Vol.. XXVI Vo V No. 12
CONNECT. GROW. PROSPER!
Welcome
C
offeeTalk Media Media is proud to bring you this compilation of the most influential thought leaders in the coffee, vending, and food-service related industries. Each article falls under at least one of the following editorial categories of particular interest to our readers: − − − − − − − − − − −
A huge thanks to our esteemed industry contributors: Alexis Rubinstein, Alma Likic, Andrew Russo, Andy Benedikter, Bill Fishbein, David Griswold, David Gross, David Weiss, Don Scherer, Donald N. Schoenholt, Erez Toker, Jason Richelson, Jeff Beer, Josue Morales, Juan Esteban Orduz, Karen Cebreros, Marty Curtis, Mike Gronholm, Miles Small, Norbert Niederhauser, Pete Tullio, Rick Peyser, Rob Bethge, Robert F. Nelson, Rocky Rhodes, Shawn Steiman, Spencer Turer, Stefanie Makagon, Thomas G. Martin, and Torie Burke.
Retailer Roaster Business Supply / Sustainability Technology / Social Media OCS & Vending Profit Building Strategies Coffee Knowledge Special Interest Sales and Marketing Issues International Issues
We hope you find the articles thoughtful, provocative, and useful! Cheers and wishing you all an extremely successful 2014!
Kerri Goodman CoffeeTalk Media
Each article was written with our readers’ success in 2014 as the guiding light.
January 2013
February 2013
March 2013
April 2013
Vol. XXVI No. 1
Vol. XXVI No. 2
Vol. XXVI No. 3
Vol. XXVI No. 4
www.CoffeeTalk.com
www.CoffeeTalk.com
www.CoffeeTalk.com
www.CoffeeTalk.com
See Coffee Fest Listings page 26 See SCAA & NAMA Exhibitor Listings page 26
Warming Up to a Frozen Beverage Program
A Brave New World Embracing Tomorrow’s
company can be in the next Buyers Guide
This Month: 7 12
A Master’s in Coffee
14
page 14
page 10
This Month: See page 7 for instructions on how your
NAMA in Costa Rica
See NCA Exhibitor Listings page 26
Technology
page 10
16
The Power of POS
22
What’s Your Legacy in Coffee Going to Be?
16
May 2013
June 2013
Vol. XXVI No. 5
Vol. XXVI No. 6
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This Month:
A Call to Action
7 10
Coffee Necessities: Sleeves, Cups, Mugs and Lids To Build a Mountain of Profits, Focus on the Big Rocks
Coffee of Grace Single-Serve Coffee Makers: Living Life One Cup at a Time
24
Latin American Coffee Market 2012/2013
August 2013 Vol. XXVI No. 8
Vol. XXVI No. 7
www.CoffeeTalk.com
See Coffee Fest Listings page 28
Packaging: Not Just
Water Quality
Secret Weapons
a Pretty Face
Essential for a Quality Cup
For Roaster Success
page 10
page 10
page 10
This Month:
This Month:
This Month:
16
Retailer Success: Boosting Profits Using Ratios
12
Commercial Coffee Brewing Systems
16
Business Plan Basics
22
Sorrow, Anger, Inspiration: Reflections on Boston
14
Training in the 21st Century
18
Game Changers
24
Building Bridges: The Path to Direct Trade
24
Social Media for Small Business
September 2013
October 2013
Vol. XXVI No. 9
Vol. XXVI No. 10
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www.CoffeeTalk.com
November 2013 www.CoffeeTalk.com V Vol. XXVI No. 11
What Happened See Coffee Fest Listings page 32
to Our SCAA and
for Retailer Success
Appreciation?
page 10
page 8
This Month:
This Month:
CONNECT. GROW. PROSPER!
L Listen A Advise S Solve The View T Thank Tha
The View 15 Tools
Appreciation Part 2 See Coffee Fest Listings page 16
See NCA Listings page 20
page 8
See NAMA Listings page 24
This Month:
Keeping the Lid on Price Risk
10
It's All About The Technology
10
Take the Initiative and Start Recycling
26
Got Expertise? Share It
18
The One-Day Business Plan
12
Appreciation Makes the World Go 'Round
30
Decoding Terroir
Dripp Coffee Company
14
A Growing Sales Trend? …Estate Auctions
16
Direct Trade
24
22
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Contents
16 18 20 22 24 26 28 30 32 34 36 38 40 42
Under The Microscope by John E. Boyle National Coffee Association of U.S.A. Board
One-Way Coffee Degassing by Alma Likic Plitek
Game Changer: IT Supported Quality Management Systems by Andy Benedikter and Norbert Niederhauser Cropster, Inc
The Borer And The Never Boring The 2013 Coffee Review
by Donald N. Schoenholt Gillies Coffee Co.
Myanmar And Specialty Coffee: Critical Crossroads by Rick Peyser Green Mountain Coffee Roasters
The Art & Science Of Specialty Coffee by Spencer Turer Coffee Analysts
New & Views From NAMA Chairman, Pete Tullio by Pete Tullio NAMA Board
Making Sustainability Sustainable Along With Many Other Words
by Rocky Rhodes International Coffee Consulting
It's Time To Put Analytics Into Packaging by David Weiss uVu Technologies LLC
Four Opportunities by David Gross Add a Scoop
Improving Your Product Sales by Torie Burke Torie & Howard, LLC
The Rise Of Single Cup Coffee
The Change Is NOT What You Think
by Mike Gronholm Single Cup Accessories, Inc.
Colombian Coffee, A Story (Still) To Be Told by Juan Esteban Orduz Colombian Coffee Federation, Inc.
Cup Sleeve Marketing
How Cup Sleeves Can Help Build Brand And Increase Revenues
by Don Scherer BriteVision
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Contents
44 46 48 50 52 54
56 58 60 62 64 66 68 70 72
The Hottest Thing In Coffee Right Now Is Tea by Stefanie Makagon TEAJA Office
Profit Building Merchandise Strategies For Coffee Houses by Erez Toker Vessel Drinkware
Single Cup Solution, What Are You Waiting For In 2014? by Thomas G. Martin Pod Pack International, Ltd
Changing Our Industry One Caring Soul At A Time by Karen Cebreros Coffee Cares
The Fourth Wave Arrives In 2013: Collaboration To Fix A Broken Coffee Industry by David Griswold Sustainable Harvest Specialty Coffee
Mobile Usage Is Exploding. Is Your Coffee Business Ready? by Rob Bethge Perka, Inc
Subsidy Programs: A Glimmer Of Hope For Struggling Coffee Farmers by Alexis Rubinstein FCStone, LLC
The Fourth Wave And Functional Sustainability Models by Miles Small CoffeeTalk Foundation
Think Global Time To Align by Marty Curtis Combustion Systems Sales Service, Inc
Discussing Coffee Quality Assessment Strengthens The Industry by Shawn Steiman Daylight Mind Coffee Company
Why Data Matters by Jason Richelson ShopKeep POS
Roaster's Resolutions by Andrew Russo Roasting Expert
Sustainability At Origin It's Not About Coffee
by Bill Fishbein The Coffee Trust
A New Set Of Critical Questions by Josue Morales Mayaland Coffee
A Roaster's Checklist For Optimal Packaging by Jeff Beer and Chris Burger Fres-co System USA, Inc
from crop to cup.
from field to table.
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*Source: AC Nielsen All Outlets, 52 weeks ending 24 Nov 2012
©2013 Cargill, Incorporated. All Rights Reserved. Truvia® and honestly sweet® are registered trademarks of the Truvia Company LLC.
Publisher’s Prologue
Kerri Goodman by Kerri Goodman, Publisher CoffeeTalk Media
W
elcome to CoffeeTalk’s 2014 State of the Industry.
This new year brings with it a sense of excitement and hope. Change is all around us, and if we wish to survive and thrive, we must embrace it. I am personally thankful for the amazing opportunities the coffee industry has bestowed, and I hope to somehow give back in some meaningful way this year next year, 2014. And to begin, we share with you the wisdom of some of the most respected professionals in the industry. Reading through each article I found myself humbled. Even after 20 years, I am just a “baby” in this industry. The combined wisdom in this issue quite literally has the power to change the world. I hope to entice you to read all of the articles by giving you a brief glimpse with my favorite nugget of wisdom in each article. However, there was one article that had just too many gems to limit it to a single quote. These concepts from one of our writers* embody the spirit of this entire issue: • Our industry continues to provide a means of expression, hope, and income for a multitude of people around the world. • Our hard work and success does not come without struggle, and many challenges await us as 2014 quickly approaches. • […] This issue should not be left to the next generation of roasters. It must be addressed.
8
• It is wrong to think there is nothing left to learn.
• As both mature and immature markets see new shops opening their doors, familiar territory is becoming anything but that. • Learning from our past mistakes and discussing our future will help us sustain and survive. So, coffee professionals, remember that knowledge is power… don’t miss out on the opportunity to learn from the seasoned souls who have created this 2014 State of the Industry. “Clearly, it’s been a challenging year for coffee in the public policy arena, and year-end won’t neatly wrap up these challenges.” Under The Microscope John Boyle, National Coffee Association of U.S.A. Page #16 “Once consumers start drinking better quality coffee, they tend not to trade down. This puts greater pressure on roasters to maintain and preserve quality…” One-Way Coffee Degassing Alma Likic, Plitek, Llc. Page #18 “For enduring success in the specialty coffee business, it is a must to understand these processes and where quality happens or lacks…” Game Changer: IT Supported Quality Management Systems Andy Benedikter and Norbert Niederhauser, Cropster Inc. Page #20 “There remains a mad scramble to get into the single serve business, with just about every roaster aspiring to produce them, and most independent multi-store operators eager to have their own private label Keurig® compatible line of coffee.” The Borer And The Never Boring Donald N. Schoenholt, Gillies Coffee Co. Page #22
“Best of all it is grown by some of the kindest, most gentle people anywhere.” Myanmar And Specialty Coffee: Critical Crossroads Rick Peyser, Green Mountain Coffee Roasters Page #24 “There are too few coffee scientists…” The Art & Science Of Specialty Coffee Spencer Turer, Coffee Analysts Page #26 “I believe we’re in a Renaissance. Growth + Innovation = Renaissance.” New & Views From NAMA Chair Pete Tullio, NAMA Board Page #28 “Words, use them wisely. Self, social, financial, and ecological sustainability…” Making Sustainability Sustainable Rocky Rhodes, International Coffee Consulting Page #30 “‘Packaging Analytics’ is entirely new terminology and intent to launch more innovations and applications aimed at providing a more scientific approach to the design and manufacture of food and beverage packaging.” It’s Time To Put Analytics Into Packaging David Weiss, uVu Technologies LLC Page #32 “The driving force behind the health and wellness movement is Opportunity. America is primed and ready. Would you like Repeat Customers? Give them what they’re looking for.” Four Opportunities David Gross, Add a Scoop Page #34 “Coffee connoisseurs are naturally curious information seeking people who are loyal, inclined to seek convenience, and easily connected to strong brand identity and reputation.” Improving Your Product Sales Torie Burke, Torie & Howard, Llc. Page #36 continued on page 10
December 2013
Publisher’s Prologue
“Is America really the land of the “pod” people? Can it really be true that the individualism we’re so proud of can actually be satisfied by a ‘pod?’” The Rise Of Single Cup Coffee Mike Gronholm, Single Cup Accessories, Inc Page #38 “Life is hard for farmers. Winston Churchill once said that, ‘If you are going through hell, keep going’… They did not give up on their love and passion for their farm, and they never lost faith in the importance of quality.” Colombian Coffee, A Story (Still) To Be Told Juan Esteban Orduz, Colombian Coffee Federation, Inc Page #40 “In retail, if it’s not making you money -- it’s costing you money.” Cup Sleeve Marketing Don Scherer, BriteVision Page #42 “Big business is most certainly betting on tea.” The Hottest Thing In Coffee Right Now Is Tea Stefanie Makagon, TEAJA Office Page #44 “Especially when considering the independent owner, there is a common thread that bonds these retailers. With all of the various concerns vying for their attention, typically there is title time left to consider what is required to develop a successful retail merchandise program.” Profit Building Merchandise Strategies For Coffee Houses Erez Toker, Vessel Drinkware Page #46 “We all like doing the things that we are comfortable doing, but it may be time to step out of our comfort zone and not let our competitors beat us to the punch.” Single Cup Solution, What Are You Waiting For In 2014? Thomas G. Martin, Pod Pack International, Ltd. Page #48 “Does the new generation of coffee aficionados embrace Direct Trade because of its hip and fancy appeal, or do they sell direct relationships for the right reasons- to truly help the farmers?” Changing Our Industry One Caring Soul At A Time Karen Cebreros, Coffee Cares Page #50 “I have this growing concern that the specialty coffee industry is broken.” The Fourth Wave Arrives In 2013: Collaboration To Fix A Broken Coffee Industry David Griswold, Sustainable Harvest Specialty Coffee Page #52 “From outmoded perceptions of the “mobile consumer,” to evolving customer habits, there’s much to learn about mobile, and the many ways you can profit from that knowledge.” Mobile Usage Is Exploding. Is Your Coffee Business Ready? Rob Bethge, Perka, Inc Page #54
10 December 2013
“The sustainability of coffee lies in the hands of its farmers.” Subsidy Programs: A Glimmer Of Hope For Struggling Coffee Farmers Alexis Rubinstein, FCStone, LLC Page #56 “[…] We are on a clear path toward a new way of doing business in the coffee world.” The Fourth Wave And Functional Sustainability Models Miles Small, CoffeeTalk Foundation Page #58 “Unless market conditions change, the struggles that farms are facing to remain profitable will have serious consequences on coffee quality […] Every voice should be heard, and every member should have an unequivocal opportunity to contribute to the organization (SCAA).” Think Global Time To Align Marty Curtis, Combustion Systems Sales Service, Inc Page #60 “Our industry should be having these conversations, not because we are necessarily doing things wrong, but because we might be able to do things better.” Discussing Coffee Quality Assessment Strengthens The Industry Shawn Steiman, Daylight Mind Coffee Company Page #62 “Data will become an equalizer […] but it’s the businesses that know how to use it well that will win.” Why Data Matters Jason Richelson, ShopKeep POS Page #64 “It is wrong to think there is nothing left to learn. As both mature and immature markets see new shops opening their doors, familiar territory is becoming anything but that. And, Learning from our past mistakes and discussing our future will help us sustain and survive.” Roaster’s Resolutions Andrew Russo, Roasting Expert Page #66 “One of the more difficult concepts for the coffee merchants to grasp is that sustainability at origin is not about coffee. It is about the farmers, their needs, their values, their culture, and their own communities, and it all must be long-term or it cannot be considered sustainable.” Sustainability At Origin Bill Fishbein, The Coffee Trust Page #68 “The learning curve of specialty coffee has advanced dramatically, and the end consumer is now better educated and curious about the topics.” A New Set Of Critical Questions Josué Morales, Mayaland Coffee Page #70 “We are lucky, for few jobs offer the fun, the commitment, and the passion that we enjoy…” A Roaster’s Checklist For Optimal Packaging Jeff Beer and Chris Burger, Fres-co System USA, Inc. Page #72 *By the way, Andrew Russo has just moved to the area and is seeking opportunities within the coffee community in the Pacific Northwest. You can reach him at andrew.russo83@gmail.com.
For more than three decades.
The single source for customized coffee packaging Technology & Innovation Service & Support
Packaging Equipment
Materials & Degassing Valves Over 30 years, Fres-co has maintained its leadership in flexible coffee packaging systems. Since we invented the one-way degassing valve, which today is the industry standard, the Fres-co name has been synonymous with quality, reliability, performance and value. Whether the need is for individual components or a complete packaging system, Fres-co provides roasters of all sizes with the equipment, valves, stock bags, custom-printed rollstock and services that meet any packaging challenge. Visit www.fresco.com, or call 215.721.4600 for more information.
Sponsors Index Company
Phone Web
Add a Scoop by Smoothie Essentials Supplement-Boosts
(415) 382-6535
smoothieessentials.com
59
Agtron
(775) 850-4600
agtron.net
65
Blendtec
(800) 253-6383
commercial.blendtec.com
65
Bloomfield Industries
(314) 678-6336
wellsbloomfield.com
27
Boston’s Best Coffee Roasters
(508) 238-8393
bostonsbestcoffee.com
53
BriteVision
(415) 374-8119
britevision.com
19
Buendia Coffee LLC
(212) 271-8807
buencafe.com
69
Buhler Inc.
(905) 754-8389
buhlergroup.com
13
Cablevey Conveyors
(641) 673-8451
cablevey.com?pmcv=CT-DD-2013
17
Cafe Femenino Foundation
(360) 576-5045
cafefemeninofoundation.org
51
Coffee Cares
(619) 889-1997
coffeecares.net
65
Coffee Shop Manager
(800) 750-3947
coffeeshopmanager.com
31
Costellini’s
(877) 889-1866
costellinis.com
43
Curtis
(800) 421-6150
wilburcurtis.com
45
Daterra Coffee
(330) 941-2555
daterracoffee.com.br
29
Diedrich Manufacturing, Inc.
(208) 263-1276
diedrichroasters.com
33
Espresso Me Services
(360) 213-0715
espressomeservice.com
65
Follett Corporation
(610) 252-7301
follettice.com
65
Fres-co System USA, Inc.
(215) 721-4600
fresco.com
11
Global Bean Shed
(907) 355-8777
globalbeanshed.com
57
Global Customized Water
(805) 484-1589
globalcustomizedwater.com
65
Grounds for Health
(802) 241-4146
groundsforhealth.org
65
InterContinental Coffee
(619) 338-8335
ictcoffee.com
49
International Coffee Consulting
(818) 347-1378
intlcoffeeconsulting.com
71
Java Couture
(206) 795-5414
javacouture.com
65
Java Jacket
(800) 208-4128
javajacket.com
15, 65
JavaSuites
(714) 240-1314
javasuites.com
65
Knutsen Coffees, Ltd.
(800) 231-7764
knutsencoffees.com
65
Mondelez International
(855) 202-3913
foodservice-snacks-desserts.com
25
Mother Parkers Tea & Coffee
(800) 387-9398
realcup.com
21
Pack Plus
(909) 902-9929
packplus.com
55
Perka Inc.
(503) 427-1377
getperka.com
9
Plitek
(847) 827-6680
plitek.com
37
Pod Pack International, LTD.
(225) 752-1160
podpack.com
35
12 December 2013
Page
Innovative technology for a superb cup of coffee. From green bean to brewed cup, Bühler offers efficient equipment for optimal coffee production. From intake, cleaning, optical sorters and accurate weighing systems to programmable batch roasters and precise modular grinders, Bühler provides turnkey solutions for your coffee processing needs. Take your coffee to the next level with Bühler.
PO Box 9497 Minneapolis, MN 55440 T 763 847 9900 F 763 847 9902 buhler.minneapolis@buhlergroup.com, www.buhlergroup.com
Innovations for a better world.
Scolari Engineering S.p.A./Texpak Inc.
(856) 988-5533
scolarieng.com
73
Service Ideas, Inc.
(800) 328-4493
serviceideas.com
65
ShopKeep POS
(800) 820-9814
shopkeep.com
63
Stalkmarket Products (Asean Corporation)
(503) 295-4977
stalkmarketproducts.com
65
State Farm
(800) 782-8322
statefarm.com
Sustainable Harvest Specialty Coffee
(503) 235-1119
sustainableharvest.com
47
TEAJA Office
(778) 840-4832
teajaoffice.com
39
The Coffee Trust
(505) 670-9783
thecoffeetrust.org
61
The Truvia Company LLC
(855) 855-2362
truvia.com/foodservice
Tightpac America inc.
(888) 428-4448
tightvac.com
65
Torie & Howard LLC
(888) 826-9554
torieandhoward.com
67
uVu Lid Company
(561) 674-9415
uvulid.com
Vessel Drinkware
(855) 883-7735
vesseldrinkware.com
23
Weldon Flavorings
(502) 797-2937
weldonflavorings.com
41
White Coffee Corp.
(800) 221-0140
whitecoffee.com
65
5
3
Who We are Owner
Professional Memberships
Publisher Kerri Goodman, ext 1 | 206.795.4471 kerri@coffeetalk.com
Editor/Feature Writer Jessica Tanski, ext 7 jessica@coffeetalk.com
Design
Print Design Marcus Fellbaum, ext 5 marcus@coffeetalk.com Web Design Justin Goodman, ext 6 justin@coffeetalk.com
Administrative
Administrative Director John Newman, ext 4 john@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
14
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. 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 2013, HNCT, LLC, All Rights Reserved
December 2013
7
Under The Microscope by John E. Boyle National Coffee Association of U.S.A. Board
I
t’s been a year of scrutiny for the coffee business. Legislative and regulatory measures have put coffee under the microscope, both literally and figuratively. Coffee is much more than the sum of its parts, as we coffee lovers know better than most. But some of its constituent compounds are behind 2013’s toughest challenges. Spurred by Congressional attention, the U.S. Food and Drug Administration (FDA) launched a new examination of caffeine in the U.S. diet. Congress focused on ill effects of highly caffeinated products and the addition of caffeine to new foods, but the FDA said it would do a comprehensive review of caffeine consumption. The FDA’s focus raised immediate concerns that a new FDA guidance document could call for lowering its recommended daily caffeine intake or requiring content labeling in foods containing caffeine. As part of its investigation, the FDA tasked the National Academy of Sciences’ Institute of Medicine to hold a public forum on the subject. NCA attended the meeting and found the focus to be primarily on energy drinks rather than coffee. However, NCA remains cautious and will keep a watchful eye on developments. NCA also plans to meet with the agency and present a scientific paper, developed by NCA’s scientific committee, that distinguishes coffee from other caffeine sources and sets out scientific findings about coffee’s healthful properties. The goal is to confirm the safety of coffee consumption and avert regulatory recommendations that could unnecessarily impact the industry. A more direct move toward caffeine labeling came in a bill introduced in the U.S. House of Representatives. The bill calls for package labeling when a food contains ten milligrams or more of caffeine per serving. Other provisions call for changes to Nutrition Facts Panel information, a new definition of “natural” that prohibits artificial flavors, colors, and ingredients
that have undergone chemical changes, such as corn syrup, maltodextrin, and alkali, and additional information on nutritional value. Like all proposed legislation, with potential impact on the coffee industry, NCA is continuing to monitor developments closely and will take all appropriate action going forward. Another substance formed naturally in roasted coffee is keeping legal pressures on the industry in California. Acrylamide, formed naturally in the roasting of coffee, like it is in bread, potato chips, crackers, and other foods, is the basis of a major lawsuit under the state’s Proposition 65 law. That statute requires a consumer warning of the presence of any of 800+ listed chemicals, including acrylamide. With the overwhelming weight of science behind it, the industry maintains that there is neither statutory basis for a Proposition 65 warning in California nor reason for consumer concern, nor any reason for consumer caution as a matter of public policy to preserve and promote health. Coffee is a healthy beverage, confirmed by a growing body of literature associating coffee with measurable health benefits. The long-term solution for preventing unwarranted legal action, like the California lawsuit, is amending Proposition 65. As a public referendum, it is very difficult to change, requiring two-thirds of both houses of the California legislature or another public referendum. But, NCA seized an opportunity when California Governor, Jerry Brown issued a call for amending the statute to tackle abusive lawsuits. Working with other affected stakeholders, NCA crafted legislative language to establish key statutory modifications and leverage the governor’s initiative into effective reform for the coffee industry. Among NCA’s recommendations were amending the law and regulations to establish an explicit exception when a Proposition 65-listed substance is created from naturally occurring components
16 December 2013
during cooking. NCA also spelled out its reform platform in a formal comment letter to the California Environmental Protection Agency (CalEPA). The governor’s office ultimately tabled its legislative efforts, but NCA continues to pursue changes on the regulatory front. Also impacting the coffee industry were more proposed rules under the Food Safety Modernization Act (FSMA). That law fundamentally changed the federal government’s process for protecting food safety, moving from remedying contamination to preventing it. This year, proposed regulations for one of the most far-reaching provisions of FSMA were released by the FDA. Spelling out the law’s approach to hazard assessment and preventive controls, the new regulations impact fundamental concepts that drive safety protocols in food production facilities. NCA filed formal comments with the FDA, seeking to clarify certain provisions that could create unnecessary additional burdens on coffee roasters and retailers. In the comments, NCA called for clearer alignment with current food safety procedures, both to make sure the new regulations would not disrupt effective systems already in place, as well as to preserve the flexibility companies need to continue to adapt plans to address real-time concerns. NCA also asked for a clearer, appropriately narrow definition of “produce,” that would exclude coffee from the law’s stricter standards for fruits and vegetables. Moving into 2014, NCA is studying the next set of proposed FSMA rules, which target safety measures to be deployed prior to importation. Clearly, it’s been a challenging year for coffee in the public policy arena, and year-end won’t neatly wrap up these challenges. But, as always, NCA will continue to pursue every avenue to achieve outcomes that protect and propel the coffee business. In line with its mission, NCA will continue advocating aggressively for the well-being of the U.S. coffee industry.
Gentle Conveying
U-Horseshoe System
(641) 673-8451 www.cablevey.com Cablevey is a registered trademark of Intraco, Inc. 12/2013
One-Way Coffee Degassing
F
by Alma Likic Plitek
resh, aromatic coffee is essential for
freshness and quality of their carefully roasted
Coffee industry trend has shown an increase
roasters, which is what a customer
and chosen blend. The purpose of a one-way
in usage of fractional packages. As consumers
desires in quality coffee. In order to
degassing valve is to allow carbon dioxide gas
desire fresh quality, they buy more fractional
provide the freshest coffee possible, and preserve
from freshly roasted coffee to escape from the
packaged coffee that will be consumed within
the quality of coffee, it is imperative for roasters
packaging while keeping environmental oxygen
short period of time.
to pack and seal their coffee immediately after
and contaminants from entering the package.
roasting in a sealed package.
These valves are now standard features on coffee
One of the Plitek product recently introduced
bags as well as lid containers. They cannot
to the market is the PLI-VALV Mini Valve;
As freshly roasted coffee cools, it releases carbon
make the coffee taste better, but are crucial
a one-way degassing valve for fractional
dioxide gas which is commonly known as the
in preserving roaster’s carefully selected and
packaging. The new valve is transparent and
degassing process. The degassing process can
roasted blend. There are two types of one-way
small, at 0.50”x 0.50” in size, with significant
last a couple of days up to over a week depending
degassing valves on coffee packaging: surface
cost advantages over standard size valves. The
on the roast and other factors. Without the
applied or heat sealed button one-way degassing
applicator to the new PLI-VALV Mini Valve can
proper mechanism in place to release the carbon
valves.
apply up to 150 valves per minute. A custom engineered option is available to double the rate.
dioxide, coffee degassing inside of a sealed package will cause the package to swell and
The effectiveness of one-way degassing valves is
potentially burst. Freshly roasted coffee can be
measured by oxygen levels in the bag with lower
Another patented innovation recently
bulk degassed; however, the problem with this
oxygen levels, resulting in better coffee freshness
introduced to the market is PV-25-FV; a
approach, in addition to tying up inventory,
and consequently quality. The industry standard
one-way degassing valve with integrated filtering
is that environmental oxygen and airborne
range on the oxygen level is between 0.5-3.0%
base that will additionally enhance valve
contaminants cause the coffee to rapidly lose its
and will depend on number of factors: type of
effectiveness and help with product freshness
freshness, flavor and aroma. This creates a bitter
one-way degassing valve used, film/material that
and quality preservation. Its carefully designed
taste that any coffee connoisseur will not tolerate.
it is applied to, location where it is applied on the
structure inhibits coffee grounds from entering
package and whether nitrogen flushing is used.
the valve and interfering with its functionality. It is one in a line of many product generations that
In our industry, since the consumer’s taste has become more refined and accustomed to
One-way degassing valve technology has
help roasters provide the best quality coffee to
great quality coffee, roasters are under more
developed immensely. It has evolved to include
their customers.
pressure to deliver best quality products. Once
various enhancements that improve product
consumers start drinking better quality coffee,
functionality and ease of use. Roasters prefer
Whichever one-way degassing choice roasters
they tend to not trade down. Studies also show
to have smaller, thinner transparent valves that
make, one crucial piece of advice is to ensure
consumers prefer consistency. The ability to
will not interfere with product packaging and
the degassing options are consistently working
maintain consistency and great quality is what
provide the lowest oxygen levels possible. In
and providing the best oxygen levels. Roasters
will sell more coffee. This puts greater pressure
other words, one-way degassing valves should
should have their bags randomly tested to verify
on roasters to maintain and preserve great
perform the function but be as unobtrusive as
oxygen levels. Granted, this adds additional
quality in their coffee through choosing the right
possible. Plitek has been continuously working
responsibility, but it prevents having unhappy
species, roasting and blending variables as well
towards enhancing performance features of
customers who will not tolerate stale coffee and
as preserving freshness of their roast.
one-way degassing valves over the last twenty-
influence them to select a different product.
five years with great success.
Furthermore, one-way degassing valve rate of
The solution is to employ the use of one-way
application has direct impact on throughput and
degassing valves to help roasters preserve
it is one of the important elements to consider
18
when choosing your degassing options.
December 2013
Game Changer: IT Supported Quality Management Systems by Andy Benedikter and Norbert Niederhauser Cropster, Inc
S
imply put, coffee is complex. A countless number of processes involving temperatures, humidity, airflows, pressures, speeds, durations, color values, and more, need to be taken care of at the right time, anytime. For enduring success in the specialty coffee business, it is a must to understand these processes and where quality happens or lacks and how it can be upheld. That is where up-and-coming coffee specific Quality Management (QM) systems come into play. They capture, display, and organize this vast jungle of information that contains the secret to outstanding and consistent coffee quality. Any coffee roaster can tell his/her story about how tough it is to fully control coffee in its metamorphosis from a bag of green to becoming a delighting cup of coffee, rich of flavors and aromas. Let’s take the example of “Perfect Roasters,” a specialty coffee roastery. Perfect Roasters gets their green coffee through an importer, stores it at the rather humid harbors or in the roastery; batches of coffee are then roasted on demand on a small drum roaster that controls gas pressure, drum speed, and airflow. A digital temp display reads the bean temperature during roasting and the values are tracked in a spreadsheet. The roastery sells everything from light single origin filter roasts to darker blended espressos with very varying tastes and flavors. Every coffee is treated differently, but any coffee should eventually reach the same high quality standards in the cup. Specialty coffee, in particular, demands for outstanding and consistent quality. By the very nature of coffee, raw materials change rapidly and frequently, and processes need to adjust quickly to keep up with these quality standards. The many different participants in coffee supply chains don’t really make this easier. Only structured, real-time information that is responsive to all these variables can help to understand the quality critical processes at every stage. But that information would get lost immediately if it isn’t captured right where and when it occurs. A key point is to have relevant information in the right resolution at the time;
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timely enough to still influence the result. However, the load of information captured can even make things more complex, rather than easier, if it isn’t organized from the beginning. The specialty coffee community is increasingly aware of this dynamic. That is why IT supported coffee quality management (QM) systems have been coming up on the horizon over the few years. These rather new technologies are specifically responsive to coffee’s peculiar processes and systematically reveal where quality can be improved. Basic solutions help to capture and structure this information and feed it back to the user. Some data is logged automatically such as roast temperature, while others are manually evaluated such as cupping results. More integrated solutions go a step further. They bring the user into the next level of activity management. Beyond simply providing information, they pinpoint to where action has to be taken, and it helps users make better decisions more quickly based on new, real-time insights. Supported by an integrated QM system, Perfect Roasters roastery integrates the roasting operation with green inventory, which can be kept either on site in a green room or in larger warehouses. Roast temperature, duration, roasting machine control adjustments (like gas or air flow), and bean color values can be measured automatically and tied back to the roast batch for later comparison and analysis. Added cupping scores and comments bring another vital dimension into play and complete the evaluation and learning cycle. These variables support Perfect Roasters when deciding on how to roast which green coffee on which profile, how quickly to heat up during the roasting, which coffee to buy from where and how often, how to store it, how a certain supplier has developed over time, etc. Everything is narrowed down to the most crucial bits and pieces. Real-time information allows Perfect Roasters to take immediate action where it is needed. Other data is formatted in the background for later analysis. Auto-consistency checks highlight outliers and decrease risk of having defected production going out for sales.
Roast comparison
December 2013
In the end, the roastery will be rewarded with a more consistent product quality and a better understanding of where quality happens or lacks. Processes can be linked to qualities at every stage, workflows are designed more efficiently, and business decisions are put on a solid information base. However, that is not the end of the story. As in many other supply chains, many will agree, that also the future of specialty coffee lies within fast, real-time interaction between supply and processing. That is why some coffee QM systems offer to efficiently share quality, quantity, or traceability information with partners to create improved trade relationships. With a fully integrated QM system, a producer or exporter will assess the quality of a coffee sample and can share it virtually with their potential buyers. On the buyers’ end, they receive the sample along with the sample quality assessment. The buyer runs a quality check in his lab to see if the supplier can deliver what is promised. If there is a match, perfect. With a mismatch, the buyer will feed back his opinion to the supplier. The full traceability provided by well-integrated QM systems throughout the supply chain, allows both parties to dig in and see what caused the problem; whether or not the mismatch came from different perceptions, different sample roasting, green coffee transport, storage, or any other potential error source. This creates common grounds for successful and enduring business relationships. The involved parties establish a transparent and complete information base for better decision making, will grow as they exchange this information with partners, and gain competitiveness in the more efficient supply chain. To be fair, IT supported QM systems don’t make coffee less complex, but they provide solid tools to capture, organize, and analyze information. They also allowed Perfect Roasters to make the right decisions, at the right time, all for the sake of consistent coffee quality. Integrating the entire workflow, including roast monitoring, QC, inventory management, information sharing, etc. into an IT system may have the potential to overwhelm individuals, especially smaller, up-andcoming roasters. However, the benefits of QM systems greatly outweigh the temporary discomfort of change. Many IT systems provide entry-level services, and offer a modular structure for growth that responds to the need of both small and large businesses. Either will benefit from traceable and consistent coffee quality that makes the difference between a regular cup of coffee and an outstanding coffee that delights the customers’ senses over and over again.
The Borer And The Never Boring The 2013 Coffee Review by Donald N. Schoenholt Gillies Coffee Co.
T
he Great Durante was fond of saying, “Everybody wants ta get inta the act!,� The act is K-cupsŽ, and it was the dominant feature of the US industry in 2013. There remains a mad scramble to get into the single serve business, with just about every roaster aspiring to produce them, and most independent multi-store operators eager to have their own private label KeurigŽ compatible line of coffee. Every hot served liquid food, from apple cider to soup, is now being brewed in a KeurigŽ. If the technology continues to extend its platform in American kitchens and workstations, foods prepared from portion control cups of dry ingredients, may brew long term change in American food preparation habits in the home and workplace. At origin, there are general concerns about climate change, and specific ones that are considered, in part, the result of climate change as coffee rust in Central America (attributed to lower rainfall), where “roya� may, according to the ICO (as reported by Reuters in March) reduce coffee output in affected areas by 20 percent. But, losses will not be even, and some countries such as El Salvador are expecting to be hurt disproportionately (35 percent), while others as Costa Rica may only suffer a “manageable� loss (13 percen). Hypothenemus hampei, the coffee borer, is also a serious concern. It is being fought, with varying degrees of success this year, in Brazil and Hawaii. The Arabica market continued to drift downward during 2013, with only the very best grades holding a value of 50 percent or better above the New York “C�. The better Robusta grades, on the other hand, held value against the Arabicas, such that by year end grades, as Vietnam GR1, SC16, Wet Polished, were being offered in New York at prices comparable to “C� grade Arabica beans. These Robusta coffees from Vietnam, and other origins offering neutral cup and bold bean style, have found favor in recent years in the espresso brands of American roasters, some of whom would not have considered the ingredient only a few years ago. Uganda, the 4th largest Robusta coffee producer, is planting 300 million additional Robusta coffee trees in a large economic wager, that in the West, the espresso market will continue to balloon, and that in the East and in the Southern hemisphere, a growing world middle class will choose to be coffee drinkers. To the gratification and relief of small independent roasters, and probably the big roasters too, the strangling effects of the historically high coffee markets of recent years, fade into memory as money flows back into their pockets and out of their inventory values. In June, Starbucks raised prices into the teeth of consumer awareness of a falling market. They’ve got grit. Usually, we would expect that reduced exports from Central American, and possibly some Brazilian regions, would echo through the market putting upward pressure on coffee prices; with increased revenues per pound helping to defray a portion of the loss to blights and bugs. That may not be the case this year as there may be an abundance in Arabica coffee supplies, as the ICO expects supply to outstrip demand by 4-million bags, or roughly equal to the coffee crop of Mexico. If this comes to pass, there will be added economic pressure on subsistence coffeefarm families brought about by the double-whammy of having less coffee to sell, while receiving a lower price per pound for that which remains. The answer, of course, is to produce coffee at such a high level of excellence that its value breaks free of the “C� contract. Sadly, becoming as La Esmiralda, Clifton Mount Estate, or La Minita is not an attainable goal, but only an aspiration for most farmers. Espresso has changed coffee in America. Espresso machines are found in every manner of food service operation today, and NespressoŽ and KeurigŽ are working hard to bring easyaccess espresso beverages into upper-middle class homes and apartments. Simultaneously, Italian coffee brands as Illy, LavazzaŽ, DanesiŽ, and SegafredoŽ continue to pour into the American cup satisfying the insatiable American taste for the exotic, and seemingly upscale taste for that which is European.
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It has been a long time since Lauren Bacall pitched Instant
Maxwell House coffee, and once again celebrities are being identified with coffee. In Australia, Al Puccino hawks Vittoria Coffee. Hugh Jackman and Leonardo DiCaprio support Laughing Man brand, and David Hasselhoff pushed Farmhouse Blend Iced Coffee. Rarely does a celebrity enter the industry as a strictly business venture, but that’s what Patrick Dempsey appeared to do this past year, taking an ownership stake in the Tully’sŽ chain of 48 retail outlets during bankruptcy proceedings in January. Mr. Dempsey was evidently burned by the experience, though according to the Associated Press, he never invested money in the chain, as by August, Dempsey had divested himself of his holdings in the coffee retailer. In other celebrity coffee news, Marley’s Coffee, who went public in 2011, (JAMN) is still losing money, though sales are gyrating. 12 OZ Marley’sŽ coffee was spotted not long ago at a Long Island T.J. Maxx outlet for $4.99. The year saw the re-launch of a grand old name in the trade, MartinsonŽ. A top brand in New York in the first half of the last century, it had been brought low (to the price/value level) by a succession of owners who did not appreciate what they had. Joe Martinson’s brand is now owned by Mother ParkerŽ, and the re-positioning in the market includes single serve, soft bags, and fiber cans. The blend selection is mid-line with names such as Joe’s Light Latin, Joe’s Donut Shop, and Joe’s Rich African Brew. It’s nice to see Mr. Martinson’s brand out there again. Another old New York brand, an A&P original, 8’OclockŽ coffee, now a Tata company, rebranded itself in 2013 with striking new red 11 OZ packaging featuring informational strips on the right TIPVMEFSyBOE PG DPVSTF B TJOHMF TFSWF MJOF No one with access to iTunes needs to go through the day without a decent cuppa. The Find Me Coffee app can find you a coffee shop around the corner or around the globe, give you directions to get there, and can even place an order. The iPhone’s coffeehunter app has a collection of 7,000 independent coffee places. In the age before mechanically bottled beer, the beverage was carried in tin pails. They were known as Growlers, which may be related to the sound made by the sloshing of beer, and the release of carbon dioxide caused by that action in the pails as they were carried. Later, the pails were replaced with bottles, but the name stuck. The Growler was returned to the tavern as desired, where it would be refilled with fresh beer at modest cost. Today, a Growler is a refillable container (usually 64oz) and an affectation used by Cold Brew Coffee entrepreneurs as a description of the package in which they market their wares. Cold Brew Iced Coffee began to take hold in the summer of 2013, with amber glass bottles of iced brew found in trendy coffee bars and upscale markets, where local iced brewers are located. Among Brooklyn, New York’s entries is Grady’s New Orleans-Style. Others around the country, include Slingshot 16oz read to drink Iced Coffee, Raleigh, NC, Installation Coffee Co’ Cold Brew, Los Angeles, CA, Jittery John’s Cold Brew, San Francisco, CA, and Chameleon Cold Brew, Austin, TX. Gorilla Coffee, Brooklyn, NY renowned for their product marketing graphics has, perhaps, the most striking package for their Cold Brew coffee. You can see it here. http://gorillacoffee.com/collections/cold-brew Some cafÊs have declared war on WiFi squatters this year, and others continue to make a point of advertising free WiFi. The tug of war between providing added value to your cup, versus the loss of seating when some patrons take unfair advantage of the service by sitting for hours over a single cup of coffee depriving the shop of open seating for newly entering customers, is becoming something that is heard more frequently in conversation between operators. Along with the belief that WiFi squatters create a squalid atmosphere that chases away a better quality clientele. Brooklyn Farmacy and Soda Fountain, Reiney’s Soda Fountain in Denison, Iowa, and Vincent’s Drug Store and Soda Fountain,
December 2013
John’s Island South Carolina aside, the old fashioned soda fountain, a fixture on Main Street in the first half of the last century, that as an industry, did not survive the post WWII era, may be about to make a comeback with Starbucks in the vanguard. Stephan Wermuth reported in a Reuter’s piece that Starbucks, using Soda stream-like carbonation machines is making old-fashioned soda fountain style sodas, by adding carbonation to its juice, tea, and coffee beverages in an experiment in selected stores in Atlanta, GA, Austin, TX, and Asia. During the Summer, while we were all drinking from Growlers and dreaming of soda fountains of yore, SCAA Lifetime Achievement Laureate, Dan Cox, was spilling the beans on coffee spills with the publication of Handling Hot Coffee: Preventing spills, Burns, and Lawsuits. It is filled and overflowing with helpful information on keeping hot coffee beverage safe for the operator, wait staff, and consumer. The need for this thin volume (98 Pages) published by Red Barn Books, ISBN-10: 1935922246, ISBN-13: 978-1935922247 should be obvious to all in the trade, as lawsuits over spilled hot coffee have been a regular occurrence since the ill-famed judgment in the 1994, California Liebeck v. McDonald’s case. Until Dan’s helpful, organized, annotated, illustrated, and indexed single source book, operators and attorneys were forced to find answers from many different resources. The trade owes the SCAA Past President, Cox, a thanks for helping his fellow man (and members of WIC, too) with this useful tool. McDonaldsŽ, who upgraded the quality of their coffee program some years ago, has seen the light, and is switching to paper cups from polystyrene. Big MacŽ should be thanked for making this change, which will cost them money as the two materials are not comparable in price. McCafeŽ will taste better, and the environment will not have to continue trying to ingest 10-million Styrofoam cups each day. Thank you, McDonaldsŽ. Joh. A. Benckiser, the new owner of Peet’sŽ and CaribouŽ coffee chains, has the two now-sister companies playing dosey-doe your partner. Minnesotta based Caribou will become a regional North-Midwestern brand, with additional outlets in neighboring Iowa, the Dakotas, Wisconsin, Kansas, and Colorado. They will also retain outliers in North Carolina. CaribouŽ stores in the rest of the country will be converted to Peet’sŽ. At the end of October, KraftŽ announced that they would begin test marketing McDonald’sŽ McCafeŽ brand coffee in selected markets. In November, an arbitrator determined that Starbucks must pay 2.76-billion dollars for walking away from their packaged coffee deal with KraftŽ to distribute StarbucksŽ. One went in and the other went out. Ron Popeil, move over, for as the year ground down, KeurigŽ infomercials were becoming omnipresent on cable TV. In the Coals-to-Newcastle department, The Wall Street Journal reported that StarbucksŽ, whose stated goal is 20,000 retail stores by the close of 2014, plans to open its first retail shop in Bogota, Colombia in the coming months. This pilot store is hoped to be the first of 50 Starbucks stores in Colombian cities, to be opened over the next 5 years. So you see, with all that transpired in 2013, we still have things to which we can look forward to in the New Year, such as 50 more StarbucksŽ.
Distinguished roaster/cupper Donald Schoenholt is coffeeman at celebrated Gillies Coffee Co., Brooklyn NY, now beginning its 175th year. Don, a founding father of both SCAA and Roasters Guild, doesn’t look 175, but he says there are days when he feels as he, and not the firm, is America’s Oldest Coffee Merchant. Mr. Schoenholt can be reached at coffeeman@gilliescoffee.com
THANK YOU! Happy Holidays from the entire oneVessel速 family.
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Myanmar And Specialty Coffee: Critical Crossroads by Rick Peyser Green Mountain Coffee Roasters
W
hen I received an invitation from Winrock International to volunteer in USAID’s Farmer-to-Farmer Program in Myanmar’s nascent specialty coffee sector, I had only one question: “Myanmar and Specialty Coffee?” The two concepts just didn’t seem to fit together. I looked at the nicely framed SCAA “Coffees of the World” map in my office and Myanmar (or Burma) was not even identified as a coffee producing country – Arabica or Robusta. I did a quick Internet search and found very few references to coffee in Myanmar. So, I accepted Winrock’s invitation immediately. I knew that Myanmar had gained independence from Great Britain in 1948 and had been under military rule from 1962 until 2010. Just recently the country has started to open up to the world and to more global trade. President Obama was in Myanmar just over a year ago to encourage leaders to continue on their paths toward democracy and participation in the global community. The country is still recovering from Cyclone Nargis, that took more than 130,000 lives in 2008. Today it remains one of the planet’s least developed nations by many measures. Yet, things are changing. I arrived in Yangon in mid-November, and I was met at the airport by Dr. Ai Thanda Kyaw, a Country Director for Winrock International who traveled with me my entire stay, and patiently translated all of my interactions with farmers and others. As the first volunteer to work in Myanmar’s coffee sector, I had been asked to provide some training on how coffee is farmed, processed, roasted, evaluated, and marketed in more mature coffee origins around the world, and to ultimately recommend how the entire sector could be strengthened to help the country take advantage of this high-value agricultural product. In short, my role was to explore, to listen, to train, and to make recommendations for the future development of Myanmar’s coffee sector. Before leaving Yangon, we met with USAID and with the 3,000-member Myanmar Fruit, Flower, and Vegetable Producer and Exporter Association (MFVP) that was a host organization for my trip. The MFVP supports its members with a variety of services including exportation. Our first stop was the Shwe Pu Zun coffee estate in Yet Sauk, located in Shan State near the center of the
country. Shwe Pu Zun is a large vertically integrated business that has 1,000 employees who work on coffee farms in Yet Sauk and Pyin Oo Lwin, or at a 200-head dairy farm, a bakery operation, a café and retail bakery, all in Yangon. Shortly after our arrival, we met to discuss our agenda over lunch, which like all meals during the two weeks, always included rice at the center of the plate, with a variety of smaller dishes to sample and mix with the rice. These dishes were primarily vegetables, dark leafy greens, beans, baby bees, and deep-fried small fish, with many dishes having some “heat.” All meals were accompanied by a soup broth, green tea, and finally coffee. Eighty percent of the farm’s 300 acres is planted in catimor, growing organically under a shade canopy of carefully planted silver oak, mango, rubber, and macadamia trees. The farm also has test plots of SL 34, #795, and yellow caturra, and expects to have over 1,000 acres in coffee production by 2018. The Shwe Pu Zun farm in Yet Sauk (altitude: 3,0003,300 ft.) is one of the best models of sustainability and diversification I have seen anywhere in my coffee travels. The entire farm is powered by its hydro-electric generator, which also has an ingenious system to pump water uphill to provide drip irrigation for coffee, macadamia nut, and mango production. It captures and uses methane from a bio-digester; has its own large organic compost facility that uses rice husks, molasses, and other local ingredients to produce a very clean “black gold;” it treats water from milling, and sun dries its coffee on screened beds that are neatly placed on the well-marked cement patio. After I spent a full day training the staff of Shwe Pu Zun, we drove over four hours to Ywar Ngan Township (altitude: 4,300-4,500 ft.) where we worked with 60 unorganized, small-scale farmers, some of whom had traveled over 20 miles to attend the training and discussion. Here, the coffee is shade grown organic catuai that is gradually replacing older varieties. The well-diversified farmers have no outlet for their coffee other than Chinese traders who offer one price, regardless of quality. This “take it or leave it” approach leaves farmers little or no incentive to improve quality and no opportunity to negotiate the price. During my time with the farmers, I encouraged them to organize themselves so that they could negotiate together, enjoy economies of scale, share technical information, and join the proposed Myanmar Coffee Farmers and Exporters Association. Our final stop was the Shwe Pu Zun farm in Pyin Oo Lwin (altitude: 3,500-3,800 ft.), which was a near replica of the farm in Yet Sauk in terms of varieties, sustainable farm practices, and overall excellent farm management. Nearby, we visited the impressive Coffee Research, Information, Extension & Training Centre in Pyin Oo Lwin that, with proper resources, could be the hub of coffee technical assistance in Myanmar.
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Once I returned to Yangon I had meetings with the
December 2013
Managing Director of Shwe Pu Zun operations, with USAID, with farm managers, and the leadership of the Myanmar Fruit, Flower, and Vegetable Producer and Exporter Association (MFVP). I shared my view that there are three critical needs to be met to further develop the coffee sector in Myanmar: 1) Organizational development at the community level (i.e., the development of small farmer associations or cooperatives) 2) Organizational development of the sector at the national level (I proposed the establishment of a Myanmar Coffee Farmers and Exporters Association - MCFEA) 3) Better resourced technical assistance and farm extension services. When I presented the concept, the Myanmar Coffee Farmers and Exporters Association each endorsed this concept. Better yet, the MFVP said that they would welcome and provide it with needed incubator space and guidance. Much like Myanmar, the coffee sector needs support as it opens up. Being out of global circulation for decades has its drawbacks; however, it also presents significant opportunities, perhaps the largest being to learn from others’ mistakes. The work I started needs follow-up, and Winrock International is committed to continuing its support of Myanmar’s coffee sector by providing additional volunteers to create a thriving industry. I believe that the “secret” of Myanmar’s specialty coffee will soon emerge, first perhaps as a boutique offering, and before long as a more mainstream coffee origin. The potential for a consistent supply of high quality, sustainably produced coffee from Myanmar will be realized; it is just a matter of time. Best of all, it is grown by some of the kindest, most gentle people anywhere.
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 Art & Science Of Specialty Coffee by Spencer Turer Coffee Analysts
C
offee, like Culinary or Mixology, has historically been considered an art rather than a science. The skills required for roasting specialty coffees, coaxing the subtle nuance of taste and aromas characteristics, and the experience required by elite barista to manipulate the grinddose-tamp extraction process to produce a truly amazing sensorial experience, have been compared to those of a painter, chef, or musician: artists, not scientists. The question of art vs. science in specialty coffee has been a steady topic of conversation for the past generation. Most debates have two distinct camps. However, most specialty coffee professionals will align themselves as artists, not scientists. Artists have long been opposed to conformity, structure, and the status quo and express their creativity and individuality in their work. Writers, singer/songwriters, painters, sculptors, poets, etc., all have mysterious, intangible expertise that allows them to arrange words, sounds, and colors in ways that are pleasing and thought provoking. Scientists follow strict protocols using quantitative analysis and precise measuring tools to collect data and reach conclusions. Specialty coffee roasters and elites baristas aspire to reach artist status, and to be recognized for their mysterious skills and expertise to produce amazing coffee. Imagine the conversation in your local coffeehouse between a consumer and their barista, “This coffee is amazing, I can taste all the characters and aromatic nuances that you described - you are a true artist!” This is the reaction to which we aspire, not: “This coffee is amazing, I can taste all the characters and aromatic nuances that you described – you are a true coffee scientist.” Before the use of PID controls and thermocouples in roasters, brewers, and espresso machines; before the industry embraced controlled time and temperature profile roasting techniques; and before we understood pre-infusion, turbulence, brew solids and rates of extraction, we used the time-honored process of trial and error as best presented by the school of hard knocks. Before the SCAA and the Guilds, there was limited access to coffee education. Knowledge was gained mainly through private research or The International Coffee Development Group and The Coffee Brewing Center who were clearinghouses for scientific coffee information. These were the days where artistry prevailed and science was not a topic of conversation in our industry. Today the skills necessary for product development are still in the realm of artistry; using one’s experiences and expertise to build and create taste and aromas through green coffee selection, roasting, brewing, or extracting. Having expert level knowledge of how sensory attributes and tastes will compliment or contradict each other is still a recognized art, similar to food and beverage pairings. Knowing how colors can combine to make new colors, being able to read music, knowing how mediums combine in sculpture, this is all necessary science that is the building blocks for creativity. Knowing the flavor changes that occur when changing green coffee, manipulating the roast profile or adjusting the drink preparation, is similar to artist who combines colors on canvas or notes in a song, it may be appealing and delicious or not. Either way artistry is at work
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Coffee marketing is best described as presenting your product superior to your competitors. One valuable tool marketers use is to evoke the sense of artistry and mysterious intangible skills to explain why their product should be purchased, using the consumer recognition of culinary and mixology as an art form. Chefs, vintners in the wine industry, and distillers in the spirits industry, are also artists, using many of the same techniques as coffee roasters and baristas to create innovative and distinctive flavor characters in their products. The too often heard “We roast with love” or “We are guided by our
passion” should remain in the realm of romantic movies and not in coffee marketing. However, in all food production there is science. How we embrace the science, meaning our level of understanding and utilization of the scientific method, measuring tools and testing protocols is what will separate a singular specialty experience never to be repeated from a sustained and consistent specialty coffee product that can be enjoyed over time and at multiple café’s. The artistry in specialty coffee is the creation of coffee products which will distinguish a company from their competitors. The science required to re-create the coffee product for consistency is the definition of quality. Beginning with product development in roasting, quantitative measuring tools must be in place to measure the attributes of the green coffee, the development of the roast, the attributes of the roasted coffee, and the operation of the roasting equipment. The data collected during the artistic process will be used to blend art and science together in the form of a product specification document. This document is a tool used by specialty coffee professionals to re-create the coffee characteristics and flavors for the next batch, for the next week, and possibly until something fundamental changes in the green coffee supply and the coffee character is not able to be re-created. The tools required to collect the process and quality data are not specific to the specialty coffee trade or the commercial coffee market. These tools are basic food science and process control tools used throughout the coffee industry and food manufacturers. For example, data collection may include ambient temperature and humidity, green coffee temperature, moisture content, and density. Other important measurements include charge weight, drum air temperature, bean temperature at specific time increments, gas pressure, flame intensity, and cooling time. Finished product measurement may include any of the following: roast development scale (Agtron), color development, or threedimensional L.a.b. color scale. Other quality data collections including moisture content, water activity, grind particle size (if applicable), counting roasted coffee defects, and headspace measurements in a stored package are for the management and control of the manufacturing process to produce a uniform and consistent recreation of the development samples using scientific tools and quantitative data collection. The specialty coffee professional will use science to re-create the product development which was a result of artistry.
plus additional information including: time from roasting, water quality (taste, aroma, pH, hardness, TDS), brew water temperature, time of brewing/extraction cycle. The bed depth, including size and shape of the portafilter or brew basket (for French press, Hario or Clever cone, etc.), will also provide valuable information that must be controlled for the beverage to be re-created. Beverage temperature, water pressure or flow rates, extraction percentage, brew solids, brix, and pH will all provide information to help create a preparation specification or beverage recipe to be used to re-create and the beverage multiple times and at multiple locations. Baristas, roasters, coffee tasters, and other coffee professionals use science when conducting cuppings. A cupping is a sensory analysis of coffee products that use science to control the variables that will change the profile or flavor attributes of the coffee being tested. Managing the roast development, grind particle size, dosage, water quality, water volume, water temperature, timing of the test, etc. will all insure a proper and appropriate coffee analysis is conducted. The goal of the specialty coffee artist is to create an amazing coffee or coffee beverage that will be recognized for its quality and appreciated for its taste, sweetness, and aroma characteristics. The goal of the specialty coffee scientist is to measure the coffee and beverage development to create a specification used to re-create the coffee beverage. Science should not only be looked at as a cold and sterile analytical perspective, but also a food safety or good manufacturing practices program. If coffee is manufactured improperly there may be a consumer health issue or product quality issue. Science in specialty coffee should be considered an ally, not the enemy of art. Retail operations thrive on uniformity and consistency, the consumer wishes to receive products with similar look, aroma, and flavor at each visit. Specialty coffee professionals who recognize and embrace the coexistence of art and science will be able to produce and prepare specialty coffee products that can be duplicated over time and between roaster or cafe locations. There are too few coffee scientists and instead of being utilized in the creative, development phase of new products they are usually called upon to solve problems. The conclusion: both art and science should co-exist as coffee equivalents.
The barista has many tools available to help measure the parameters of brewing or extraction. The artistic process of blending roasted coffee for a particular desired profile or from a single lot coffee to develop a high-quality beverage has not changed. The expertise that is derived from experience with coffee and coffee preparation techniques will drive the artistic process. Developing the flavor characteristic, accentuating the acidity or body, maintaining the sweetness, and aromatics can all be manipulated within coffee, similar to blending colors and textures on a painting, or developing the melody and harmony in music. Culinary Artists consider acidity (perceived organic acids), temperature, texture, fats/oils, primary spices and herbs, accent or finishing ingredients, as well as color and plate composition when developing recipes and menu items. Chefs, artists, and baristas are all following a similar artistic process of bringing together complimentary and contradictory characters and attributes to create something that is greater than the sum of the parts. The barista may collect process control or quality control data when developing preparation formulas or drink recipes that include all the collected information from the roaster/manufacturer
December 2013
Spencer Turer graduated from Johnson & Wales University with degrees in culinary arts and foodservice management, and began his coffee adventure in 1994 as a barista. After working in quality control, green coffee buying, retail marketing and importing, Spencer is now the Vice President at Coffee Analysts in Burlington, VT. He is a Co-Founder of The Roasters Guild, a Licensed Q Grader and has earned many certifications from the SCAA. Spencer can be contacted at spencer@coffeeanalysts.com
New & Views From NAMA Chairman, Pete Tullio by Pete Tullio NAMA Board
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s I write this, I’m six months into my term as the NAMA chair, and I’ve got to tell you, now more than ever before, I believe we’re in a Renaissance. I believe the industry, and our association, has done so much work getting us prepared for this inflection point.
We are always looking for new ways to showcase our leaders, and a newer effort that’s been launched this year is our Emerging Leaders Network. We’re working to help encourage our younger leaders of the industry to network and to learn. We believe they will establish a solid foundation for the industry’s growth in the future.
Growth + Innovation = a Renaissance. Let’s be honest. We’ve seen the dark days and it’s clear we’re beyond them. While we can’t rest on our laurels, we are meeting and outperforming in many important metrics. With a world-class One Show and a growing CTW, we’re enhancing great opportunities for continued growth, with the important addition of a new tool we’ve introduced this year: the NAMA Strategic Plan. We know you’ve heard about our strategic plan, from Carla at the OneShow or through our website and other communications. In fact, you may have even seen it – I hope that’s the case. We have communicated the good news regarding our progress on our strategic plan in the form of a mid-year update, providing context and details on exactly how we’ve moved the needle in the key areas. Here are some highlights: Our Government Affairs division has completely stepped up its game with advocacy, an important cornerstone of NAMA’s efforts. We increased our relationships with elected officials throughout Washington, DC and the country. We are on top of the issues, and we are being recognized as a valuable resource by legislators from both sides of the aisle and federal agencies. Have you seen NAMAvoice? It’s our new advocacy website and it’s awesome. In minutes, you can get all the information you’re looking for to get a comprehensive update on the issues we’re facing and helping to manage, both in Washington, D.C. and in your state.
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On the nutrition front, we continue to work to enlighten our detractors and engage our stakeholders by setting the record straight about our industry. As you know more than anyone, we care about the millions of consumers that you, our members, serve every day. To that end, we are providing nutritional information to help them make the right food and beverage choices for them. We have been doing this since 2005, one of the first organizations like ours, to provide leadership in this area. Now, based on much feedback from you, we’ve creating a revamped website. The NAMA Nutrition Center, that will prove to be a “onestop shop” for all things nutrition related, including data, news, and trends regarding the issue, tools for work, with special customer sites including schools, as well as an updated Fit Pick component, including all the latest standards, including the new USDA School regulations many of you are working on. With that, I’d like to mention our ongoing quest to find and share success stories. Since we know networking is a highly valued feature of NAMA, we want to encourage more sharing amongst operators. One method we’re exploring with the staff at NAMA is engaging a more dynamic website. Maybe we will be sharing your story in one of my columns like this, that you will be seeing every couple of months. Finally, our ability to grow as an industry will be accelerated by the innovation in office coffee, single cup brewers, and micro markets. With that momentum, we’re really hoping to make a difference and to continue to provide the
December 2013
professional leadership and support, including tools that will help our membership grow and succeed. Micro markets. What an opportunity! Many of you have participated in the Micro Market Seminars that provided much-needed strategic and operational information for this channel. As a vending and office coffee guy, I don’t know that I would have believed it ten years ago, that I would expand our company’s horizons in this XBZy0ďDF TVQQMJFT ESVH TUPSF JUFNT TBMBET BOE TBOEXJDIFTyUIF TLZ T UIF MJNJU BOE JU T really exciting. Our second annual Public Policy Conference, Advocacy in Action held in Washington DC in October was an enormous success, in spite of the historic government shutdown. NAMA’s Board of Directors worked hard to deliver the important messages of our association and industry in an effort to tell our story, and also building relationships that will continue to help us fight potentially harmful legislation. November brought us to CTW in Nashville, once again, the not-to-be-missed industry event of the year. The education sessions were packed and the exhibit hall was completely sold out, signifying its dynamic growth. Highlights included the award of Coffee Legend to Joe Webster, founder and chief executive of Newco Enterprises, along with global guest speakers including Juan Esteban Orduz, Stephen Twining, and Luz Marina Trujillo. Special thanks to my CTW co-chair Howard Fischer for his efforts, helping to ensure the event’s success. Lastly, I want to thank you. I really love our industry and the opportunities we see in front of us. Thanks for being part of the excitement, see you at the OneShow in Chicago.
Making Sustainability Sustainable Along With Many Other Words by Rocky Rhodes International Coffee Consulting
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hen writing about the State of the Industry in our wonderful coffee world, there are a number of words that can be used. That number of words is shrinking, however, as we collectively emasculate them through overuse or agenda driven usage. If this continues we will have no words left! It’s OUTRAGEOUS! It’s EVIL! The point is, that words which once meant something severe like OUTRAGEOUS and EVIL, no longer carry the ‘ummph’ because our first reaction to something starts at these levels. To say that a person swooping in to steal a parking spot executed an OUTRAGEOUS act perpetrated by an EVIL person should be considered a bit overstating of the facts. Perhaps it should have been an INCOSIDERATE act by a THOUGHTLESS person. Hyperbole rules the day, diminishing our ability to use certain words. The coffee industry has been around for a while and only continues to grow. The words are in danger of IMMINENT ERADICATION if we don’t try to save them! Let’s look at some examples of words that have lost their meaning. Green: It used to be a badge of honor that you went above and beyond to protect the planet. If you operated in a Green Way, you accepted higher operational costs for the greater good. You led by example as you blazed a high moral trail. Then came the ‘greenwashing,’ where if a company used 25 percent recycled paper in their envelope stock they proudly displayed some newly crafted ‘earth-dogooder’ logo on their business card and advertising. This word is so badly beaten up, that a company could just paint their building green and profess to be nurturing the planet. Fair: Brought into the coffee industry primarily in the context of Fair Trade where the general understanding was that if you believed in fair business practices then everyone in the supply chain should make a profit and no one got squeezed. Fair in our industry is incredibly important because in many of the producing countries our suppliers have to walk away from their homes and jobs because the market forces have dictated some falsely low number below the cost to produce. On the other end of the chain, if the retailer can’t make any profits due to high cost of goods, then they close and can’t buy coffee. At some point fair became divisive. Groups with agendas wielded Fair as a sword to smite down those that did not see fair in the same way. The “I’m more fair than you” folks that would smear your reputation in social media as killing babies because you did not participate in their version of Fair. Fair even started to become a bad word as it tended to indicate what ‘camp’ you were in. Many even replaced the word with other words like ‘direct.’
Specialty: Ask 20 people what Specialty Coffee is, and you’ll get 20 different answers. It used to be a way to say, “My coffee is dramatically better than commercial coffee.” Now it carries almost as little value as Gourmet. Some will think that coffee is specialty if they buy it from a major chain rather than a store. Some will say specialty means ‘not in a can.’ Others have said that specialty coffee is an espresso drink. The term is so widely used and in so many ways that the term creates more confusion than clarification. For the coffee wonks out there the word is being replaced by a number with the SCAA / CQI scoring system. But this is too hard to explain to most folks so there is very little way to define a quality difference in coffee anymore. There are also words that are starting to be co-opted but still have value. Consider this an effort to try and save them. It’s not too late if we as an industry use them properly and call out those who don’t. Certified: This literally means that an independent certifying agency has done an evaluation and certain criteria have been met. When we talk about ‘organic’ we should talk about certified organic. When we talk about Q Grades of coffee they should be Certified Q Scores. Certified adds depth and clarity to some of the words on the endangered list above. The way this word gets marginalized is when companies make up their own certifications that only they can achieve such as ‘Certified BOB-Friendly.’ While funny, it minimizes the real certifications that actually mean something. Call these people out. They are hurting you and the industry. Relationship: This is a tricky one as there are many types of relationships. It used to be that you had a relationship if you ate a meal together, or talked on the phone more than once. With social media you might have 30,000 ‘friends’ you have never met. For the coffee industry we want to preserve the specific use of the words ‘direct relationship’ to mean only those people where you have shaken hands and deal together without intermediaries. You do not have a direct relationship with a farmer just because you buy beans from the roaster that has one. That is nothing more than a supply chain relationship. The farmer won’t know your name, has never met you in person. Let’s agree that this is NOT what we mean by relationship and specifically a direct relationship. Call the others out. They are hurting you and the industry. This brings us to one of the most crucial words to save before it is too late: Sustainable: In order to save this word, we have to stop using it by itself. There is almost always a qualifier for it. The qualifier gives us a context, and then we can judge the veracity of the ‘sustainable’
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claim. An example: “We run a sustainable company!” The obvious response is, “Duh! Otherwise your company wouldn’t exist.” What was the person trying to imply? That they act responsibly in their business dealings? Everybody wins? The Earth is not harmed? In fact they may have none of these characteristics but by claiming Sustainability they get to claim it all. Let’s agree to only use this word qualified in some way that can be verifiable. Some options are: SELF Sustainable: Runs on its own without outside help. SOCIALLY Sustainable: Treats people with dignity and does not take advantage of others. FINANCIALLY Sustainable: Built on a model of ongoing best business practices to ensure long term success. ECOLOGICALLY Sustainable: What you take out of the world in terms of resources is balanced by what is returned in such a way to keep the planet ‘healthy’. Sustainable ENERGY: Sources of power that have less of an impact on the earth than others and is renewable. You get the idea. In order to keep ‘sustainable,’ sustainable, we must pay attention to its use and try to be specific in our intentions. When you see others taking advantage of the word by making it imply more than the truth, point it out. If they continue, call them OUTRAGEOUS and EVIL and let’s make sure they are NOT sustainable!
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
It’s Time To Put Analytics Into Packaging by David Weiss uVu Technologies LLC
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great cup of coffee, with a sleek designed cup, is a great combination, but when paired with an un-safe lid, it’s a partnership doomed for failure. Yet, everyday a coffee drinker’s experience is dampened, both literally and figuratively, by this mismatched coupling. Clearly, the next generation of disposable coffee and tea lids must confront the problem of unintentional spillage, which reportedly occur hundreds of times a day. This happens when ordinary consumers, wishing to enjoy their cup of coffee, believe they have applied it to their cup, only to find out it wasn’t really secure, seated, and thus sealed, thereby resulting in unintentional spillage. Indeed, you need look no further than The New York Times’ 2011 feature article, “A Changed Starbucks. A Changed C.E.O.,” in which Starbuck’s Founder and Chief Executive, Howard Schultz, reported that J. Crew’s CEO, Millard Drexler, had personally emailed him to report that the lids at his local Starbucks in Manhattan kept spilling coffee on his shirt.
In a recent study, entitled “The Product Mindset,” Underwriters Laboratories (“UL”) seeks to untangle and classify the global product ecosystem to gain deeper insight in the variance between manufacturer and consumer attitudes. In a category relevant to this article, UL polls the two groups on product safety, resulting in an extremely wide divergence between the manufacturers’ “perception” that they are improving in product safety, and the consumers’ belief that manufacturers value sales over product safety. On scale of most (“1”) to least (“7”), manufacturers ranked the need to improve product safety as a “4,” while consumers scored the goal as a “2.” Clear metrics demonstrate the camps are misaligned when it came to assessing consumer confidence in product safety. In fact, 84 percent of the manufacturers polled believe consumer confidence in product safety is increasing, while 58 percent of the consumer group disagreed, believing instead that manufacturers tend to value sales over product safety.
Recently, news has been brimming with reports of spilled hot beverage claims. These news reports and articles focusing on the deficiencies, inherent in past lid designs bolster the demand for a better fitting, more secure and safer lid fit. Even mainstream media is focusing on beverage packaging issues. The main focal point in the excellent, 2013 New York Times article, “Who Made that Coffee Lid,” is the focus on the consumer’s interaction with the lid. Which actually defines the hot beverage drinking experience, rather than the cup.
The import of the UL 2013 study, while mainly applicable to electrical devices and components, is clearly transferrable across many industries, including the food and beverage packaging sphere. Up until recently, new food and beverage packaging innovations arose to fit within specific existing machinery. As run under Kaizen or Six Sigma methods of process improvement, machinery and process drove design criteria.
The take-away from this article appears to be that, with all of the manufacturers battling to “one up” the other’s cup design, the war will actually be won by the individual who delivers a safer more secure drinking experience. This, in turn, means attention will finally be focused on the true defining element in the packaging equation: Who can provide the consumer a safer, more intuitive, and more secure lid? Simply changing to a new cup will not resolve the horrible safety problem hot beverage drinkers are presently experiencing with existing single-use lids today. In order to resolve the problem, it is vital to generally understand just how design choices in new packaging products are promulgated, given the green light and ultimately projected through the manufacturing cycle into the market.
As an example, within the hot beverage packaging field, innovations in forming machinery and plastics resins allow for faster cycle times, production of larger volumes of hot beverage lids in less time. This methodology drove design choices, which may not have resulted in production of the safest product. Thus, what appeared to be a drive to improve the overall process might have resulted in the decision to opt for a design. Which may be practically suited to the manufacturer’s current machinery capabilities, yet may not be the safest design choice leading to a product that is functional with the potential to cause injury or property damage. As a matter of product liability law, a manufacturer need not insure against all possibilities of personal injury or property damage. Indeed, in most jurisdictions, a manufacturer may defend against a claim of negligent design by demonstrating that, at the time the product was designed and then
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produced, it had selected a reasonably safe design as compared with comparable product design choices known at the time. And, as a defense to a product liability claim, the manufacturer and its insurer may very well succeed. However, given the growing force and power of the “blogosphere” – i.e., the “Wired Court of Public Opinion” delivered up by the Internet, one can see that this process-driven method of product design may fail to meet a growing higher level of expectation in the lightening fast information world of today’s consumer. With the advent of spectacularly new design aids, such as commercially available 3D printers and, for the first time ever, a real-time tool-oriented thermoforming quality control monitoring system, best design criteria can now be successfully married with process driven manufacturing. This will result in both a safer design produced within an efficient manufacturing process serving to close the gap between consumer product safety expectations, and a manufacturer’s real world process delivery program. With our own independent thermoforming engineering laboratory, headed by our Technology President, Mark Strachan, SPE Chairman/President and Thermoforming Engineering Professor, Penn State College of Technology, we have even created an entirely new terminology entitled “Packaging Analytics.” And, in 2014, we will co-host, with Penn State College of Technology, the very first “Packaging Analytics” conference in the World. We hope that this annual conference will attract the best and brightest in the packaging world, with the intent to launch more innovations and applications aimed at providing a more scientific approach to the design and manufacture of food and beverage packaging; bolstering safer design decisions within accepted methods of processing improvement.
David is the C.E.O. of uVu Technologies. He is also founder of “Packaging Analytics™,” which strives to foster advancement in packaging technology as a science.
Four Opportunities by David Gross Add a Scoop
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ealthy Opportunity: The driving force behind the health and wellness movement is Opportunity. Opportunities exist across the board, across America. The surveys are showing the trend. The market demand is clear. Your business can thrive among a cluster of competition seeking to outperform you in the health and wellness arena. Reach for the fresh fruit, the natural and organic choices, energy boosts, less sugar and carbs, the more menu innovation that differentiates you, can put you a step ahead. America is Primed and Ready. America is already running to a greater consciousness about calorie-intake, organic foods and supplements, and disease-prevention via good nutrition. They might stop for a sugar-glazed donut once in a while, but they’ll take the healthful, vitaminrich choices at every other opportunity; new opportunities arrive every day. Would you Like Repeat Customers? Give them what they’re looking for: a menu board centered on healthy choices. You’ve got a guaranteed four-opportunities a day: breakfast, lunch, dinner, and the snacks in-between. Make each opportunity count. Your customer base will come in looking at options. Give them sweets, they’ll take one and see you again maybe next month. Give them the option of adding a multivitamin boost to their frappé, smoothie, or iced coffee, and as the trends show, they will visit you more often. Most people are in a rush, and they’re looking for convenience. They eat every day, and they visit a coffee concept every day. Offer them a quick, healthy option, and you’ve got yourself a regular customer.
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Marketing Healthy Menu Items is Easy. Most manufacturers of frappé mixes, chai mixes, and smoothie mixes have followed Starbucks’ lead and reduced the amount of sugar, trans fats, and high fructose corn syrups. So, if you are buying from the same drink mix manufacturers that you were using even two or three years ago, you have already begun to serve healthier drinks! If your refrigerated drink case contains Functional RTD Beverages such as Vitamin Water, Energy Drinks, Arizona Iced tea with ginseng, Horizon Organic milk fortified with Calcium and
Vitamin D, then you are currently providing what your customers want- healthy menu items. Example: Starbucks Buys Evolution Juice. “This is the first of many things we’re going to do around health and wellness. We’re not only acquiring a juice company, but we’re using this acquisition to build a broad-based, multi-million dollar health and wellness business over time.”Howard Schultz, chairman and CEO, Starbucks Corporation What the Leaders in the Coffee Industry are Doing. Because the leaders are the ones who have the wherewithal to study consumer trends, you should apply their tactics to your shop as well. When they make changes, those changes are a reflection of consumer research. There’s No Way to Miss the National Health & Wellness Movement. The consumer is demanding healthier menu items. You can capitalize on that, and here’s how to do it: Healthier menu items with less fat and sugars; Drinks with added vitamins and boosts; Packaged grab-and-go snacks and sandwiches with reduced fat and higher protein contents. Research Shows It. “Fresh fruit is not only the top snack food consumed in America, it is also one of the fastest growing,” according to the summation of research conducted by National Purchase Dairy. “Taking the who, what, when, and where of fresh fruit consumption into account, the point to be made is that fresh fruit is a top-of-mind snack with most consumers,” says Darren Seifer, National Purchase Diary.
menu board that is directed towards Health and Wellness. If it is just coffee you’re offering your customers will still be attracted to innovation. The demand is there for supplement boosts added into the beverages. They’re looking for nutritional boosts in the refrigerated beverage case as well, like Vitamin Water, Energy drinks, and bottled teas with boosts in them. Originally, the coffee shop served coffee and pastries. Next came the frappé and the smoothies. Now, boosts are being added to the blended beverages, pastries are getting their sugar content dropped, and the ready-to-drink beverages have gone from simple bottled water, to choices including bottled nutrition and energy drinks. Conclusion: Get Noticed by Telling Your Customers. Make yourself known. If you’re using the same products you were using several years ago, chances are that you are already selling lower sugar-content beverages. The manufacturers have already done most of the work by changing their ingredient base. The difference now is whether or not you are letting your customers know it. Surveys show that people are looking for, preferring, and willing to pay more, based on key words. Put signage on your windows or your walls. Tell your sales team to talk it up with the customers. In summation, if you’re not geared toward health and wellness, get on board. If you already are on board, put the word out where your customers can see it.
Health: Who’s concerned about health? Your customers, most importantly. The major players are showing their concern for meeting that demand: Starbucks, PepsiCo Brands, the Healthy Weight Commitment Foundation, The Partnership for a Healthier America, the "NFSJDBO DPOTVNFS y BOE ZPV UPP SJHIU Innovation. Consumer trends indicate a need for more than just a cup of coffee, and they’re looking for more than just a banana on a tray. The big companies are stepping up innovation, introducing unique products, and building a
December 2013
David Gross, President, Add a Scoop
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Improving Your Product Sales by Torie Burke Torie & Howard, LLC
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offee connoisseurs are naturally curious information seeking people who are loyal, inclined to seek convenience, and easily connected to strong brand identity and reputation. They are social individuals, considering that during pre-social media times, the coffee shop was where people gathered to socialize. Today, while certainly still a social place, shops stand for grab-and-go, a place to hang, or a place for an out of office experience. Café owners understand that the coffee consumer experience starts with a great environment. “Promote a warm, welcoming, and friendly environment, rather than copy the big chain style of self-promoting visuals, structural sameness, and regimented layouts. Unlike other service and retail businesses, customers can engage multiple times a day with a cafe or coffee shop, so make them feel like it’s a “home away from home” in your cafe with interesting and changing visuals, a variety of seating arrangements, and let the customer alter the furniture to suit themselves.” - Peter Baskerville on Quora “This goes with Coffee”…Selling product in the coffee channel? Some key points to improving product sales: t #SBOEJOH NFTTBHF t &EVDBUF UIF DPOTVNFS t &OHBHF XJUI UIF DPOTVNFS t 4UBZ 5SVF t ,OPX ZPVS DVTUPNFS Sending Your Message: Tight branding, well-honed, consistent, and targeted product messaging is primary to making a strong initial impression, at both the
retailer and consumer touch point, wherever, and whenever, they first find you. Creating messaging that represents your brand quickly, thoroughly, effectively, and works across the board is a superhighway towards sales. Make your first shot count. Edu-tise: Consumers are increasingly savvy and looking to your brand for education and information at all key-messaging points. Asking retailers who are willing to work with your brand and post in-store signage, and/or agree to product demonstrations given by knowledgeable product representatives, as well as smart labeling, all create an invaluable consumer-brand relationship faster and more efficiently than traditional advertising and marketing routes. Always consider how your product will be merchandised in the retail environment. Don’t miss the opportunity to boost your visibility and strengthen the consumer bond with information on how to connect with a brand personally via social media channels. Be Responsive and Relatable: Market awareness includes an ever-evolving demonstration that your brand is up on the same trends and information that your savvy, discerning, and adventurous consumers are. Create and maintain a brand personality and derive your messaging in ways that show shared interests and concerns. Respond with innovations tailored to your retailers and your consumers needs. Following these guidelines will take you a long way towards becoming a reliable, relatable, trustable source for your customers, and contribute to brand loyalty. Connect, Connect, Connect: Understand how, where, why, and when your customer wants to connect. Relating to your customer in the ways they prefer to communicate, and providing them with what they want, like, and need, is the ultimate in brand orientation. Being fluid and flexible in these areas, while staying true to your brand, makes for strong and lasting impact.
Be True: Staying true to your brand, while building an open dialogue with your customer, takes careful attention. Consistency balanced skillfully with transparency, however, is well worth the effort and goes miles in creating a solid market foothold. Don’t Forget Who’s Buying, Keep Your Finger on the Pulse: Always keep an eye on who’s buying and consider the following: “Millennial power: Retailers are not fully understanding the needs of millennials, who are expected to outspend baby boomers by 2017, according to executive search firm Berglass + Associates. This includes nearly half of respondents being unaware that millennials will outspend boomers annually within five years and overemphasis on online advertising to reach the younger demographic, according to Berglass.”- Candy & Snack Today Try to keep focused on your vision, while maintaining some flexibility. It’s all hard work, branding, messaging, connecting, and selling. Market research is key, however, spend some time, drink some beverages, and shop in your local coffee shop. While you are there, speak to the manager and ask them what sells, curiosity did not kill the cat. Good luck! We are proud to share that shortly after launch we were awarded the 2012 Coffee Fest –NY Best New Product in the consumables category.
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The Rise Of Single Cup Coffee The Change Is NOT What You Think by Mike Gronholm Single Cup Accessories, Inc
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in K-Cups®, which means that you’re not as
coffee world through its brewer manufacturer,
purchase pod style brewers, it gets harder to hold
Keurig. The Keurig (K-Cup®) style brewer has
onto and get new customers.
he Present
eliminating a major obstacle to reusable brew
Everyone knows that Green Mountain
“convenient” as coffee packaged in K-Cups®.
cup use.
Coffee Roasters is taking over the
Eventually, as more of a roaster’s customer base 3. K-Cups® are usually the most expensive brewing option for a given beverage and given the cost of packaging and shipping,
rocketed in popularity because users can make a fresh, hot, reasonably good cup of coffee in a
Does this really mean that we’re headed for
probably will be for some time to come. In
minute or so. The marketplace has responded
a “pod” beverage society? Maybe not. There
fact, K-Cup® coffees can easily cost as much
by purchasing 10,600,000 brewers in 2013 (that’s
are some compelling reasons to believe that
as $1.00. As Keurig owners become used to
883,000 per month!). Estimates are that they
the trend toward the use of “pods” may not be
their brewers (and work through the K-Cups®
have sold over 32,000,000 brewers so far.
everything it seems. Some things to think about:
that came with the brewer) that they will
GMCR/Keurig sells these brewers at or below
1. The environment – as we proliferate single
eventually be introduced to refillable brew cost through nearly every retail channel
cup brewers we are going to have to address
reusable brew cup, used with a brew cup
imaginable, believing that the more brewers
the environmental effects of “pods.” We could
refilling system, are nearly as easy to use as
in the market, the more K-Cups® will be sold.
easily hit 10,000,000,000 consumed next year.
a K-Cups®, it will be hard to go back to the
The strategy seems to be working because
That’s a lot of garbage. Surely, there is a lot
expense of K-Cups®. This is especially true
GMCR’s CFO reported that in FY 2013 they
of research going into ways of making pods
when you can spend about $.26 to fill the
sold 8,400,000,000 K-Cups. It’s pretty clear that
“disposable,” but they’re not now and there is
brew cup with the same coffee for which you
people like the single cup brewing system. It’s
a growing impression that just throwing them
would have paid $1.00 for a K-Cup®.
also clear that the K-Cup® “pod” is a runaway
away is distasteful. 4. Is America really the land of the “pod”
favorite as a way to buy your beverage of choice. Until September of 2012, Keurig enjoyed a
2. Owning a K-Cup® style brewer no longer
people? Can it really be true that the
lock on K-Cup® manufacture through patent
means you need to use K-Cups®. When
individualism we’re so proud of can actually
protection and received a $.062 royalty for
Keurig first began selling K-Cup style brewers,
be satisfied by a “pod”? For many people, the
every K-Cup® manufactured. Even though
the only option for brewing was the K-Cup®.
answer may be “yes,” but for an increasing
some of these patent protections have expired,
Then Keurig developed and marketed the
number the answer is “No! I’d rather use my
GMCR makes most of its profit from K-Cups® in
My K-Cup®, which was a reusable brew cup
own grind in a refillable brew cup.”
one-way or another.
that allowed the use of any coffee grounds without using a K-Cup®. It was, and is, pretty
Conclusion
The rapid proliferation of the kinds of coffee
pricey, but allowed the Keurig owner another
There is no doubt that GMCR will sell a lot
and other beverages to be found in K-Cups®
option than K-Cups®. Soon, other reusable
more brewers over the coming years. There
has helped fuel the K-Cup® revolution. In fact,
brew cup manufacturers, like ekobrew™ and
is also no doubt that there will continue be a
there is an emerging belief that K-Cups® could
Solofill™ entered the market. These brew
rush by beverage makers to put their beverages
eventually elbow out every other brewing option,
cups we’re easier to use than the My K-Cup®
in K-Cups® to pursue these brewer owners.
leaving us as a homogenous pre-packaged pod
and generally less expensive. Today, several
However, let’s not underestimate our growing
society. In fact, word on the street is that even
new reusable brew cup manufacturers have
concern for ecology, the high cost of K-Cups®,
Folgers is contemplating giving up on its bulk
entered the market and the cost of reusable
the emergence of refillable brew cups and the
coffee business and go strictly to “pods.” Who
brew cups has plummeted.
need to assert our individuality that we always, eventually, exhibit.
would have thought? In 2013, Single Cup Accessories, Inc.
38
cups. When they find that K-Cup® style
Further evidence of this is the decline in small
introduced its brew cup refilling system,
coffee roaster fortunes. If you’re a small coffee
which makes filling and cleaning K-Cup® style
roaster you probably don’t sell your beans
refillable brew cups easy, quick, and clean,
December 2013
Colombian Coffee, A Story (Still) To Be Told by Juan Esteban Orduz Colombian Coffee Federation, Inc
W
e all know that the lives of millions of farmers in today’s world have become extremely difficult due to coffee prices that are determined by supply and demand, financial speculation, weather, and other global market factors. Making matters even worse are domestic conditions such as the exchange rate, economic conditions in consuming countries, and plagues like leaf rust in Central America. Colombia has been no exception. It is, in fact, one of the countries that have suffered the most during the last five years. Suffice to remember how production plummeted during the last decade, going from 11 or 12 million bags or more per annum to eight million in 2012. For four years we suffered the “Perfect Storm,” with alternating “El Niño” and “La Niña” conditions, leaf rust infestation at certain times, berry borer at others, and lower fertilization due to high oil prices, among others. All of this was happening while our farmers where immersed in the most ambitious tree renovation program that some outsiders questioned during those days, only to recognize its indisputable benefits today. If it is true that no good deed goes unpunished, Colombia seemed to be paying a toll for having become the most widely recognized and differentiated origin for quality coffee in the world. It seemed to be insufficient to have the strongest coffee grower institutions; to invest billions of dollars in communities over more than 85 years; a technical assistance team of about 1,500 men and women in more than 50 percent of the country; and a world-class coffee and environmental research center (Cenicafé) with almost 80 scientists, 23 of them with a Ph.D. In the midst of a heavy drought or torrential rainfall all over Colombia, at a certain point with close to one million hectares underwater, towns destroyed, cattle drowning, flowering, and crops nowhere to be seen, it was really discouraging not to be able to answer to the question: “when is Colombia’s production going to be back?”
40
Winston Churchill once said, “If you are going through hell, keep going.” That is exactly what Colombian coffee growers did. They did not give up on their love and passion for their farms, and they never lost faith in the importance of quality. FNC´s Cenicafé continued to invest, research and develop in resistant varietals and treerenovation programs, and thanks to which more than 50 percent of Colombia´s coffee trees today
are “technified,” about five years old or younger and rust resistant. And that is why the answer to the question: “when is Colombia’s production going to be back?” is certainly, now! Increased production is not enough. We still face challenges that affect millions of farmers that are beyond the control of any single entity or government. In Colombia for example, coffee prices and market conditions, as well as our exchange rate that reflects the strength of the Colombian peso and growing costs of production, have reduced the income of many coffee farmers by half or even more. They suffered a reduced income, to the extent where the government had to deliver significant financial support to for their losses. Not with standing, all crises bring some opportunities as well; that is of course, if they are addressed in the proper manner. Today, Colombian farms have much younger trees, healthier trees, and are much more productive. The development of coffee varieties resistant to rust over the last decades and the massive tree renovation yielded their fruits. Our significantly higher production in 2013 shows a clear trend upwards that will bring Colombia’s production way above 11 million bags in 2014. So, what about the quality? How has Colombia kept their high coffee quality after so many difficulties? The keyword has always been differentiation. Following the market very closely, trying to understand and anticipate the consumers’ wishes and expectations, and identifying the next local and global trends, are also crucial. Consumers are saying that they want to know more about their coffee and identify with the coffee that they are drinking. There has been an “explosion” of coffee shops all over the world, in traditional and in emerging markets, where one can have a dripped coffee, an espresso, an espresso based drink, or a cold coffee beverage. Consumers also have access to information through the Internet, social networks, and digital media. Some 21st century coffee drinkers just want to know more about their coffee. Some already understand a lot, and they already know what they want. Some consumers just want to have different choices. Some consumers want to leave a positive footprint in the world through the coffee they choose. It is also safe to say, that some other consumers want all of the above. The fact that coffee is now recognized and praised for its
December 2013
medical benefits, including its high content in antioxidants, also helps. That is why “specialty coffees” are so important. They do not just deliver to consumers what they are looking for, a great beverage. These coffees also deliver values behind them, a feel good factor, and also social interaction. In many cases it even becomes part of their identity, what does my coffee say about me? At the same time, specialty coffees improve the producers’ income because consumers are willing to pay more and that goes down the value chain to the farm. Colombian “cafeteros” understand that. Specialty coffee is a key income driver for many, whether it is estate or community coffees, specific cup profiles, or certified coffees that are produced with the highest social, environmental, and economic sustainable standards. Furthermore, the same happens with wine areas like Bordeaux, where experts and enthusiasts identify regions such as Medoc or Bourg, and even sub-regions such as St. Estephe, Pauillac, or Margaux. Colombian coffee today is not just Colombian coffee. It goes from traditional coffees in Caldas or Antioquia, to newer ones in Cauca, Nariño, or Huila. It can also stem to the many sub-regions, all with their different profiles and their distinct notes and values. That should not surprise anyone familiar with our coffees. In Colombia, which is twice the size of France, coffee is grown in more than 53 percent of the municipalities, by more than 560,000 families, along three mountain chains that cover the country from south to north, plus the Sierra Nevada de Santa Marta in the north and other scattered areas. It is only natural to expect many different, diverse, and very special coffees in these locations. However, you must bear in mind that, beyond geography, climate, and soil, 29 percent of our farmers officially comply with international sustainability standards. Perhaps, this is an untold story, and that is why it is the story that Colombian “cafeteros” are telling the world. They will tell the story with all of its details, regions, sub-regions, profiles, and notes, in early October in Medellín at ExpoEspeciales 2014. ExpoEspeciales is the biggest specialty coffee event and convention in a producing country, and it is organized by the FNC. jeorduz@juanvaldez.com ecordero@juanvaldez.com ccastaneda@juanvaldez.com
Small Footprint Benefits to OCS Operators & Customers With so many benefits to OCS Operators and Customers, the switch is easy! Use it in coffee, tea or water. With a wide variety of flavors that appeal to everyone in the work place, it’s a great way to increase sales for both new customers and current clients.
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Cup Sleeve Marketing How Cup Sleeves Can Help Build Brand And Increase Revenues by Don Scherer BriteVision
I
n retail, if it’s not making you money – it’s costing you money. This was once the case with a café’s paper cups and sleeves, but not anymore. Coffee sleeves have become a valuable marketing and promotional tool for large coffee chains, QSR’s, and small cafés. Sleeves enhance brand identity and help grow in-store sales. Independent research indicates that cup sleeve messages are noticed, they stay with customers for a long time, and they are persuasive in communicating branding and promotional messaging. BriteVision Media, a leader in custom printed cup sleeves, commissioned Edison Research to evaluate the effectiveness of using cup sleeves as a means to promote in-store products. The results of the study were significant: t QFSDFOU PG UIF DPOTVNFST SFDBMMFE the promotional message on the sleeves t QFSDFOU TBJE UIFZ MJLFE SFDFJWJOH offers or promotions on cup sleeves t QFSDFOU CFMJFWF TMFFWFT BSF B HPPE
way to inform consumers about in-store products or special offers t QFSDFOU TBJE UIF QSPNPUJPOBM TMFFWF aided in their purchase decision In a prior study conducted by GfK for BriteVision, other important metrics were determined, including that the coffee sleeve is in the hands of the consumer for an average of 52 minutes and seen by an average of six people. Cafés are looking at cup sleeves, not as a paper goods expense, but rather as a means of expanding their brand and in-store promotions. BriteVision helps in these efforts by providing free marketing consultation and creative support in designing the look of the cup sleeve. In addition we have taken “color” out of the cost equation. Customers can print sleeves with unlimited colors for the same price that other cup sleeve manufacturers charge for simple one or two color projects. Finally, to meet tight deadlines, BriteVision has shrunk its delivery time to under four weeks for fast in-store promotions.
This focus on marketing has opened the door for cafés to communicate with customers like never before. They can showcase their brand with eye-catching vibrancy. As their cup sleeve is being seen in offices, grocery stores, or anywhere their customer goes, it is introducing the brand to people who had never previously seen it. Sleeves can be used to promote not only coffee, but also food. Baked goods and lunch items may be showcased on sleeves inviting new product trial and up-sell. Promotional sleeves may be used to motivate customers to purchase new items on future visits. They can offer incentives for customers to visit during off peak hours. For example, “Come back in the afternoon and receive a free cookie with an iced coffee.” Sleeves can promote loyalty card programs or even be used as coupons for future purchases. Should a café want to promote different items or have multiple designs, sleeves may be mixed in their packaging. In each example, the coffee sleeve invites action and attention – working to build the café’s business. In summary, the research conclusively shows that sleeves provide substantial value and can be much more than just a paper goods expense. When done right, they are liked and remembered, and they have the potential to build brand awareness and sales. Today’s economy presents substantial challenges. Every expense has to work for the café, delivering more customers and generating more purchases. With ever increasing prices for paper goods, it’s nice to find a product that also drives sales and the bottom line! To learn more about how cup sleeves can help build your brand or be used in your 2014 marketing programs, please contact Don Scherer, Vice President of custom Sales at don@britevision.com
42 December 2013
The Hottest Thing In Coffee Right Now Is Tea by Stefanie Makagon TEAJA Office
T
ea is the second-most consumed beverage worldwide, after water. But, in this coffee-crazed nation, tea has always MBHHFE CFIJOE PUIFS CFWFSBHFTy Until now.
Tea could rocket past coffee sales by 2017, according to coffee and tea industry panelists at last year’s World Tea Expo in Las Vegas.
Tea is rapidly becoming the new coffee in the United States, and companies that move quickly to expand their product portfolios to accommodate this trend can capture market share during this period of massive growth.
On any given day, over one half of the American population drinks tea. The time of day, and the frequency at which tea can be enjoyed, plays into rising consumption rates.
You don’t need to read the dozens of data reports projecting the exponential growth of tea consumption to be a believer. Even the casual observer can note the growing availability of specialty teas and tea beverages being served in coffee shops and restaurants. As well as the increasing amount of space devoted to tea in the grocery store aisles.
Coffee drinking, to the American consumer, tends to be skewed toward the morning, whereas tea is more likely to be enjoyed at any time during the day. While drinking coffee in the morning may give you a jolt of caffeine, drinking tea at the office can improve mood and performance while reducing stress.
It can’t be denied that the most powerful indicator of the growth of tea in the market is the ever increasing number of specialty tea rooms and retail shops popping up in big cities and small towns across the United States.
Studies have shown that the L-theanine amino acid found in tea affects the central nervous system, causing a sense of euphoria, optimism, and serenity. At the same time, the low-levels of caffeine work to increase mental focus and alertness, while the EGCG antioxidants have a calming effect.
We’re not just talking about mom-and-pop shops either. Big business is most certainly betting on tea. Last year, Starbucks expanded its one billion dollar Tazo Tea business by opening its first Tazo tea shop. The Company also spent more than $600 million dollars to acquire 300 of the Teavana chain stores. Starbucks recently opened the doors to its first two Teavana tea bars in New York City and Seattle, with hopes to open 1,000 more locations in North America over the next ten years.
While more and more Americans are citing concerns about over-caffeinating, experts say that tea increases hydration. Its relatively low caffeine levels make it possible to drink large amounts without the jitters, fast heartbeat, and stomach upset that the same amount of coffee would probably induce. For those who want a caffeine free option, herbal and rooibos teas are naturally un-caffeinated.
“We could do for tea what we’ve done for coffee,” Howard Schultz told investors. “This is a big, big opportunity.” Tea drinking is growing in the U.S. at a faster rate than coffee, according to IBISWorld. In the last decade, the amount of tea consumed by the average American grew 22.5 percent, and it will continue to rise over the next five years. Coffee slumped 1.9 percent between 2003 and 2013, and will grow less than one percent through 2018.
44
consumption has grown by at least ten percent a year over the past decade.
According to the Tea Association of the USA, a New York-based industry group, consumer tea purchases have increased for 20 consecutive years; retail supermarket sales have surpassed $2.2 billion; and away-from-home tea
With consumer awareness of tea skyrocketing, the tea drinking demographic is widening. Increasing tea consumption by the two largest demographic groups, Baby Boomers and Millennials, is contributing to the surge and is predominantly being driven by healthier lifestyle choices. Baby boomers are making choices driven by preserving their youth and wanting to take better care of themselves. Millennials have similar motivations. However, as with wine, this generation is engaged by the complexities and the intricacies of tea. Their consumption is driven by health reasons, but also by the discovery of specialty and premium tea. Millennials thrive on being socially connected and sharing new discoveries
December 2013
with their peers, therefor, strengthening and accelerating the growth of the tea culture. Even younger generations are adopting a tea drinking culture right from a young age. Across the board, the increasing health consciousness of American consumers is an important factor contributing to the popularity of tea. Tea is classified into five types: black, white, green, oolong, and Pu’erh. All are created from leaves of the same warm-weather evergreen, and all contain polyphenol antioxidants, which work to neutralize damaging free radicals. A growing body of research suggests that teas are anti-inflammatory in nature and help prevent cardiovascular disease, burn calories, and ward off some types of cancer. There is also some evidence that tea promotes digestive health, boosts immune system, and has anti-bacterial properties. Drinking tea also helps soothe stress, while maintaining alertness. Regular tea drinkers have been shown to lower levels of a stress hormone, cortisol. Evidence of tea’s many contributions to health can be found everywhere and even through endorsements from TV personalities such as Oprah and Dr. Oz, and is published medical journals boosting awareness of tea’s wellness properties. As tea drinkers become more sophisticated, they are seeking out higher quality loose-leaf and organic teas, which have superior aroma, taste, and greater health benefits, free from chemical fertilizers, herbicides and pesticides. Trends are pointing towards loose-leaf and Organic teas and being a significant contributor to growth in the industry. The tea industry anticipates strong, continuous growth over the next five years. This growth will be driven by an interest in the healthy properties of tea, and through the continued discovery and appreciation of unique, flavorful, high end, loose-leaf, and Organic teas. In a world ruled by lattes, espressos, and drip, the trends and research are pointing to tea as the new coffee. For those in the beverage industry looking to grow their business and increase revenue, a move towards tea could prove to be a lucrative shift.
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Profit Building Merchandise Strategies For Coffee Houses by Erez Toker Vessel Drinkware y team works closely with owners
M
to develop a targeted yearlong plan with an hour
always use apparel as an example because people
of independent coffee houses across
or two of solid planning if they know where to
can easily relate to the following examples:
the country, helping determine
start.
develop programs geared towards meeting
There is two basic elements to any retail
recognized, the parallels between people’s
those goals. More often than not, we find
merchandise program: products and the
patterns in buying products and apparel are
retailers struggling with their retail merchandise
programs designed to promote the sales of
quite similar. Many customers fall into the trap
programs, and that’s where we really like to
those products. When custom tailoring your
of year after year re-ordering exactly what they
draw from our experience in working with a
own program, it’s always a good idea to include
ordered in the past for whatever reason. Keep in
broad base of retailers to help them advance
at least one or two items that can be used
mind that customers desire variety. They may
in this area. Especially when considering the
as promotional tools to help drive the sales
buy multiples of shirts, coffee cups, and travel
independent owner, there is a common thread
of the entire collection. The further out in
mugs, but at the end of the day, rarely do you
that bonds these retailers. With all of the various
advance a program can be developed, the more
find exact duplication in their closet or cabinet.
concerns vying for their attention, typically there
opportunity a retailer has to successfully execute
is little time left to consider what is required
that program. As you explore the marketplace,
Now that the New Year is upon us, it’s a great
to develop a successful retail merchandise
you will see that very few merchandise programs
time to do an assessment of your own program.
program.
have a deliberate and directed plan. Most often
goals for their merchandise programs, and to
At a glance it may seem silly, but once
you will find a collection of product to choose
Have you bought in to the fallacy that
The fact is, great coffee service requires great
from, but there are rarely ever incentives in
merchandise only sells in fourth quarter? Have
care and is very labor intensive, there is rarely
place to encourage customers to acquire those
you fallen into the trap of ordering product for
much time left to ponder the development of
products.
4th quarter and spending the rest of the year just
a successful merchandise program. The result
passively “selling through” the residual product
is that most retailers end up with merchandise
So, what types of promotions work? How
for the next nine months? Or, have you resigned
on the shelf, but there is no real direction, no
would someone go about building a deliberate
yourself to the thought that “retail merchandise
goal, and no rhyme or reason built-in to help
program for their store? Surprisingly, a great
doesn’t sell”? Consider implementing a more
drive sales. However, it is possible for a retailer
place to study a variety of promotions that work
active approach to help drive sales. The tools
is to study large retailers who have invested
are readily available for you to have successful
unfathomable amounts of money to determine
year-round programs. It just takes a little bit of
a collection of different programs that resonate
planning, some discipline, good messaging, and
with the buying public.
good execution. All retailers have the ability to create great program
The first thing that I would like to point out is that no single program works for everyone. Then, I like for clients to consider the types of programs to which you and your family prefer. Some of the various promotions you’ll see being utilized include the everyday low price, couponing, discounts, purchase-with-purchase programs, Buy X Get Y, graduated discounts, and bundling. Any of these could work in your own store, too. The product selected should always be determined by the goal of the promotion. I
46
REUSABLE DRINKWARE
Erez Toker, President of Vessel Drinkware
December 2013
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Single Cup Solution, What Are You Waiting For In 2014? by Thomas G. Martin Pod Pack International, Ltd
S
ingle cup brewing is exploding in the US, it is not just happening in the Northeast anymore. It is growing briskly in every metropolitan area in the US, and even starting to pop up in many of the more rural areas of the country as well. Even though single cup already seems big in the US, which has surpassed $2 billion, it hasn’t penetrated the total market as well as it has in parts of Western Europe, where the single cup brewing market (estimated at over $5 billion) is almost twice as large as in the US, according to Rabobank. As further confirmation of the growth, the NCA National Coffee Drinking Trends survey in January 2013 showed that 19 percent of Americans who drank coffee yesterday drank coffee prepared in a single-cup brewer. Past-day consumption of coffee made in drip coffee makers fell to 37 percent from 43 percent last year, and awareness of single-cup brewers reached 82 percent. The NCA report also stated that younger consumers are more inclined to use a single cup brewer. As a result of these age skews, the drip brewer will probably continue to decline and single cup will probably continue to grow. Consumers have determined more and more, that the convenience and having choices outweighs the incremental cost. For example, Peet’s and Starbucks are successfully selling K-Cups in the range of $.80 - $.85 each. That’s around $35 per pound! On the other hand, the soft pods sell for around $.50 - $.55 with most of the same convenience and choices, but that is still over $20 per pound.
Variety and choices are the second attraction. There are over 200 varieties of coffees, teas, cocoas, ciders, hot chocolates, and other items that come in different forms of capsules and pods. Coming soon will be soups that can be made in single cup brewing systems. It can be almost overwhelming!
Consumers might even sacrifice quality for convenience and choices. Views on the quality resulting from single cup brewing systems vary, but mostly everyone agrees that is has improved over time. The NCA study showed that perceptions of the single-cup systems as “excellent� or “very good� improved between 2007 and 2011 and remain strong in 2012.
Single cup brewing has become a way of life for many coffee and tea drinkers. It was first established in the offices and hotel rooms. In fact, OCS operators found that selling was easy once office workers became comfortable with single cup brewing systems and simply demanded them instead of other systems. There was no longer a reason to sell the new concept of single cup brewing anymore. In fact, some OCS operators found that they forgot how to sell new items.
Single cup coffee makers can brew good coffee, and in some cases the resulting cups of coffee can meet the Specialty Coffee Association of America’s Golden Cup Standard. The newer machines are getting better and better with preset brew times and more precise, higher water temperature to improve the extraction yields. The coffee and tea cartridges and pods are being made with more precision, since the manufacturers do a better job of controlling the coffee grind and the dose for betterbrewed cup consistency. Finally, overall quality is better for the mere fact that a single cup system brews a cup of coffee fresh and eliminates the burnt or stale coffee that has been sitting around in a carafe from a “brew by the pot� system.
48
So, convenience appears to be the main attraction. Single cup brewers are very easy to use. Simply select what you want to drink, place a cup under the dispensing unit, and press a button. Usually within less than a minute the brewed cup is ready. With single-cup coffee and tea systems, there’s no grinding, no pots and brew baskets to clean-up, or the chance to spread coffee grinds around the kitchen. Once brewing is complete, drop the used pod in a recycling bin (if compostable or biodegradable) or drop the capsule in the trash can.
Although, consumers continue to fall in love with their single cup brewing systems, they have some objections which should be addressed as we go forward. Daymon Worldwide has identified five consumer objections to the current generation of systems; the biggest one identified being “taste� among 35 percent of respondents. Other items identified included 28 percent of the respondents say capsules are “too expensive,� 17 percent call them “wasteful,� 15 percent call the capsules “harmful to the environment,� and five percent report “defective cups.�
that is concerned about delivering fresh coffee to your customers, you probably are incurring more waste than you would prefer, because you are pouring out partial pots of coffee. Single cup brewing could become a better solution to reduce waste and improve quality for these establishments. So, which coffee outlet, segment, or establishment do you sell to? Are you noticing a reduction in sales because you don’t have a single cup solution? In nearly every segment I have identified there is a major shift going on from “brew by the pot� to single cup brewing. We all like doing the things that we are comfortable doing, but it may be time to step out of our comfort zone and not let our competitors beat us to the punch. At the very least commit to looking at a single cup brewing system for one of your key business segments in 2014. * BN QVUUJOH NZ NPOFZ XIFSF NZ NPVUI JTy * am heading to Europe to buy some more single cup packaging equipment, just as I am writing this article.
Having the single cup brewing systems available in offices and hotel rooms definitely created trial with the consumers that frequent these places. After nearly a decade, there was a desire to have the same convenience and choices at home, and thus, an explosion in demand occurred at the retail level. In retail sales, K-Cups share has grown from 6 percent in 2011 to 26 percent in 2013. Every other coffee category has lost share, especially Roasted & Ground, which went from 47 percent to 36 percent during the same period. Private Label K-Cups have grown from a 6.6 percent share in December 2012 to an 11.6 percent share in September 2013, according to Rabobank. Furthermore, it appears that there has been a recent shift to more consumption at home and away cafes, restaurants, C-stores, etc. But, what about single cup brewing systems for other establishments, such as the restaurants and convenience stores where the coffee isn’t always as freshly brewed as it could be and the quality disappoints the guests? But, if you are an operator of a C-Store or restaurant
December 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).
Changing Our Industry One Caring Soul At A Time by Karen Cebreros Coffee Cares
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s a green coffee trader and organic coffee pioneer, I’ve seen too much poverty in the coffee sector. I’ve found a way to help erase it. I’ve started working with Profits For Purpose to promote a cloud based CSR called Coffee Cares. Industry professionals and communities use it to track the real dollar impact of their philanthropy throughout the supply chain. I’m an ambitious woman-in-coffee. I’ve seen micro-credit unions transform women’s lives throughout the developing world, and I want to create transformative micro-loans that will reach women at origin and help them bring their organic coffee to market. They need solar ovens, sustainable irrigation, and access to market information, among other necessities. I want to provide sustainable technology to co-ops and measure and report its effectiveness. My goal is to raise ten million dollars over the next three years to make Coffee Cares a powerful tool to generate wealth in a sector of our industry that has been passed over for too long. Willem Boot is an early adopter of Coffee Cares. Boot is perplexed by the rampant poverty he observes in origin countries, especially in countries like Ethiopia and El Salvador. Upon learning about the concept, he was immediately convinced of the massive potential of the system to reach and serve distressed coffee growers. Willem Boot cannot stay still. Coffee moves him. Boot is a teacher, a diplomat, a researcher, and a philanthropist. He has established numerous programs in origin countries that empower farmers and other professionals whose lives depend on coffee. He firmly believes that balance must be found within this industry to provide a sustainable livelihood to all of the people working in it, from farmers to baristas. He consistently advances equality and quality in specialty coffee and he doesn’t shy away to get his own hands dirty. The first time Boot experienced the Geisha varietal, it was love at first sip. This coffee got him thrilled to plant these awe-inspiring coffee trees in Panama, on his own Finca La Mula as
well as Finca Sophia, which he co-owns with Brooke McDonnell and Helen Russell of Equator Coffee. Boot’s efforts toward the preservation and cultivation of specialty coffee extend to the birthplace of Arabica, Ethiopia. Boot has passionately supported the efforts of Common River, a US-based non-profit, to establish a school for orphaned children and for young women in the town of Aleta Wondo, in the heart of the Sidama coffee region. With the help of USAID, Boot has built four coffee laboratories in the remote highlands of Ethiopia, to ensure quality at origin. He has also organized cupping caravans, involving mobile coffee laboratories which travel to the producer’s communities, so the buyers can cup the available coffee lots with the producers on their own turf. By introducing hundreds of coffee professionals to specialty coffee producers, via “roaster-meetfarmer” trips in El Salvador, Panama, Ethiopia, Colombia, and Honduras, he has generated numerous direct lines of communication and trade. Just recently, Boot launched a groundbreaking Internet based learning platform for the coffee industry through the website bootcampcoffee. com. The plans for 2014 include the launch of eLearning courses for the global population of coffee producers in Latin America and beyond. The program will focus on teaching the best farming and processing practices, and to strengthen the quality infrastructure of coffee farming communities. Boot comments, “Coffee farmers in Latin America are facing unparalleled challenges with the devastating effects of coffee rust. The online courses will help producers to implement farming techniques for the prevention of such catastrophic situations.” Lately, something has been on Willem’s mind. He has been wondering whether today’s ThirdWave roasters share the same compassion toward coffee farmers, that the founding fathers and mothers of specialty coffee did when they championed Fair Trade in the late ‘90s.
50 December 2013
“Does the new generation of coffee aficionados embrace Direct Trade because of its hip and fancy appeal, or do they sell direct relationships for the right reasons- to truly help farmers? If you pay $17 per 12 ounces of direct trade hipster coffee, should you be concerned about the financial gain for the farmer from such a pricey bag of beans?” Boot wants to know whether proponents of direct trade, especially those who use the trade practice as a marketing point, are really offering better prices to the farmers at origin. “New wave roasters seem to have turned away from Fair Trade; they question its ability to make a sustainable impact. Direct Trade retailers and marketers create the perception that their quality oriented purchasing practices directly benefit the farmers. How real or how fake is this image? That’s the key-question.” But, Boot says, lacking transparency, the customer never really knows how their money benefits the farmer when they purchase “Direct Trade” coffee. Willem Boot knows that transparency is the true key to equity in coffee prices at origin. He embraces Coffee Cares because it sheds light into another dimly lit corner of our industry, philanthropy. Everyone needs to know, in actual dollars, the benefits our philanthropy produces in origin countries, so we can more effectively meet needs that may otherwise be overlooked. Eliminating poverty in the coffee sector will not happen over night. With the support of those of us who have it easy, we can make life much better for those who do not.
Karen is the Co-Founder of IWCA and founder of Coffee Cares; she has been 23 years in coffee as founder and president of Elan Organic Coffee.
f o y r o t as Hope
Making a difference in the lives of women and their families in coffee communities around the world.
g r o . n a c e coffe
S OPEN ALWAY
See how we’re making a difference by visiting our web site at www.coffeecan.org. The Cafe Femenino Foundation is a registered 501(c)3 non-profit. Š Copyright 2013 Cafe Femenino Foundation, all rights reserved
The Fourth Wave Arrives In 2013: Collaboration To Fix A Broken Coffee Industry by David Griswold Sustainable Harvest Specialty Coffee
I
have this growing concern the specialty
includes increased susceptibility to a host of
serve as the foundation of our industry will
coffee industry is broken. It’s a viewpoint
powerful diseases and resulting taste defects
decline.
that I shared at Sustainable Harvest’s recent
that farmers, roasters, and consumers are not
supply chain meeting, Let’s Talk Coffee, held last
accustomed to dealing with.
October in El Salvador. The big issues we face,
Let’s Talk Coffee 2013 illuminated the serious challenges we collectively face, but it was a
including climate change, a volatile C market,
While in El Salvador, I spoke to Carlos Batres,
forum for discussing the exciting opportunities
and the resulting inability to cover farmers’ costs
owner of Montecarlos Estate, and Price Peterson,
for collaborative solutions. Overwhelmingly, the
of production, threatens the industry’s ability
of Hacienda Esmeralda in Panama, and they told
consensus was that collective action is essential
to grow long-term. When I asked top industry
me the long-term affects of Roya and climate
to our shared future. As actors in the market we
leaders at the event to share their thoughts on
change were not the only concerns. The biggest
have to work together to sufficiently transform
these issues, unfortunately they echoed my
issue is the world coffee commodity price, which
the current status quo. At Let’s Talk Roya, a
perspective. They spoke to the fact that, generally
is far below cost of specialty coffee production.
climate change focused event that followed
speaking, we all recognize the problems, but
Let’s Talk Coffee, participants learned not only
their individual and collective complexity is too
As everyone in the coffee chain realizes, the C
about Roya mitigation techniques, but also
great for any one person or company.
Market price is dictated not only by fluctuations
about innovative financial solutions such as
in the global supply and demand of coffee, but
the partnership between Root Capital, Green
The catastrophic outbreak of Coffee Leaf Rust
also by investment speculation by large financial
Mountain Coffee Roasters, the Multilateral
in 2013 exposed our collective vulnerability.
institutions in the coffee futures market to
Investment Fund of the Inter-American
Visiting coffee farms highlighted how quickly
achieve greater profits. The true price of specialty
Development Bank, the Skoll Foundation, and
things can change for farmers. Within a matter
coffee bears little resemblance to the price
Sustainable Harvest, a seven million dollar
of weeks, leafless coffee branches were a
offered by commodity markets. For example, the
initiative to help farmers recover from the effects
common sight, even among farmers who had
C-market says there is a surplus of ten million
of Roya and bolster socio-economic resiliency.
used chemical sprays to protect their farms. It
bags in the market. And yet, as a result of Roya,
was even worse for organic coffee producers
there will be a significant shortage of coffee in
We’re embarking on a new era of specialty
who struggled to find non-chemical tools to
the region that represents nearly 75 percent of
coffee, referred to as the “Fourth Wave.” This
fight the disease. And for roasters counting on
the coffee consumed in North America and
Fourth Wave, according to Miles Small, of the
the high quality Central American coffees from
Europe. This disconnect directly undermines
CoffeeTalk Foundation, is a movement where
typically reliable and healthy farms, expectations
economic opportunity for farmers, and therefore
coffee chain actors focus on collaboration,
regarding volume and taste profiles have had to
the longevity of the entire supply chain.
transparency, and mutual benefit so we can
be quickly adjusted. It may be as long as three years before the supply chain fully recovers.
sustainably preserve the specialty coffee industry. Case in point: The average age of coffee farmers in Latin America is 50+ years, and younger
In 2014, we will continue to face problems of
Arguably, La Roya is the tip of the iceberg. In
generations of coffee growers do not see coffee
price, climate change, and an aging generation
2014, I expect we will see how irregular weather
farming as a profitable or sustainable business
of coffee farmers. But we must we must work
patterns are likely to permanently alter the
endeavor. Without the next generation carrying
collaboratively in the years ahead to ensure
climates of many coffee-producing regions
on their parents’ dedication to quality coffee
farmers see coffee as a viable economic
throughout the world. Long-term impact
production, the supply of the fine coffees that
opportunity. It is critical to our collective future.
52 December 2013
Mobile Usage Is Exploding. Is Your Coffee Business Ready? by Rob Bethge Perka, Inc
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our future success depends on mobile marketing. Here’s how (and why) to go mobile, now.
Everyone knows mobile usage is rising, yet when you examine the stats, surprises prosper, including the coffee industry’s vanguard role in this revolution. For instance, did you realize Starbucks generates over 90 percent of all mobile transactions, more than PayPal, Google Wallet, and other players combined? From outmoded perceptions of the “mobile consumer,” to evolving customer habits, there’s much to learn about mobile, and the many ways you can profit from that knowledge. As the leading solution for independent coffee businesses, we know first-hand how mobile loyalty can galvanize coffee sales. Below are four surprising mobile trends you should harness for your coffee business. 1. Who’s “Going Mobile” Now? Consumers Over 45. Many of us cling to an outdated image of the “mobile consumer.” We equate “mobile” with “kids,” but in fact, consumers over 45 are the fastest-growing group of mobile users today. With 10,000 participating Starbucks locations, half of their global total, mobile now accounts for ten percent of all in-store transactions. In North America, Starbucks loyalty cards booked 30 percent year-over-year growth in dollars loaded, according to their 3Q13 earnings results. CEO, Howard Schultz, has repeatedly described the company’s “core customer” as an average of 42 years old, educated, and earning $90,000 on average. When you picture the “mobile consumer” leading the blockbuster growth Starbucks is experiencing, add a few gray hairs. This consumer segment is at the peak of their earnings potential, busy enough to value convenience, yet young enough to incorporate new technologies easily into their routines. Arguably the most valuable consumer category is only now joining the mobile revolution. 2. Mobile is Killing the Laptop Star. Pew Internet’s mobile research reveals that 63 percent of US adults use their phones to go online, but 34 percent of that group go online mostly using their phones, versus other devices.
As mobile speeds increase, this trend will only accelerate. Internet access that resides, literally, in your customer’s pocket is the ultimate convenience, one that more and more consumers will rely upon. 3. Mobile Drives Consumer Shopping Decisions. 85 percent of digital shoppers will make a purchase via mobile by 2016, according to Association of National Advertisers and MediaVest. Today, these shoppers spend ten percent of their media-time on mobile and only seven percent on print media. Yet marketing spending is exactly opposite: only one percent of marketing budgets are spent on mobile campaigns, and is spent 25 percent on print. Consumer eyeballs are migrating fast to mobile, but marketers haven’t caught up. Increasingly, mobile devices play a decisive role in spur-of-the-moment purchases. In an April 2012 survey, Pew Internet found 30 percent of respondents used their mobile devices in the past 30 days to decide whether to visit a business, particularly QSRs, eateries, and coffee shops. 62 percent of all U.S. adults use their mobile phones for “just-in-time” decisions like these. 4. Mobile devices play an intimate role in our lives. Mobile devices are our constant sidekick and go-to resource. Pew Internet found 67 percent of cell phone owners check their phone for incoming activity, even when it’s not ringing or vibrating. 44 percent of respondents sleep with their phones next to their beds, and 29 percent describe their phones as “something they can’t imagine living without.” Now that’s intimacy. Going Mobile: Strategies for Coffee Businesses What do these stats mean to coffee businesses? Simple: go mobile now. Consumers’ eyeballs are migrating to mobile, fast. They’re spending more and more time on the tiny screen. Shopping decisions hinge on what a mobile search tells them. Critically, as marketing dollars shift to mobile from traditional media, your competitors, even mom-and-pop shops, will get savvier about mobile. Join the mobile revolution, in short, or you’ll be left in the dust. An easy, effective way for coffee shops to dive into this new space is mobile loyalty. Mobile loyalty is proven to grow coffee sales and engage customers today, while building profitable relationships for the future. Consider the evidence: t QFSDFOU PG DVTUPNFST XPVME SFDPNNFOE B business for their rewards program, according to a 2013 Loyalogy study. t QFSDFOU PG MPZBMUZ QSPHSBN NFNCFST SFGFSSFE BU least one person; 42 percent referred four or more, according to a Granbury Restaurants study. t "DDPSEJOH UP B 6OJWFSTJUZ PG $IJDBHP TUVEZ customers buy 20 percent more product and accelerate purchase frequency by 20 percent, when motivated by a reward.
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Among 250+ coffee shops and 30,000+ participating customers, we find up to 300 percent increases in customer engagement as customers participate more actively in a Perka mobile loyalty program.
At Perka we’ve seen proof of these trends up close.
December 2013
Mobile loyalty lets coffee merchants go way beyond old-fashioned punchcards. Take Jonny’s Java Coffee in Winkler, Manitoba, Canada. They rolled out a loyalty program in April 2013 with several goals in mind. They wanted to increase purchase frequency for occasional coffee-buyers, plus lure morning-coffee customers back for lunch, snacks, and desserts. Jonny’s experimented with mobile specials sent directly to customer phones and social media and discovered two hits: a ten percent off deal on Oreo Frappes and “20 percent off edibles.” Now with 400 participating customers, 9,000 punches awarded, and 6,000 visits, Jonny’s can quantify their value as a local fixture, while demonstrably increasing purchase amounts and frequency. I’Mpressed Coffee in Vincennes, Indiana, represents another mobile loyalty success story. In the first year of their program, I’Mpressed signed up 800 customers and awarded 28,000 punches, and 20,000 visits. With a daily run rate of 75 punches, their participation rates compete with stores in major cities. Customer tiering is also a bang-up success. I’MPressed’s #1 customer has visited the café 800 times since the program began, that’s twice daily! Mobile loyalty offers tangible benefits at the wholesale level, too. Roasters are increasingly offering mobile loyalty as part of their comprehensive services to cafes. Roasters can extend a discount to their best cafes, solidifying those relationships, while multiplying the loyalty effect down the line. Roasters who sell beans direct-to-consumer report that enlisting retailers helps them both boost bean sales. A roaster, with 50 café accounts, can use their mobile loyalty dashboard to reveal larger buying patterns of their customers’ customers. In this two-tier model, roasters can pinpoint which end-customers love their blend and send them an offer directly. As consumers mull where to shop and play, they’ll be consulting their mobile devices for guidance. Businesses that “get” customer predilections, which foster true relationships, and that inject consumers’ days with fun will ultimately win over businesses that don’t. Mobile loyalty programs can make that critical difference.
Subsidy Programs: A Glimmer Of Hope For Struggling Coffee Farmers by Alexis Rubinstein FCStone, LLC
C
offee is cyclical. Not just in its production patterns, but in its valuation as well. With Brazil being the world leader in Arabica production, prices on the InterContinental Exchange have been greatly impacted by the country’s biennial crop cycle. In recent years however, the changes have been narrowing, with off-cycle yields steadily increasing. For the 2013-2014 coffee year, Brazil is expected to 53.7 million bags, according to CoffeeNetwork forecasts, indicating record off-cycle figures. In Colombia, a rejuvenation program has proven successful, with expectations for the 2013-2014 crop to reach 11 million bags. Even with significant losses caused by the coffee leaf rust outbreak in Central America and Mexico, supplies are still expected to exceed demand, keeping the market under pressure in recent months. In the beginning of November, Arabica prices fell to the lowest levels in seven years, hovering right above one dollar per pound, a level not broken since September 2006. As a result of declining prices, the financial situation at origin has become dire, with producers seeking financial assistance from their local governments. Colombia Coffee Crisis: In February 2013, Colombian coffee producers took to the streets to engage in a national strike, which shut down production and transportation for the sector in hopes of persuading the government to provide additional support to the sector. Struggling farmers were faced with rising production costs and declining global coffee prices. As a result of the protests, the government reacted with a subsidy agreement, entitled Protection for the Income of Farmers (PIC), which took effect on March 18, 2013. It ensured growers a minimum internal floor price of CP$480,000 (US$270) per bag and an additional CP$145,000 (US$80) per bag in the form of a direct payment. The government also raised the subsidy for small farmers with less than 20 hectares, from $33 to $63 per bag. Additionally, if the international coffee price falls below CP$480,000 the total amount of GOC financial assistance will increase through 2013. Conversely, the GOC will reduce the amount of subsidies if the price rises above CP$700,000 (US$395). With total financial support of CP$625,000 (US$353), the subsidy may fall short, ensuring that growers will earn a profit or even break even, since many producers claim a production cost of CP$750,000 (US$425) per bag. According to a press release from the Colombian Coffee Federation, coffee growers have received $975.386 million pesos from the subsidy programs of the Colombian Federation of Coffee Growers. A total of 97 percent of the processed invoices are approved for payment.
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In conflicting reports, in August 2013, producers were claiming they were not able to access the subsidies
being provided to them, and they called for another strike on August 19th. The strike was met with military intervention and reports stated that “everything was under control” from President Santos. On August 30th, the central bank held its key rate at 3.25 percent for the fifth straight month, as the President’s approval ratings fell in the election year.
will meet the need of the market to have a very clear vision about future flows of production. The ICO equally encourages other producing countries to take measures in order to regulate their supply flow, and is confident this will contribute to a clearer vision for the market of the current balance in terms of production and consumption.”
While coffee producers returned to the fields, talks continued over the next few months, and most recently, the finance minister presented a plan for the 2014 subsidy to support the coffee sector. The proposal included changes, such as funds being allocated to producers by areas planted instead of per bag.
The Central Bank of Brazil hosted four auctions in September selling all three million contracts at R$343/bag.
Big Business in Brazil: In April 2013, the Governor of Minas Gerais, Antonio Anastasia, sent President Dilma Rousseff a letter requesting actions required by the Ministério da Agricultura, Pecuária e Abastecimento, to raise the minimum price of coffee “to a level of not less than $350 per sack of 60 pounds, so that the coffee grower can cover the cost of production, which today reaches this level in most regions.” The Governor claimed in the letter to the President that the price paid is currently around $300, which is well below the value of May 2011, when the price of the crop reached R$530. Later that same month, the National Monetary Council met to discuss the matters and approved an extension of 12 months for any coffee sector related debt. In May, a Monetary Council Meeting resulted in the government’s decision to increase the minimum coffee price by 17 percent. Prior to this official announcement, the minimum price for Arabica was lifted to R$307 per bag and Robusta to R$180 per bag. In the new program, the government will offer to buy coffee for roughly $343 per bag. On August 7th, after continued turmoil, the Brazilian government announced a new subsidy/options program. The program was deemed “two-pronged,” addressing both subsidies and funding concerns for inventories and production costs. The first part of the program saw the government offering options contracts for three million bags at R$343 per bag with a delivery date of March 2014. Additionally, the government will buy coffee at the current minimum price of R$307 per bag. The second “prong” outlined that the state-controlled bank Banco do Brasil will receive 1 billion Real ($434.6 million) to finance coffee growers’ inventories and costs to assist farmers as global prices continue to fall. The ICO has supported the Brazilian government with a note on its website saying, “The ICO acknowledges the actions taken by the Government of Brazil to regulate the flow of the 2013/2014 Brazilian coffee crop, and is certain these actions
December 2013
The Minister of Agriculture, Livestock, and Food Supply, Antonio Andrade, announced that coffee producers may renegotiate past due and current debts as the result of the proposal submitted on Friday, November 22. The farmer will have until January 15, 2014 to opt for renegotiations. For some loans, including marketing and farm operations, the farmer will have until 2015 to repay 20 percent of the total debt. The remaining 80 percent can be paid in four annual installments. Payments for investments can also be delayed for one year. However, these measures were considered merely a start, as coffee producers in Brazil continued to plea for additional measures. Currently, a coffee policy panel, which includes Agriculture Ministry officials and industry leaders, has submitted a new proposal. Under the new program, as much as $430 million would be distributed to coffee producers to help them diversify their crops, and the amount of coffee the government will offer to buy through options contracts may increase to five million bags. Fruitful or Failure? The efficiency of these subsidy programs has yet to be seen and opinions vary depending on who is giving them. The programs are new and certainly have their challenges, mainly dispersing updated information to producers in rural areas and finding the funds that will help the governments provide additional assistance. One thing is certain, however, it is a step in the right direction. The sustainability of coffee lies in the hands of its farmers.
Alexis Rubinstein, Senior Editor INTL FCStone/ CoffeeNetwork
The Fourth Wave And Functional Sustainability Models by Miles Small CoffeeTalk Foundation
T
he emergence of sustainability within the coffee value chain is starting to show examples of workable business models. Three are of particular interest and have captured my belief that we are on a clear path toward a new way of doing business in the coffee world. It is bold to declare that this is the Fourth Wave of coffee, but I believe that these sustainable models have key elements in common that mark the emergence of a new paradigm. These three models share these components: They Take Title and Responsibility for the Coffee at he Farm Gate. The traditional model takes title after the coffee has cleared customs and is tested to ensure consistency with the selling samples. This forces all of the financial risk unto the farmers and the cooperatives. By taking title and responsibility for the coffee at the farm gate, the risk shifts to the buyer. The farmers, who can least sustain the enormous risks currently in the system, instead are released from the transaction and their risk is removed. They Place Proprietary Cupping Labs in the Exporting Country. By having testing labs at the farm level, these companies can monitor the developing coffees, mitigate risk, and ensure, through testing and training, that the purchased coffee is to contracted expectations at the farm gate. They are Vertically Integrated. These companies control and manage all movement of the coffee, from the farm gate to their import warehouses in their home countries. They Strive for Full Transparency. Using sophisticated product coding and digital tracking, these companies are able to track lots, from the farm to the roaster. These systems allow them to not only monitor the movement of product, but to also ensure food safety guideline compliance and dramatically reduce reaction time if a problem develops in transit. They are DeďŹ nitely NOT Charities. These companies are all for-profit corporations, which have made their models work and are making money. In truth, I do not think it would be possible for a charity to develop these kinds of innovative solutions to this difficult problem.
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They Hold as a Core Value the Idea of the “B� Corporation. These companies recognize the need for these enhanced business elements as essential to ensuring a sustainable, profitable, and abiding supply chain. They mitigate much of these higher costs through efficiencies in the vertically integrated supply chain,
The “Wavesâ€? of coffee 1st Wave – The traditional commodity based commercial coffee culture 2nd Wave – The emergence of the CafĂŠ culture focusing on Specialty coffee and the by-the-cup consumer experience 3rd Wave – The shifting focus away from lifestyle CafĂŠ culture experiences toward the focus on excellence in preparation and careful eclectic roasting Fourth Wave – The emergence and understanding of “relationshipâ€? coffees and empathetic interaction across the whole supply chain, ensuring shared values from the farm to the cup and they accept unmitigated costs as essential expenses of continuing the business model. These companies, in no particular order of excellence, are all different aside from the key FMFNFOUT ćFZ BSFy Sustainable Investments – This company’s model is to identify an under producing farm that has good potential, then purchase the farm directly from the owner. The farm is then parceled into smallholdings and sold to sophisticated investors in consuming countries as real estate opportunities. The additional cash influx from this is used to reinvest and revitalize the farm and community, improve infrastructure, and typically hire the current farm manager and his staff at higher wages and benefits than previously paid. Additionally, an on-site cupping lab is established on the farm. Coffee produced on the improved farm moves up the supply chain through a vertically integrated channel to the owned importer in the United States that is responsible for selling the green coffee into the roaster market. The selling price of the product is mitigated by complete control of the coffee, from the seedlings to the flame, without any 3rd party participation and commissions. Profits from the sale of the coffee are then returned to the investors as their ROI. Brilliant really, a closed value chain that actually works and solves the problem of economic sustainability. Sustainable Harvest – This company, driven by David Griswold, former president of the SCAA and a very bright guy, is another company focused on sustainability. The company does not buy farms; instead it places employees at origin to engage in product discovery, cupping, and training to assist growers in delivering high quality product. When they are successful, Sustainable
December 2013
Harvest purchases and takes title to the coffee at the farm gate or cooperative, and then it controls the shipment of the product to the United States using their staff at origin, in cooperation with their staff in Portland, Oregon. As well as focusing on ensuring that farmers receive a fair price for their coffee, the company is also sensitive to needs in the communities they work in. Griswold is the champion of the idea of “relationship coffee� and building empathetic responses to the requirements of all participants in the value chain. The company has developed a number of innovative programs and digital environments to ensure the success of the sustainability mission. Doi Chaang Coffee – This company reversed the process. Founded by members of the hill tribes of Northern Thailand, they had a vision of what their home village might be like if it could recover from the devastation caused by the forced production of heroin. Coffee was the answer, and it came in the guise of a small man named Wicha. What the hill people needed was international support, and Wicha found this in a Canadian named John Darch. Together, they built a sustainable enterprise in the remote Golden Triangle of Thailand that has become a vibrant example of a community’s determination and the power of vertical integration. The people of the village of Doi Chang (yes it is spelled differently) are now owners of a multinational corporation that spans from a remote corner of Thailand to stores and shops across Canada. Is this the Fourth Wave? I believe it is. We have reached a moment in our industry when it has become clear that all our striving for excellence may be in vain, unless we ensure a sustainable supply chain. That goal can only be accomplished through complete transparency and full inclusion of all participants. The age of buyer control of the market is about over. We either welcome our partners at origin into the process, or we risk losing access to sufficient supplies of coffee for the future.
Miles Small, President, CoffeeTalk Foundation
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Think Global Time To Align by Marty Curtis Combustion Systems Sales Service, Inc
I
n recent years, the Speciality Coffee Association of America has done an outstanding job of building training classes, standards, and protocols, based on comprehensive scientific data and cuttingedge research. We’ve designed more objective specifications and increased transparency, but now we need to expand our scope and increasingly concentrate on thinking globally. As I travel across the world to collaborate with farmers, roasters, and leaders of the coffee industry, I consistently encounter demand for training and educational programs. I’ve also been working with several Ph.D. programs to determine whether the SCAA standards and protocols can be incorporated into their research and improved through further scientific analysis. The new courses offered by the SCAA have been gaining praise in the coffee world, but the classes are only offered in the United States. There is a clear opportunity at this time for the SCAA to expand its focus to form global alliances, and to help establish internationally accepted objective standards and guidelines. The newly SCAA-certified METAD/Kabu Coffee Quality Control Laboratory in Addis Ababa, Ethiopia is a prime example of how this global focus can translate into benefit for the industry as a whole. Among other services, the lab will provide training to many levels of the coffee industry in the region using SCAA standards, which will lead to better quality speciality coffee being exported to the global market. The certification of METAD laboratory follows on the heels of several newly certified, including Municipalidad Distrital de Villa Rica in Peru, and the Academia do Cafe in Brazil. These are steps in the right direction, and we should continue to strive for additional international partnerships. The SCAA has many roles to play in connecting all of the levels of industry with these newly created laboratories in order to maximize their utility at origin.
It is no secret that plummeting coffee prices are creating substantial pressure on many growers. The ICO Composite Price has fallen from $1.94/ lb. in November 2011 to $1.01/lb. in November of 2013. Although, this is still a marked departure from the $0.46/lb. average that we saw in 2001, the current prices are inherently unsustainable. Unless market conditions change, the struggles that farms are facing to remain profitable will have serious consequences on coffee quality. The issue of sustainability is further complicated by the effects of global warming, which are already having serious and potentially irreversible effects on farms in some parts of the world. The Roya disease has devastated crops in Central and South America, and many regions are seeing longer dry spells and erratic rainfall patterns. A 2012 study from the University of Western Ontario, suggests that up to 99.7 percent of wild Arabica may be destroyed by 2080, due to rising temperatures. There is no simple way to remedy this increasingly severe problem, but the SCAA has a pivotal role to play in collaborating with farmers, international organizations, and government at all levels, to optimize crop management practices. In order for the SCAA to expand its focus, it is essential that integrity and transparency continue to be key objectives. Over the last five years, the SCAA has made all standards and by-laws publicly available. This is a positive trend that needs to continue. Every voice should be heard, and every member should have an unequivocal opportunity to contribute to the organization.
also requires a properly functioning auditing system; so, all decisions are based on objective evaluations rather than assumptions. We need the farmers in the fields to be able to see how the barista is using their product. We need to connect farmers, exporters, importers, roasters, baristas, and consumers to achieve our goals. All players, at all levels, in the coffee chain are integral. We have to connect the dots and get feedback from the global community. There is tremendous opportunity for us to create substantial and lasting changes. The SCAA has momentum propelling the organization in the right direction, but we will require the input of all members, the new blood as well as the old, in order for the SCAA to become a global leader. Many of you may not know, that the SCAA has transformed from a West Coast organization to a national organization, through the implementation of regional training centers and through the use of certified labs. This alone provides more than 300 million people equal access to all of the programs, standards, and certifications that propel the SCAA to the forefront of the specialty coffee industry. Now it’s time to seek alignment in the specialty coffee industry. We will all need to be open to change, hard work, and obstacles along the way, but through this, we can achieve a more united industry with shared standards and protocols. There may be disagreements along the way, but we must agree to align to make this happen.
There will be a cost to taking deliberate and methodical steps toward spreading SCAA standards, and it will require some shifts in our thinking. Instructors, who are teaching core SCAA standards on behalf of SCAA and improving the industry for everyone, need to be appropriately compensated. The SCAA Marty Curtis
60 December 2013
Discussing Coffee Quality Assessment Strengthens The Industry by Shawn Steiman Daylight Mind Coffee Company n 2010, Ken Davids and I wrote
I
can’t handle the range of flavor profiles so easily
is likely to creep upwards. The more people
philosophically opposing articles about
accessible to coffee professionals today. For
who are assessing quality will lead to more
coffee quality assessment in another coffee
example, many argue that you can’t use a system
improvements in coffee quality.
publication. It was the first time I had seen
designed for a washed coffee to assess a natural
any discussion in the traditional media of how
or wet-hulled processed coffee. Assessment
Second, more and more companies are seeking
specialty coffee professionals assess quality.
systems are generally context-based and reliant
out and working with non-washed coffees.
Recently, some other discussions of assessment
upon some subjective measurement; thus, using
There is a quest for fun and unusual flavors.
have appeared in trade magazines. (While I
them out of context doesn’t work.
This means that consumers are keen to try new things and that specialty coffee is finding those
suspect various online forums have hosted such conversations, I think media that focuses on
Other frustrations stem from relying too much
consumers. The internal, academic discussions
reporting, not un-moderate conversation, tells
on the mathematics of score sheets; coffees aren’t
about our quantification of these coffees, while
us a deeper story.) This past year there were full
always best represented by numbers. Some users
fun, should play second fiddle to the reality
length articles about companies doing things a
recognize that the descriptors of a coffee can be
that the preferences of geeky, specialty coffee
little differently at the cupping table. It would
far more valuable than data on the characteristics
professionals are trickling down to consumers.
seem this is becoming a more important and
like acidity and body. Thus, assessing coffees
relevant topic.
should sometimes be more about why the coffee
Third, as an industry, we are opening up
tastes like something other than just coffee, not
our secrets and discussing them with our
just a summation of its parts.
competitors, potentially giving up a competitive
This growing conversation about assessing
edge. Essentially, we are experimenting with
quality isn’t about the cupping method and its protocols. Rather, it is about the information
All the coverage in the media is really just people
an open source platform for assessing quality.
assessors’ want and need to capture about
talking about what is lacking in the system
This too, will help raise the bar of quality. More
the coffee and the format of the scoring sheet
they were using and what they’ve developed
importantly, though, it will help us be better at
they use to record that information. In the
to address those flaws. Interestingly, many of
communicating with each other and consumers.
last decade, the specialty coffee standard for
the stories captured in the articles talk about
Recording quality data has one purpose: to
assessing quality has pretty much become the
improving their system, not fixing it entirely.
translate our immediate taste experiences
SCAA’s methodology and score sheet, although
Assessing coffee in an efficient, perfect manner,
to other people and our future selves. By
it isn’t universal. If most companies use the
whether using a single score sheet or multiple
discussing our assessment systems, manipulating
SCAA system (my hypothesis) which was
variations, seems to be a work in progress. There
them, tweaking them, and reinventing them, we
adopted fairly recently, why is there now public
is no ideal solution.
improve our ability to understand and talk about coffee quality.
discussion about the SCAA system and the alternatives that companies are developing?
62
These conversations are happening because the industry is growing and changing and they
It is a great thing that the industry is exploring
I do not believe the SCAA system is inherently
are a reflection of its current state. There are
assessment systems. Those companies that
flawed. I do believe it has a limited range of
three things these conversations say about the
are sharing their work and trusting it to others
utility because of its structure. Essentially, it is
industry. First, many people are assessing coffee
should be commended and lauded with praise.
not a system that adequately works with every
quality and they’re delving deep into the process-
In the coming year, I expect more conversations
coffee in every situation. Sometimes, when
deep enough to recognize their dissatisfaction
to take place and more people taking a critical
using it, it is hard not to feel like you’re pushing a
and deep enough to care about addressing it.
view of how we approach coffee quality. Our
round peg into a square hole.
With lots of people exploring coffee quality, the
industry should be having these conversations,
processes involved with that exploration are
not because we are necessarily doing things
This idea seems to be at the core of the
certain to be examined as well. This delving is
wrong but because we might be able to do things
conversation. The current scoring sheets and the
a sign of good things: when quality is the focus
better.
philosophies behind them are too limiting. They
of a conversation, the general level of quality
December 2013
Why Data Matters by Jason Richelson ShopKeep POS
H
ow do you optimize your floor plan? What products should you feature on the counter, and which are just wasting space? Which items should you lower prices on, and which should you increase? Does one store need a different inventory level from another? These are all critical questions that contribute to your bottom line, and increasingly, retailers are using data to help them make the right decision. Big box retailers have been collecting this type of data for years. By gathering and analyzing information related to sales, products, customers, profits, costs, staffing and more, they can identify trends and opportunities that help them run a more profitable business. Achieving these insights, however, has required the use of expensive data analysis and storage systems that have been priced beyond the reach of smaller stores. Until now. The Democratization of Data Cloud computing has made this type of information accessible to small stores. Storage is no longer an issue, you can collect and store as much data as you like in the cloud, and instead of hiring a team of analysts to go through it, you can use web-based tools to generate reports and easy-to-interpret dashboards. The world of data that once only existed to the Wal-Marts or Starbucks of this world now exists for anyone who wants it. Small stores and cafes can use data in exactly the same way to run a more efficient business, and in fact, it’s essential that they do. Competition in local retail has never been greater and will only increase as technology continues to accelerate the pace of change. Retailers are dealing with greater local competition, larger chains moving into the area and a proliferation of traditional and new marketing techniques. This environment makes it harder than ever to compete and differentiate, and store owners
need to be sure they are making the right decisions to survive and thrive. The use of data to understand the strengths and weaknesses in your business is an absolute must to cut inefficiencies and grow into more profitable areas. So Now You Have Access to This Data the Next Step is Knowing How to Use it Data will become an equalizer, as it becomes cheaper in the industry overall, but it’s the businesses that know how to use it well that will win. With that in mind, here are some simple ways you can start to gather data about your store and put it to good use. 1. Hourly Sales You probably have a hunch about when the store is most busy, but having concrete numbers at key intervals throughout the day can help you make consistently optimized decisions about things like opening hours and staffing levels. 2. Sales by Employee Understanding how your employees are performing will allow you to train or reward them as appropriate. A skilled, knowledgeable and confident sales person can make a big difference in selling more of your higher margin products. Identifying and rewarding this employee is a great opportunity to encourage that behavior and share ‘best practices’ with the rest of your team. Equally, if someone is consistently underperforming, you need the data behind you to have that tough conversation. 3. Best and Worst Selling Items Tracking best and worst selling items can help you manage your inventory as well as let you know which products you should be featuring prominently on the counter or in the window. When you drill down into your revenue it often becomes clear that a small number of products are contributing disproportionately to your overall sales. Equally, some products may be contributing so little they are not worth the space on the shelf.
very slim. That’s why it’s important to track your margins and ensure you are doing everything you can to increase sales of high-margin items. 5. Customers It is crucial to identify and reward the core group of repeat customers that are disproportionately contributing to your revenue. Equally, it’s important to reach out to and re-engage those customers who haven’t been back in a while. You can do this by collecting emails at the point of sale, and emailing regular offers or updates relevant to those customers. Look at which products your regular customers are buying or what a less frequent customer bought last. Understanding your customers will help you both streamline your product offering and plan your marketing. There are all kinds of different measurements you could add to this, but starting with these basic data sets will allow you to establish a baseline from which to start to measure and learn. Once you have the benchmark in place and can see the regular rhythm of your business, you can begin to introduce and test new initiatives. That’s when you’re using your data to become more efficient and grow. We call this approach ‘Lean Retailing’, because it uses data as a basis to implement and test new ideas without overinvesting. To find out more about this approach visit TheLeanRetailer.com. Leveling the Playing Field Cloud computing has leveled the playing the field between big box and small retailers, and now small businesses have the opportunity to take advantage. Small businesses are by their nature less complex and more nimble than their larger counterparts, allowing them to react faster to make the most of new trends. Small businesses in 2014 have the opportunity to leapfrog larger retailers in adoption of new technology and the intelligent use of data. The opportunity is there for the taking, make it your New Year’s resolution.
A good rule of thumb here is the 80/20 rule. Find the 20 percent of your products that are contributing 80 percent of your sales. These products are the core of your business and should feature heavily in your promotions. They can also reveal similar products that may be successful, or even opportunities to diversify. 4. Tracking Your Margins From behind the counter it’s easy to mistake a busy day for a great business day, but just because something is selling like hotcakes doesn’t mean that it is really growing your bottom line.
64
In reality, most storeowners have a product line where the margins range from the reasonable to the
December 2013
Jason Richelson, Founder and CEO, ShopKeep POS
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2
013 has been an incredible year for our industry. Prices for green coffee have returned to their lowest levels in three years, coffee consumption continues to expand into new markets like India and Nepal, and roasters are seeing advances in science and technology that are opening up new possibilities within our craft. Our industry continues to provide a means of expression, hope, and income for a multitude of people around the world. Our hard work and success does not come without struggle, and many challenges await us as 2014 quickly approaches. What pressing issues should we address and dedicate as resolutions to fulfill for the New Year? In my opinion, two issues continue to be at the forefront of discussions among roasters, and both issues should find themselves at the top of our agendas. The first issue is the challenge of sustainability. We all want to roast and serve the same great coffees for years to come. This issue should not be left to the next generation of roasters. It must be addressed. The second issue is the struggle for our businesses to become and remain fiscally viable. We often put a great deal of passion into our business. However, we must learn to put business into our passion if we are to succeed. Whether a new startup company, installing their first roaster, or an already established entity desiring to see black for the first time, it is in all of our best interests to see you succeed. There are numerous resources available to us, for free, through education programs provided by a wide variety of government agencies and NGOs.
In the United States, for example, is the Small Business Administration, which offers small business training, loans, and advice to companies and individuals willing to seek it. Many local universities and business schools offer programs to businesses in the area, often at little to no cost. They can sometimes also provide financial assessments and monitors to aid you in the process. It is wrong to think that there is nothing left to learn. Training and education is an often overlooked portion of many roasting facilities. They are too often seen as an expense rather than an investment. However, it is through education in both the art of business and our trade that our products will continue to please old customers and find new ones. As both mature and immature markets see new shops opening their doors, familiar territory is becoming anything but that. Though there is certainly room for new faces, to remain operating a roaster/retailer business, one must run an efficient business. In an industry that is growing and experimenting as rapidly as ours is, there is more opportunities than ever for us as roasters, to not only improve our business acumen, but to advance our knowledge of our chosen trade. This year the SCAA has implemented changes to its educating and training standards, releasing a fluid certification process that aims to achieve accreditation. As an added benefit, these courses are now available in local SCAA certified labs, which make training and education accessible to hundreds of coffee professionals. 2014 is the year to learn new techniques and get a certification that is not only a marketable item for yourself, but also for your business.
For your passion to continue not only do we need to survive in this industry, but our product needs to thrive in this industry. Sustainability has been the subject of much discussion as consumers develop new demands, and reports surface on the dire consequences of inaction both at origin and in consuming nations. Arabica may cease to exist in my lifetime. As shocking or extreme as that report may be, the consequences of dwindling supply will prove detrimental, not only to my daily ritual, but it will also most certainly destroy the prospects of producers and the economies of coffee producing nations if not addressed. Sustainable coffees are no longer a niche product or a product that we can afford to ignore. Sustainable coffees are most appealing to consumers between the ages of 18 and 35, and have been growing steadily in their market share to account for nearly ten percent of coffee sold. Both consumer education and demand for these products have driven companies to embrace sustainable sources. True, successful marketing campaigns by coffee companies and trade groups have brought it this far; however, it is also a genuine concern among the coffee community, be it roasters, retailers, or enthusiasts, that something must be done to ensure producers are able and willing to provide us, all of us, the beverage we love. Sustainable coffee is affordable, far more accessible than it has been in past decades, and of higher quality as research and demand continue to support their development. The key here, is still, demand. Even in nascent markets like Boston, where specialty coffee is starting to gain traction, customers are concerned with the certifications our coffees hold. Certified coffees have become a cause, and have moved beyond our own concerns and into the mainstream. If the marketing campaigns of larger coffee companies can teach us anything, they certainly prove this simple point. As roasters, we owe our customers, our producers, and ourselves what resources we can spare to ensure quality coffee reaches our warehouses and continues to do so when our sons and daughters move to take their place in our chairs. It is a great deal to keep in mind as we approach 2014. Yet in any business, especially the coffee business, things change so quickly that we must be on our toes. Understanding trends on the international and the local scale can help you succeed. Applying new knowledge that is available will help us grow. Learning from our past mistakes and discussing our future will help us sustain and survive. 2014 is shaping up to be an exciting year. I wish you the best with your roasting and hope to see another prosperous year for us all.
66
Coffee farm San Marcos Tarrazu, Costa Rica
December 2013
Sustainability At Origin It’s Not About Coffee by Bill Fishbein The Coffee Trust
O
ver the last 25 years, we have witnessed an unprecedented effort by specialty coffee to address issues of sustainability at origin. No other industry has made such a commitment in such a dramatic fashion to improve the quality of life at the origin of its supply chain. In fact, looking at packaging and marketing, the continuous improvement of quality in the cup has been practically joined at the hip with issues of sustainability. With that being said, we have also witnessed 25 years of development in the name of sustainability at origin; after which, one might think something as basic as hunger would not continue to be a fundamental characteristic of life for coffee-farming families. After 25 years, a serious gap exists between the sincere intent to promote sustainability at origin and the actual results. The specialty coffee trade has overcome the enormous challenge of making sustainability a part of the specialty coffee conversation. However, if we expect our coffee-farming partners to improve the quality of their lives to a level consistent with the quality of the product we ask them to produce for us, we need to do more, and we need to do it better. One of the more difficult concepts for coffee merchants to grasp is that sustainability at origin is not about coffee. It is about the farmers, their needs, their values, their culture, and their own communities, and it all must be long-term or it cannot be considered sustainable. Responsibility must rest on the shoulders of coffee farmers, and their ability to carve out a sustainable, diversified future for themselves, free from unhealthy dependencies. Specialty coffee is an impressive industry. But, its volatile pricing structure and environmental challenges, like la roya, can undermine the benefits from even the best of direct or fair trade relationships. Any project that creates or enhances a dependency on coffee will serve to obstruct, rather than promote sustainability at origin. Since the film After the Harvest, food security projects supported by specialty coffee have grown rapidly. However, things become complicated when coffee buyers become the direct donor to any development project within their supply chain. Intentionally or otherwise, buyers arrive with a built-in power dynamic, a power dynamic that can negatively affect sustainable development.
Coffee buyers buy the coffee, the most important cash crop for the community. It is completely understandable for communities to defer to coffee buyers and their project preferences, whether culturally sensitive, or whether the project is self-managed. Coffee buyers, who support food security or other projects within their supply chain, must be extremely diligent to allow the people to create their own programs, free from the interests of the buyers. To avoid what may even appear as a conflict, independent, local NGOs should be sought out to guide the process. Of course, it is equally important for local NGOs to ensure that full responsibility rest in the hands of the people. Power dynamics influence recipients to feel they are in subservient roles, less capable of carrying out responsibilities themselves. Instead of sending the clear message to farmers that they have the capabilities to control their own food production, a message is sent that farmers need the coffee buyer, or the cooperative, to design and manage the program. Such programs invariably last as long as the outside support lasts and never indefinitely. Of course, indefinitely is exactly how long these projects must last to be sustainable. To succeed, projects must be fully integrated into, and managed by, each community.
Sustainability at origin begins with food sovereignty, not food security. Food sovereignty is designed and created by each farming community. It is sensitive to cultural values and community established priorities. Food sovereignty is self-managed by the people themselves who take control of, and responsibility for, their own food production. Families pursue sustainability by learning to produce and prepare a basic, balanced and nutritious diet for themselves and their children. Of course, sustainability includes education, healthcare, and improved local economies less dependent upon coffee. However, no one can study, heal, or go to work with any level of energy on an empty stomach. Sustainability requires cultural sensitivity. If a new agricultural product is brought into a community, it must have some similarity to foods accepted by the culture. After the project has been completed, what is left must integrate easily into the community. Foreign elements are the first to erode. They rarely last.
included among the skills to lead a successful coffee business, are the skills to undertake culturally sensitive development at origin. With the sincerest intention, cutting-edge coffee businesses have established their own development divisions, doling out development projects to their favored suppliers. While support from dedicated coffee purveyors can have a positive influence on sustainability at origin, projects undertaken by unaware businesses may do no more to solidify a fluid line of supply than promote food sovereignty or sustainability. Of course, solidifying long-term relationships at origin is not is bad thing. However, unaware of the subtle dynamics at work, efforts like these may unintentionally take the weight of responsibility away from the people who need to bear that responsibility the most. Sustainability efforts supported by the specialty coffee trade must be done carefully with a deep respect for the risks as well as the benefits. Monitoring and evaluating have become standard fare for coffee businesses to judge the progress of a project. However, coffee buyers may define progress differently than local communities. While monitoring can be a valuable tool for each community to look at itself, evaluation programs dominated by buyers may subtly usurp responsibility from farming communities. Selfevaluation based on local standards may differ wildly from evaluations concluded by the benefactor. For producing communities to become sustainable, they must feel the liberty to evaluate their own progress and pursue their own vision of the future. After 25 years of promoting sustainability as a critical component of specialty coffee, we may have become more successful at the conversation than the goal. At the very least, we must recognize that if we do not change the way we are promoting sustainability, we will be having the same conversation 25 years from now. While specialty coffee must continue its commitment to improved quality of life at origin, sustainability at origin is not about coffee. Power dynamics and dependencies may undermine even the best of intentions. For specialty coffee to pursue a more effective sustainability strategy, the weight of responsibility for development must fall directly onto the shoulders of coffee farming communities.
It’s not about us. We have become quite self-impressed with our own successes. In many cases, we have drawn the erroneous conclusion that automatically
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
68 December 2013
A New Set Of Critical Questions by Josue Morales Mayaland Coffee
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he sun is rising over the Pochuta Valley in Guatemala as I write these words. It’s early, yet some minutes ago I saw a group of coffee pickers starting to go up the mountain to clear out the first ripening cherries of the new harvest. As I sip on my first cup of coffee, I take a walk towards the wet mill where water is already running, and half a dozen skillful workers wash and distribute fresh pergamino onto the patios just as the first rays of light illuminate the tip of the Atitlán Volcano. Over the past week, I have visited more than twenty farms in an attempt to touch base with farmers that have ventured with me during the last five years, in what many of them call my “experiments.” These “experiments” basically consist of creating specialty coffee wherever there is a will to do so. And as much as I have been awed and inspired by the beauty of the whole harvest dynamic over the past number of days, the one thing that comes to mind when sitting down to write about “the state of the industry,” is a set of key questions I have tried to ask my peers during the past months, as I traveled through many cities in The United States and Asia. There were three questions, to be specific: 1. Everything is changing in the world, how has coffee changed? 2. Where do you see yourself in five years? 3. What would you say your role is in the industry? I tried formulating these questions, sometimes by announcing them, sometimes just blending it into conversations as casually as I could. I asked baristas, roasters, importers, aficionados, professionals, writers, teachers, and end consumers. I asked basically anyone I came into contact with, provided there was a good flow of communication between us. The responses went from evasive, to non-committal, to outrageous, to simplistic, to non-answers, to confusion, and even to suggestions that I should make such inquiries in writing to management of different establishments asking for permission to formally ask these questions. The best answers I received were from friends within the industry that answered truthfully. Yet, I
do believe they all answered as my friends and still with a certain degree of caution. Their answers, nonetheless, are answers I deeply respect and the reason why today, I continue to ponder about the subject. I ponder about it because it is something that worries me. It worries me that there is such a big collective mentality and behaviorally about what specialty coffee is, or what it should be. Yet there are very few and scattered voices who are proposing objective answers to the above mentioned questions. Being able to answer these questions is critical for anyone working in coffee, especially when the level of knowledge and skill in the craft has been advancing so much. The learning curve of specialty coffee has advanced dramatically, and the end consumer is now better educated and curious about the topics. How has coffee changed? Well, for one, there has been a general outcry for better coffee quality for the past ten years, and now, drifting away from darker roasts is something desirable by many. We have discovered new varietals and new possibilities in taste that have gone viral in popularity. Regional and world competitions have been pushing the need to own gesha, and new processes that contradict the historical way of doing things in producing countries. The premiums paid on such coffees make the news every day. It is precisely this reason why it is so important to provide an answer, because each trend echoes and resounds deeply within the producing countries worldwide. The pursuit of certain flavor profiles and the request to have something new, has lead coffee growers to start realizing that the traditional way of doing business is over. Which brings me back to the subject of my writings this morning. Every single farmer I have met during this past week has been able to answer these questions without hesitation, in a direct, straight forward way that has impressed me, and given me a whole new perspective on the extent to which this change has happened. Some weeks ago, I thought the answers I received from some of the farmers I met from the other Central American countries during a trade show
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in Taipei, were contextual of the moment. Yet now that I have ventured back into rural Guatemala and found myself confronted by this unanimous phenomena, I understand the current coffee trends have made their lasting marks already. Things are set in motion in producing countries to fulfill the needs of the market. Yet the one subject that certainly does hover over any critical question is sustainability. We have learned that better coffee is fortunately linked to better environmental practices. For example, shade and the use of more efficient processes at the farming level that preserve water and provide better pay for workers. Yet sustainability is not limited to these factors alone, and along with quality, there needs to be sustainable pricing. Specialty coffee is not a matter of speculation, and trying to pay for better quality based on speculation, defies the whole purpose of it all. The main purpose of this article is to be educational, and I do believe there is a powerful lesson here to be learned. While everything I have heard during this year in my travels was roya-related in terms of a desire to know what is happening at origin, everything I have to answer back at this point is that it is an old subject in Specialty Coffee. Farmers are way ahead of us, that they have found a way to start implementing new techniques, in everything, so that they remain competitive and profitable. In the same way the trends descended to the farming level through news and relationships, the quality we asked for in the same way will start to surprise us. Our role will consist of being able to continue providing the right price incentive, in order to answer farmers’ voices, we demanded be heard years ago, and knowing that making the right decision at this crossroad guarantees that specialty coffee will, in five years from now, continue to be the great agent of change it has become, in both the consuming and producing communities. josue@mayalandcoffee.com
A Roaster’s Checklist For Optimal Packaging by Jeff Beer and Chris Burger Fres-co System USA, Inc
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hose of us in the coffee industry are lucky, for few jobs offer the fun, the commitment, and the passion that we enjoy. Certainly, as with most work, there are many long hours working our craft, whether it is obtaining the best beans available, roasting to achieve a desired taste, or managing our business to a suitable profit. But when you experience the “nose” of your finished product, it can be hard to find another job that offers the same level of personal satisfaction.
four layers of laminate material. Below are some common materials used in coffee packaging. t
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t Much of our work comes to nothing if we don’t offer our customers a fresh product. In fact, our efforts may come undone in just one critical step in the process: the packaging. This checklist will help you keep your coffee as fresh as possible, from your roaster to your customer. PROTECT AGAINST COFFEE’S BIGGEST ENEMY. Good coffee packaging must have good barrier properties against oxygen, moisture, and light, in that order. The air we breathe is composed of 21 percent oxygen; the remaining 79 percent is largely nitrogen. A roaster’s goal is to have less than one percent oxygen in the package, because a constant flow of oxygen will lead to staleness. You can achieve this either by vacuum packaging the coffee or by flushing the coffee with an inert gas (N2 and CO2 are commonly used for this method). While a nitrogen flush on a vertical form fill seal machine (VFFS), which is performed automatically, can add cost, this investment in the quality of the coffee is worthwhile. A good barrier film must also be used in the package to prevent oxygen infiltration. Different materials will allow oxygen to permeate through them at different transmission rates. The best packaging must also be able to degas the coffee, via a one-way valve, which releases gasses generated by roasting while blocking incoming oxygen. Some roasters use pinholes to release the gasses inside, but this practice is self-defeating as it lets oxygen back into the package.
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CHOOSE THE MOST APPROPRIATE PACKAGE MATERIAL. Multi-layer laminations are used for coffee packaging because they combine the properties of different materials into a single substrate. This can be accomplished with two, three, or
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#JBYJBMMZ 0SJFOUFE 1PMZFTUFS XIJDI PČFST a heat stable layer suitable for printing, abrasion resistance, dimensional stability, and toughness. "MVNJOVN GPJM PČFST UIF CFTU PYZHFO barrier, and it is resistant to oxygen, moisture, light, and odors. .FUBMMJ[FE 1&5 PČFST GBJS PYZHFO BOE moisture barrier for short shelf life, but at a lower cost than foil. &UIZM 7JOZM "MDPIPM &70) PČFST B high oxygen barrier for a clear material application. #JBYJBMMZ 0SJFOUFE /ZMPO #0/ QSPWJEFT puncture resistance. 1PMZFUIZMFOF 1& JT VTFE BT UIF TFBMBOU layer. It also offers bulk and strength to the finished package.
USE PACKAGES THAT SEAL HERMETICALLY Roasters can serve customers by providing packaging that is sealed hermetically (airtight), helping to extend the freshness of their coffee: t
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5P CF NPTU FČFDUJWF UPQ BOE CPUUPN TFBMT should be smooth, flat, and free of large wrinkles. ćF UPQ BOE CPUUPN TFBMT TIPVME OPU appear distorted, curled, or burned. They should also have a distinctive seal bar impression across the entire width of the package. ćF CPUUPN TFBM ĘBQ TIPVME GPME ĘBU BOE not “butterfly.” ćF CBDL TFBM NVTU OPU BQQFBS EJTUPSUFE curled, or burned. It should also have a defined seal bar impression. (VTTFUT TIPVME CF UIF TBNF TJ[F BOE aligned on both the top and bottom of the packages. 6TF B QFFM TFBM NBUFSJBM XJUI B TFBM indicator, which turns white when the properly formed seal is peeled opened.
TEST FOR PACKAGE LEAKS High barrier packaging materials are of little use if the package leaks. Here are two simple tests to verify that your package is not leaking.
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A Submerged Leak Test determines the presence of a gross package leak. If the package has a valve, cover it with tape. Puncture a small hole in the package and inflate it with air until puffy. Apply a piece of tape over the inflation hole and submerge the package in a bucket of water. Gently squeeze the package under water. Leaks will be identified by a steady stream of bubbles emanating from the leak location. Be careful not to over inflate or squeeze too hard as you may actually create a leak.
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ćF Mead/Bell Jar Test is similar to the submerged leak test but with some control of package pressure. Instead of a bucket of water, the package is placed into a specially designed package leak-testing unit. This type of equipment is readily available; simply search the Internet for “package leak detector.” The unit is activated and the package observed for the stream of bubbles emanating from the package leak. The amount of stress applied to the package needs to be adjusted based on the type of material being used. (Be careful not to over-pressurize the package; this will result in a burst package and coffee in the Mead/Bell Jar). Leaks will be identified by a steady stream of air bubbles. Observe the location of the bubbles and determine if the problem is machine related. NOTE: Micro leaks cannot be identified with this test method.
Our customers depend on us for the qualities that are unique to fresh coffee, including its aroma and flavor. For all the effort that goes into sourcing, shipping, roasting, and grinding, it would be a shame to allow coffee to go stale just because of an ineffective packaging system. Post script: As we discuss coffee packaging, we also need to recognize the limitations of single-cup packages. While these single servings are fast and convenient, they also give coffee aficionados a tradeoff in freshness. Fres-co’s research shows that the wide range of barrier protection in the cup and lid stock can lead to a difference in shelf life, sometimes as much as twelve months. When choosing a single-cup packager, be sure to know the barrier properties of their capsules.