not cupped Black Ivory, but I have pondered if it is good to the last dropping.
Author and Roaster’s Guild founder, Donald Schoenholt, is said to have an unerring sense of coffee, coffee history, and coffee continuity—but no sense of humor. He will deny this. He believes he is quite droll. Mr. S., celebrating his 50th anniversary in coffee, can be found round the roasting room at www.gilliescoffee.com.
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Science and Law: A Toxic Mix by Robert F. Nelson
Special Interest
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ndustry challenges continued to grow this year under California’s Proposition 65. Eighty coffee companies have been joined to original defendants as two lawsuits trudged forward. Many more roasters were embroiled indirectly as retailers demanded assurances from suppliers. Both cases have been moving slowly through the California courts. In the case against retailers who serve coffee in the cup, the plaintiff has asked the judge to rule in his favor without trial. It’s a common procedural move – known as a “motion for a summary judgment” – which asserts that there are no fact outcomes that can justify a defense. Defendants’ counsel is opposing the motion with a series of pivotal fact outcomes that support a successful defense. In the “roast and ground” case, which targets the 80 new roaster and retailer defendants along with the original 30, the judge has put all proceedings on hold – or “stayed the case.” At the same time, all action in the “coffee in the cup” case, aside from the summary judgment motion, were also stayed by the judge. With that, all fact-finding interviews and other pre-trial proceedings will not go forward at least until the motion is heard on April 5, 2013. The newly named defendants, however, must still file responsive papers based on the court’s request. Chasing Zero While these cases have caused extreme concern across the industry, they are a symptom of a broader, systemic challenge. Science has made it possible to detect increasingly small concentrations of chemical components in foods, beverages and other products. As researchers and regulatory agencies “chase zero” with advanced detection methods, an endless cascade of trace substances are coming under the microscope. That’s why single molecules of acrylamide could be discovered in coffee, potato products, cereals and other foods. Multiple molecules, chemically bonded in specific ways, make up polyacrylamide, which is an industrial compound imputed to be carcinogenic.
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Public Scrutiny With increased detection also comes increased attention by government regulators, legislators, food safety groups and consumers. As a result, science is
taking on larger significance in legal, regulatory and public relations challenges to coffee, and is increasingly critical to the industry’s protection. Including acrylamide, California’s Proposition 65 lists 1,000 substances the state has deemed to present a risk of cancer or reproductive harm. Each has a set concentration thresholds, above which foods and products containing the substances must carry consumer warnings. And, the challenges will not be limited to California. Already, acrylamide and a host of other heat-formed substances are on the radar of the U.S. Food and Drug Administration (FDA), Health Canada and the European Food Safety Authority (EFSA), among other governmental entities and research institutions. Protection Heightened scrutiny of minute components in coffee presents a new dimension of challenge for all segments of the industry, including large and small roasters, manufacturers, specialty retailers, and independent coffee shops. Protecting your business means that you need to follow and understand unfolding scientific developments and their legal and regulatory consequences. At the National Coffee Association, that’s an important function we provide for the industry’s benefit. For many years, NCA has been the industry’s eyes, ears and minds when it comes to scientific developments surrounding coffee, caffeine and health. The NCA Scientific Affairs Program is the industry’s only such resource, covering the field on all aspects of coffee science, as well as its implications for consumers and the industry. Among the program’s comprehensive functions are: • Tracking and analysis of research on coffee and caffeine • Science-based perspective on food safety legislation and regulation • Expertise in food chemistry, toxicology and epidemiology, along with implications for physiological and environmental exposure • Acknowledged influence in worldwide scientific circles • Active collaboration with leading food and environmental safety organizations. At the program’s core is a dedicated committee of leading industry scientists who hold decades of expertise in
December 2012
epidemiology, toxicology, biochemistry, medicine, food safety and quality assurance. In fact, the committee is one of just a handful of internationally respected groups devoted to the study of coffee science around the world. Through the committee and other research channels, NCA has continued to track, flag and analyze every study done on coffee, caffeine and health worldwide throughout the year. At the same time, NCA has also identified and scrutinized the regulatory and legal constructs based on science that could turn research findings into legal proceedings. Going Forward Every day, science is becoming more granular, and government and consumer attention more intense. Over time, the threats to coffee are only likely to grow in scope and dimension. It’s a new type of challenge, a hybrid of sorts, which arises at the intersection of science and law. It harbors multiple potential threats, each of which needs to be addressed quickly and aggressively. All eyes are now on California, as the industry fights the most visible example to date. Inevitably, though, the issues will transcend place and time and pose new threats to coffee companies of all types and sizes. Going forward, surmounting this hybrid new challenge will take industry awareness, individual attention and, most of all, professional expertise devoted to understanding the science behind the law.
Robert F. Nelson is the President and Chief Executive Officer of the National Coffee Association of U.S.A. He also serves as chairperson of the Private Sector Consultative Board of the International Coffee Organization, where he is member of the official U.S. delegation. Nelson sits on Harvard University’s Institute of Politics Global Food Policy Advisory Board and is a graduate of the Harvard Business School Executive Seminar on Agribusiness. He is the recipient of the Colombian Manuel Mejia Medal of Merit.
What it Takes
Lessons from an OCS Legend by Fred Steiner
OCS & Vending
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hen I was growing up the popular meeting spot was the local bar or restaurant, today it’s the coffee shop, with one on every corner and in fact, sometimes two or three. Years ago, I remember hearing that coffee might be bad for you, today we hear that we should drink more because it may in fact help many health conditions. One thing is for sure, we know it is a mild diuretic and although unproven, a friend told me that it is a sexual stimulant in rats! Wow, are we the “in” product today. I began in the OCS business on June 1st 1974. At the time my coffee kit had 42 packages of 2 ½ ounce coffee and contained 2 x 1lb. powdered creamer plus 2 x 1 lb. granulated sugar and sold for $25.00. A double kit of 84 packets was offered at a 10% discount, thus pricing was $45.00 and included 4 x 1lb. powdered creamer and 3 x 1lb. granulated sugar. It didn’t take long before we isolated the creamer and sugar and removed it from our ‘coffee kit’. For one thing, customers were being stockpiled on these products and secondly if sugar or creamer was on the rise, we would be forced to raise the entire coffee kit price, even though coffee itself had not increased. The perception we wanted to guard against was that we were increasing coffee prices when in fact we weren’t. Once removed from the coffee kit, we developed a creamer and sugar package consisting of two bags of powdered creamer and 2 bags of sugar which sold for $4.25 or four creamers and 3 bags of sugar for $7.50. Of our total sales, 75% were coffee and 25% were allied products. At the time, allied products consisted of six products: powdered creamer, sugar, stir sticks, Styrofoam cups, tea and hot chocolate. Our targeted gross profit margin was 60% +.Today my coffee sales and total allied products are split about 50/50 and we have over 600 SKU’s in allied products alone. In those good old days, for every three accounts we opened, one might have come from a competitor and two were virgin accounts where we were selling the concept of OCS to the uninformed. Today, for every three accounts we open, all three come from competitors. Back in 1974 my biggest competitor was my ex salesman. Machines were inexpensive and a supplier would always take a chance by extending a bit of credit to the new operator whose garage or basement became their warehouse and office. With today’s customer sophistication, and the fact that they are currently on their 3rd, 4th, or 10th office coffee supplier we need to spend far more on equipment which eliminated easy and inexpensive entry into our industry. Today some of our competitors include warehouse clubs, office supply houses and of course, the multitude of coffee shops on every corner, all vying for the ability to provide coffee to the same person.
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There were a few significant events along the way which I look back on, as being responsible
for shaping my philosophy in the building of our business. Shortly after I started in business, the Mr. Coffee home brewer from North American Systems made its debut with Joe Dimaggio flogging it on every TV station I watched. “That was it”; I honestly thought the OCS business was all but over as a small pour-over machine was now readily available to our customers and coffee and filters were available in every supermarket. I was wrong; we not only survived, but flourished, because we understood that our business was to provide a service not just coffee as a commodity.
a job to build a champion but it’s quite another job to stay at the top when everyone is trying to knock off the king of the castle.
Then in July 18, 1975 a major frost hit Brazil and a projected carryover of 12 million bags of coffee became a projected shortage of several million bags. The price of coffee soared to levels never before seen on world coffee markets. We faced the task of raising prices significantly and often. Those that understood they could not be timid survived, and the rest I ultimately bought out.
Secondly, I was fortunate to always remember that service was a part of our name and business. We pride ourselves on delivering a very high grade of service and have never been motivated to be the cheapest in town, In fact for 38 years I have taken great pride in always being among the highest priced services, if not the highest and offering our customers tremendous value and benefits over our competition. When prices have to be raised we never hesitate to jump right on it and always try to maintain our margins. Someone can always offer it cheaper. In fact, you all remember the yellow pages. Well we refused to advertise in them, save and except the free line they gave you with your phone number, because we never quoted prices over the phone as we found that most Yellow Page calls were only price shoppers.
Into the 1980’s as frosts created wilder price swings, roasters became more creative and ground their coffees finer and roasted them darker allowing the operator to remove fractions of the bag and still achieve a similar taste. In fact, this became the forerunner of ‘Hi-Yield’ coffees and operators in every market were offering as low as 1.1 oz. ‘hi yield coffees’. Again, any OCS operator who thought they could build a business on hi yield coffee soon learned a big lesson by ignoring quality. In fact those thousands of coffee shops I mentioned earlier actually became an ally of the good OCS operator as they educated the public about a quality cup of coffee. During those early years I questioned if this was really a sustainable business. I wondered more than once if this could become an industry or was just a fad which would ultimately fade. Then a funny thing happened; I became a believer one night while watching a TV show. It was a police type of show and there was a scene in an office and one of the detectives went for a cup of coffee from the coffee machine on the counter and I thought to myself that I had always seen the detectives carrying a tray of two cups of carryout coffee from a diner. Suddenly a coffee machine was a prop in the office that they had set up along with the desks and chairs. We had arrived! At the same time, it was clear that coffee roasters were not opting into the office coffee market. They sold by the pound, we sold by the cup and they opted to sell to us, not our customers directly. From that moment on I believed we were going to remain and flourish and I made a 1000% commitment.
When I started this business I set up a simple business plan. Gross profit would be sixty percent of sales, 1/3rd of the GP would go for overhead, 1/3 for wages, and the last third would be profit, thus net profit would be 20% of sales. That has been my objective since day one, but before you get too excited I have to say that I never hit those numbers, however, I have done well financially while trying.
In summation, I have built our company, together with the bonus of having a smart son with me for the past several years on a few simple principals: • • • • •
Have a financial plan and stick with it. Always remember that service is the most important part of our business. Don’t be afraid to get your price, remember profit is not a dirty word. Don’t ever discount luck but if you are like me, the harder I worked the luckier I got. And the most obvious, hire, train, motivate, and compensate good staff.
Well that was a quick look at my start and some of the key events that shaped it but now comes the $64,000 question: How did I become a so-called “coffee legend”? Well I guess staying at or near the top for almost 39 years is the simple answer. We all know from sports teams that it is one heck of
December 2012
Fred Steiner, Winner NAMA 2012 Coffee Legends Arward
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Quality and Supply Driven Markets The Future of Washed Arabica Coffee
Supply / Sustainability
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offee in general and specialty coffee in particular, is a cyclical business. From the natural rhythms of planting, pruning and harvesting to the start up, growth and consolidation of roasters and retailers, this cyclical nature plays out over and over again, and those of us getting longer in the tooth recognize and accept these cycles as a part of the business. The year we saw what would appear to be some reaffirmations of this cyclical nature of the coffee business. In particular, after two years of tight supply and elevated prices, we saw coffee stocks increase and prices begin to subside. This is typical of coffees history, with high prices driven by tight supply spurring more intensive husbandry, new plantings and renovation of existing farms. The resulting increase in supply drives price down, and if the cycle continues over time the market pushes to new bottoms before the cycle continues and husbandry declines, new plantings cease, and the supply and demand equation slowly turns pushing prices higher again. There is nothing new under the sun here, and it is very tempting to accept this as the nature of the business. On closer inspection, there is something fundamentally different in the current cycle. This time, while overall supply of coffee has increased somewhat, the real story is not the downward price pressure of increased supply of coffee to the market. The story of real interest is tied up in the kinds of coffees being produced, exported and roasted in the marketplace. Total production of coffee in the 2011/12 crop year was nearly 135 24 million bags of coffee to satisfy a
by Ric Rhinehart demand of roughly 140 million bags worldwide. Closer examination reveals two downward drivers on price. First, is a 2012/13 crop prediction for upwards of 146 million bags, producing the first substantial surplus in supply since 2006. The second is the change in the mix of both supply and demand by coffee type. In the 2011/12 crop year robusta production accounted for over 53 million bags, or 40% of the world total. Brazil and other natural arabicas accounted for another 41 million bags Colombian and other milds just 40 million bags. The resulting mix on the world market is less than 30% washed Arabica and over 70% naturals and robustas. The overall result was significant downturn in both the ICO indicator price and the benchmark New York ‘C’ price. In spite of a diminished production of the underlying product, washed Arabica coffee, forecast for the coming crop year, prices remain low as roasters turned to ever increasing commitments to coffees other than washed Arabica. Much of this change in the mix can be ascribed to increasing consumption in traditional producing countries, where price sensitivity and entry level consumption patterns push greater consumption of lower priced and/ or qualities. Some small measure is also attributable to mature markets, particularly in Europe, demonstrating a willingness to sacrifice quality for price and pushing consumer expectations downwards. This is another cycle in itself, where decreasing quality drags down consumption, a scenario played out in the US in the not distant past. This confluence of decreasing prices, changes in production mix and increasing aggregate supply create an unusual, decidedly non-cyclical scenario in which quality is hard to find and December 2012
producers struggle to find a balance between the costs of quality and disappearing price incentives. The cyclical nature of growth and consolidation in the retail markets also had some interesting manifestations this year, most notably the acquisitions of Peet’s Coffee and Tea and Caribou Coffee by the Joh. A. Benckiser Group. In the independent specialty world smaller companies continued to grow, with new capital infusions, perhaps most notably Blue Bottle Coffee, driving expansion in a variety of markets. The SCAA continue to work to support and inform the specialty coffee community, and we will be adding more insights into the supply and demand scenario and its implications for specialty coffee as the new year begins. We will also be continuing our work from last year in understanding the consumer’s relationship to specialty coffee and will have new information to share on that topic.
Ric Rhinehart is currently serving as the Executive Director of the Specialty Coffee Association of America. Prior to taking on this position he was the President of a Los Angeles, California based roaster and retailer. Mr. Rhinehart has over the past twenty years held executive positions in several coffee & tea firms.
Tips and Tools to Manage Risk for Roasters Roaster
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he coffee industry is multi-faceted; with far ranging areas of expertise, varying specialties and a massive array of knowledge. The coffee roaster is more than meets the eye…or cup. The strategies and financials are just as important as the craft and properly managing risk can make or break a roasting business. Risk management can be broad for a roaster (and possibly overwhelming) but if approached correctly, can become second nature. Ways to manage risk could be as general as making the right relationships, or specialized, like making use of the “C” market. Regardless of the approach, you must first identify the risk, and then find a way to avoid it, reduce its effects or accept its results. Navigating the “C”: Swim, Don’t Sink Coffee futures have traded in New York since 1882, and coffee is famously known as the second most traded commodity after oil. Its longevity makes it a piece of history, but its “intraday volatility” makes it a “favorite for day traders over the years,” according to the InterContinental Exchange (ICE). For participating roasters, there is a critical need for risk management when dealing with the market. When a roaster is involved in the futures market, they become “commercial traders” and can play a role in determining the price. “First and foremost roasters should keep in mind that their chief purpose in using mechanisms such as futures and options trading is to secure desired coffee quality supply at reasonably targeted levels,” says Carl Leonard, V. P. Green Coffee Procurement at Louisiana-based Community Coffee Company. The futures market also allows roasters to transfer risk. Coffee roasters are “short” the market, as they are at risk if Arabica prices increase. The risk can be transferred, or offset, if a roaster goes long a futures contract. “Hedging done carefully can be a means of protecting a company from excess risk, however speculative trading is like going to the Casino which can have very negative results,” says Leonard. “If you are a novice, your best course of action could be to align yourself with a competent coffee commodities broker who has years of experience with coffee hedging.” Joseph Fernandes III, Vice President of New Jersey-based Socafe, is the second generation to work for the company after his father brought it to the US from Angola nearly 26 years ago. He has recently made the decision to become more involved with the “C” market and echoes Leonard’s sentiment. “I’m learning from, and currently receiving help from, someone who knows how to successfully navigate the market.” By partnering up with someone who can help Socafe manage risks, Fernandes believes “2013 is going to bring change within the company.” It’s Not Complicated: Easier Relationships
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“Global but connected” is how the coffee industry was initially portrayed to me. Relationships are imperative to better business practices, no matter what your role. Roasters, however, are
by Alexis Rubinstein probably the most connected. With direct links to producers, importers, distributors and retailers, the coffee roaster must take advantage of its rank in popularity. The risk aspect is mostly associated with the purchase of green beans. “Buying coffee for a good sized roaster means making use of sizable sums of money. Making sure that you are getting the correct consistent quality, and on time delivery is of extreme importance,” advises Leonard. “Selecting the right producers, cooperatives, exporters, Importers, ocean going shipping companies, trucking companies and warehouses to partner/work with is essential. Having consistent procedures in place to check grade and cup quality to insure you are receiving coffee of the value that you have purchased is a must.” The better your relationships are, the more efficient your business will be. Fernandes makes it a point to travel to origin at least 3-4 times per year, meeting directly with producers, cooperatives and exporters. “This allows me to be specific with what I want and competitive with my prices,” he says. He reduces his risk by properly delegating logistics he doesn’t feel comfortable handling to importers who he knows and trusts. “I can commit to purchasing upfront, which motivates them to give me a fair price.” It is critical to work with trustworthy companies for your own management of risks, and to ensure the reputation of your company mirrors that of your affiliates. “Your word is your bond, only do business with people of their word. Most times in the coffee business a signed contract is what follows, business is actually done upon one’s word,” states Leonard. Actions Speak Louder: Tactics and Techniques For most roasters, buying practices have changed dramatically in the last few years. Information is available more quickly, sparking a newfound fast-paced, competitive market with everyone looking for the same thing: quality coffee at a fair price. “Where I used to look at consumer demand as a main indicator, I now focus on the behaviors of the importers,” says Fernandes. “Conventional indicators are almost thrown out the window.” Differential prices went from being available for a few days to five minutes, “you have to act fast or you miss out,” Fernandes emphasizes. A good plan is to align yourself with multiple brokers who may be dealing with rejections or mishaps with inventory. If your relationships are strong, this can be a risk free way to get coffee for under market value. If your roasting business is lucrative enough, it pays to stock pile inventory and constantly rotate through supplies. This puts precautions in place that will allow your company to overcome various supply issues, like sudden price movements, natural disasters, or poor weather cycles. Socafe learned to spread their inventory throughout multiple warehouses. “When Hurricane Sandy hit the East Coast, those who kept their inventory solely in that one warehouse in Kearny, New Jersey that was damaged, must have faced major setbacks,” says Fernandes.
December 2012
If your roasting business is involved with the private label sector, you can minimize the risk involved with those niche customers by simply educating them. Fernandes suggests empowering them as much as possible. “Tell them why the prices are the way they are. Explain to them manufacturing costs, transportation costs, etc. Ensuring transparency can ensure continued business.” Last, but incredibly far from least, the utilization of proper tools to help manage risk is crucial in today’s struggling economic times. Many firms, contractors and websites can help a roaster understand, and benefit from, the futures and options coffee market. Coffee roasters should utilize the market to transfer risk and help determine current prices. Combining this with other strategies could bring a balanced understanding of the global coffee picture. “While it is the futures market first and foremost,” admits Fernandes, “that is just a snapshot of the present moment and a roaster cannot react to the current screen. Therefore, we need another way to identify trends.” Talking directly to importers, as previously mentioned, is key, as they are on the forefront of it all. Watch weather patterns in coffee growing regions to stay ahead of crop quality conditions. Get on the ground information about who’s selling, who’s holding and what prices they are looking for. Gather information from ports of origin to gauge what they’re sending over. And, as Fernandes advises, “Don’t put all your eggs in one basket…all it takes is one speculator to ruin it.” “Join pertinent coffee organizations and associations to meet your roasting peers and leading suppliers in the industry,” says Leonard. “Continuously attend Coffee Organization and Association training sessions to gain depth of knowledge required to be successful as a roaster. Read industry books and trade magazines to stay in tune to current developments in our industry. Spend time at coffee origin and learn coffee from the Producers point of view. Work closely with your sales and marketing department to help educate them about the world of coffee and what might appeal to the consumers that you are trying to reach.”
Alexis Rubinstein, Senior Editor INTL FCStone/ CoffeeNetwork
Digital Latte: Drinking Coffee with my Smart Phone New Mobile Platforms Enabling Coffee Shops to go Digital
Technology / Social Media
L
ooking back on 2012, there were many events that dominated the news cycles. Besides the presidential election, Hurricane Sandy and the state of the economy, one of the most closely watched stories by media of all stripes was Facebook’s IPO in May. There were many reasons, but it had such great appeal because of how much Facebook has become a part of the daily lives of a seventh of the world population. More than half of Facebook’s 1.01 billion users access their news feeds daily, and according to the company in its most recent earnings report, the number of users accessing their feeds from mobile devices increased 61% from September 2011 to September 2012. Another reason for the media interest is how addicting Facebook is to so many users: According to Edison Research, 23% of Facebook’s users check their account five or more times daily and the mean number of daily log-ins by Facebook users is four. The Facebook IPO, and subsequent chronicling of the path of its stock price highlighted an even larger business story this year—the maturity of the social media market overall. While the jury is out on Facebook, the IPO’s of other companies like Groupon have said a great deal about the challenge these companies face proving out their business models. Social Media: The World’s Digital Mall People don’t just use social media to post pictures of their kids or what they are having for lunch. In fact, more and more consumers rely on social media to influence their purchasing decisions. According to the same Edison Research survey referenced above, last year 32% of Americans using social networks said that those networks had an influence on their buying decisions. This year, 65% said that social networks influenced their decisions. Also, 47% say Facebook has the greatest impact on purchase behavior (up from 24% in 2011). It’s not only Facebook that has an impact. • 56% of consumers share purchases on Facebook, Twitter, Pinterest and other social sites • 59% of Pinterest users have purchased items they saw on the site • 33% of Facebook users have purchased an item saw on their news feed or a friend’s Timeline • 79% of Pinterest users are more likely to purchase items they’ve seen on Pinterest
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The Coffee Industry has always had a social and community component; long before online shopping, social media or mobile apps, coffee shops were gathering places to interact with others. The challenge for us
by Paul Friel
today is to extend our local coffee community through social media and mobile tools that allow us to drive business and increase consumer participation with our brands. This explains the significant investment made by Starbucks and Dunkin’ Donuts in particular on social media marketing campaigns and mobile apps. What these giants have shown is how to very effectively build a massive social media following and tie it together with loyalty programs across platforms to drive business.
customers to help them get better offers and localize the experience. Merchants benefit from a direct-to-consumer marketing channel informed by rich data across retailers, gift lists created by the app user and their Facebook friends, past responses to offers and geolocation information. Today, white label platforms that include a registration process are emerging, so that gift card buyers and recipients—as well as loyalty card holders— are no longer anonymous, enabling brands to identify and engage more of their customers.
The linchpin for both these pioneers has been mobile. Starbucks’ mobile application has powered more than 29 million transactions to date. The application effectively ties together loyalty and offers a mobile wallet and payment mechanism that gives it even more visibility into the habits and preferences of its customers. This in turn allows it to market in a more personal way—including through social media—and connect emotionally with its customers through “feel good” posts that generate an average of 15,000 Facebook Likes. It also allows social media to be integrated into every one of its campaigns.
Conclusion Nearly all roasters and merchants understand the value of establishing programs to breed customer engagement and loyalty while increasing revenues. They also understand that social media channels have moved from “nice to have” to “must have.” The challenge now is finding the tools that integrate the two together in a way that includes mobile marketing as a very strong component.
Take, for example, Starbucks’s December “12 Days of Gifting” campaign. The mobile app was one promotional channel that allowed customers to opt-in via text. Customers were then pointed to its campaign Web page and invited to connect to its Holiday Facebook app. On the same page, customers could access each of the “12 Days” offers. As this example shows, Starbucks pioneered the ability to gain tremendous visibility into the purchasers of its loyalty and gift cards by bringing them to its mobile app, through which it can receive offers and make purchases (with a strong social media component).
Only through a white-label and integrated, functional platform can coffee retailers of any size effectively develop a mobile engagement strategy that generates revenue without having to build it all from the ground up. This will help merchants and roasters realize the potential of highly targeted, personalized, local and actionable promotional campaigns and messaging to the individual consumer. While the big guys got off to a great start in 2012, once the thousands of coffee shop communities around the country unleash the digital tools now available, the smaller guys will be the ones to come up with the big ideas for 2013 and ‘14. What we’ll see in 2013 is the emergence of white-labeled platforms for all other merchants and roasters that want the same capabilities of the big retailers but lack budget, time and know-how.
Aside from major brands, most merchants have no visibility into who purchased the gift or loyalty card or who the ultimate recipient is. This lack of visibility represents significant loss of opportunity for brands to distribute targeted promotions, incentives, discounts and special offers to their best customers. As these new mobile platforms emerge, smaller brands that take advantage of them will be able to make direct contact with the card buyer and the card recipient. This one to one relationship increases brand awareness, amplifies consumer mindshare and engages customers in real-time. These new mobile platforms will include a consumer mobile app that integrates shopping, gifting and loyalty solutions with users’ real-time location, preference and friend data. This empowers merchants to provide relevant and timely information to
December 2012
Entrepreneur and Investor, The former CEO of Swiss Farm Stores and Saxbys Coffee Company, Paul Friel is president of Entourage Partners LLC an Angel investment group located in Philadelphia that helps early stage companies. Entourage has investments in the mobile payment and retail POS categories.
Employment Law 2012 Review and the Employer Landmines to Avoid Business
2
012 was a year of change, progress, digress, and a Presidential Election – all of which brought significant developments in employment law, especially for employers. Here are just a couple of highlights from 2012:
Social Media – Can Employees Really Say That About Us On-Line? There are millions of people on social media these days. If it be Facebook©, Twitter©, LinkedIn©, internet blogs - you name it. With all the social media avenues out there in cyberspace inevitably come employees wanting to vent and complain about their jobs. They complain about paychecks, the salary they make, or they don’t like the way their employer handles the workforce. Once the employer gets wind of the inappropriate posts, the employer’s first instinct is to fire that employee. NOT SO FAST! Generally, under the National Labor Relations Act, employees are allowed to congregate and discuss their working conditions for mutual aid and protection free from employer retaliation. Now the National Labor Relations Board (“NLRB”)(the governmental agency that generally protects employees’ rights to unionize and have unions represent them) says it does not matter in what forum the employees have their pow-wows. This is because the NLRB views social media as an appropriate forum to congregate and should not give the employees any LESS protection, and essentially it just gives them more due to the power of social media in today’s society. The current decisions in 2012 coming down from the NLRB are very much pro-employee. The broader the policy on restricting the employees’ conduct in social media, the worse off the employer is. States are even getting involved with their own legislation, such as, as of Jan 1, 2013, it will be unlawful in Illinois and other states for operators to request passwords and log in information to access employees’ personal social media sites. Revising your social media policies is a must and not an option!
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Employee Background Checks – What Is Really Fair & Consistent Treatment In Hiring? Background checks came into the employment spotlight in 2012. Traditionally, employers thought they could comply with discrimination laws by having blanket policies that state, for example, no employee would get hired if they had a felony criminal conviction in the
by Heather A. Bailey past 7 years. It is a consistent policy and it treats every individual the same, right? Well, not according to the Equal Employment Opportunity Commission (“EEOC”) (the governmental agency that enforces federal laws that make it illegal to discriminate against a job applicant or an employee because of an individual’s protected class). The EEOC has recently fine-tuned its guidance on background checks. The EEOC finds that these general policies have a discriminatory effect on African Americans and Hispanics because these two races have a higher statistic of getting arrested and ultimately convicted. Thus, employers must go through an individualized case-by-case assessment before they can disqualify applicants from positions. This assessment includes, among other factors, the nature and gravity of the crime; the time that has elapsed from when the crime was committed; rehabilitation efforts; and postconviction employment. State laws may also throw another layer of restrictions that you should be aware of in the states you operate. It makes good sense to have written guidelines for those administrators in your company that perform and analyze such background checks. Wage & Hour Violations – To Pay Or Not To Pay, That Is The Question! Employee-side attorneys have made it a priority in 2012 to sue companies for wage and hour violations, and it is not dying down. This could be for not paying employees minimum wage; not calculating overtime pay correctly; paying them salary when they should be paid hourly; calling them an independent contractor when they are truly an employee; inappropriately deducting from employees’ paychecks for shortages, uniforms or broken company equipment; or not giving them their required meal or rest breaks – to just name a few. Unfortunately for employers, they must stay abreast of not only federal laws, but also differing state-specific laws that dictate how, when, where, why, etc. to pay employees. Getting re-educated on these changing laws should happen sooner rather than later as honest mistakes can happen so easily, yet cost your company a lot of money in fees, penalties and interest. Practice Tips • Review existing written policies for compliance, or create ones if your handbook is deficient. • Train management employees as there can never be enough training
December 2012
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to ensure they are enforcing your policies and practices correctly, consistently, and uniformly. Sign up for employment labor blogs from law firms and state and federal agencies! This is an easy and quick way to get news alerts on new laws.
What to watch out for in 2013? For those employers who are non-unionized, the NLRB will continue to make its presence known in your workforce, if it be rejecting your “at-will employment” disclaimers in handbooks and contracts, restricting your social media practices, or requiring the posting of the NLRB’s “Employee Rights Poster” that gives employees guidance on how to unionize (although this requirement is currently put on hold by a federal court). Along the same lines, the NLRB is looking for a faster way employees can get unionized, which cuts down the time frame for employers to campaign for management. Lastly, health care reform is not going anywhere. You should keep your eyes and ears open for new or revised mandates to ensure your company is following the right steps for compliance come January 1, 2014 – some mandatory compliance has already started. We recommend you contact your employment counsel to ensure your policies and practices are tuned up, and you can also contact the author -- an attorney with a focus on representing companies on labor and employment law issues since 2001.
Heather A. Bailey, Partner with SmithAmundsen LLC Email: hbailey@salawus.com Heather has emerged as a thought leader in the labor and employment industry and is a frequent contributor to the Illinois Chamber of Commerce’s HR Advisory blog and the NAMA Quarterly In-Touch magazine for the vending industry. NAMA Employment Layer.
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Feelin’ Groovy by Bill Fishbein
Supply / Sustainability
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generation ago, a small cadre of coffee enthusiasts in the United States began a journey in search of the world’s finest quality coffee. The objectives were more personal than financial. As the quality of coffee improved, their numbers grew. Not only was the specialty coffee trade born then, shortly thereafter, the course of an entire nation had changed. Once well known as the most ignorant coffee consuming nation on the globe, in one generation the United States raced to the top of the world in terms of coffee quality. Organic coffee, which had been viewed, first as organic and last, last, last for its quality, soared ahead to run neck and neck with the world’s finest quality coffee. Fair trade coffee used to be sold by those often referred to as radical, rabble-rousing communists. Today, fair trade coffee is sold by Smucker’s, the same corporation that owns Folgers. Yet, even more impressive than uplifting the coffee trade’s broad base faster than a speeding bullet, is how hard the brakes have been slammed on to create Slow Pour. In the beginning, price was the first variable to give way to quality. Given that nothing has led the coffee world away from its poor quality roots more effectively than that small cadre recognizing the value of quality over price, other variables, such as volume and time, may also be vulnerable to the quest for quality. Slow Pour points directly into the prevailing winds that demand speed and volume, and asks the consumer to stop and smell the coffee. Could there be another cadre of coffee enthusiasts out there?
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While the race to the top has been led by the unrelenting pursuit of quality in the cup, it has been closely followed by consumer concerns for improved social and environmental conditions at origin. Marketing departments have latched on to these very hot consumer concerns and answered with widespread Cause Related Marketing campaigns. Unfortunately, consumers have precious little time in the supermarket aisles or in the café cue, to get a clear picture of the complexities at origin. So, marketing departments have consolidated the complex issues into sound bites and certification seals. But, sound bites and certification seals simply cannot explain the complexities at origin, and consumers are left to their own interpretation. Consumers really want to know more. But, clever marketing phrases have led them to oversimplify, and their interpretations have fallen well short of reality.
Slow Pour slows down the entire coffee experience, and offers consumers a pause from the rush and an opportunity to consider what life is like behind the mystery in the cup. The care and attention to each brew may be more than the latest step in delivering the highest quality coffee to the consumer. It may also be the first step in providing the time and space for consumers and servers to acknowledge and respect the complexities hidden behind every cup. Let alone the time and space to fully enjoy the sensory experience, and acknowledge, respect and truly be in awe of all those complexities, both behind and within every cup.
destroyed. It’s not like the US where FEMA comes in to rebuild and offer funding for economic relief. It’s still pretty bad.”
Let’s face it. Explaining the sensory experience pales in comparison to the experience. Nor, is explaining sustainability any easier. Slow Pour offers the specialty coffee trade the opportunity to invite consumers in to the mysterious world within every cup and beyond the sound bites to begin untangling the complexities, loosening them into more manageable, understandable pieces. Over a slow, pensive cup there is room for a healthy dialogue, and a free flow of ideas and questions that would otherwise be impossible in the hustle bustle of the coffee rush.
Customer: Oh! This is good!
Customer: “May I have a small cup of that Caracolito Peaberry, from Injerto in Guatemala, please”? Barista: “Sure. This is an extraordinary coffee from Huehuetenango. It has a delicate body, creamy texture, it’s mildly acidic with citrus accents and sweet touches of peach. It’s a particularly balanced cup, clean, silky with good structure. I particularly like brewing this coffee in a Chemex. It will be ready in a minute.” Customer: “Oh, I’m going to like this. Does this coffee come from anywhere near the earthquake that stuck Guatemala a short while ago”?
Customer: “Can I do anything to help”? Barista: “In one sense, you already are. Injerto supports education, health, and nutrition for all its workers. So, keep buying their coffee. And, here is a list of organizations supporting rebuilding efforts in the region. I’m sure they could use whatever help you could afford. Here’s your coffee. I hope you enjoy it.”
Next Customer: “May I have a cup of coffee from Café Capucas in Western Honduras”? Barista: “Sure. Did you know that in Western Honduras,…….” No. This is not about getting them in and out. Slow Pour offers coffee businesses the opportunity to share their knowledge about issues at origin with customers who want to know more, and at the same pace of brewing each exquisite cup. There will be those who will say, “Do you really expect me to earn a living selling coffee at that pace?” Of course, I remember what it was like when I was starting out in specialty coffee. My friends would come in to my store and ask me, “Do you really expect to earn a living by just selling coffee?” Slow down, you move too fast, you’ve got to make the morning last Just kickin’ down the cobble-stones, lookin’ for fun and feelin’ groovy Simon and Garfunkel (1966)
Barista: “Yes, it does. The earthquake wasn’t that far from Huehuetenango and Injerto farms. It made the news for a few days, but with elections, and the mid east crisis it just disappeared.” Customer: “Do you know anything about what happened?” Barista: “It was devastating. Homes were lost. Roads were blocked. And, what made matters worse, the government didn’t respond at all in the beginning. So, it was up to local NGOs to provide food, shelter, and take care of those who were hurt.” Customer: “What’s it like now?” Barista: “Well, the government has finally responded and is providing relief to those who have been hurt the most. Now, the NGOs are trying to rebuild. Homes, businesses, entire communities have been
December 2012
By Bill Fishbein, founder of Coffee Kids and The Coffee Trust. Bill is currently working at origin in the Ixil region of Guatemala and in the Western Highlands of Honduras promoting comprehensive, integrated, grassroots development for small-scale coffee farmers. www.thecoffeetrust.org
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Coffee Outlook for 2013 from Rabobank by Keith Flury
Supply / Sustainability
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offee prices are expected to increase in 2013 finding support from increasing global demand and tightening stock levels. Arabica prices are down over 52% from the 2011 high. However, a potential deficit in the 2013-14 season, as well as an already large short speculator position, will temper further downside. Robusta market prices are contingent on the Vietnamese crop, and as the current outlook is positive, major rallies are not anticipated, but expect moderately higher prices in 2013. The price difference between coffee varieties has settled to a level of stability in the coming year. The range-bound outlook for the spread between Arabica and Robusta prices in 2013 is a forecast for less volatile price action in the Arabica market. Coffee consumption has not decreased, but demand has largely moved away from washed Arabica to Brazilian-natural Arabica or Robusta, which has shifted differentials closer. This dynamic is a focal point in our forecasts for mostly lateral but positive movement in 2013. Arabica fundamentals are forecast to be in surplus for 2012 and 2013, which will be a bearish aspect weighing on prices in late 2012 and early 2013 due to investor shorting and hand-to-mouth roaster buying. Market prices may hit a bottom in 2012, with a positive outlook in 2013 based on new season fundamentals and increased buying. The fundamental forecast for Arabica beans in 2012-2013 is for a 4.1 million-bag surplus, while early projections for 2013 and 2014 suggest a likely deficit. The Arabica price outlook in 2013 is positive due to this potential deficit, anticipated roaster buying and Brazilian farmers holding supply off the market. Farmers in Brazil still have a significant amount of 2012 Arabica harvest to sell on the market, but given their well-capitalized position and government subsidies for storage, we anticipate the supply from Brazil will arrive only if prices are attractive. The speculator gross short position— near historic highs—is expected to be pared back in 2013 as the deficit season looms. The gross short position is equivalent to 14 million bags of coffee, and a reduction in 2013 will likely support futures prices. With the Arabica market in surplus, buyers have disciplined roasters in 2012, likely based on the assumption that the oversupply will result in a further reduction in prices. The outlook for 2013 calls for end users to increase buying to build stocks, which will support a retracing in the market.
development is positive, it will be an off-season crop, potentially shifting the Arabica fundamental balance into deficit. The scale of the season-toseason production shift has fallen in the past decade due to agronomic practices. The difference between on- and off-season crops is anticipated to continue to shrink in the coming years, but given the scale of Brazilian production relative to global Arabica output—forecasted at 46% in 2012 and 2013—the off-season harvest will still likely bring about a global deficit in the coming seasons. Also impacting the supply of Arabica in 2013 will be lower incentives from prices. Multi-year production highs of Arabica in Central America, Asia and Africa in 2012 and 2013 were in part a reaction to the highest nominal season average New York price ever. In 2013, anticipate lower New York values and lower washed differentials will reduce incentives to use inputs and thus moderate yield potential in the short term. With reduced yields and an off-season Brazilian harvest, a high probability of an expected Arabica deficit supporting New York prices in 2013 is predicted. The shifting demand profile in the coffee market will keep washed Arabica prices and differentials under pressure and support Brazilian Naturals and Robusta markets in 2013. Coffee-demand growth in 2013 is likely to be concentrated in emerging and nontraditional markets as it has been for the past couple of seasons. Given the price conscious consumers in these growing markets, roasters are expected to focus on lower-priced beans, therefore maximizing Robusta use. The 2010-2011 price rally in New York supported washed Arabica production. This, coupled with demand moving towards Brazilian Naturals, is projected to result in an oversupply of washed Arabica. In the short term, oversupply is illustrated by the New York exchange inventories growing 52% in the second half of 2012 as origins sell to the board due to modest physical buying interest. The post-boom Arabica market leaves Brazilian supply in demand while higher cost washed supply exceeds demand. In 2013, the market will have to pay Brazilian farmers higher prices to draw out supply while producers of washed Arabica will find the market oversupplied. This has resulted in differentials moving closer together, a situation that is likely to remain in 2013.
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The speculator gross long position in the Robusta market has been pared back significantly since its peak in July 2012 as the supply outlook improved. If Vietnamese and Indonesian crops meet expectations, investors will likely keep reducing long positions. A sharp reversal in the fund positioning is probable if bullish supply news arrives, and consequently our sense for price spike risks in Robusta are elevated. With our base case Robusta supply scenario for 2012 and 2013, we do not anticipate investors increasing the net long levels, but we expect commercial buying and the need to encourage Robusta production to be supportive factors, resulting in increasing prices in 2013. Early season harvest pressure coupled with fund liquidation is forecast to give way to commercial buying supporting futures prices.
The Robusta market has been balanced with strong demand growth and large Vietnamese harvests, and in 2013 we see this dynamic continuing.
Keith Flury, Senior Analyst Soft Commodities for Rabobank
Market expectations for the 2013 Brazilian Arabica crop will drive roaster buying and speculator positioning in the coming year. While early
Arabica differentials have shifted closer together as demand has moved from washed to naturals
Expect the market to be supported by increased consumption, especially at origin and in Asia. In our view, the substitution of Arabica for Robusta in 2010 and 2011, which estimated at between 3 million and 5 million bags globally, was a dynamic not expected to occur again. If the Robusta/ Arabica price spread remains near current levels, we do not expect consumption to shift back to Arabica, and we do not expect further substitution. Robusta demand is forecast to increase 3.8% in 2012 and 2013, down from 11% the previous year, and will likely grow at a similar pace in the following season if prices are near our forecasts. Robusta market fundamentals are forecast to be in a modest deficit of 204,000 bags in 2012-2013. The continued growth in demand is expected to be countered by a large Vietnamese crop of 27 million bags in the new season.
Robusta is forecast to move to deficit in 2012/13 while Arabica will be in surplus
December 2012
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Specialty Robusta
A Revolution or a Tragic Mistake
by Shawn Steiman
Supply / Sustainability
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arlier this year, the Co ee Quality Institute announced the launch of the R-grading system. The premise is that there are Robusta co ees good enough to be considered specialty co ee and that a system of discovery and promotion is needed to build a substantial specialty industry around them. The idea of specialty Robustas has polarized some parts of the specialty co ee industry with both strong detractors and adherents speaking out; it is not a simple issue. As Robusta co ees have a significant taste di erence from Arabicas, the specialty co ee industry (at least, in the U.S.) has spent decades demonizing them. While the industry admits that not all Arabica co ee is specialty co ee, there has been a fairly good agreement that Robusta is evil. While there have been some Robusta supporters, in general, though, the message has been clear: it cannot be specialty co ee if it is or if it contains Robusta. The idea of specialty Robustas is not new. An Internet and trade magazine search will turn up articles written in the last few years discussing the matter. It is only the new R system, with its active promotion of Robusta co ees, which has caused some people to cry foul. CofeeTalk Magazine has played host to a conversation about specialty Robustas in the last few months within the editorial section and letters to the editor. Instead of recapping those conversations, this article will explore some points of those conversations while bringing up some new ones. Can Robustas taste good enough to be considered specialty co ee? I have long been a proponent that each individual consumer is an arbiter of quality. Far be it for any expert to claim what is universally good or bad for everybody else. In this context, there are certainly Robusta co ees that will be acceptable and desirable to some consumers. Given the current Q-grading system and its attempt to define specialty co ee, are there specialty Robustas? Nobody knows. A few farmers are selling them but the sample size is so small that it is impossible to make a generalized conclusion. Thus, co ee geeks cannot even weigh in on the possibility.
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Agronomically, the question is di cult to answer. Arabica co ees have long been receiving royal treatment and pampering. In the field, they are better cared for, better harvested, and better processed than Robustas. Farmers even plant specific
varieties with taste in mind. Arabicas are given more opportunities to attain their potential as specialty co ee. Robustas, on the other hand, are almost never treated as well. Thus, we do not know if, given a chance, they could be much better than they currently are. It is probable that there will be a variety, a process, a location, or a combination of such things that will produce a specialty Robusta. Can specialty Robustas help keep costs down? Most likely, no. The primary reason Robusta co ees are cheaper is that they are not produced as lovingly as Arabicas. Thus, if farmers fertilize and water them more, pay pickers more for better harvesting, and spend more money on processing, their cost of production is likely to rise to comparable Arabica levels. In addition, if specialty Robustas do take o , then they’ll need to be supported by scientific research to discover best practices for specialty production. That research will need to be funded and there’s little hope that producers (and consequently consumers) won’t have to bear part of that burden. Will specialty Robustas help increase the amount of available specialty co ee? While the simple answer is “yes” – more of any specialty co ee will add to supply – the hope is a false one since increasing the supply of specialty Arabica can be solved just as easily as adding specialty Robusta to the mix. Better farming practices (more nutrient and water input along with better pruning, processing, and storage) could probably increase specialty Arabica yields 2-5 times their current levels! Yet, this hasn’t been done nor is it widely advocated. To suspect that appreciable amounts of specialty Robusta will be produced and discovered without appreciably increasing their cost while having substantially equivalent quality to Arabica is unlikely. A new species is not the immediate solution, better farming is.
now drinkable when yesterday they were not while di erentiating them from their cheaper counterparts sold by the conglomerates and still coming across as having integrity. It is not that it cannot be done, only that it will not be easy. The establishment of the “R-Grading System” might have already jeopardized the promotion of specialty Robustas. The R-Grader System’s very existence says that Robutas are not substantially equivalent to Arabicas. If the Q-Grader System – whose purpose is to define specialty co ee – cannot grade Robustas, then either they are not specialty or the Q-Grader System is dysfunctional (a very real possibility, but one not to be discussed here). The R-Grader System appears to be a smoke- and-mirror trick to convince everyone that Robustas are specialty without making them succeed-bytrial in the Q-Grading System. I cannot predict whether specialty Robustas will be adopted by the specialty co ee industry as a whole but I think the attempt to get them adopted will be, forgive the pun, robust. Personally, I support the search for them. I celebrate the diversity of the co ee taste spectrum and I delight in the discovery of new, interesting cup profiles. There is no reason Robustas have to be equivalent in any way to Arabicas. That said, we must be honest with ourselves and consumers about what we are discovering and promoting, and why. It is ok to change our preferences and widen our horizons. However, we should admit that we are exploring something we’ve spent decades decrying and recognize it is going to be a bumpy road we journey upon. Not everyone has to embrace specialty Robustas. Those that do, however, should do so in a way that doesn’t diminish the creditability specialty co ee has worked so hard to gain nor in a way that will damage someone else.
Can Robustas be marketed successfully after so many years of negative publicity? Convincing specialty co ee roasters and consumers that Robustas are now worth drinking is a di cult and tricky venture. Poor marketing will lead to all Robustas being hijacked and celebrated by the large co ee conglomerates, much as “100% Arabica” has been. Selling a consumer on a more expensive Robusta will be a huge challenge: you need to quickly and easily teach people why and how Robustas are
December 2012
Shawn Steiman, PhD, is a co ee scientist and consultant. He has authored numerous books and articles on a range of co ee related topics. He specializes in co ee production, quality, and education. He can be reached at steiman@co eaconsulting.com. This modified version is reprinted with permission from The Co ee Store (www.mauico ee.com).
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Connecting at Origin
Approaching Sustainability from a Holistic Perspective by Ashley Prentice
Supply / Sustainability Another major conference that took place in Costa Rica this September was the 24th International Conference on Coffee Science organized by ASIC (Association for Science and Information on Coffee.) This was the first time it was done in a Central American region, and it achieved record attendance with over 500 attendees from 38 countries. While very technical and scientific, the purpose of this conference is to inform the world about the results and achievements of the most recent scientific studies related to coffee.
I
n order to approach the subject of sustainability it is imperative to look at the industry in a holistic way. This not only starts by examining your own practices but also by understanding what happens throughout the supply chain, and particularly, the issues taking place at origin. With this in mind, this November two major events took place in Costa Rica that brought individuals from all over the world to connect, discuss ideas, learn, and share findings about the world of coffee. And what better place to do this than in a place where coffee is actually grown? Sintercafé is known as the biggest coffee event in a producer country. For a producer, this is a conference to learn, but most importantly to network and connect with buyers. Various farmers in Costa Rica had the opportunity to entertain their buyers and show them their country, as well as their farms and practices. Farmers from other countries had the chance to not only meet new buyers, but also discover and learn about new and different ways of growing, processing, and selling coffee. Other industry professionals had an opportunity to create a profound relationship with farmers, develop new relationships, and connect with their existing clients on a deeper level.
According to Andrea Illy, President of ASIC and CEO of IllyCaffé, “The most important macro issue that the world faces today is sustainability: Social, environmental, and economical.” For this reason, two major topics were addressed at this conference: Coffee and Health and Coffee and Climate. The first subject, addressed how coffee improves health, as it focused on the vast medical evidence that shows how the consumption of coffee is linked to minimizing the risk of diseases such as Parkinson’s disease, Type 2 diabetes, and several types of cancers. Furthermore, other health related subjects were discussed, such as addressing components in coffee that might affect health and how to neutralize them. The section on Coffee and Health began with James Coughlin, Board Member of ASIC and President of Coughlin & Associates, presenting on the topic of coffee and cancer, and the news that has been reported on this subject by presenting scientific research showing that coffee actually helps prevent many types of cancer. “15 years have been spent defending coffee and its impacts on health. We have been trying to change the consumer’s mentality and perception about coffee because through science we have found that most of the bad reputation of coffee was wrong.” stated Coughlin.
The latter topic, which focused on Coffee and Climate, focused on the development of new disease and climate resistant varieties; new and improved agronomical practices; and the impact of climate change on coffee. Coffee is very important in Central America and many other parts of the world. Many families are based and supported by coffee production, meaning that coffee has a direct effect on their economic and social standing. Currently, producers have various challenges that they cannot solve themselves; topics like climate change that are affecting crops, yields, and therefore, the very sustainability and livelihood of the farmer. “What we are trying to do at this conference is invite various presenters to exhibit several issues and possible solutions.” said Coughlin. Every country has its idiosyncrasies in how they produce, process, and sell coffee, and there is much to be learned about these differences. The attendees of these conferences had not only the opportunity to talk about sustainable practices, but to actually witness it in Costa Rica. Unlike many countries, coffee production in Costa Rica is regulated by multiple laws and decrees, which warrant fair pricing along the entire coffee supply chain within the country. In addition, these laws and decrees protect bio-diversity, forests, and water resources to ensure the sustainability of the industry and the environment. If we understand what is happening since the inception of coffee, until this is a final product, only then, will we be able to truly approach the concept of sustainability and accurately educate consumers. If difficulties arise at origin, this will have a direct effect on the end product. By coming together to share concepts, ideas, and research we will be able to connect and improve our daily practices to ensure the sustainability of our industry as a whole, from crop to cup. Ashley Prentice, Freelance Journalist CoffeeTalk Media & Certified Q-Grader. Ashley Prentice, Freelance Journalist CoffeeTalk Media & Certified Q-Grader.
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Ashley Prentice in Costa Rica
December 2012
Coffee Partnerships Save Lives Supply / Sustainability
by Jane S. Dale
C
offee—the world’s second-most traded commodity after crude oil—is the source of livelihood for millions of people around the globe through its cultivation, harvesting, processing and trading. Though industrialized nations consume the bulk of coffee, 90% of it is produced in developing countries where females make up the majority of the coffee labor force. Ripe coffee cherries are harvested manually. According to the International Trade Forum, women do at least 70% of the harvesting and sorting. It takes approximately 3,200 beans to constitute a single pound of coffee for which the picker can be paid as little as 14¢, according to some industry figures. Women play an undisputable role in the health, vibrancy and sustainability of coffee production. Yet, these same women are among the last in the world to gain access to basic health screening services that can keep them healthy and productive members of their communities. For instance, when a woman in a coffee-growing community dies from cervical cancer— as nearly 200,000 do each year—it is not only a human tragedy, but also bad for business. Moreover, the lasting negative impact in terms of education, health and lost opportunity on the next generation of would-be coffee farmers is incalculable. Since 1996, the coffee industry (most notably the specialty coffee industry) has been supporting the work of Grounds for Health to create sustainable cervical cancer prevention programs in coffee-growing communities. Cervical cancer, the number one cause of cancer death for women throughout the developing world, is preventable, treatable and curable. Yet, every two minutes a woman dies somewhere in
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the world, often because she lacks basic access to routine screening. To date, Grounds for Health has trained 500 community health promoters to educate and recruit women to be screened for cervical cancer. The nonprofit has taught 270 doctors and nurses how to conduct a low-cost yet highly effective screening protocol to detect pre-cancer of the cervix and to treat women who test positive. This “screen and treat” technique, recognized by the World Health Organization as a “best buy” in international public health, can be done even in the most remote settings. Through Grounds for Health programs, more than 40,000 women have been screened. These local doctors and nurses will continue to provide services throughout their careers in the communities where they work and live, making the program truly sustainable. When women need treatment, they get it. When they are shown to have advanced cancer needing more aggressive treatment, they are referred for more care. Coffee companies have recognized these results and intuitively understand both the humanitarian and business incentives of safeguarding the health of women as an integral part of the coffee value chain. What may be less understood is the global impact that supporting Grounds for Health and other coffee non-profits has had and continues to have. Grounds for Health’s work, for example—which is only made possible by coffee support—has been recognized for its impact on addressing a major global health problem. The organization’s approach of only going where invited and then incorporating community mobilization as a critical element to long-term, local program
December 2012
sustainability has gained traction in the international health community. In 2011, the World Health Organization asked Executive Director August Burns to join a seven-person Technical Advisory Group on Cervical Cancer Prevention. This group is literally re-writing international guidelines for reducing the burden of this global public health problem, taking into account the necessity of a “ground up” approach. Grounds for Health has also been invited by the Global Health Council, the Pan American Health Organization and the Federation of International Gynecology and Obstetrics (among others) to present its model as an example of a public/private partnership that is making a measurable difference. One example of the effectiveness of the community-centered approach is that the government of Tanzania has now adapted Grounds for Health training protocols and materials for its national programs. Coffee companies have proven themselves to be incredibly philanthropic and truly concerned with the welfare of the people who produce their product. When coffee companies open their checkbooks to support a variety of coffee-based charities, they do it for their own altruistic reasons. The fact that these generous impulses also have positive long-term ramifications worldwide—not just in the world of coffee—is a benefit few could have foreseen. Jane S. Dale is Development Director for Grounds for Health. Previously, she held the position of a Vice-President for Cone, Inc. This Boston-based cause-marketing firm helps align the philanthropy of Fortune 500 companies with their business objectives through targeted financial support of nonprofits and social cause.
For 2013, Quality is still the Key Supply / Sustainability
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t the Coffee Quality Institute, we have expressed since 1996 that the best sustainability project is one that improves and rewards quality. It is just as true today as it was then. CQI continues to build on over a decade of success in the promotion and education about quality coffee. 2013 will be a record year for lives helped through our efforts. Improving Quality Improves Lives! When founded, CQI had a strong focus on the science of taste formation and evaluation of coffee. It was determined that this science could be the most useful if the entire supply chain spoke the same language and were calibrated on flavor attributes. From this, the Q-Grader Certification was born. Since then, the world has been populated with over 2,100 Q-Graders in 59 Countries. The education component continues to improve and the value to the student grows each year. The release of the latest version of the Q-Grader course material in early 2013 will be one of our first great achievements for the year. What may not be so well known about CQI are the many other areas where we serve the coffee supply chain. Technical assistance has been given in the areas of production and processing, quality improvement and increased internal consumption. Many producers are unaware of marketing tools, geographical identity of production zones and use of cup profiles. We find that
by Joan Uphoff with Rocky Rhodes producers are eager to learn about quality improvements and marketing of specialty coffees. CQI has an intimate understanding of coffee industry needs and has years of experience in the development of efficient coffee market linkages, technical assistance, market development, and capacity building in developing countries. A great example of helping to create a market for specialty coffee was our efforts to help the Specialty Coffee Association of Indonesia bring some of their best coffees directly to the specialty roaster with a coffee auction. CQI was able to lend expertise in grading, selecting and preparing for the auction as well as provided an auctioneer to help boost the prices. All coffees received higher than market prices by being in the auction! Over seven times market in some cases! CQI’s Coffee Corps™ volunteer program matches coffeeindustry experts with farmers and associations at origin. The Coffee Corps is a group of volunteers passionate about coffee and willing to share their time and talents with coffee farmers and coffee communities. These volunteers help growers improve their production methods and processing, and train labs, roasters, packagers, exporters, baristas and café owners about quality control processes and marketing. A well-received class in 2012 was the ‘Honey and Naturals Processing Class’ in Ethiopia run by CoffeeCorps Volunteers.
The latest new program for CQI is the R-Grader program. This is similar to the Q-Grader program but focuses on Robusta coffee and the farmers that produce this misunderstood crop. It is entirely possible that a whole new community will be able to benefit from the increased education and quality programs initiated by CQI. When you think about it: Quality Improvement is Quality Improvement, and Lives are Lives; therefore, regardless of plant species Improved Quality = Improved Lives. As we look ahead to 2013 we see more contracts in place to do good work and pursue new research. We see programs growing on their own so we can focus on others that need more attention. We predict that there will be more lives helped by CQI than any other year in our history! Bring on 2013!
Coffee Corps Volunteer Coordinator, Coffee Quality Institute Joan is originally from Wyoming, growing up in Cheyenne and graduating from the University of Wyoming in Laramie in 1976. She grew up in the travel agency business that her dad started in 1949, learning from him after school and during summer breaks. She spent several years in the hospitality industry as a sales manager for a resort hotel in Hood River followed by five years as Administrative Assistant at a small hospital in the area. Joan has traveled extensively and brings a good deal of experience to managing logistics for the Coffee Corps Volunteers and Consultants. She also assists with proposal development, report generation and training activities.
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5 Steps to Building Long-Term Customer Loyalty Profit Building Strategies
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n a world where customers have no shortage of choices, how can your brand or business earn customer loyalty? To many coffee retailers, “loyalty programs” are synonymous with promotions and giveaways. While these programs are important, we at Insight Beverages have a foundational fivestep plan to earn customer loyalty that extends beyond promotional tactics. 1. Know Your Customer Consumers vary widely, so first identify your core shopper, and then understand this group’s shopping choices. For example, if you are targeting Millennials, research indicates a demand for convenience and a willingness to pay more for it. Convenience can come in many forms—it can be the portability of the Starbucks VIA® brand, the portion control of single-serve K-Cups®, or the ability to customize a beverage to suit a personal preference. For more priceconscious consumers, it could mean a great cup of coffee at a great value served through a convenient fast food restaurant drive-thru or bought during a quick stop in the morning at their local convenience store. An understanding of your core shopper, as well as general industry trends, should shape what you offer. It is the first step to earning customer loyalty. 2. Offer a Great Product Once you have an understanding of your core customer, offer great-tasting products at a fair price, in an atmosphere people enjoy. Getting that right will do more for your business than any punch card. Starbucks® and Wawa® are both examples of great products served consistently, and they have earned legions of loyal customers. If establishments choose a value price strategy, they must be careful not to downgrade the overall experience, including customer service and in-store ambiance. Offer consumers the best product and experience that you can.
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3. Develop Management Quality To Enhance Customer Retention Loyalty is generated at the local level, but support for it has to be a companywide commitment. Equally important: Define what loyalty will look like for your business, and then track it. Some companies measure loyalty by how many
by Andrew Dun customers promote their brand to their friends and family. Others choose to measure it through repeat business. It is widely understood in the restaurant business that the quality of local store management influences employee satisfaction, which, in turn, influences customer satisfaction, loyalty and samestore sales. Coffee retailers must ask how they are driving and measuring employee and customer satisfaction. 4. Build a Strong Brand Building your own brand is a commitment to earning customer loyalty because it is a way to differentiate yourself and satisfy consumer needs. Safeway® has done it through its private label O® Organics brand and Eating Right® line of betterfor-you foods. These are corporate brands, but you wouldn’t know they are Safeway® labels. However, be selective where you create your own brand. Many retailers successfully partner with other brands to provide complementary products and services. For example, many grocery retailers have national brand coffee outlets and banks on-site. Besides meeting a consumer need, they recognize the power of association with a premium brand like Starbucks®. Many coffee retailers offer single-serve dairy and juice beverages from leading national brands. As a coffee retailer, consider pairings with other businesses in your market in order to extend your brand. This could be a local bakery, catering company or wireless Internet service. Could local restaurants or offices start serving your coffee? Many coffee and tea retailers have made the move to sell their products at local and national retailers. Can a local Internet provider help you sell your products online? The choices are almost endless, depending on your market and clientele. 5. Don’t be Afraid to Innovate Coffee retailers can earn loyalty by customizing their products for the season. In doing so, they show that they know what the customer expects: Pumpkin flavors in fall; eggnog, mint and cinnamon flavors in the winter. Coffee retailers can also earn customers’ loyalty by adopting “hot trends.” Salted caramel and marshmallow are among the most popular flavors currently, and at Insight Beverages, we have created products based on these trends. Coca-Cola® capitalized on iced tea as being one of
December 2012
the largest, fastest-growing beverage categories in foodservice when it took a successful retail brand and began selling Fuze® Iced Tea in U.S. restaurants. There is also a lot of innovation in natural and organic beverages that can be leveraged by coffee retailers. Innovation requires some economic flexibility and a willingness to risk trial and error. Too many retailers wait for a category to get big, running the risk of losing their competitive advantage. Besides product innovation, we recommend a willingness to adopt social technology to boost loyalty. Coffee retailers can have conversations with customers via social media such as their Facebook page and implement loyalty programs through options like Punchh.com or SCVNGR.com. Social technology is also a great tool to gain customer insights, which in turn can shape products and loyalty programs. How well the dots get connected, however, depends on the organization’s commitment to both understanding the data and earning customer loyalty. In summary, start with the basics. Know your customer. Serve products in an appealing atmosphere staffed by great people. If you do these things well, you will be on your way to creating an enduring brand that you can expand in multiple ways, supported by social media, loyalty programs and new technologies.
As Vice President of Marketing for Insight Beverages, Andrew Dun is responsible for charting the future growth for the company through innovative products and services.
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My Shop Is Circling the Drain! What Do I Do? Roaster
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s a consultant in a down economy, I get several questions about how to ‘save’ businesses that are feeling the squeeze. These are the ones not afraid to ask for help. That means there are lots of others that need the help and don’t even know how to ask. This article is for anyone looking to improve their business, but especially for those that NEED to get control. I have been EXACTLY where you are and I hope that this simple advice might trigger an idea for you so you can break your cycle of ‘hanging on’ and move to one of prosperity. There are only two ways of increasing revenues for your store: 1) Sell more to the people that are already coming. a. The metric that people use is ‘dollars per transaction.’ If you can increase the amount you sell to each person that comes in you can quickly see a big change. A cookie, a box of mints, a cup of soup, a pound of beans, etc. b. If your average ticket is about $3 right now and you were to increase that by only 50 cents, that is a 15% increase in sales. That starts to change everything. 2) Get more people through the door. This is harder, but essential. If it can’t be done, start looking for an exit strategy. a. It almost always can be done, just not the ways you have tried. b. Word of mouth is cheapest and produces the best results. Find a way to reward your existing customers if they bring in a friend who has never been to your place. “Coffee on the house for your friend’s first visit!” The advertising cost to you is about $3 to get a new customer that might spend $10 per week or more. That is cheap! You also have to stop being you. YOU are the one that is stuck, not your store.
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You are taking the first step; ask anyone and everyone what THEY would do in your situation. No one will have the whole solution for you, but everyone will have a piece of the puzzle. You are now the puzzle master and will find the path that fits your
by Rocky Rhodes style and shop. I asked friends, customers, even competition. After about 25 responses I started to see the path. So top puzzle pieces for me are listed below. They may not be the same for you but they may trigger an idea. 1) Reconsider the hours of operation. Look at the peak times for your store and consider closing on the slow times to both reduce employee costs and to free you to work on the business and not the espresso machine. 2) Add non-perishable food items to the menu. Powerbars, cup-o-soup, candy, etc. 3) Discover what your existing customers would buy if you offered it. Survey them. a. I made a sign that said “Free Coffee Friday” and did not tell anyone what it meant. On Fridays I handed customers a short questionnaire that gave them a free coffee or $1 off an espresso drink if they filled it out. EVERY Friday, sales went up instead of down AND I got valuable information! 4) Reconsider your loyalty program: Are you using one? Can it be tweaked to help increase sales of other products? Instead of ‘Buy 10 Get 1 Free” try “Buy 10 get a logo mug free” as a way to increase hardware sales of items already on the shelf. 5) Trade coffee for flyers from a printing company and then post flyers on every house and business within 1.5 miles of your shop.
Last Thought
I had a ‘lucky moment’. When I figured out that I needed to ‘not be me’, I had no way of paying someone else to be me. At the same time my brother was laid off at his job. I told him to move in with me and I would supply food and shelter if he would run the coffee shop until I could get it straightened out. He accepted and I was able to dedicate myself to working ON the business. After three months I was able to pay him and me and we grew the business. Who could be your lucky person to help? Retired grandparents? Un-employed customers that might work for tips part time while they look for other jobs? Be creative! Finding some free labor will help on lots of levels! I also learned to design an exit strategy. I built the business up and sold it for a profit. I then took my experience to the ‘next thing’ and have been even more successful. No matter how this shop turns out for you, you will have gained an education you can’t get in school and you will be able to apply it to your next step in life. Now go solve your problem! Add my advice to the pile of puzzle pieces and put together a solution. AND buy a copy of E-Myth. It is worth every cent.
After Thought
If this advice works, and has value to you, my fee will be a cup of coffee the next time I am in your town! I really hope to collect so knock ‘em dead and let me know how it goes for you!
A good next step is to stop working IN your business and start working ON your business. If you are behind the counter, you are not out there asking people to come to your shop. If you are mopping floors, you are not finding that new cookie or box of mints. To get there you must improve the systems of your shop so it runs without you. I know that this means you might have to bring on more staff but it might be the only way to get you free enough to grow the business and it will then pay for the new person. Thinking about your business differently is essential, and I was able to do it using the book The E-Myth Revisited by Michael Gerber. This book guided me to do all the things above. I discovered what my business really was and I turned everything around in three months. IT WAS NOT EASY! But coffee house owners are not afraid of hard work so work hard on the right things!
December 2012
photo: Trish Rothgeb
Rocky Rhodes started as a coffee lover, became a coffee roaster, evolved into a coffee educator and is currently serving time as a coffee addict. He loves telling other people his opinion so being a consultant suits him well. Rocky can be reached at rocky@INTLcoffeeConsulting.com
Gender Equality and Education as a Sustainable Future by Andreza Mazarão
Supply / Sustainability
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ducation, health and gender equality are the core social issues faced by all nations regardless of their development status. These issues were globally addressed in the Millennium Development Goals set by the United Nations in the year 2000. The Millennium Development Goal for gender equality is to promote gender equality and empower women. The target is “to eliminate gender disparity in primary and secondary education, preferably by 2005, and in all levels of education no later than 2015”. In 1999, primary school enrollment was 91 girls for every 100 boys and 88 girls for every 100 boys enrolled in secondary school. In 2008 the ratios were 96:100 and 95:100 for the two levels of education respectively. Despite this progress, there is still disparity between girls and boys, and the goal is still out of reach for many developing countries. The coffee industry can be a contributor to the successful achievement of this goal. What is the gender status of our industry and how can we promote equality? Is there a parity problem when we think about the baristas, cuppers and roasters professionals? Not really, as we see women and men working and running their own businesses, equally organized and skilled.
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The gap becomes evident when we look at coffee origins around the world. There is a lack of statistics regarding the number of women working in the coffee fields, their education level and their opportunity for advancement. For example, in Central and South America many farms are registered under a woman’s ownership through inheritance or for tax benefit, but the women have no control over the property. On the other hand, farms are still registered under a man’s ownership and are run by a woman as many men did not come back from the political conflicts occurred over the past decades. So, the “mothers” had to take over the business and run the farms themselves as an act of desperation and courage in order to feed their families. These women do indeed exist, as we in the coffee industry
see them, talk to them, touch and consume the products they produce all the time—but still to the outside world, these women are invisible and speechless. NGO’s have been working on the goal for quite some time now. A leader in recognizing the potential of working with women in coffee was Cafe Femenino in 2004. The success of empowering women farmers with educational tools to produce improved quality coffee led to the creation of the Cafe Femenino Foundation that now provides funds to other projects related to a better living for all women and their families working in coffee production. The International Women Coffee Alliance (IWCA) has a similar goal. “The overall message we like to convey is the importance of women participating in training opportunities and financial transactions,” says IWCA vice president, Johana Bolt. “Both factors impact production quality and volume, as well as ensuring that a higher proportion of income is invested back into the health, nutrition and education of coffee communities.” Eight chapters were formed by IWCA in coffee-producing countries to better understand the local needs, develop leadership and implement local educational projects. Another eleven countries have shown interest in forming their own chapters.
producing areas. Daterra Coffee farms in Brazil is one of the world’s largest specialty Arabica coffee producers which employs 553 staff, 142 of which are women working in the diverse tasks needed to run the business throughout the year. This means that around 25% of the whole staff is female, and the target is to reach at least 30%. Daterra’s most recent gender equality project was a technical course to teach women how to operate machinery used in coffee production, traditionally a male-only position. In the last ten months, thirty women took the two months course. Twenty-two are now employed at the farm in new positions. They previously worked on hand picking and this was an opportunity to learn new skills as well as increasing their paying. “They will be able to use this training for the rest of their lives, even if they decide to work in another company. Much of the machinery is used in other agricultural productions as well,” said farm general manager Leopoldo Santanna, who developed and implemented the project. Also, another important part of the whole business is run by women. The Daterra farm is a family owned company controlled by Isabela Pascoal Becker, Luis Pascoal’s daughter, who has trusted the sales and marketing division to another woman, Andreza Mazarão. These are just a few examples of what can be done for gender equality. There are still challenges: We need more accurate information on the statistics and we need to set goals for gender equality at the farm level, as well as to develop tools to measure its progress. Educating these women provides them with the chance to make their own choices and improve their own family future. Sharing knowledge is the ultimate “sustainable” way of doing almost everything in our lives!
Certification organizations have been instrumental regarding equal pay for men and women. In many places women are paid less than a man to execute the same work. Certifications like Rainforest Alliance® and Good Inside® make sure that all employees of a certified farm are decently and equally paid. The largest Arabica producer in the world, Brazil, is one of the countries where the lack of gender equality statistics is overwhelming. The Brazilian IWCA chapter has been recently formed, and research on these statistics is planned by 2014. Private initiatives have created outstanding examples of gender equality in coffee
December 2012
Andreza Mazarao, Sales & Marketing Manager and Isabela Pascoal Becker at Daterra Coffee
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Strategic Beverage Menu Management in the New Year OCS & Vending
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perators are continually facing a balancing act in beverage menu management. On one hand, it is imperative to offer options that reflect the most current trends. For example, at this time of year a consumer can expect to see pumpkin and peppermint-flavored drinks making a short-lived but popular appearance on many industry menus. On the other hand, the operator must rely on and trust in equipment that is profitable to operate. The last thing an operator should be dealing with is constant battles with a service technician or service support line. While both sides of the equation need thoughtful attention, there are several key factors in the first variable that can promote chances of operator success: Improve reach and get new buyers. New buyers may be reached in innovative ways. For example, suppose filter coffee is a popular menu item. An operator can expand to specialty niche buyers by adding equipment brewing and grinding options to the counter that creates a baristalike experience and is designed to highlight flavors in single-origin coffee. There are options available that place little demand on the countertop footprint that can operate alongside more traditional brewers.
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by Greg Fisher Increase visit frequency by existing buyers. This strategy involves keeping current on beverage trends and staying relevant to your customers. A stalwart in the day part line up for coffee-related drinks is the morning breakfast slot. However, an emerging day part vying for strong consideration is the early evening snack time. By determining appropriate offerings in both time slots that additionally reflect regional seasonality, regular customers could be enticed to visit a location at multiple times per day. And once menu options are updated, don’t forget to tell customers about new product offerings through a social media strategy or coupon mailers.
regular tea drinker may be looking for something new in the category. This type of customer may be willing to pay more for a single origin coffee, sweetened tea or unique flavor of granita beverages such as coconut-mango. Take a moment to evaluate all of these factors as you approach a new business year. Then determine if your equipment will allow you the flexibility to experiment or expand. While nothing is guaranteed in our current economic times, attention to the rationale behind purchase decisions gives an operator a solid business approach to menu management decisions.
Look for ways to increase the average party size or buyers per occasion. Family-friendly menu options are a great way to build sales in this strategy, if a location concept can accommodate it. Many times, a family will consider an establishment based on the range of food and beverage options available for all members of the group. Increase the average check per customer. Incorporating a potential trade-up strategy is ideal here. Described in the first tip above, a customer who is a regular filter coffee drinker may be ready to explore new taste options and experiences. Or, a December 2012
Greg Fisher is Senior Vice President, Commercial Sales-North America for the Bunn-O-MaticÂŽ Corporation. During more than twenty-five years with the Springfield, Illinoisbased company, he has worked in nearly every aspect of coffee brewing and grinding technology. Greg has been an active member of the Specialty Coffee Association since the very first conference in New Orleans.
2013 ... The Huge Opportunity! How to Be Successful in Whatever Economy.
Roaster
by Thomas G. Martin Then, assume 7.5 oz. of brewed coffee weighs 208 grams. The coffee the water ratio is therefore 2.5 grams of coffee / 208 grams of brewed coffee = 1.20% Total Dissolved Solids (TDS). For a golden cup, the SCAA recommends a range of 1.15% - 1.35% TDS. So, that meets the final requirement.
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At the end of the day, the end-user really wants a great cup of coffee!” We hear this over and over, but as a manufacturer do we really make Quality the ultimate objective day in and day out? Do we really believe that “quality in the cup” will separate us from the crowd, create loyalty, and guarantee success in any economy? First of all, can we prove to ourselves and to others that we are making a great cup of coffee? Well, that is pretty subjective and can vary by as many opinions as there are people in the room. But, there is a certified method to quantify brewed coffee quality which has been developed by the Specialty Coffee Association of America. It is called the “Golden Cup Standard”. Assuming you are using good quality water, proper brewing equipment (with the proper settings), and grinding the coffee properly, the analysis focuses on the starting coffee volume, water volume, and the resulting coffee to water ratio in the brewed cup. Ok, that is a lot of information, but let’s simplify the calculations by analyzing exactly what happens when you brew a cup of coffee with a coffee pod. Suppose you start with a coffee pod containing 12.5 grams of coffee and end up with 7.5 oz. of brewed coffee. Assume 2.5 grams of coffee makes it to the brewed cup. So, 2.5 grams out of the starting 12.5 grams means you created a 20% Extraction Rate (2.5 grams / 12.5 grams = 20%). For a golden cup, the SCAA recommends a range of 18 – 22% Extraction Rate. So, that meets one requirement.
As you can see, the golden cup standard is theoretically possible with a soft paper pod. In fact, there is no other single cup brewing delivery system (that also offers variety) that can meet both the recommended SCAA Extraction Rate and the TDS ranges in a 7.5 oz. brewed cup of coffee. That is a bold statement but it has been and can be proven by following the simple method outlined above. So, if you are the marketer that wants to offer the end-user variety and a great cup of coffee that meets the golden cup standard, the only option is the soft paper pod. Understanding this theory and using it in your presentations can only improve your selling results, if your key focus is on “Quality” in the cup. Additionally, there is a very “Green” story connected to the pod. Pods are “compostable”. Other alternative single cup brewing systems, that offer variety, use a plastic cartridge that is not compostable, biodegradable, or recyclable. These plastic cartridge options include K-Cups, Flavia, Tassimo, etc. (probably need copyright symbols for each of these.). Finally, there are three other advantages. One is a lower cost advantage of approximately 20%. The second is enjoying a 50%+ gross margin again. Remember those days when you could price your products without worrying about your customers buying your product offerings cheaper at a retail store? The third is the option of using your own coffees and branding. Wasn’t it important to be different and sell your own private brands back 15 to 20 years ago? Did we get used to selling our competitor’s brands (the same brands as other competitors sell)? What’s that all about? Were we duped somehow without realizing it? Bottled water companies are starting to see pods as a profitable way of entering the coffee business during the cooler
52 December 2012
weather periods when their water sales slump. They are also creatively looking at ways to add coffee pods to their home delivery accounts. Why not increase your gross profit per stop? They are beginning to understand this concept very well and will be capitalizing on this in 2013. Selling pods is a slow education process. You may start out growing at a rate of one account at a time. But, you will develop strong loyalty with those customers. Remember that you are delivering the best cup of coffee and that is what they truly want. You can also provide variety in your private brands. What a novel idea! This is totally different than selling the same K-Cup brands as your competitor down the road, and only competing on price (and, of course, lower margins!). And, it will take a while before you have new customers picking up the phone and calling you for your pods, but they eventually will, once they find out that the pod delivers the best cup of coffee. But, if you are patient, you will convert them. So, in summary, with pods you can offer a great cup of coffee with your blends and branding, a green story, and all of this at a lower price! How hard is this to sell in today’s economy? Go for it in 2013!
Thomas G. Martin is the Executive Vice President, Chief Operating Officer and an owner of Pod Pack International, LTD. located in Baton Rouge, LA. Pod Pack specializes in providing single cup brewing solutions for its private label customers. Previous to Pod Pack, Tom spent 11 years working at Community Coffee Company in various roles. Tom has a BS degree in Industrial Engineering (1977) from Mississippi State University, as well as an MBA (1987) from LSU. Since the early 1980’s, he has been active in a number of coffee related trade organizations (NCA, SCAA, PCCA, NAMA, and was a past President of the Southern Coffee Association).
Composting is Coming Whether You Like It or Not! by Buzz Chandler
Supply / Sustainability that are derivatives of petroleumbased chemicals), the waste—or “Gray water”—that goes down the drain and the energy used to pump that waste water, cleaning it at a wastewater treatment facility, and disposing sludge from the water before it can be allowed back into a fresh water source.
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he ever-humble coffee bean, taken for granted by most in the general public, is the key ingredient for the coffee industry’s very survival, and the survival of coffee beans depends on its sustainability. From the growers up to the shop retailers, sustainability and environmental issues deeply concern those in the industry. In its own quiet manner, coffee and its purveyors have taken a lead in having their operations focus on various sustainable options in their daily operations, including energy efficient lighting, reduced water usage and recycled products for use in delivering your coffee product.
One of the great concerns is the use of coffee cups. Whether they are made out of a durable material like ceramic or metal, a typical paper petroleum film lined paper cup (with possibly a bit of recycled fiber in it), or one of the newer fully compostable cup and lid products on the market—they all have their positives and negatives. For instance, a typical ceramic or metal vessel requires frequent washing. One might think this is the most environmental friendly option, but in reality the answer is a little “yes” and a lot more “NO”. To really assess the full impact, an operator needs to understand the full context of what it takes to wash that cup or thermos. The carbon footprint is actually quite large. One needs to consider the following: the energy needed to heat the water, the cost of manufacturing, shipping and distribution the soaps and cleaners used to wash them in the hot water (not to mention many 54 of the basic additives to the soaps
On the other hand, your standard single-use paper hot cup with a poly sip hole lid might be a better answer. It does use natural fibers that are renewable, and in some offerings the very paper itself is made of partially recycled material. All the materials are, in theory, recyclable—but, in reality, none really are or cannot be. The reason is because the foodwastes that are left on the paper or plastic contaminantes the recycling of these products. Most of the cups end up in landfills. Paper itself can only be recycled about 3-5 times before becoming so poor in quality that they end up as landfill disposal or compostable material. The same thing is true with the poly lids—the food waste on the lid renders it essentially non-recyclable. The reason is that food waste contaminates the recyclable materials and the necessary processing of those materials— contaminants cannot be allowed or the making of the new materials will be flawed or similar. That brings us to the development of compostable cups, lids and other service ware. They use much the same materials and energy as single-use paper cups, but with one key difference: All the materials, including the plastic film lining, are made from natural plant raw materials. Even the manufacturing process requires less energy in its overall structure, which results in a reduced carbon footprint. By being compostable, there are significant declines in raw garbage to landfills. One of the benefits of a community and industry that composts as its entire operation is that composting is local and reduces the need for
December 2012
landfills. It is a local job creator— for instance, a single commercial composting operation creates four jobs while a landfill creates only one, based on figures from the US Composting Council. Also, the compost end product can be used on agricultural crops as a fertilizer, reducing dependency on man-made fertilizers, or home gardens, lawns, erosion control, etc. What you have in compostable cups is a full circle of life use. And this trend is not only happening with cups, lids, take out boxes etc.—but also with plastic bags and food wastes. Food that is thrown out accounts for over 70%, by weight, of all garbage sent to landfills. Think about the tremendous use of energy, soils, fertilizers, etc. needed to grow food that is simply being thrown away. Reversing long-held beliefs and practices to innovations like composting products with food wastes can deliver businesses and communities a sustainable future for generations to come. Whether you like it or not, Composting is coming.
President of Asean Corporation, parent company of the Stalkmarket family of the branded compostable products for the centerplate foodservice industry. Also serves as President of the Biodegradable Products Institutue, and is an active member of the US Composting Council. National Restaurant Association and various local community social and sustainable community groups in the Portland Oregon area, where Asean has its world headquarters.
Fair Trade, Shade Grown, Organic Coffee Sales Continue to be Hot! by Sandra Marquardt
Supply / Sustainability for Fair Trade organic coffee imports
$2.2 billion), according to findings from
was 11.5% from 2008-2011. The total
the Organic Trade Association’s (OTA’s)
estimated retail sales value is based on
2012 Organic Industry Survey.
both out-of-home sales (cafes, coffee shops, restaurants) and retail sales at
One of the most recent indications
mainstream and specialty grocery stores.
of coffee retail change-of-course is the commitment of Bolla Market, a
S
“The demand for Fair Trade Certified
chain of New York City-area high-end
organic coffee from both consumers
convenience stores, to switch to offering
and industry has made 2012 an exciting
only top-quality, specialty coffee
year for the communities we support,”
certified to organic, Fair Trade, and Bird
said Jennifer Gallegos, Director of
Friendly® shade grown standards for
Coffee at Fair Trade USA. “We expect
all its coffee offerings at its 21 locations
this momentum to continue in 2013,
ranging from Brooklyn to Riverhead on
helping farmers earn funding for much-
Long Island as well as in Staten Island,
needed social, environmental and quality
New York. Similarly, Pennsylvania-based
improvement programs that will uplift
Golden Valley Farm Coffee Roasters has
the coffee industry as a whole.”
found convenience stores increasingly interested in offering high quality coffee
ales of coffee certified to
In addition, sales of the stringent
certified to the standards, although the
organic, Fair Trade and Bird
Smithsonian Migratory Bird Center’s Bird
chains they supply often choose not
Friendly shade-grown standards
Friendly® standard, considered by many
to advertise the certifications and let
continued to increase substantially over
to be the ‘gold-standard’ for shade-
the increased coffee sales speak for
the last two years. This is the direct
grown coffee production, reached $5.3
themselves.
result of consumers continuing to vote
million in 2011. Bird Friendly®-certified
with their pocketbooks in favor of
coffee enjoyed a 29% average annual
companies providing high quality coffee
increase in sales in the global market
that is also certified to standards that
from 2008-2011, according to Dr. Robert
protect workers and the environment.
Rice, coordinator of the Bird Friendly
But, the sales could not increase if it
program.
weren’t for the coffee importers and retailers across the country that have
The North American organic coffee
incorporated increasing amounts of the
market topped 1.4 billion dollars in
certified coffee into their product lines.
2009, the most recent data available, according to leading market analyst
56
Indeed, imports of Fair Trade Certified™
Daniele Giovannucci. But it’s not only
organic (FTO) coffee grew 14 percent
organic coffee sales that are increasing—
in 2011 to just over 72 million pounds,
the U.S. organic industry grew by 9.5
representing 52 percent of all Fair Trade
percent overall in 2011 to reach $31.5
coffee imported into the U.S. with an
billion in sales. Of this, the organic food
estimated market value of $700 million,
and beverage sector, including organic
according to the latest data from Fair
coffee, was valued at $29.22 billion (the
Trade USA. The annual average increase
organic non-food sector accounted for
December 2012
Sandra Marquardt is the president of On the Mark Public Relations and the coffee spokesperson for the Organic Trade Association (OTA). She formerly coordinated the Organic Coffee Collaboration – a project of the OTA.
Cup of Excellence® is the premier coffee competition and auction worldwide. Join us! Cup of Excellence is the highest award given to an exemplary coffee. The level of scrutiny that Cup of Excellence coffees undergo is unmatched. All of the Cup of Excellence award winners are cupped at least five times (the top ten are cupped again) during the three-week competition. Literally thousands of cups are analyzed, tasted and scored based on their unique characteristics. The prices that these winning coffees receive at the auctions often break records and prove that there is a huge demand for these rare, farmer identified coffees.
IF IT DOESN’T SAY “CUP OF EXCELLENCE” — IT ISN’T. 2013 CALENDAR Brazil Late Harvest
Costa Rica
Rwanda
Pre-Selection: Dec. 10-14, 2012
Pre-Selection: April 15-19
Pre-Selection: July 15-19
National Jury: January 14-18
National Jury: April 29-May 3
National Jury: August 5-9
International Jury: January 21–25
International Jury: May 6-10
International Jury: August 12-16
Auction: March 14
Auction: June 19
Auction: October 8
Head Judge: Silvio Leite
Head Judge: TBD
Head Judge: Sherri Johns
Colombia
Nicaragua
Burundi
Pre-Selection: February 18-29
Pre-Selection: April 15-19
Pre-Selection: July 22-26
National Jury: March 4-8
National Jury: April 29-May 3
National Jury: August 12-16
International Jury: March 18-22
International Jury: May 6-10
International Jury: August 19-23
Auction: May 21
Auction: June 26
Auction: October 15
Head Judge: Eduardo Ambrocio
Head Judge: Silvio Leite
Head Judge: Paul Songer
El Salvador
Mexico
Brazil Early Harvest
Pre-Selection: April 1-5
Pre-Selection: April 16-20
Pre-Selection: October 7-11
National Jury:April 22-26
National Jury: May 6-10
National Jury: October 28-November 1
International Jury: April 29-May 3
International Jury: May 13-17
International Jury: November 4-8
Auction: June 6
Auction: July 20
Auction: TBD
Head Judge: Sherri Johns
Head Judge: Eduardo Ambrocio
Head Judge: TBD
Honduras
Guatemala
Pre-Selection: April 1-4
Pre-Selection: April 16-20
National Jury: April 22-26
National Jury: May 6-10
International Jury: April 29-May 3
International Jury: May 13-17
Auction: June 11
Auction: July 3
Head Judge: TBD
Head Judge: TBD
NEXT LIVE ONLINE AUCTION: 2012 Brazil Early Harvest Cup of Excellence January 10, 2013
It’s time to register for 2013 memberships – join our family of coffee lovers! Call 406-542-3509 or visit us online at
www.cupofexcellence.org
Roaster Issues Selecting Material Handling Equipment Profit Building Strategies
C
offee handling solutions in today’s environment require a considered focus on safety, energy consumption and reliability. There are a number of companies who offer material handling and conveying systems as merely an accessory for other equipment. Unfortunately, their product and experience often reflects this. Given the potential for problems with all but the freest flowing of materials, it is essential to select a supplier who specializes in material handling. Look for a company that has experience with the products you handle and one that has significant technical expertise to apply their equipment to the specific requirements of the application. This normally requires an engineered solution, with layout drawings and any necessary custom designed parts to adapt the system to suit the application and location. Does the supplier offer a product test? Testing of your exact material will ensure that the recommended solution operates as expected and this step often eliminates surprises at startup. Does the supplier guarantee their recommended solution and provide installation and post sales support? Issues can arise during the installation and you want a supplier committed to quickly and effectively work through these with you. From an equipment perspective consider a vendor who can supply solutions for moving the coffee between processes with a complete range of conveyors, filling and discharge systems with high levels of containment. Keep in mind that during the material handling process, whatever the industry, even the most harmless ingredients can become a hazard when they appear as dust in the atmosphere. ‘Homemade’ fabrications can never match the safety, reliability and containment offered by specialist suppliers demanded by today’s industrial practices and current legislation. Your material handling solution may include silo/hopper/container/bag unloading, process links (conveying between processes or from process to packaging) and container filling (super sack/bulk bag, bag, box or tote filling). Bag/Container Unloading: Raw ingredients can arrive in a variety of bulk containers from 50 lb. bags to 2,000 lb. super sacks/bulk bags or even drums, boxes and totes, and need to be transported to the process from these containers. Specialist suppliers offer material handling
58
Tubular Drag Conveyor in Operation at Roaster Facility
by Dave Hesketh equipment to empty and fill these various containers and offer several conveying and controlled feed options suitable for conveying whole green coffee beans, roasted coffee beans and ground coffee from the containers to the roasting process. Silo/Hopper Unloading: Depending on the requirement, this can be as simple as a slide gate or butterfly valve with a volumetric feed or as complex as a loss in weight, load cell and PLC weight controlled feed using a bin activator. Bin activators use the angle of repose of the material and tilting louver blades with vibration assistance to control product flow in an accurate and controlled feed to the next part of the process. The correct selection of equipment here could eliminate a conveyor or process step. Process Link Equipment solutions vary based on specific application requirements. Roasters should consider three mechanical conveying methods. Flexible Screw Conveyors (FSC) provide dust free, low energy, low maintenance and low cost conveying solutions. FSCs provide gentle handling and constant remixing of the conveyor contents. Constant mixing is an interesting advantage of this type of conveyor. A centre-less auger rotates within a sealed tube and the speed and helical action of the screw encourage the product in the conveyor to rotate with the screw with each particle in motion. This creates a constant tumbling effect that provides a homogenous mix of particles in the conveyor and is essential when feeding pre-mixed ingredients to packaging or process machines. It is also possible to use this type of conveyor as an ingredient mixer by adding a second product inlet onto a conveyor. A controlled feed will provide a proportional ingredient mixture. Selection of conveyor size, screw section and speed are determined during testing. Aero-Mechanical Conveyors (AMC) are often overlooked but are very efficient for conveying coffee. This type of conveyor provides high conveying capacities and a total batch transfer. The totally enclosed tubular system provides a path for the driven rope and disc assembly to move around the circuit and the result is a gentle conveying action and a reliable means of transporting coffee from process A to B.
that are suitable for containing coffee in all its forms. When the rope and disc assembly are in motion (driven by a sprocket) the coffee fed through an inlet port is contained within the travelling pockets and gently dragged around the circuit until it reaches a discharge outlet in the circuit. This conveyor Aero-Mechanical Conveyor provides total delivers coffee blends to batch transfer the buffer hopper on top of but sacrifices the packaging machine conveying rate due to a lower operating speed than an AMC. Operating speed is determined by the complexity of the circuit and distance travelled. Working with a supplier that offers multiple conveying products will ensure that the strengths of each conveying method are objectively considered for your application. Container Filling: If a roaster doesn’t complete packaging after roasting, they may need to move bulk volumes of coffee and therefore require a filling system. These are available with various levels of complexity to suit every budget. Generally the larger the budget the more automated the process and this means it will be more efficient. For example, filling machines are designed with new programmable controllers designed to increase filling accuracy and cycle speed. Automatic gain in weight adjustment monitors compensates for any weight variations within an accuracy of +/- 1%. This level of sophistication on fillers is ideal for companies seeking NTEP approval. There are also many custom features available to suit different containers and applications.
A Georgia based roaster has used an AMC for 8 hours per day for 14 years to transfer blends of roasted coffee from a mixer to a packaging machine without any new components. The reliability and longevity of this equipment solution indicates that this type of conveyor was correctly selected for the task.
The most reliable suppliers of material handling equipment will have a wide range of products to choose from when recommending a solution, can easily customize their equipment for different situations, provide a material test and have a strong post sales support track record. In other words, the right supplier will be more than a vendor but a partner with a vested interest in providing a safe, efficient and reliable solution.
Tubular Drag Conveying: This conveyor circuit is made up of straight and curved tubes to provide a totally enclosed tubular system that provides a path for a driven rope and disc assembly to move around the circuit. The result is very gentle conveying action. This is more sophisticated than an FSC or AMC and allows for complex circuits with multiple inlet and discharge points. It does not use air as a conveying medium. Instead it relies on the equally pitched discs along the cable to form equal pockets within the conveying circuit
David Hesketh is Vice President of Engineering for Spiroflow Systems, Inc. Hesketh has 26 years experience in material handling particularly the design and development of conveyors and bulk handling equipment. He has worked for Spiroflow in the United States and the United Kingdom for 23 years and holds a BSc in Mechanical Engineering from the University of Central Lancashire.
December 2012
Tips for Building Profitable Strategies Profit Building Strategies
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onsumer taste and personal income drive demand. The profitability of individual companies depends on the ability to secure prime locations, drive store traffic, and deliver high-quality products. Large companies have advantages in purchasing, finance, and marketing. Small companies can compete effectively by offering specialized products, serving a local market, or providing superior customer service. Cafes compete for consumer dollars with other specialty consumer stores such as convenience stores, gas stations, quick service and fast food restaurants, gourmet food shops, and donut shops. These stores are generally under 1,500 square feet and have a small food preparation and back of the house area. Cafes highlight the Espresso process, offer high-quality bakery items, and are leaders in quality coffee and roasting. Seating has expanded toward more diverse styles and table heights. Expanding your food and beverage offering can increase your hours of operation, profitability, and bring in more customers to your café. Maintaining quality is important when adding items and experience. Experience keeps customers
60
by Melanie Corey-Ferrini comfortable and coming back. The physical and virtual experience for cafes is becoming more unique and closer to that of a full dining experience. Community relationships are more and more important with consumers looking to purchase from retailers with an outreach into the community. A service model that considers a loyalty program, engaging your customers, social media, and other forms of continuous connection will have an impact. The following are Tips to consider when planning a program for success: 1st Tip – consider food items that are desirable beyond the AM hours. Salads, soups, smoothies, and sandwiches can be integrated easily if implemented right. Be careful to create a menu and food preparation that keeps your infrastructure costs to a minimum. Often a table top induction burner, a high speed air impingement oven, and sandwich cart are all you need to make a variety of menu items and still keep your infrastructure costs to a minimum. Typically, the menu prices at Cafes on food items are lower than dine in restaurants; therefore, target under 15-20% food costs (percentage of menu price). Work with a menu consultant on competitive menu items, process, flow, and low preparation and labor time. 2nd Tip – consider other beverage items to expand your hours of operation. Coffee and tea consumption and purchases often end around 3:00 pm. creating more reasons to visit your café at different hours of the day will increase your profits. Consider adding beer or wine to your menu. When integrating beer or wine, consider the space layout to maximize sales, tasting events, food pairing, and pricing that is competitive in the market. Look into local codes regarding your space layout, barriers, and other regulations in the serving of beer or wine. 3rd Tip – consider integrating special dietary items such as gluten free, sugar-free, and non-dairy selections in your menu. Having a variety of options will attract a wider range of consumers into your café and you can market that
December 2012
you have a menu for many tastes and dietary needs. 4th Tip – consider updating your experience to align with your new menu refinements. The experience that would align with healthy menu items might integrate sustainable and green materials and fresh colors and tones. Typically retail and restaurant concepts need to be reviewed and updated every 5-7 years at the most or when menu items and overall content has changed dramatically – which also is an indicator to re-review your overall brand and messaging. 5th Tip – consider unique loyalty and community outreach programs. Giving back to local organizations can include donating your café venue for their events, thus providing exposure to your café, as well as, showing customers that you are part of their community and want to give back. Consistency and patience is the key. Results in this area can often take 6 months to 1 year at a minimum. When considering these tips, create a sound plan of delivery including research, benchmarks for success, and hire industry experts to lead you through the process as needed for better results. Competition has increased and success means planning ahead of the curve.
Melanie Corey-Ferrini is the Founder of The Dynamik Group in Seattle, WA creating café and restaurant concepts throughout the world http://www.dynamikspace.com .
Wired for the Future: The Influence of Technology on Commercial Coffee Service Coffee Knowledge
by Kevin Curtis track freshness right from the point of brewing, alerting when a new brew is needed.
W
hen restaurant diners, specialty coffee cafés, or c-store customers take that first unforgettable sip of coffee, high technology is most likely the last thing on their minds. But once you fully understand the complex systems and multitude of people behind that experience, you see that technology indeed plays a very prominent role in today’s commercial coffee service. The machine’s the thing Since most people associate technology with equipment, let’s start there. The introduction of all digital controls on coffee brewers back in the nineties was laid the foundation for some of the advancements you see today. By eliminating knobs, levers and unreliable mechanical or analog adjustments, digitization provided a quantum improvement that has carried through to today’s third and even fourth-generation systems.
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One-touch, pre-set recipes based on coffee type, grind, and weight help ensure the perfect cup of coffee. But the latest technology goes many steps further, offering all the features all on an intuitive touch-screen screen. Furthermore, many modern systems provide self-diagnostics to identify issues such as water flow and lime scale conditions, so operators can ensure that brewers are always ready to serve delicious coffee. RFID (radio frequency) technology is another interesting development. It employs communications and flashing indicators affixed to decanters to
Plugging in major convenience The ability to produce an excellent cup of coffee across multiple brewers, stores or outlets is extremely important for many restaurateurs, QSRs and c-store owners. And technology has come to the rescue here, too. Accordingly, many modern units now come with a USB port that allows operators to update firmware, install custom recipes, change display messaging and more. All they need to do is load the data onto a thumb drive, plug it into each machine, upload, and they’re done in minutes. Perfecting back at the factory If you look at brewing machines as the “engines” of great coffee service, one can say that building a better engine will help produce a better cup. That’s where technological advancements in design and engineering come in. Many manufacturers take a lean design approach which helps them build products that are simpler, offer less to break or fail, and can be tailored to appeal to a wider range of consumer tastes. Computerized CAD design helps bring new innovations to market faster. Plus, high-tech laser inspection systems make sure quality is top notch. Online training brings big time benefits The Internet has also been a great technological force multiplier when it comes to critical things like training. Think of the point of coffee service as the tip of a pyramid of personnel, including sales reps, technicians, restaurant owners, plus all the people they employ. Distributing training materials to these individuals—often across the country and the world— was once a monumental task. But the Web has eliminated that problem, and made it relatively simple to give everyone the information they need to keep equipment at peak performance.
December 2012
Going social Social media, the Internet’s golden child, has also had a significant impact on the coffee business, helping customers connect to brands, keep up with the latest trends, and form a kind of coffee-serving “community.” Many manufacturers now use outlets such as Facebook, Twitter, YouTube and Vimeo with great success to push out company updates and maintain critical conversations with our customers. Technology and nature combine Technology continues to drive our business unlike any other factor. And when it unites with brilliant natural forces that create a great coffee bean, it only magnifies the aesthetic experience. Add to that the legion of coffee devotees who staunchly dedicate themselves to making one great brew after another, and we have a rich future ahead in this exciting business.
Kevin Curtis, Executive Vice President, Sales and Marketing Part of the third generation of the Curtis family, Kevin oversees all of the sales and marketing operations for Wilbur Curtis. After attending California State University, Northridge in 1978, Kevin quickly learned the Curtis dedication to craftsmanship and quality from the ground up, working in plant operations in their Los Angeles facility. An active member of the Specialty Coffee Association of America, Kevin has been an instrumental part of the success and global presence Wilbur Curtis enjoys today. Kevin lives in Manhattan Beach, CA with his wife Jan and enjoys surfing, sailing, golf, the desert and international travel.
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Bridging the Chemistry Knowledge of Coffee to the Sensory Knowledge of Food Coffee Knowledge
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offee can be seen in its deconstructed forms: as a fruit, a bean, or a brew—and within each of these categories it can be further simplified. Because of globalization terminology, vocabulary and descriptions became intermingled with marketing, tradition and reality. During the mid-20th century, efforts began to unravel all these concepts into knowledge that can be scientifically verified and transmitted. Those efforts produced a lot of chemical analysis to help understand coffee components and their relationship to humans. Then the big question arose: What set of knowledge can we use to describe this relationship? A big leap was taken to bridge the chemistry knowledge of coffee to the sensory knowledge of food. This resulted in using knowledge from the food industry in looking for a common vocabulary to describe the attributes of coffee. But, vocabulary and a set of attributes were not enough—we needed a methodology and metrics to evaluate coffee. Nowadays, we do have a few methodologies and standards, but coffee is still seen as different things to different people—it is almost as diverse as cultures So, where do we go from here? We in the specialty coffee industry are ready for the next level of knowledge. Although trying to create new knowledge for all the coffee industry may be rather ambitious, finding more scientific knowledge for the specialty coffee is an attainable one. Currently, specialty coffee is studied in four fields: agri-business, agronomy, chemistry and food. Now a group of coffee professionals is leading a new integrated approach by establishing the first SCAA/CQI certified labs in a university environment. Two universities have agreed to participate in this project: The University of Puerto Rico (Utuado campus) and the Universidade Federal 64 de Lavras (UFLA) in Brazil. The main
by Alfredo Rodriguez, Bruno Souza and Marty Curtis goal of the project is to create a body of knowledge for a sustainable coffee industry including all its components using an integrated approach from agronomy through processing and food preparation—including blending, roasting and product creation. At the University of Puerto Rico at Utuado— located right in the center of Puerto Rico’s coffee producing region—the project is called Café del CORMO. It was intended to be a lab environment for experimental developments in all fields of coffee to set an environment to foster research and development of ways to improve the quality and consistency of coffee. At UFLA, a similar project was conducted at the Center for Coffee Quality.
started to talk about a partnership between our group and the university in order to better understand the results of the sensory evaluation with, for example the chemistry tests at the university.
These two projects are linked together through the participation of three Q-Graders and coffee experts—Marty Curtis, Bruno Souza and Alfredo Rodriguez—to acquire the knowledge that will allow the delivery of consistent results through the Specialty Coffee Industry while respecting different cultures and their appreciation of coffee. Let coffee be an exciting experience for everyone.
We will extend the program to state of Sao Paulo certifying a lab in a nice farm in Parana State one of the oldest region that produce coffee in Brazil. In 1976 frost almost erased the coffee producing in the state, only the far north of the state still produce coffee. It is actually the only sub tropical region in the world that produces coffee, bellow the Capricorn tropic.
The taste of coffee can be very different, depending the location (altitude and latitude) and the process (natural or washed). The way to determine the quality of the coffee is to evaluate the aspect on the green beans, the aspect on the roasted coffee and, finally, the cupping. In early 2000, a group at the SCAA the Technical Standard was formed with the intention to create a form that could be used worldwide in a coffee evaluation: The SCAA Cupping Protocol. The idea was to create a tool that could be used anywhere in the coffee world with the similar results independent from where the coffee was grown. SCAA created the “SCAA Cupping judge program” to graduate specialized Cupping Judges in the idea at the coffee world needs good cuppers to understand the protocol in order to fairly evaluate the coffee sample. We continued the project in May and
December 2012
Lavras has 5 Q graders, all those PHD or in the process to be a PHD in coffee. All those Q graders will be trained to become a Q instructor as we believe that with more instructors we will have more Q graders and in consequence more people talking about the quality in coffee what will drive for the increase of the consume and the more important, understand the reasons the coffee taste different.
The idea is to keep extending the program to the whole country, and to have better answer to all our questions.
PRM Inc, Alfredo Rodriguez CEO Academia do Café, Bruno Souza CEO Just Quantify Coffee Academy, Marty G Curtis CEO
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Refreshment Services 2013 Supply / Sustainability
I
t was a challenging year for our industry; despite the continued economic downturn, operators have recovered much of the revenue they lost in the prior 24-months. Many operators are reporting record sales increases over the prior year. The 2012 NAMA coffee consumer research revealed at CTW 2012 further showed that one-third (31%) of office employees increased their office beverage consumption. Additionally, access to coffee and tea in the office has increased significantly from 2005 to 2012. One of our objectives at NAMA is to increase coffee education so to raise the level of professionalism in the refreshment industry and with our operator members. We currently offer professional sales training classes at our coffee events and trade shows; our QCCP (Quality Coffee Certificate Program) and our CCS (Certified Coffee Specialists) programs, improving coffee
by Roger Stewart
knowledge and skills that are used to educate the customers. These higher level skillsets are validated in the 2011-2012 State of the Coffee Industry report and our 2012 consumer coffee research. An average of 71% of the coffee service decision makers’ surveyed feel their representative makes good equipment and product recommendations, they understand needs and they know coffee and tea. Two key market segments that will receive priority from NAMA and our members are: 1. Micro Markets 2. Single Serve Micro Markets are the fastest growth area within the vending industry. Micro Markets are essentially a selfcheckout vending machine. Just a few profitable benefits: -increased selection of products -make non-traditional items for sale (i.e. 2-ft long Beef stick) -customers can hold and examine specific products -zero service calls for out-of-order machines -keeps employees on site for meals -increased margins and higher sales revenue The single serve market continues to grow, 32% of offices that offer coffee service now have single serve. It is estimated that single cup growth will reach $8 billion by 2017 (home and office-Study Logic). The workplace customer is hooked on the convenience, the coffee/tea varieties and is willing to pay a higher price. One strong key to continued single serve growth is the younger employee, 57% of those surveyed say their consumption would increase if they could prepare specialty drinks.
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Three strategic imperatives for 2013 will be: 1. Work with operators to move away from a “prevent” strategy to a “broaden” strategy. 2. Enhance the value of refreshment services by raising expectations. 3. Expand the benefits of coffee beyond productivity to include balanced health, supported by mood and relaxation benefits. NAMA is looking forward to working with our members and providing the tools for an exciting and profitable 2013. Sources: * State of the Coffee Service Industry-Automatic Merchandiser * Jim Brinton Vending Times articleJanuary 2012 * NAMA 2012 Consumer Coffee Research-Heart + Mind Strategies * StudyLogic, UBS-Rabobank
Roger Stewart, NCE5, CCS Director of Coffee and Water Service. Joined NAMA in 2003. Previously was VP of operations for USRefresh, a division of US Office Products. He lived in Seattle, WA, working at Starbucks Corporate office as Director of Special Markets and later was President of AAA Coffee Service with branches in Seattle, WA, Portland, OR, and two locations in Southern California.
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Erasing the Pornography of Poverty Supply / Sustainability
T
here is one thing stronger than all the armies of the world and that is an idea whose time has come. ~Victor Hugo
The specialty coffee industry is the global leader in sustainability. At the SCAA in 2000, our keynote speaker, Paul Hawkin, author of The Ecology of Commerce stated he had consulted to over 500 corporations worldwide and the industry that was farthest along was specialty coffee. Those words have never rung truer than today, but how then do we take our generous work to the next level? This mission even more powerful when we realize only 25% of Americans donate to good causes and 80% come from individuals not corporations, government or religion. People today often quit their careers to become corporate refugees; starting nonprofits with a goal of saving the world. John Wood left Microsoft to start Room to Read 13 years ago, and now has a 60 million dollar annual budget to distribute millions of books to 11 Asian countries. Excellent work, but most of us in our industry balance our day jobs with our community service. With so many fantastic nonprofits in our industry, many of us want to support all of them. Cup for Education is also sending out books, paying for teachers and schools, Coffee Kids has been working for decades in origin countries in the areas of heath, education, and training and focusing on what the local community wants and needs. Grounds for Health continues to open up new countries for their cervical cancer clinics, a disease that August Burns declared will be gone in our lifetime. Cafe Feminino has helped women diversify with community gardens and micro credit loans. Food 4 Farmers is working on food security, Root Capital and Transfair, also 13 years old, are touching the lives of millions through fair wages, loans and literacy training. Then we have the International Women’s Coffee Alliance, CQI, SMBC, Coffee Lifeline, Rainforest Alliance, START, and the numerous other organizations working as hard as possible to lift farmers out of abject poverty.
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New business models for global sustainability are growing rapidly. The face of social responsibility is no longer
by Karen Cebreros big sad eyes and a bloated stomach. We no longer sell guilt or pull on heartstrings to raise up all stakeholders in the chain from tree to cup. We believe every bean counts and now we believe every person counts and we view them with dignity and as equal partners. We will not let our partners starve. A fast emerging business model is now the “B” corporation. This corporate structure benefits all, not just shareholders. Think Paul Newman salad dressing. A fair market exchange drives a corporation and allows businesses to pursue a “triple-bottom line”: profits and environmental and social benefits. Excellent resources on why this is the future are Sustainable Harvest and Equator, both pioneers in sustainability, and B Corporations. Partnering is an excellent solution to maximizing efforts. Mohamed Yunas won the 2006 Nobel Peace Prize for starting micro credit in Bangladesh. Starting as the lender to the poorest of the poor, now there are 300 million small loans out with an astonishing 97% payback. One of his B Corp business partnerships was made with Dannon Yogurt. Thousands of women received loans to open up yogurt stores. They paid back their loans, got on their feet, and increased the health of the community with the customized India style yogurt. And the benefits keep on giving. Access to credit is a monumental struggle for women. Female coffee farmers own less than 1% of land at origin. Micro credit is showing success with groups of women paying back principal, interest, and savings sometimes at $1.00 per week. It works. A developing concept is coming from the National Cooperative Business Association in Washington D.C. Partners include organic women’s Guatemalan coffee co-ops, exporters, importers, roasters, distributors, added-value arts and crafts, IWCA and North American Retailer Co-ops. Complex? Yes, but of tremendous value to all the small partners. “So,” asked Don Schoenholt, CEO of Gillies Coffee Company in Brooklyn, New York, “how do we engage the small and medium-sized businesses that make up 80% of the SCAA? How do we reach past the CEOs, Vice Presidents of Corporate
December 2012
Responsibility, Marketing Departments and the one person who makes the donation decisions?” We all know that the majority of coffee farmers live on less than $2.00 a day. I believe if given an easy platform, everyone would donate at least $1.00 per month and we would lift up everyone together. Whole Foods already asks all its employees to donate $1.00 per month to micro credit if they chose. While brainstorming with Robert Fulmer of Royal Coffee in Emeryville, California, he came up with an idea for how small businesses can participate in the broader social good. Larger business could act as an aggregator for Mom and Pops and medium-sized companies like Signature, Equator, Bird Rock and Strong Tree, consolidating volunteers and donations into one space and help with their distribution. Janet Aguilar of Thanksgiving Coffee suggested a membership type of volunteering and donating, and the brainstorming continues… How do we leverage every person, penny, and pound of coffee to benefit all? With all of our small and medium-sized businesses, including every employee, working together we can and will impact the social and environmental issues on a grander scale. As Paul Katzeff said it is not just a cup but also a “just cup.” We can shift our thinking from the pornography of poverty to erasing poverty. Let’s challenge ourselves to engage all of us and work together in a synergistic way that is efficient and that can be replicated instead of recreating the wheel, wasting energy and talent. We can and will declare ourselves as one of the global leaders in the Sustainability of the Planet. Send in your ideas to the Sustainability Council.
Karen is the Co-Founder of IWCA and Track the Impact; she has been 23 years in coffee as founder and president of Elan Organic Coffee.
Peanut Butter and Jelly by Heather Perry
Profit Building Strategies
W
hen a new café opens, there are a thousand things that need to be done, and the money just won’t stop pouring out. So many cafes open their doors at the first opportunity, leaving many things unfinished, with you and your staff unprepared. “You have one chance to make a first impression.” As a café owner, it is important to ask the following questions: When a customer walks into your store, how are they greeted? Does your staff continue working with their heads down, ignoring the customer until they are at the counter ready to order, or do they introduce themselves and your company to this new customer? When the customer orders their drink, how confident is your staff in the recipe they are following? Are your customers the guinea pigs for your staff that are making this drink for the first time? Or has the staff practiced these drinks many times before and are preparing the drinks with confidence? If there are no customers in the store, does your staff have checklists to follow for prioritizing what needs to be done or do they stand around and talk while the bathrooms are dirty and the creamer is empty? And what about when your staff leaves for the day? Do they feel as though they represented you and themselves well, or do they really have no idea what your business stands for? You have one chance to make a first impression, and the chances of this impression being great are much improved when you open with a well-trained staff that has procedures to follow and checklists to implement. While these items aren’t much fun to talk about, they really are what allow a business to grow and operate efficiently.
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Procedures and recipes are something that a new business should be working on weeks in advance of opening. Any time your staff prepares something they should prepare it by following an exact recipe. I had a teacher in the 3rd grade that had all of us write down the directions for making a peanut butter and jelly sandwich. While this sounds like a simple task, the results were hilarious. She followed all of our directions to the T, and out of a class of twenty she ended up with just a few edible sandwiches. Many of us never specified to use a knife to spread the
peanut butter or jelly, so she smeared it on with her hands. Others never even said to take the bread of the bag, so she spread peanut butter and jelly on the bag. While these may sound like extreme examples, I am constantly shocked by the things my staff does when there are not explicit instructions. For every recipe you create, give it to your staff and don’t say anything, just watch. Any time you see them struggle, you know you need to rewrite the directions. Now, while you can write instructions for most things, there will always be a few items that also require a skill in order to do the task properly. For those items, you need to make sure that you allow your staff the time to develop those skills. Steaming milk is a perfect example; one cannot simply read how to properly steam milk. You need to begin by giving your staff the proper training and then you need to give them time to develop and perfect that skill. They should not be practicing these skills on paying customers; otherwise they will not be paying customers for very long. Other items you can write detailed instructions for are checklists (for example: opening, closing, shift change, etc). Checklists are one of the most important things that a business can utilize for success. Look at the big guys: Whether it is McDonalds or Starbucks, there is a checklist for everything. It allows for people to operate with efficiency and ensure that everything gets done. For instance, when your morning crew comes in, do they remember to put the creamer out or is it the first customer of the day who has to ask for it? Does your closing crew have a checklist that is organized in the way in which they should work? Is it written in a way that prevents one person from sweeping before the other person has wiped down the counters? Do any of these lists even exist at all? You also want to write lists for when there are no customers in the store—for when the staff should be cleaning up and getting ahead, rather than leaning on counters and chatting about last night’s episode of The Real Housewives. All of these questions about what your staff believes and how they work relate to the important essential that every business needs but many lack, and that is culture. What message is it that you are sending to your staff and what message
December 2012
are they sending to your customers? While this may sound vague, try to think of it this way. If a customer was to order an espresso on ice, would you give it to them without question, or would you get into a lengthy explain about how espresso should not be served over ice? Or maybe you threaten to punch them in the groin because you believe that it is a sin to have espresso on ice! No matter how you choose to respond or react in a situation such as this, you have to ask yourself, how would my staff respond? The key here is have built a strong culture in which your staff not only asks, “What Would the Boss Do?” but they actually know the answer to that question and they do the same. This creates a consistency among individual staff, across multiple locations, and throughout the business as a whole. Looking back on the last few paragraphs, there are a lot of questions. Hopefully, this will get you to think about how to both start and grow your business and what is necessary in order to take it to the next level. Does your staff know your recipe for a peanut butter and jelly sandwich?
Heather Perry, Director of Training & Consulting, Klatch Coffee Inc. Heather has fifteen years of experience in the coffee industry. She began her coffee career at the age of eleven by washing dishes and sweeping floors in her parent’s coffeehouse. By the age of fifteen, Heather was working behind the espresso machine and experimenting with different drinks. Since her first shot of espresso, Heather has continued to improve and hone her skills behind the bar. Heather holds many Barista titles including 2003 and 2007 U.S. Barista Champion, 2004, 2005, 2006, 2007 Western Barista Champion, 2007-2010 Ultimate Barista Champion and finished 2nd in the World at World Championships in Tokyo. Heather graduated from Cal Poly Pomona with a degree in International Business and Marketing.
The State of the Industry as Related with Merchandising and Branding Retailer
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s I write this article, sipping on a coffee at Bo’s Coffee in Makati city, Philippines, I sort my thoughts in order to answer the question, “How has merchandising and branding evolved in the coffee industry over the last decade?” It is a much tougher question to answer than it would seem because we have seen quite a few developments within different market segments. The common contributing factors that impacts behavior in brand management and execution of retail merchandising are typically the size of the company and the company’s unique positioning within the local market. I’ve come to find that selling the highest volume of merchandise is not the sole underlying driver for most retailers. Many retailers feel that if a customer is going to buy a product from their store that the customer
by Erez Toker should be out in the marketplace advertising the retailer’s brand. I feel that for even the strongest brands they should broaden their merchandise collections to include designs with lifestyle driven artwork. The goals of retail merchandising are various. Most retailers simply want to have their logo prominently displayed on each item, standing in perfectly straight rows. Typically, the motivating goals of these programs are simply to uniformly display logoed merchandise in order to enhance the ambiance of the store. Most companies take a static approach when creating merchandise for their brand, leaning solely on the corporate logo to deliver their message to their consumers. This traditional approach summarizes the state of the industry as a whole. But there are some retailers that are starting to shift the trend.
In recent years we have seen many independent coffee retailers change their approach to creating their merchandising program. Rather than starting with the logo, they start with a design. They begin by selecting lifestyledriven artwork that captures a core element of their customer base, then incorporating elements of their logo into the design. These programs are much more successful than traditional logoed merchandise programs, because retailers focus on what speaks to the customer, rather than starting off with what’s best for the retailer. Size, structure and style weigh heavily in these decisions. Independent retailers are faced with challenges of budget, space and large custom-run minimums; franchisees are faced with a myriad of challenges ranging from franchise guidelines to rogue franchisees; and large retailers with more than ten locations typically have the most flexibility to create really fantastic comprehensive merchandise assortments that change seasonally. It is my impression that the owners of those chains have the most fun.
Erez Toker, President of Vessel Drinkware
72 December 2012
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Six Reasons Why Coffee Shop Owners Are Switching to iPad POS Systems Retailer
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eciding to use a cloud-based tablet POS system instead of an old fashioned cash register or windows based PC is becoming less of a trendy choice and more of a necessity for retailers looking to make smarter business decisions. Because iPad point of sale systems have significantly lower costs, are safer due to cloud storage and enhance the customer experience, merchants that come on board using a tablet-based POS over traditional cash registers will have significant retailing advantages. iPad POS systems provide powerful features like real time sales reporting that goes way beyond anything a traditional cash register can offer. iPad POS also allows merchants to control everything from inventory management to the collection of customer information for marketing purposes, all in one place and in a small, sleek package. Small business owners are busy people, and don’t have time to read through the hundreds of reasons why I, as a former retailer myself, believe that iPad POS systems are the best option, so I’ve included the top six. These were the points that really drove it home for
by Jason Richelson me when I became so frustrated with my expensive POS system that I was forced to create my own cloud-based system:
With nearly unlimited customization, you can design your POS so that each interaction can be just a few taps of a screen.
1. The Safety and Security of the Cloud: Anyone who spends a year running a business can write a book about unexpected disasters. Merchants know that problems will arise, but it is impossible to predict whether it will be a threat from hackers or Mother Nature. With an iPad point of sale system, all information is stored in the cloud, relieving the stress of storing valuable information on computers susceptible to any number of incidents including flooding, being dropped or stolen. There is also no need to fret about the cost of upgrading hardware or running out of space as you store more customer and inventory information on your system. Cloudbased data is encrypted and secure.
3. Freedom: There will be no more of those nights waking up in a cold sweat wondering how many lattes you sold that day or whether you’ll have enough ice cream cones for the Saturday rush. You can monitor your business from anywhere with an iPad POS as long as you have a computer or a smartphone. Check to see how the day’s sales are going or monitor and reorder inventory from the gym or, even better, the beach.
2. It’s Just So Easy: “Wait a sec, which button do I press to open the register? And what if there’s no sale?” Anyone who has trained employees on how to use a cash register has heard these questions dozens of times. iPad POS systems are as easy to use as, well... as an iPad. Training takes seconds, and ringing up customers is just as quick.
4. Customer Information: Through loyalty rewards programs and emailed receipts, you can easily capture customer email addresses at the point of sale by having them enter their information on the iPad. This information can be used to further develop loyalty programs and to keep customers in the loop on what is new in the shop. 5. Options: Most iPad point of sale systems are about providing merchants the opportunity to build their businesses with no limits and choices ranging from which mobile payment systems to integrate to where they put buttons on their cash registers to which credit card payment processor they use. ShopKeep POS is always happy to recommend a reliable and inexpensive processor, or you can shop around and pick the processor that has the best rates and meets your needs. 6. Platform for the Future: An iPad POS system is not just about the freedom of having access to real-time data from anywhere, it is a platform that will continue to be developed and built on. Meaning the solutions will only get better and more powerful, continually integrating new features that will help merchants make smarter business decisions that grow their businesses. Jason Richelson is founder and CEO of ShopKeep POS, a complete iPad POS solution for high-volume small businesses.
74 December 2012
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Time to reflect and plan for the future… The next 10 years
by Karl Seidel
Roaster 10 years? Through relationships? Better equipment solutions? Pricing? All of the above?
I
was talking to the guys the other day and we realized that the first coffee show we went to, as Cablevey was getting interest from coffee roasters, was the SCAA event in Boston in 2003. We had sold systems to roasters and it seemed there was more business to be had. In 10 years a lot has happened with conveying in the coffee world. Much has been learned over the decade. We have collectively learned about whole bean, decaf, organic, ground, flavored, de-gassing, nitrous-flushing, breakage, the hardness of green coffee, the fragility of decafe and how coffee affects conveyors at an angle, when it hits a sweep, when and where it lands, and how it is affected when it moves too far and too fast. Here is what we know, at the least, about coffee roasters: They know a lot more than just roasting. They have gained much knowledge and perspective over the years in terms of best practices—not only for roasting equipment but all the ancillary stuff. They are well informed and capable of making good decisions, which can save sales people from having to stress obvious points. They know the pros and cons of vacuums, pneumatics, augers and buckets. They also know what are tubular drag conveyors and the difference between a cable system and a chain system. They know that speed kills roasted coffee. It has been seen time and again when conveying systems are poorly matched to the needs of roasters. Most often, their questions assume a degree of thought, exposure, experience and thoroughness.
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What about the next 10 years? How do you turn the first 10 years into the next
Looking ahead to the next 10 years involves taking stock, digging deeper, being more specific, getting better at conveying gently with less breakage and minimal system downtime, building conveyors that take into consideration the daily activities of the plant personnel. Ideally, offering value that is often overlooked because everything might seem to be going well. Being a small company, our operating axiom is that we are flexible enough to address issues and make changes fairly quickly—and that holds true for most small companies. Being owneroperated, it is unlikely that we will not be responsive. And that’s a good thing for our customers! We’re grateful for the attention and the orders. We remain humbled about how many roasters have trusted us and have embraced the concept of gentle conveyance. The next 10 years can be a plan to make improvements to equipment and approach (i.e., sales, marketing and management), to progressively address past and current issues in a knowledgeable way. In the next 10 years it is imperative to have already heard the primary concerns of customers and to be prepared to come to market with solutions that anticipate their needs. For example, in 2003 we didn’t have a 6” system. Our capacity and our ability to serve the needs of roasters evolved from 2” to 4” to 6” over the previous 10 years, nicely handling the needs of some of the biggest specialty roasters. This may have worked for coffee, but both coffee and other industries need greater capacity to decide what our next best move is to serve the needs of our most likely target market.
competition and what changes they’ll bring to the market. We can probably learn a few things from them as well. In other words, it’s good to be aware of “the competition,” but it does not serve your business to worry about what they are doing. The 10-year question could be summarized as such: Listen and be responsive and help solve customers’ issues. 2- Be specific and improve each aspect of your offerings. 3- Look internally and improve personnel and business processes. 1-
Listen. Be specific. Look within. In any case these are just my perspectives and definitely not representative of everyone in the conveying industry. What are your thoughts about the next 10 years? Do you have a vision that defines the future of your business? Here’s to the next 10!
Being specific is good, but quality improvement--getting better at each aspect of business—must be part of the plan. In other words, better marketing, sales, manufacturing processes, inventory and personnel management and training all must be figured into the equation. It’s a funny thing too, because with all this self-reflection and plans for improvement one hardly has time to think about the
December 2012
Karl Seidel works for Cablevey Conveyors as Marketing Manager and enjoys roasting a good Yirgacheffe on his Probatino.
The Benefits of Technology Through Consistency and Success Roaster
T
by Joseph Ferrara
echnology is something we
every time? How and why are your
slow we would like to cool our coffee in
all use, from small to large-
beans turning brown? A lot of people
the cooling basin as well as controlling
scale applications. Technology
say that it is their favorite recipe, which
the volume of air when pulling the
advances every day, even in our
is what we say when we want to make
coffee to the destoner (this is, to
industry. There are many benefits to
our coffee.
improve breakage percentage from city roasts to French roasts).
applying technology in the coffee industry to achieve consistency and success. Over the past two years, we at
Why is this different then roasting
Unique Coffee Roasters have invested
with your drum roaster with manual
in the very latest in roasting and
discharge and your basic burner?
packaging technology.
It is impossible for one person to achieve a consistent roast profile
As we decided from whom to
without measuring the above
purchase our equipment, we explored
variables. Atmospheric variables
every option available. For example,
have the greatest impact on coffee roasting before, after, and during the
we traveled throughout Europe to compare the different applications
Our roasting machine allows us to
roasting process. Even an experienced
of roasting and process technology.
create a recipe for each of our desired
roast master cannot control these
What we wanted to ultimately
roasts. We have complete control over
variables. Our system can control these
achieve is a roasting machine that
the roasting process. We can control
variables by measuring humidity and
gave us complete control over the
the airflow with the temperature of
barometric pressure modulating the
roasting process: airflow, recirculation,
the hot air as well as the volume of hot
roaster automatically to achieve its
convection, conduction, quenching and
air we are putting through our drum,
time to temperature ratio giving us our
emissions, just to name the basics. By
as well as controlling the volume of
consistent taste profile. Without using
allowing us to control every stage and
fresh air allowed into the combustion
a similar system you can absolutely
variable in the roasting process it can
chamber. We can control the speed
achieve a consistent roast shade.
then allow us to produce consistent
of the drum allowing us to change
However, changes due to outside
coffee.
the roasting process mid-cycle from
variables can cause your sugars in the
convection to conduction and vice
coffee to become extracted at different
Any roasting machine can turn your
versa. We can choose to re-circulate
stages during the roasting process.
beans brown; even your household
hot air back into the combustion
toaster oven can do that for you. But
chamber, allowing our burner to
the important thing to remember, as
modulate and not work as hard to
my father says, is that “making coffee
reach temperature—which is also
is a lot like making a pot of gravy—
energy saving. Our computer PLC
you can buy the same tomatoes
system as well as a number of sensors
from the same grower but have your
on the machine, monitors all of those
sauce come out different every time.”
above phases of the roasting cycle. We
Meaning that they agricultural products
can roast and follow a curve exactly
will always be different no matter how
every time. This is important when
or where they are grown. So how do
roasting in your time- to- temperature
you achieve your perfect pot of gravy
ratio. We can even control how fast or
78 December 2012
Joseph Ferrara, Vice President at Unique Coffee Roasters