GCR May 2020 by Prime Creative Media

MAY/JUNE 2020

RTD ON THE RISE

A booming market driven by millennials

THE MOTHER OF ALL CAUSES Will 2020 be the tipping point of climate change for the global coffee industry?

STARS ALIGN FOR ETHIOPIA

The inaugural COE competition and open export market create new opportunities

A NEW KIND OF THREAT

How will the market react to the spread of COVID-19 and a decline in commercial activity?

DARE TO

DREAM

LÖFBERGS CEO LARS APPELQVIST ON LEADING ONE OF THE NORDIC REGION’S LARGEST FAMILY-OWNED ROASTING BUSINESSES AND MAKING BOLD DECISIONS IN HARD TIMES www.gcrmag.com

CONTENTS May/June 2020

COVER STORY DARE TO DREAM

Löfbergs CEO Lars Appelqvist on leading one of the Nordic region’s largest family-owned coffee roasting businesses, and the behavioural traits likely to evolve after the world’s viral pandemic ends.

IN THIS ISSUE FEATURES

08 A SWEDISH SUCCESS

Löfbergs CEO Lars Appelqvist on making bold decisions in challenging times

12 THE MOTHER OF ALL CAUSES

For coffee farmers, climate change is nothing new, but will 2020 be the tipping point for the rest of the global coffee industry?

16 THREAT OF A DIFFERENT KIND

The International Coffee Organization on how the market will react to the rapid spread of COVID-19

20 RTD ON THE RISE

The boom of the readyto-drink coffee market, led by a growing coffee culture, health conscious consumers, and wide functionality

25 ARABICA AT RISK

New study results show Coffea arabica is one of the least genetically diverse crop species in the world

32 A SOURCE OF STABILITY

The Colombian Government launches a Coffee Price Stabilisation Fund to shelter producers from the effects of low coffee prices

PROFILE

34 INFORMATION IS POWER

Cropster discusses the importance of business intelligence

48 WORTH THE WAIT

New dates and new opportunities when the Melbourne International Coffee Expo and World Barista Championship take place in November

36 THE FULL PACKAGE

The Cama Group provides flexible secondary packaging solutions

ORIGIN

28 STARS ALIGN FOR ETHIOPIA

How the inaugural Cup of Excellence competition and an open export market are creating opportunities for producers

38 GOOD HYGIENE Cafetto on the increased importance of cleaning equipment and maintaining hygiene

40 BOOST YOUR MOOD

DaVinci Gourmet unlocks the personality of fruit in its new campaign

OPINION

52 THE GEOMETRY OF LIFE

Eversys Chief Commercial Officer Kamal Bengougam on how to navigate this new reality without a map

42 AUTOMATING AUSTRALIA

Franke Coffee Systems sets its fully automatic focus on the mature yet underserved markets of Oceania

46 COFFEE’S CARBON FOOTPRINT Probat analyses and improves the carbon emissions of coffee roasting facilities

Lars Appelqvist

Löfbergs CEO

LAST WORD

58 GRAZIE TO AN ICON

La Marzocco mourns Honorary President and espresso machine visionary Piero Bambi

44 A LIFE OF ITS OWN

Nuova Simonelli reveals its most advanced machine in the Appia Life range – the XT

“I EXPECT HOME COFFEE CONSUMPTION TO BE A BEHAVIOURAL TRAIT THAT WILL LAST LONG AFTER THIS CRISIS IS OVER AND LEAD THE NEXT GENERATION OF COFFEE CONSUMERS.”

REGULARS 04 06 54 56

EDITOR’S NOTE NEWS DRIP BY DRIP DIARY DASHBOARD MARKETPLACE M AY /J U N E 2 0 2 0 | GCR

EDITOR’S NOTE Global Coffee Report

PUBLISHER Christine Clancy christine.clancy@primecreative.com.au EDITOR Sarah Baker sarah.baker@primecreative.com.au JOURNALIST Ethan Miller ethan.miller@primecreative.com.au

STAY STRONG STAY SAFE IT’S SURPRISING HOW quickly your world can turn upside down. In early March, I ventured to my local café for a morning brew. I paid in cash. I shook hands with new people I met. I went to work in a packed city office. I didn’t flinch when someone coughed. I didn’t hesitate in going out for dinner with friends, and I certainly didn’t think twice about exchanging hugs goodbye. In the space of 48 hours, I, like so many others around the world, lost that freedom as the faceless villain that is coronavirus made its presence felt. Flights were cancelled, borders closed, mass gatherings banned, self-isolation imposed, and social distancing became a ‘thing’. This was our new reality, and maybe still is by the time you read this. Amid the lockdown, I spoke with Lars Appelqvist, CEO of Swedish roaster Löfbergs. He admitted he had considered cancelling our interview fearing it would be “just another coronavirus chat”. Rather, we talked about everything from his athletics career to accidental employment, business failures, and market success. An hour later he thanked me for the “welcome distraction”. If Appelqvist was concerned about the impact the virus would have on his company and its operation, he didn’t show it. His role, from day one at the helm of Löfbergs until today, despite the global pandemic, remains the same: make clear decisions and make people feel safe and strong. They are the markings of a true leader. There’s little doubt the supply chain will suffer some sort of impact from this crisis.

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Some producers will be left with large supplies and fewer buyers. As one friend described it, coronavirus is the “leaf rust equivalent”. On the other hand, businesses are adapting to the environment and thinking outside the box. Roasters are using online services, and still-standing coffee shops are operating as takeaway- and deliveryonly, or as reinvented general stores. Some may argue they are more in-touch with consumer needs than ever before. When we go back to ‘normal life’, it’s likely some of our newfound behavioural traits will stick. Perhaps we’ll see a continued rise in the retail sale of beans, at-home coffee consumption, investment in home brewing devices, or maybe a greater appreciation for our baristas from our time in isolation. This pandemic may be a harsh lesson to value time spent with loved ones and demonstrate kindness to others, but it will also teach us strength and resilience. Just like Appelqvist, we too can make bold decisions in uncertain times and make it through the other side. We’re in this together.

Sarah Baker Editor, Global Coffee Report

DESIGN PRODUCTION MANAGER Michelle Weston michelle.weston@primecreative.com.au ART DIRECTOR Blake Storey blake.storey@primecreative.com.au DESIGN Madeline McCarty, Kerry Pert BUSINESS DEVELOPMENT AND MARKETING ACCOUNT MANAGER Courtney Walker courtney.walker@primecreative.com.au CLIENT SUCCESS MANAGER Janine Clements janine.clements@primecreative.com.au CONTRIBUTORS Lindsay Holloway, Kamal Bengougam, Peter Papoulias PHOTOGRAPHY Tommy Andersson, LM Salazar, Crop Trust, Devon Barker, Neil Palmer HEAD OFFICE Prime Creative Pty Ltd 11-15 Buckhurst Street South Melbourne VIC 3205 Australia p: +61 3 9690 8766 f: +61 3 9682 0044 enquiries@primecreative.com.au www.gcrmag.com SUBSCRIPTIONS +61 3 9690 8766 subscriptions@primecreative.com.au

Global Coffee Report Magazine is available by subscription from the publisher. The rights of refusal are reserved by the publisher.

ARTICLES

All articles submitted for publication become the property of the publisher. The Editor reserves the right to adjust any article to conform with the magazine format.

Global Coffee Report is owned and published by Prime Creative Media. All material in Global Coffee Report Magazine is copyright and no part may be reproduced or copied in any form or by any means (graphic, electronic or mechanical including information and retrieval systems) without written permission of the publisher. The Editor welcomes contributions but reserves the right to accept or reject any material. While every effort has been made to ensure the accuracy of information Prime Creative Media will not accept responsibility for errors or omissions or for any consequences arising from reliance on information published. The opinions expressed in Global Coffee Report are not necessarily the opinions of, or endorsed by the publisher unless otherwise stated.

WE SERVE THE COFFEE INDUSTRY

www.probat.com

NEWS In brief

NEWS DRIPBYDRIP AFRICA In 2020, Ethiopia is hosting its firstever Cup of Excellence competition, the annual Alliance for Coffee Excellence event that identifies and celebrates the highest-quality coffees around the world. While international judging occurred outside of origin due to the coronavirus pandemic, the competition aims to boost awareness of Ethiopian coffee. It is hoped the inaugural event will help drive interest at the farmer level to produce higherquality coffee. See page 28.

AMERICAS Since the 2016 Paris Agreement first set into motion global commitments to slow climate change by decreasing greenhouse gas emissions, companies and organisations around the world have been making their own commitments to lessen their respective carbon footprints. Coffee is no exception, with industry leaders like illycaffé and Starbucks committing to sustainable action. At origin, World Coffee Research continues its multi-location variety trial, testing a number of varieties in diverse growing regions. This includes trial sites in Zambia, where the hottest month maximum last year was 34°C. The Costa Rican Coffee Institute has also trained 8500 farmers in good agronomical practices specifically to reduce carbon emissions. At the mill level, 62 of Costa Rica’s 272 coffee mills have become low carbon and three are completely carbon neutral. See page 12.

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The Ethiopian Cup of Excellence will take place for the first time in 2020.

The world’s coffee supply has been threatened by climate change and low prices for several years. Now, the COVID-19 pandemic provides an additional challenge to the industry, bringing an even greater sense of urgency to the issue of economic sustainability for the sector, from farmers to consumers. The International Coffee Organization estimates the global 2019-20 output at around 168.9 million 60-kilogram bags. This is a result of lower prices as well as Brazil being in the off-year of its biennial Arabica cycle rather than any impact from the coronavirus. See page 16. Coffee shop culture has taken off across the world, and where it goes, the ready-to-drink market follows. A historic focus on brand recognition has led to Americanstyle RTD coffee spreading to other regions. In January 2020, US plantbased beverage company Califia Farms received US$225 million in a financing round to build on the

success of its oat platform and launch other product lines. However, an increased focus on functionality could suggest a new direction for the future. See page 20. According to World Coffee Research’s latest study on genetic diversity, Arabica coffee plants are one of the least genetically diverse major crop species in the world. The study concluded that with a significant likelihood, Arabica derived from a spontaneous coupling of Coffea canepohra and Coffea eugonioides species. See page 25. In February 2020, the Colombian Government launched a Coffee Price Stabilisation Fund, worth COL$218 billion (about US$64 million) to protect producers from volatile coffee prices, which have masked a deficit of washed Arabica in the international market. See page 32.

27,944 The number of tonnes of coffee produced by Swedish coffee roaster Löfbergs in 2019.

ASIA PACIFIC Australia-based company Cafetto has developed a broad portfolio of products suited to different equipment and requirements to help the coffee industry maintain safe hygiene and cleaning practices. See page 38. DaVinci Gourmet has analysed consumer trends and psychology and implemented the results in its Pump Up The Mood campaign, which highlights fruit-based beverages, the most popular beverage category in food service across Asia. See page 40. Oceania has seen a rise in demand for reliable automatic coffee solutions, particularly in the corporate sector, convenience stores, and the mining industry. With the new A300, Franke Coffee Systems is ready to cater to the growing market. See page 42. Cropster tailors its solutions to the individual needs of its customers.

Due to Australian federal and state government measures to mitigate the risk of spreading COVID-19, MICE organisers have moved the dates of the dedicated coffee expo from May to 3 to 6 November at the Melbourne Convention and Exhibition Centre. See page 48.

EUROPE Swedish roaster Löfbergs has an annual turnover of SEK1.9 billion (about US$1.8 billion) and production of 27,944 tonnes of coffee, equivalent to more than 10 million cups of coffee per day. CEO Lars Appelqvist says the global coronavirus pandemic will cause a permanent behavioural shift in consumers towards at-home coffee preparation. See page 8. Access to reliable information is key to a business making good and quick and good decisions. Software

solution provider Cropster is able to integrate its service with existing platforms to provide this business intelligence to its customers. See page 34. Italian company Cama Group has provided secondary packaging solutions to the global coffee industry – and other food and beverage sectors – for more than 30 years. It prides itself on its flexibility and ability to adapt to the needs of its customers. See page 36. Nuova Simonelli is offering the most advanced espresso machine in its Appia life range to date with the Appia Life XT. The machine is dedicated to coffee shop chains in mature markets that demand advanced functions, such us precision and control. See page 44. After discovering the carbon emissions produced by a single cup of coffee, German roasting plant manufacturer Probat calculated the typical emissions of a roasting facility in Germany powered by natural gas to be 2608.82 tonnes of carbon emissions in its first year of operations. See page 46. This coronavirus has taken over the global agenda, promoting fear in the midst of uncertainty. Eversys Chief Commercial Officer Kamal Bengougam says change is inevitable, and it must be accepted without fear. See page 48. On 22 March, La Marzocco Honorary President Piero Bambi passed away, aged 86. He will be remembered for his contributions to the global coffee industry and his significant technological innovations. See page 58.

$218B The amount, in Colombian pesos, that has been committed to Colombia’s Coffee Price Stabilisation Fund.

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COVER STORY Lรถfbergs

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DARE TO DREAM LÖFBERGS CEO LARS APPELQVIST ON LEADING ONE OF THE NORDIC REGION’S LARGEST FAMILY-OWNED COFFEE ROASTING BUSINESSES, AND THE BEHAVIOURAL TRAITS LIKELY TO EVOLVE AFTER THE WORLD’S VIRAL PANDEMIC ENDS.

t’s the start of the day in Karlstad in the heart of Sweden. Löfbergs’ CEO Lars Appelqvist is making executive decisions for his company hour by hour. He, like so many business leaders facing unprecedented times during the COVID-19 pandemic, is doing his best to secure coffee production and keep morale high. “My role is two-tiered. One, to keep calm and try to make clear decisions, but two, make people feel safe and strong,” Appelqvist tells Global Coffee Report. “We’ve never seen a situation like this before. We need to adapt, get through this, and come out stronger on the other side.” Appelqvist has been the leader for his team since 2008, when he was “accidently” appointed Löfbergs’ CEO. He was called on then to lead his team towards growth and achieving sustainable development goals, and he continues to do so in today’s challenging economic climate. “I’m confident that after this situation is over, it will identify new consumer behaviours, accelerate trends, and produce the next generation of coffee drinkers,” Appelqvist says. Before the global coronavirus pandemic, Löfbergs had launched a new strategy to help connect people together and help exterminate loneliness, “one fika at a time”. “Coffee drinking and the tradition of having a fika – the Swedish way of socialising with coffee and cake – is such a big thing for our country, our communities, and our families. It’s what I remember most when I think of my father, grandfather, and visiting my grandmother. It’s very much how I have developed my relationship with coffee,” Appelqvist says. Löfbergs turned to the Pestle strategic analysis model developed in the United States in the 1960s to study human behaviour within six perspectives: political, economic, sociocultural, technological, legal, and environmental. The company gained insight into what its consumers would value and how it could market its products to adhere to their core principles. “We learnt a lot from this study. We know that the younger generation is focused on podcasts and movies. They are socially connected all the time, but we also identified that this generation values the spirit of coming together and choosing brands according to their values. They want to know where the product comes from and its impact on the wider community,” Appelqvist says. As such, Appelqvist is proud that Löfbergs is one of the world’s largest purchasers and importers of organic and Fairtrade-labelled coffee. According to its 2018/2019 Sustainability report, Löfbergs Group increased its share of purchased certified coffee to 71.8 per cent. It contributes SEK52.5 million (about US$5.21 million) in premiums to Fairtrade cooperatives it buys its coffee from and works with more than 180,000 farmers through different cooperation projects. Appelqvist says Löfbergs is on track to reach its goal of 100 per cent certified coffee across all its brands, in-line with the long-term sustainable perspective the Löfbergs family started 114 years ago.

Photo credit: Tommy Andersson

FAMILY, FIKA, AND FUTURE Brothers Anders, John, and Josef Löfberg founded the Swedish family business, AB Anders Löfbergs, in 1906. In 1911, it started roasting its own coffee in Karlstad, where its headquarters and main roasting operations remain. The company upholds traditional Swedish roasting practices, catering to the country’s preference for medium roast filter blends of Arabica beans, typically from SouthCentral America and East Africa. Most Swedes consume six to eight cups of filter coffee each day, but Appelqvist says over the past 10 years, there’s been a slow transition to darker roasts and espresso-based coffees. He adds that the retail sales of whole beans are growing steadily, now more than ever with countries in lockdown and consumers preferencing quality beans in home isolation. “I expect home coffee consumption to be a behavioural trait that will last long after this crisis is over and lead the next generation of coffee consumers. I predict consumers will continue to invest

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COVER STORY Löfbergs

“I AM MOST PROUD OF THE WAY WE DARE TO MAKE BOLD DECISIONS IN HARD TIMES. WE WERE MAKING ACQUISITIONS IN 2009 AND 2010 WHEN NO ONE ELSE WAS. WE HAVE ALWAYS DARED TO GO INTO NEW MARKETS, DARED TO MAKE TOUGH DECISIONS, AND DARED TO MAKE LONG-TERM DECISIONS.” Löfbergs, located in Karlstad, Sweden, has an annual production of 27,944 tonnes of coffee.

in home brewing devices and bean-to-cup machines to experience the production of coffee in the comfort of their own homes,” Appelqvist says. While whole bean sales are on the rise, there is one type of coffee consumption Appelqvist says has failed to take off in the region. “Capsules are not a big player in the Nordics. Maybe it will be different in 15 or 20 years, but capsules are generally espresso-based and expensive if you want to drink eight cups a day like we do in Sweden. In the United Kingdom and European markets, however, we recognise it has a huge following,” he says. “In the United States, we’re seeing growth and popularity in ready-to-drink coffee and cold brew products, but it’s a few years away from hitting the Nordic market.”

A BALANCING ACT Much like Appelqvist’s CEO appointment, he also describes his employment at Löfbergs as “accidental”. Appelqvist pursued an athletics career from ages 15 to 25, but in 1998, when he realised his professional running days were destitute, he looked for a secure job at Löfbergs, “one of the biggest and most famous brands” in his region. Appelqvist started work in the exports and sales department, followed by a logistics role known as ‘transport planning’, then in production, and the supply chain. Two weeks before he was appointed company CEO, Appelqvist met with then-CEO Anders Löfberg and observed how tired he looked. “If that was what being a CEO did to you, I didn’t think I’d want the role, to be honest. I didn’t plan for it. I was very surprised when I was made CEO. I was only 34 years old,” Appelqvist says. “I didn’t believe I could do the job. I wasn’t experienced but [Anders] believed in me, so I had to believe him, and I had to believe in myself.” Appelqvist says he has the liberty to be quite free in his decision-making and building his 354-strong team, whom he calls his family.

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Lars Appelqvist Löfbergs CEO

“I’ve recruited many of them, from salespeople to warehouse workers. People and culture are so important. You are no stronger than your team,” Appelqvist says. “Coming from athletics, where you are very alone and individual in your training, I thought I could manage the business myself. You soon realise you need to share everything with your people. You need to show you are vulnerable, show you make mistakes, and show you are strong. It’s a balance.” Now, after 22 years working at Karlstad’s “biggest and best” roaster, Appelqvist remains motivated by the ever-evolving industry. “You can have a strategic plan for a brand, but you need to have a strategic plan for the different markets you support, the coffee you source, the quality you deliver, and how it’s done in the most sustainable and transparent way,” he says. “I am most proud of the way we dare to make bold decisions in hard times. We were making acquisitions in 2009 and 2010 when no one else was. We have always dared to go into

new markets, dared to make tough decisions, and dared to make long-term decisions.” Up until the 1990s, Löfbergs operated mainly in Sweden. Since then, it has started and purchased companies in Norway, Denmark, Finland, and the UK. It has roasting houses in Sweden, Norway, Denmark, and Latvia, and sells its coffee to about 10 markets across Northern Europe, including Estonia, Lithuania, and Ireland, as well as Canada. Probat has been a long-time partner of Löfbergs. It supplies roasting equipment in each of its markets, and helps develop solutions to optimise Löfbergs’ roasting processes. However, Appelqvist says there’s a fine line in knowing when to forge ahead with a new venture and when to hold back. The UK is one market he identifies as “a slow burn”, while Finland is thriving. “It’s taken time to find the right way to approach the UK market. There have been ups and downs. Respecting culture takes patience. It’s so easy to be impatient and want to deliver good figures in the short term. We may be in red figures now, but we realise we need to be there in the long term. It’s a market with huge potential and somewhere we want to keep a presence,” Appelqvist says. “If we can identify a strong underlying trend or interest for coffee when it comes to taste, quality, sustainability, and experience of the brand, then there’s a strong reason to move in. But there’s also markets we have failed. We have stopped projects and stepped back when it’s been difficult to compete, or where there’s been tough pricing scenarios. We have to remember who we are and what we stand for. I’m human. I make mistakes too.” While other “large roaster players” have their eyes set on the potential of the Chinese market, as a “regional, small player” Löfbergs is focused on markets that are niche and geographically close – for now. “Large players can be sharp, but we can be sharper. We were the first roaster in the Nordic countries to go for Fairtrade certification. It was a tough decision to make because of price and logistics, but now all the big players have done the same,” Appelqvist says. Within Sweden, Appelqvist says the region’s main players are divided between large international roasters, local players, and familyowned businesses like Löfbergs.

The company is still fully owned by the Löfberg family, now in its third and fourth generations. Its coffee is sold under Löfbergs and associated coffee brands, including Peter Larsen Kaffe, Melna, Percol, and Green Cup. It also owns Swedish tea brand Kobbs, and organic/vegan snack brand SuperBonobo. Half of its sales are retail based, a third comes from cafés and restaurants under the out-of-home category, and the rest is from external customers that sell or serve coffee under their own brands, such as Ikea and McDonald’s. The company has an annual turnover of SEK 1.9 billion (about US$1.8 billion) and production of 27,944 tonnes of coffee, equivalent to more than 10 million cups of coffee per day. In every decision Appelqvist makes, he seeks to uphold Löfbergs’ four values: togetherness, inclusivity, accountability, and entrepreneurship. This means he loves doing business – new and profitable – and is not ashamed to say so if it means securing future generations of producers, and delivering a quality product for consumers. “We are accountable both within and outside our value chain, which means we are proactive in society and with our consumers. We do things together. We are stronger together. We share things, and we are inclusive,” Appelqvist says. At present, many of us would like a crystal ball to predict the future, but without it, Appelqvist has a fairly clear idea of where the company is headed. “By 2030, I think we will be more of a game changer than a disrupter. We will be a global company. It may not mean we will have a roastery or a subsidiary in every country, but we will have a presence from a consumer point of view, meaning we will be connected in some shape or form,” Appelqvist says. “I believe we will be so much more than coffee, but a brand people can connect with. And in times like those we face now, that’s not a bad thing.” G C R

Lars Appelqvist says its important to demonstrate strength and vulnerability in his role as a leader.

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FEATURE Climate change

The mother of all causes FOR COFFEE FARMERS, CLIMATE CHANGE IS NOTHING NEW, BUT WILL 2020 BE THE TIPPING POINT FOR THE REST OF THE GLOBAL COFFEE INDUSTRY?

ince the 2016 Paris Agreement first set into motion global commitments from 195 countries to slow climate change by decreasing greenhouse gas emissions, companies and organisations around the world have been making their own commitments to lessen their respective carbon footprints. The agreement set an ambitious goal of limiting the global temperature increase to “well below” 2°C above pre-industrial levels by the end of the century. In working toward that longer-term target, the Agreement required countries to set shorter-term commitments for 2030, and to become carbon neutral by 2050. Four years in and a decade from the first benchmark, 2020 is shaping up to be a year of more significant pledges and change, including from the coffee industry. In January, the 2020 World Economic Forum in Davos, Switzerland, made its focus once again on climate change. There, global asset management firm BlackRock announced plans to rebuild its multitrilliondollar portfolio around climate change and the McKinsey Global Institute released an in-depth “Climate Risk & Response” report. Earlier that month, Microsoft committed to removing more carbon from the atmosphere than it emits by 2030, as well as removing its 45 years of historic carbon emissions by 2050. From the coffee sector, Starbucks announced its commitment to become “resource positive” by 2030, and back in October 2019, illycaffé committed to carbon neutrality by 2033, its centennial anniversary.

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HOW COFFEE ADAPTS Climate change has manifested across regions and industries in various ways and its impacts are being felt worldwide, especially in the agricultural sector. Meanwhile, agriculture itself is a significant contributor to climate change through direct and indirect greenhouse gas emissions. The coffee industry is not exempt from either. “Not only is climate change threatening the future suitability of growing regions with major shifts or entire loss, it is also amplifying the challenges already facing the industry, from aging coffee trees and pest and disease outbreaks to poor management practices and limited investment funding for implementing change,” reads the Brewing up Climate Resilience in the Coffee Sector report, produced in 2019 by a consortium of industry climate leaders.

The report highlights five critical climate issues: loss of suitable areas for coffee production, increased water stress, outbreak of pest and diseases, poor flowering and cherry development, and growing vulnerability of smallholder coffee farmers. The common climate factors behind most of these are increasing temperatures on average and variable, erratic weather. “Weather is something farmers have always had to contend with and it has always been one of their biggest risks,” explains Hanna Neuschwander, Communications Director at World Coffee Research (WCR). “It’s just a lot more unpredictable now and the trajectory of it is changing in a way that is really difficult.” In response, scientists have attempted to create climate models to identify patterns and make useful forecasts. But as climate change has made weather increasingly unpredictable, historical weather and past observations are less indicative of future trends and, thus, of limited use to guide decision making and adaptation measures.

A farmer in Colombia, a country at the forefront of climate action, checks the health of his coffee trees.

“We have ongoing research projects for this, but we don’t yet have the more granular information that is important to guiding farm management,” says Christian Bunn, scientist at the International Center for Tropical Agriculture (CIAT). “Because our climate models are not at the level of accuracy that allows us to give specific recommendations for certain management practices, we’re not saying what farmers should do [so much as we are trying to answer] the question of how we can increase resilience and how we can [equip] farmers to make the decisions themselves.” As much as Bunn stresses the importance of data and analysis in assessing adaptation measures, he stresses the importance of good agricultural practices. Some more common adaptation measures include irrigation, mulching, pruning, shade management, and terracing. A more intensive measure that has been explored is expanding or relocating farms out of lower-altitude regions that are increasingly unsuitable for coffee growing. Although estimates skew more toward decreasing land suitability, some areas that were previously unsuitable for coffee will eventually become available as the planet warms. This factor may enable relocation for larger producers, but relocation otherwise remains too expensive or unfeasible for the average smallholder farmer. Concerning coffee plant varieties, those that can withstand hotter, drier climates and pest and disease are essential in adapting coffee to climate change. In its multi-location variety trial (MLVT), which launched in 2015, WCR is testing a number of varieties in diverse growing regions around the world, including in hot, dry climate zones where a lot of varieties haven’t been tested before, Neuschwander tells Global Coffee Report. One of WCR’s trial sites is in Zambia, where the hottest month maximum last year was 34°C. Heat tolerance is of particular interest to WCR because the biggest driver in designating a region unsuitable for coffee is actually heat, says Neuschwander, referencing research from Bunn and CIAT. “So heat tolerance will clearly be a breeding target for climate resilience, as well as resilience to variability because it has the most dramatic impact on farmers.”

HOW COFFEE MITIGATES While the urgency for adaptation is very real for coffee farmers, endless experts and studies warn that global warming is currently outpacing efforts to curb it. This is where many organisations and companies have stepped up to actively mitigate the coffee industry’s contribution to global warming, ultimately working toward the greater global goal of carbon neutrality by 2050. After initially setting an ambitious goal to become carbon neutral by 2021, its 200year anniversary of independence, Costa Rica decided to double down on climate action in line with the Paris Agreement. At the time of the initial goal setting in 2007, the United Nations Climate Change Conference in Bali was also developing nationally appropriate mitigation actions (NAMAs). Given Costa Rica’s climate commitment and coffee’s role there, Costa Rica launched the first NAMA for coffee – also making coffee the first agriculture NAMA worldwide. According to María Paz Lobo Zeledón, Project Manager in traceability and environmental management at the Costa Rican Coffee Institute (ICAFE), NAMA Café has five areas of work, including at the farm and mill levels; in measurement, reporting and verification; in promotion and communication; and in financing. Through ICAFE, NAMA Café has trained more than 8500 farmers in good agronomical practices specifically to reduce carbon emissions, says Lobo. At the mill level, 62 of Costa Rica’s 272 coffee mills have become low carbon and three are completely carbon neutral. Aside from positive impacts on the planet, one of the biggest outcomes for producers under NAMA Café is that “they can eventually sell their coffee for a higher price because its low carbon or even carbon neutral,” she tells GCR . “So as a country and a sector, our goal is to eventually produce 100 per cent low-carbon coffee.” What’s more, Costa Rica now has a plethora of lessons learned, insight, and methodologies to share on a global scale, Lobo adds. “Although NAMA Café has been entirely linked to Costa Rican coffee, it should eventually shift to be seen more as a global initiative as other countries start adopting their own coffee NAMAs.” Land degradation, deforestation, and

M AY /J U N E 2 0 2 0 | GCR

FEATURE Climate change

fertiliser use are the main sources of carbon emissions from agriculture. So natural mitigation measures include proper land and soil management, reducing deforestation and implementing reforestation, and switching or reducing fertilisers. Another measure is reducing water use, largely in wet processing. Where possible, producers can switch to a semi-wash process or even fully dry process. At the 2019 Ernesto Illy International Coffee Awards in October, illycaffé Chairman Andrea Illy announced that the company was dedicated to “the mother of all causes: climate change,” he said, highlighting carbon sequestration and soil enrichment. “Everything starts from the soil. Besides being where plants are rooted, the soil is the second-largest carbon sink after oceans, with a capacity of three times as much as the atmosphere.” In March, illycaffé adopted Benefit Corporation status for its commitments to sustainable and integrated agriculture, energy efficiency and reduction of emissions, as well as quality of life for stakeholders. A farm worker carries a sack of coffee While illycaffé is pushing a bigger “virtuous agriculture” beans in Colombia’s southwestern Cauca movement as part of its goal of carbon neutrality by 2033, department, an area where climate change has affected production. Starbucks seems to be focused on the later stages of the coffee value chain in its commitment to be “resource positive” by 2030. In a public letter in January, CEO Kevin Johnson promised formalised goals and action plans in 2021, the company’s 50th anniversary. For now, Starbucks has set five preliminary benchmarks based on comprehensive footprint assessments by the World Wildlife Fund (WWF) and Quantis. Namely, this includes more environmentally friendly menus, packaging, stores, and overall operations, and investing in conservation all along the supply chain. Through these priorities, Starbucks hopes to halve carbon emissions, water withdrawal, and waste sent to landfills by 2030.

PATH TOWARD PROGRESS Not unlike coffee farmers’ current operating environment, one of the biggest constraints on climate change progress in the coffee industry is the significant lack of resources at the farm level, including financing, infrastructure, tools, training, and other support. While many producing countries have dedicated government institutions for coffee, the level of investment into climate research, extension programs, farmer organisation, and other critical training and support is often lacking, according to the Climate Resilience report. “The countries that are succeeding on a meta scale are the ones that have coordinated institutional support across all of these domains,” adds Neuschwander. “They’ve figured out a way to [provide] higher access to training, credit for farmers to renovate their farms, and investments in the sector in their countries.” The other hurdle is buy-in and subsequent participation all along the supply chain. Illy believes that success in his company’s goal is only possible if there is strong engagement from the grower communities and other partners. “Growers need to believe and understand to appreciate the advantage of this virtuous agriculture revolution, as well as the capacity to implement the practices,” he explained in October. “And we need an open innovation system, with a network of innovators and information sharing. There is no way we can implement a system like virtuous agriculture by teaching top-down to growers what they must do.” For NAMA Café, it helped to highlight climate action’s positive impact on a producer’s bottom line. “A lot of the initiatives that reduce carbon emissions have an economical component,” Lobo tells GCR . “For example, a lot of the good agronomical mitigation practices also mean diminishing costs at the farm level. It’s easier to sell an initiative when the [stakeholder] can also see the monetary benefit.” Although consumers are increasingly conscious about their impact on the environment, extending through to their favourite brands and products, buy-in and participation at the

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consumer level is still lacking. “Even though all [climate change] mitigation is important, in the life cycle of coffee, farming and processing isn’t the biggest impact,” says Lobo. “The greatest environmental impact is at the consumer level.” She stresses that both adaptation and mitigation efforts need more support from consumers and consuming countries. According to the WWF and Quantis assessment, Starbucks generated 868 kilotonnes of coffee cups and other waste in 2018. But when the company tried to convert one-quarter of its customers to reusable cups between 2008 and 2015, the effort fell flat, indicating that the industry just wasn’t ready for widespread consumer uptake. But in light of the big signals from big business so far this year, perhaps 2020 is the tipping point for climate action among coffee consumers, too. “Today, more than ever, the world needs leadership in environmental sustainability,” said Johnson. “We agree with the consensus of scientific experts who note that without drastic action from everyone – governments, companies, and all of us as individuals – adapting to the impact of climate change in the future will be far more difficult and costly, taking a toll on our supply chains, our business, and more importantly, the lives of everyone involved.” G C R

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FEATURE ICO report

THREAT OF A

different kind THE WORLD’S COFFEE SUPPLY HAS BEEN THREATENED BY CLIMATE CHANGE AND LOW PRICES, BUT HOW WILL THE MARKET REACT TO THE SPREAD OF COVID-19 AND THE DECLINE IN COMMERCIAL ACTIVITY? THE INTERNATIONAL COFFEE ORGANIZATION FINDS OUT.

he economic sustainability of the coffee sector has been the focus of debate among a large group of coffee stakeholders in the last two years. In September 2018, it was widely called into question when international coffee prices fell to their lowest level since October 2006. Prices have remained subdued, averaging 102.21 US cents per pound since September 2018, 28 per cent lower than the average of the previous 10 years. In response to this prolonged period of low prices, the International Coffee Organization (ICO) has been examining the economic sustainability of the sector through economic analysis to assess the key determinants of low prices and volatility, publishing a new economic flagship publication of the ICO, “Growing for Prosperity: Economic viability as the catalyst for a sustainable coffee sector”. This work was guided by an unprecedented consultation process. It mobilised all coffee public and private stakeholders, NGOs, academia, and development partners that lead to the historic industry-led London Declaration and the call by the ICO Member governments to establish a Coffee Public-Private Task Force with one of the goals to take concrete actions on price levels and volatility. In this context of low prices already threatening the long-term economic health of the coffee industry, the COVID-19 (coronavirus) pandemic provides an additional challenge to the industry, bringing an even greater sense of urgency to the issue of economic sustainability for the sector, from farmers to consumers. By the end of January 2020 when the World Health Organization stated that the coronavirus pandemic was a public health emergency of international concern, much of the harvest for the 201920 crop for October-September producers was nearing completion. Global output in 2019-20 is estimated 1 per cent lower at around 168.9 million 60-kilogram bags, as a result of lower prices as well as Brazil being in the off-year of its biennial Arabica cycle rather than any impact from the coronavirus. Given the more limited supply this year, short-term deficits in the international market are helping to prop up washed Arabica prices, but this may be a temporary phenomenon.

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In the March 2020 interim report of its economic outlook, the Organisation for Economic Co-operation and Development (OECD) adjusted its global growth forecast downwards to 2.4 per cent for 2020 in its baseline scenario. However, it was noted that the situation was rapidly evolving and the potential for a more significant downturn increased as the virus spreads. Coffee farmers around the world were already in a vulnerable situation as some producers were operating at a loss compared to the prevailing low prices. Given their lack of ability to access price risk management tools, such as hedging in the futures market, smallholders are heavily exposed to fluctuating prices. Several producing countries had already observed the negative impact low prices have had not just on future coffee production, but also on broader socio-economic indicators such as income and food security. Given the economic vulnerability already faced by producers because of this prolonged period of low prices, the ICO analysed the longterm relationship between ICO indicator prices and global economic growth using a quantitative

for market fundamentals on the demand side. Figure 2 shows a graphical representation of the relationship of prices and inventories, indicating that the larger the inventories of green coffee in importing markets, the lower the international price of green coffee. An additional model was tested using prices, GDP, and inventories in three specific markets – US, Germany, and France – which are the three import markets for the ICO indicator prices. This second model uses a more robust quantitative technique, Market-Fixed-Effects, that controls for the particular characteristics of each of these markets. The results of the quantitative models indicate that there is a positive and statistically significant relationship between GDP growth and green coffee prices. Specifically, a 1 per cent increase in GDP is associated with a 1.6 per cent increase in coffee price. In terms of inventories, a significant negative relationship was found, in which a 1 per cent increase in green coffee inventories is associated with a 0.54 per cent decrease in green coffee prices. In its November 2019 outlook, the economic growth for 2020 of the six economies considered was 1.3 per cent. The OECD revised these figures as a result of the impact of the coronavirus in early March 2020, projecting GDP growth -0.2 percentage points lower, at 1.1 per cent for 2020. Using ICO prices in 2019, the GDP effect of these economies, assuming all other things being equal, would have caused coffee prices to increase by 2.1 per cent to 102.6 US cents per pound in 2020. However, due to the coronavirus, this effect would now be lowered to 1.8 per cent. While the effect might look small, for coffee farmers in some of the poorest areas of the world as well as farmers that face higher production costs, this reduction in price can create a real difference in income at the farm level. This analysis of the impact of a slowdown in the global economy on coffee sector prices is the initial step to understanding the full impact coronavirus may have on the coffee sector. In

model, covering a 29-year period, from 1990 to 2018. The model explores the relationship of prices with GDP from leading world economies, which also represent significant importers of coffee and the traditional consumer markets. These economies include the United States, Japan, Germany, Italy, France, and the United Kingdom. According to the World Bank’s World Development Indicators (WDI), the combined Gross Domestic Product (GDP) of these six countries has represented an average of 52 per cent of the world’s GDP during the 29year period under consideration. In addition, these six countries import 42 per cent of all green coffee shipments and are responsible for an estimated 33 per cent of the total global coffee consumption. Figure 1 plots coffee prices against the GDP of these six economies for the last 29 years. A first indication is a positive relationship of coffee prices with global economic growth. The model also includes the inventories of green coffee in those six markets, as a control

FIGURE 1. GREEN COFFEE PRICES AND GDP OF SIX LEADING WORLD ECONOMIES 250

ICO COMPOSITE INDICATOR PRICE (US CENTS/PER POUND)

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150

100

0 20 GDP CONSTANT 2010 USD (TRILLIONS)

40 Source: ICO, WDI-WB.

M AY /J U N E 2 0 2 0 | GCR

FEATURE ICO report

FIGURE 2. GREEN COFFEE PRICES AND INVENTORIES 250

ICO COMPOSITE INDICATOR PRICE (US CENTS/PER POUND)

200

150

100

0 2

INVENTORIES OF GREEN COFFEE (MILLION 60-KILOGRAM BAGS)

the coming months, more information will become available to provide a clearer picture. In particular, the ICO will be looking at the impact on both demand and supply across the value chain. Regarding supply, harvesting should be starting soon for producers with a crop year commencing in April, which includes Brazil and Indonesia. Further, the upcoming crop is an on-year for Brazilâ&#x20AC;&#x2122;s Arabica production, and this seasonâ&#x20AC;&#x2122;s weather indicates that Brazil should have a sizeable, though not recordbreaking, crop. The expectation of a large upcoming Brazil crop has limited a sustained rise in prices. However, if the virus becomes widespread in these producing countries and containment measures limit the availability of on-farm labour and raw materials, there is the potential for a reduced harvest. This would have a noticeable effect on the availability of coffee in late summer, when supplies from producers with a October-September crop year start to dwindle.

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Source: ICO, WDI-WB.

Disruptions to the supply chain may be another source of shock on the supply side. Coffee is widely traded, with over 90 per cent of production shipped from origin as unprocessed coffee, a portion of which is shipped to additional destinations after processing. However, transporting the coffee to its destinations is showing some signs of difficulty. Given the reduced output from China, a major global manufacturing hub, fewer shipping containers are available, and some cargo lines are cutting back on the number of stops they make. Data through January 2020 shows that total coffee exports reached 10.3 million bags, compared to 11.1 million bags in January 2019 and 10.5 million bags in 2018. However, the lower volume remains within market expectations due to the lower output this season. Additionally, farmers that were unable make sales in December 2019, when prices surged, have held on to their coffee waiting for another rise in prices. Further reductions in shipments, particularly if prices remain elevated could suggest ongoing issues with logistics. On the demand side, inventory and import data can provide indications about the impact on overall demand, particularly in the two largest import markets, the United States and Europe. Typically, inventories in these markets are drawn down in the fourth quarter of the year with minimal change in the first quarter. Then during the second quarter, stocks tend to be replenished. Data through November 2019 demonstrate a similar drawdown of around 7 per cent for inventories in the United States and Europe. Given the disruptions to the supply chain that may occur in the next few months, the typical rebuilding may be delayed or reduced, which in turn could create shortages of certain qualities in the market in the near-term. The market is closely watching for an expected drawdown of the ICE certified stocks under the C contract, signalling that supplies remain tight for Arabica Milds. Imports by the large consuming markets declined by 3.5 per cent in the first two months of

coffee year 2019-20. This follows two quarters of significantly higher volumes and precedes the pandemic. However, if imports continue to remain dampened over the next few months, this may be an indication of reduced demand. While early reports have indicated a sharp fall in out-of-home consumption, stockpiling of consumer goods is likely to have resulted in increased retail sales of coffee. Over time, though, continued strain on the supply chain may impact at-home consumption as well, particularly in emerging markets where coffee is not considered a staple good. Looking beyond the next few months, containment measures across the world haveÂ resulted in a global decline in commercialÂ activity as COVID-19 has rapidly developed into a global health emergency. This could have knock-on supply- and demand-side effects on the coffee sector over the medium term. We may expect to see output contractions in processed coffee, a fall in new processing

About us This article was written by Rebecca Pandolph (bottom left), Chief, Statistics Section, and Marcela Umana, Economist at the International Coffee Organization (ICO). The ICO is the main intergovernmental organisation for coffee, bringing together exporting and importing governments to tackle the challenges facing the world coffee sector through international cooperation. Its Member Governments represent 98 per cent of world coffee production and 67 per cent of world consumption.

For more information, visit www.ico.org

units as a result of decreased investment flows, decreased public spending on agriculture as government incomes decline and are directed to health care, as well as an impact on prices due to fluctuations in currencies of major coffee producers. The ICO has already started a dialogue across the coffee sector in the face of low coffee prices. However, with the current situation both in the short- and medium-term, it is more urgent now than ever to continue this dialogue on identifying and implementing solutions for the health of the industry. G C R

JA N UA R Y /FE B R UA R Y 2 0 2 0 | GCR

FEATURE RTD coffee

RTD on the rise GLOBAL COFFEE REPORT LOOKS AT THE BOOM OF THE READY-TODRINK COFFEE MARKET, LED BY A GROWING COFFEE CULTURE, HEALTH CONSCIOUS CONSUMERS, AND WIDE FUNCTIONALITY.

arbonated soft drinks have experienced a huge decline in popularity over the last few years as consumers become warier of sugar and artificial flavouring. According to Euromonitor Senior Beverage Analyst Matthew Barry, this has created opportunities for other beverages to fill the void, with bottled water the beverage category that benefits most from the decline of carbonates. Barry tells Global Coffee Report that ready-to-drink (RTD) coffee is another increasingly

attractive option. “We’re seeing a lot of occasions opening up where, if someone isn’t drinking a carbonated soft drink, what are they drinking instead?” Barry asks. “If you were drinking a soft drink for the caffeine or energy, you need to substitute it with something else. RTD coffee is succeeding in places where it can poach those occasions successfully.” Declining popularity of carbonates is only one of many reasons that the RTD coffee market has seen a spike in popularity. Barry says the rise of café culture in many countries is the main driver of coffee in the RTD space, as it leads to a greater knowledge and appreciation of coffee and the ways it can be consumed. “As coffee shop culture expands worldwide, RTD coffee follows in its wake, particularly as cold coffee becomes popular,” he says. “There are also plenty of places with strong café cultures where RTD coffee isn’t taking

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off as well, like Italy. That’s probably because these countries don’t particularly value cold coffee. Places that do praise cold coffee, the United Kingdom for example, have a more correspondingly active RTD market.”

CALIFIA CALLING One of the RTD coffee brands to quickly gain momentum across the world is the USbased Califia Farms. The plant-based beverage company received US$225 million in a financing round in January 2020 to build on the success of its oat platform and launch other product lines. Califia Farms produces plant-based milks in a variety of formats for the coffee industry, including barista milks and creamers. CEO and Founder Greg Steltenpohl tells GCR the company’s interest in RTD coffee came from

developing its milks profiles to be compatible with coffee. “We started making dairy alternatives and found some combinations of coffee with almond or oat milks tasted better than with dairy, due to certain flavour notes and personality,” Steltenpohl says. “Looking at the macro profile, plant milks are lower in fat and sugar, so it can provide more transparency with lighter cold brews than dairy. If you’ve got a well roasted product, it allows the coffee to stand on its own terms.” In the last few years, Califia Farms has built a strong following, particularly in the natural foods segment, where it leads the RTD coffee market. Other than health, Steltenpohl says a key component of Califia Farms’ popularity is its commitment to sustainability, particularly in the sourcing of its coffee. Califia Farms supports the direct trade model, paying a premium for its coffee, verifying the farm gate price paid to farmers, and maintaining transparency and traceability

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with cooperatives and importers. “We focus on a small group of grower and cooperative suppliers and buy over a multi-year period so they have a reliable level of economic support,” Steltenpohl says. “First and foremost, people want the taste, variety, and functionality, but after that, brand loyalty is determined by the ethics of the company.” Alongside the US, Califia Farms’ major markets include Canada, the UK, Australia, Hong Kong, Singapore, and Mexico. Steltenpohl says the UK is its strongest RTD market, due to the government’s heavy messaging on health and reducing sugar intake. With Califia Farms established in Western countries, Califia Farms focus for expansion is Asia and the Middle East. “The Middle East has high temperatures, a strong coffee culture, and plenty of occasions where people are out and about and looking for mobility,” Steltenpohl says. “Plant milks aren’t really established yet in Asia, so we see potential in a market already familiar with RTD coffee, especially Japan.”

THE FANTASTIC FOUR Although the global RTD market has become more complex in recent years, Euromonitor’s Barry says historically, it could be broken down into four categories. Japan was the first country to see the potential in the RTD market for coffee. Barry says its popularity blossomed in the 1970s, when companies like Suntory and Ueshima Coffee Company began selling coffee in cans throughout the country’s major cities. Today, Japan is notorious for the coffee vending machines sitting on every street corner. Barry says the RTD market in Japan has always emphasised functionality, and is still the largest in the world.

FEATURE RTD coffee

PLAYING WITH THE BIG BOYS

Califia Farms entered the RTD coffee market after finding profiles that complemented its plant-based milks.

“These products were designed to get people through the country’s notoriously long working days,” he says. “Now, the Japanese worker can get it from a vending machine most places any time of the day.” While this is where the RTD coffee market started, Barry says this focus on functionality was isolated to Japan and surrounding Asian countries. Other markets emerged independently with their own preferences. In Europe, particularly German speaking countries, dairy producers like the Emmi Group dominated the RTD coffee market until recently. Many of these products were mixed with milk and sugar, unlike the predominately black Japanese market, to appeal to local tastes. “If you look at what was selling in Europe a decade ago, it was almost exclusively these types of drinks,” Barry says. “Even on the shelves, you’d find RTD coffee next to the milk products, which isn’t necessarily the case in the US or Japan.” Similarly to Europe, the Australian market features RTD and iced coffee drinks filled with milk and sugar. Barry says the key difference between the two markets is Australia’s focus on multi-serve products. “You see RTD coffee in bigger pack sizes, with companies like Farmers Union quite popular in Australia. It’s a lot more unusual worldwide,” he says. “In the long term, this Australian style could face challenges. It’s sweeter, milkier, and runs into the same sugar concerns dogging the carbonates category.” With globalisation bringing divergent coffee cultures together, the fourth market style – North America – is the one Barry believes has gained the most traction. In this market, RTD coffee has been heavily tied to coffee shops and chains, leveraging off the brand recognition to build a foothold. “The American market can probably be traced back to the 1990s, when Starbucks started distributing its Fall Frappuccino line with Pepsi Co. They probably thought: ‘people like our frappucinnos in food service, what if we sold them in a retail setting?’,” Barry says. “This American type of coffee is still doing well in the US and Canada and has expanded internationally. Of the four, it’s very clear the American type is winning out and I think it’s because of how it has attached itself to the coffee shop.”

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Total beverage companies have also taken notice of how brands hold value in the RTD coffee market. Coca-Cola completed its acquisition of British chain Costa Coffee in early 2019 and launched a range of RTD coffee drinks under the brand in the UK later that year. Barry says Coca-Cola also produces RTD coffee in the US under licenses from Dunkin’ and McCafé among other brands. “There’s a shift in wider beverage companies towards the coffee space. As their core markets struggle, they see this as a growth area, where young people are drinking and there is a lot of potential,” Barry says. “When you think about Coca-Cola, you picture that iconic red can. They don’t just want to sell more of that. They want to be drunk in different occasions. If you want to be a total beverage company, like Coca-Cola and its competitors do, you need a viable a coffee strategy.” He says RTD is the most appealing avenue into coffee due to their existing strengths in distribution, bottling, and marketing. However, total beverage companies have also begun using their own names in relation to coffee. Coca-Cola and Pepsi Co have both released variants of their signature drinks combined with coffee. Barry says these drinks market themselves mainly on caffeine content, and try to fill the niche between soft drinks and energy drinks.

FORM FOLLOWS FUNCTION The line between coffee and energy drinks has become increasingly blurred as products like High Brew Coffee, Java and Caffé Monster, and Starbucks Doubleshot Energy Coffee complicate the market. “Energy drinks are still doing well, but the two categories are getting close together. It’s tricky because in some cases, energy drinks are becoming more like coffee and vice versa,” Barry says. “This is part of an emerging functional category. We’re seeing a lot of coffee drinks competing for the same occasions as energy drinks while others are targeting completely different markets.” While café culture and brand identity have led the growth of RTD coffee, Barry says

moving forward, functionality is influencing many new products in the market. “It’s still a pretty small market in terms of sales, but functionality dominates in product launches. We’ve started to see many brands appear, for example, with CBD – or cannabis – coffee, which could offer an energy boot in a less jittery way,” Barry says. “We don’t know for sure if that’s the case yet because it’s still very new.” RTD coffee’s functionality extends beyond offering an energy boost. Coffee can be customised in many ways to create new products that fill different niches in the market. Nitro, sparkling, and alcoholic coffee are trends from food service that have leaked into the retail space, which Barry says has kept RTD coffee “exciting” and its growth rate high. This is only the tip of the iceberg when it comes to RTD coffee’s versatility. “Cold brew is naturally healthy with low sugar and artificial content, so it’s a good base for other products,” Barry says. “The question is: ‘what can we do with it?’ And we’re starting to see answers.”

MILLENNIALS ARE THE FUTURE Many of the trends and factors driving the RTD coffee market are most appealing to or caused by the millennial generation. “It goes back to coffee shop culture. It’s younger people who are spending more time in coffee shops and prefer cold coffee,” Barry says. “Particularly in the US, there’s a stronger preference among younger people than previous generations for cold brew, which benefits RTD which is almost always served cold. Then there’s their presence in the on-the-go segment that RTD is also targeting.” As the main consumers of plant milks, millennials are also likely contributing to the success of dairy alternatives in the RTD coffee market. As well as Califia Farms, Sweden’s Oatly, England’s Minor Figures, and numerous coffee roasters have made plays in the space. Califia Farms’ Steltenpohl says millennials are making more health, quality, and money conscious decisions than their parents and grandparents. “Americans typically have a very sweet taste palate, but many younger people were raised on low sugar diets. They’re also willing to seek out those specialty taste profiles that craft coffee has made popular,” he says. This is also translating to the popularity of Califia Farms’ larger bottles in grocery and natural food stores. “People are finding good value cost-per-ounce by buying a multiserve container. For the price of one large latte at a specialty store, they can have six servings at home. It’s quite a pragmatic solution for many younger consumers.” With growing interest in on-the-go functionality, coffee shop culture well ingrained, and healthy alternatives on the rise, Euromonitor’s Barry says the RTD coffee market has a bright future. “RTD coffee can be an indulgent sugary beverage that’s just a treat if it wants. It can also be purely functional, very much like an energy drink, and everything in between,” Barry says. “You can do a lot with RTD coffee and I don’t think the market is even close to figuring out all of the possibilities.” G C R

MAY/JUNE 2020

MARCH/APRIL 20

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RTD ON THE RISE

A booming market driven by millennials

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THE MOTHER OF ALL CAUSES Will 2020 be the tipping point of climate change for the global coffee industry?

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DARE TO

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SOLUTIONS

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Image credit: LM Salazar, Crop Trust.

The genetic diversity of coffee on display at the CATIE collection in Costa Rica.

Arabica at risk A MAJOR STUDY SHOWS THAT COFFEA ARABICA IS ONE OF THE LEAST GENETICALLY DIVERSE CROP SPECIES IN THE WORLD, AND UNLESS ACTION IS TAKEN, THE FUTURE OF THE COFFEE INDUSTRY IS AT RISK.

rom 1845 to 1849, Ireland experienced one of the most significant chapters in its history: the Great Famine. Commonly referred to as the Irish Potato Famine, Phytophthora infestans, a type of water mould, infected potato crops around the nation and rotted them from the inside out. The event provided a stark lesson on how reliant humans are on crops. Approximately one million Irish died and a further one million emigrated, leading to the nation’s population immediately falling between 20 to 25 per cent. It took more than a century for Ireland’s population figures to recover. According to World Coffee Research’s (WCR) latest study on genetic diversity, Arabica coffee plants are one of the least genetically diverse major crop species in the world – meaning the coffee industry may face similar threats in the future.

“Researchers have known for a long time that the genetic diversity of Arabica coffee is low. This [WCR’s recently released] paper provides clear, definitive evidence that the diversity is even lower than we thought,” says Jennifer Vern Long, CEO of WCR. “This is tremendously concerning for a crop as important as coffee. It reveals a profound vulnerability for any business that depends on coffee.” WCR led the study to decode the

M AY /J U N E 2 0 2 0 | GCR

Molecular breeder and WCR Advanced Research Manager Lucile Toniutti and WCR Scientific Coordinator – Central America Dr. Francisco Anzueto examine an Obata plant.

genetic history of Arabica along with The French Agricultural Research Centre for International Development (CIRAD) and Instituto di Genomica Applicata (IGA). There were further collaborations from the Italian Universities of Trieste, Udine, Padova, and Verona, and key contributions from The Tropical Agricultural Research and Higher Education Center (CATIE), the University of Sana’a in Yemen, and Texas A&M University. “The study was partly based on modulisation and predictions. It was the first study to use genotyping-by-sequencing (GBS),” says Lucile Toniutti, WCR Advanced Research Manager. GBS uses restriction enzymes to split DNA into fragments to discover genetic mapping. The sequence was completed on a Red Bourbon plant and researchers analysed the GSB data for 736 Arabica plants. The study concluded that with a significant likelihood, Arabica derived from a spontaneous coupling of two species, Coffea canepohra and Coffea eugonioides. This

G C R | M AY /J U N E 2 0 2 0

Image credit: Devon Barker

FEATURE World Coffee Research

would mean the billions of Arabica trees in existence today derive from a single plant that existed an estimated 10,000 to 20,000 years ago. WCR says key threats to Arabica coffee include climate change, heat, drought, and leaf rust, making the species “extremely vulnerable”. “If an epidemic breaks out, think of a new disease emerging like COVID-19 but for coffee, it has the potential to kill all varieties of Arabica because they are so similar. All these plants are susceptible to the same threats,” Toniutti says. Coffee leaf rust, a fungus which attacks a coffee plant’s leaves, can lead to a drastic decrease in photosynthesis. This causes an affected plant to severely reduce its yield and, in some cases, die. The most recent major outbreak of leaf rust occurred across Central America in 2012-14. According to Promecafe, the epidemic led to more than US$3.2 billion in damage and lost income, including more than 1.7 million coffee workers losing employment. “The leaf rust epidemic of 2012-14 in Latin America was a canary in the coal mine [an advanced warning of impending danger]. It obviously didn’t wipe out Arabica coffee entirely, but it made a huge dent in epidemic regions,” says Hanna Neuschwander, Communications Manager at WCR. Toniutti adds many approaches breeders use in other crops do not apply to Arabica due to its lack of genetic diversity. This means in the long term, the solution will lie in crossbreeding Arabica with other species of coffee, including wild coffee relatives. In the short term, however, breeders are turning to the small reservoir of genetic diversity that does exist in Arabica, resulting in “F1 hybrids”, a name which derives from it being the “first generation” offspring of two distinct parent plants. “When creating F1 hybrids you need to choose plants that are as different genetically as possible. The process utilises existing Arabica coffees that haven’t been much used in breeding before. Typically, breeders are using one parent of a common, widely cultivated coffee. In some

cases, this includes rust resistant Arabicas from the Catimore or Sarchimor families that already incorporate some Robusta genetics and crossing them with another parent that is genetically distinct and has not been used before,” Toniutti says. “In the long term, a similar approach may be taken to cross Arabica with other coffee species. There are almost 130 coffee species, so we need to cross-breed the Arabica with species that have a higher tolerance to factors like disease or drought.” The tendency of crossbred plants to show superior qualities to both parents is known as ‘hybrid vigour’, a topic which Toniutti covered in her PhD. “When doing crosses between Arabica and other coffee species, you want to maintain the genetic background of Arabica but just integrate some genes from other species. This means you may have to do several crosses which can take some time, so we are developing molecular markers to track important genes,” Toniutti says.

Disease resistance is a valuable trait for Arabica crops to develop, as are yield and cup quality. The rising impact of climate change, however, means that it is important for researchers to breed plants with the ability to produce high yield in a range of different climates, including tolerance to drought and heat. “The threat of climate change is real and extremely serious. Arabica is not well-adapted to the kind of variability we are increasingly seeing in weather around the world. Without a reservoir of genetic diversity to tap into it’s harder to find the right tools to fight the disease,” Neuschwander says. “The weather is so erratic in many places around the world now. Farmers need a plant that can handle heat one year, cool the next, and varied levels of dryness. Climate scientists are telling us that variability will be the biggest problem for coffee farmers overall. We need to increase the ability of Arabica to handle that variability.” The first F1 hybrid varieties were created in 1997 by CATIE, CIRAD, and Promecafe, proving that it’s possible to produce genetically superior Arabica. WCR and others are proceeding with additional F1 hybrid breeding on the evidence of success of these earlier efforts. According to Neuschwander, the definitive findings about Arabica’s limited genetic diversity should help give the coffee industry impetus to take the front foot in tackling these potential threats. “To have this definitive evidence is meaningful – this is the kind of finding that mobilises action,” she says. “The good news is that breeding F1 hybrids that utilise Arabica’s existing but underexploited genetic diversity, and breeding with other species of the coffee family are both underway.” G C R For more information, visit www.worldcoffeeresearch.org

IT’S ALL ABOUT THE MOMENT when a coffee to go becomes an experience that stays.

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ORIGIN Ethiopia

Stars align for Ethiopia THE INAUGURAL CUP OF EXCELLENCE COMPETITION AND AN OPEN EXPORT MARKET ARE CREATING NEW OPPORTUNITIES FORÂ PRODUCERS.

his year, Ethiopia is hosting its first-ever Cup of Excellence (CoE) competition, the annual Alliance for Coffee Excellence (ACE) event that identifies and celebrates the highest-quality coffees around the world. The auction this summer is the culmination of years toiling on the farms, weeks of cupping and scoring, and navigating daily hurdles as the novel coronavirus spread globally and threatened to cancel the competition. Given all the resources invested and record-levels of interest by farmers, ACE and its partners worked hard to ensure the competition stayed its course, albeit safely and with necessary modifications. The only major change, at the time of print, was the location of the inaugural event. For the first time in the CoEâ&#x20AC;&#x2122;s 20-year history, the competition will take place outside of origin due to travel and socialdistancing restrictions of the coronavirus.

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The top 150 pre-selection winners were stored in the Addis Ababa CoE Center before being sent to ACE’s homebase in Portland, United States, for national and international judging rounds from 30 March to 10 April. “Our members and board of directors have been demanding that we bring on Ethiopia at all costs,” says ACE Executive Director Darrin Daniel. “Ethiopia is such a good fit for CoE for so many reasons: the coffee quality, diversity of regions, coffee culture, and history of the country. Everything we think about coffee comes back to Ethiopia, so some might say it’s a no-brainer.” But he explains that picking the next new competition country is not nearly as simple as throwing a dart at the coffee belt map. First, there needs to be a certain level of quality for a country to qualify. Then there needs to be an organising partner in-country to help facilitate the various stages and a mandate from the host country to make it a national program. Lastly, proper infrastructure and funding is necessary to license the program and work with ACE, among other costs. “They have to really want us to be there,” Daniel tells Global Coffee Report. “There has to be a profound desire to work within our standards because they’re very difficult standards and it’s not a cheap program. But if these countries really care about their producers, the impact for producers is pretty immeasurable. That’s what makes the stars align.” For Ethiopia and the CoE, the stars truly did align. After liberalisation of the sector in 2017, ACE finally had the inroads into the country that it needed. It partnered with the Ethiopian Coffee & Tea Authority (CTA) and the US Agency for International Development (USAID) through its Feed the Future initiative. According to Ian Chesterman, Chief of Party in the Feed the Future Ethiopian Value Chain Activity, the CTA organised a series of briefings across all of the key coffee production areas that were attended by more than 2800 farmers in late 2019, and then

followed them up with a national radio and print media campaign. Daniel says a typical first-year CoE competition sees about 400 to 500 entrants, but Ethiopia received a whopping 1462 submissions, 300-plus more than the previous record holder of Colombia. “I think the interest is just testament to how excited they were that CoE was finally coming to Ethiopia,” admits Daniel. “Farmers [often] have a degree of skepticism when a foreigner comes in with a plan and promises to get high prices for them. That’s when you normally see people sitting back and waiting to see how the first year goes. That clearly didn’t happen here.”

ENDLESS VARIETIES Being coffee’s birthplace, Ethiopia has the most genetic diversity of coffee varieties in the world. In addition to wild cultivars, or “landraces” known among farmers for their specific traits, the Jimma Agriculture Research Center (JARC) has been breeding improved coffee varieties since the 1970s. Today, JARC has developed about 40 different coffee varieties. This includes varieties for disease resistance, drought tolerance, high yield, specialty-grade quality, and more, according to Getu Bekele, owner of Ethiopia-based G Broad Trading Private Limited Company and co-author of Counter Culture Coffee’s book A Reference Guide to Ethiopian Coffee Varieties. Despite this vast collection, coffee buyers and roasters often lump Ethiopian coffee under the “Heirloom” label. “There are more than one hundred different improved and local landrace coffee varieties that have been grown in different coffee producing areas in Ethiopia,” Bekele says. “Because information on these varieties was not reviewed and compiled in a very accessible way to the wider coffee community, very limited knowledge about Ethiopian coffee varieties has been shared and communicated in the global specialty coffee industry.” This knowledge gap was the motivation for the varieties book Counter Culture published in 2018. “[Since then] we have seen a great deal of actions taken to decode the very generic descriptor

Ethiopia has the most genetic diversity of coffee varieties in the world, some of which will feature in the inaugural CoE competition.

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ORIGIN Ethiopia

A whopping 1462 coffees were submitted in the inaugural Cup of Excellence Ethiopia competition.

‘Ethiopian Heirloom’ into the specific coffee variety names and their respective details. The book has been helping coffee buyers and roasters communicate more clearly about their coffee lots from the perspective of varieties,” Bekele tells GCR . “Similarly, coffee farmers are better informed of the types and characteristics of different Ethiopian coffee varieties. This, in turn, helps farmers make smart decisions during variety selection, which impacts coffee production, productivity, quality, and sustainability.” Ethiopia’s main coffee-growing areas are largely located in the eastern, western, and southern regions of the landlocked country. According to Adugna Debela, Director General of CTA, the Oromia region is responsible for about 60 per cent of total production, and the Southern Nation Nationalities and Peoples (SNNP) region produces about 35 per cent. Both are in the southern half of the country, so the east and west regions produce the remaining 5 per cent. Some districts within these regions are becoming more recognisable at the roaster and consumer levels for their specific characteristics. This is happening as Ethiopia’s varieties are further investigated and as consumers become more interested in coffee origins. Ethiopia has also branded a few of its growing districts, including Harrar, Limu, Sidama and Yirgacheffe. “There is a significant level of difference among coffee regions for their quality profile, which is mainly due to differences in variety, environment, and agronomic practices. Due to these differences and their inevitable interactions, it is possible to produce a wide range of coffee quality profiles in Ethiopia,” Bekele explains. “The presence of diverse agroecology where coffee grows plays a great role in the production of different coffee types in Ethiopia. These include high altitudes, fertile soil, adequate amounts and distributions of rainfall, and adequate shade.”

INCREASING DEMAND TRENDS Smallholder farmers are responsible for 95 per cent of total production, a volume that has been increasing steadily since about 2012. The International Coffee Organization

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estimates total production at nearly 7.8 million 60-kilogram bags for the 2018-19 harvest, making Ethiopia the fifth-largest producer globally. The estimated 4.3 per cent increase from the previous year is “due to favourable weather conditions, including better rainfall, and less disease and pest pressure,” according to the USDA Foreign Agricultural Service’s GAIN Report. “Farmers are also benefiting from improved agriculture extension services from the government to support coffee production and marketing.” Although farmers are up against some of the same challenges as the rest of the global coffee industry – increased pest and disease, climate change, aging trees and lack of access to necessary resources – production is climbing as industry reform and foreign investment have opened up markets and supported renovation programs. The Ethiopia Commodity Exchange (ECX) was established in 2008 to reduce price volatility and incentivise increased production through a centralised trading system, according to the USDA, but it also effectively ceased any direct trade and created traceability issues – two things that have become increasingly important to coffee companies and consumers. In response, the government loosened ECX trading restrictions in 2017. In addition to giving growers direct access to international markets, “Ethiopian coffee sector reform brought competitiveness to exporters, growers, suppliers, and service providers; improvements in coffee quality and traceability; export volume and value increment; and new investors into the coffee industry,” says Debela. Like production, exports have been increasing steadily, especially due to Ethiopian coffee’s high value on international markets. In the 2018-19 harvest season, Ethiopia exported a record 3.8 million 60-kilogram bags of coffee, according to the ICO. But because Ethiopia consumes nearly half of its annual production – the top consumer in all of Africa – the country’s export ranking on a global scale isn’t as high as that of production. Because coffee has such a long history in the country, consuming it – whether casually over conversation or in a traditional coffee ceremony – is ingrained in the local culture. This creates a tug-of-war between domestic and export demand. Considering coffee makes up about 34 per cent of total country export values, according to the USDA, the government mandates that high-quality coffees be reserved for export. In the 2018-19 harvest season Ethiopia exported a record 3.8 million 60-kilogram bags of coffee.

“ETHIOPIA IS SUCH A GOOD FIT FOR COE FOR SO MANY REASONS: THE COFFEE QUALITY, DIVERSITY OF REGIONS, COFFEE CULTURE, HISTORY OF THE COUNTRY. EVERYTHING WE THINK ABOUT COFFEE COMES BACK TO ETHIOPIA, SO SOME MIGHT SAY IT’S A NO-BRAINER.” Darrin Daniel

ACE Executive Director

In fact, “it is highly prohibited to sell high-quality coffees for local consumption”, explains Bekele. “It is only possible to supply lower-grade and rejected coffees to the local market. As a result, specialty coffee consumption has not [picked up] in Ethiopia the way it has around the globe.” To manage the balance between export and domestic demand, Debela says the focus should be on continuing to increase production, particularly of specialty coffees. This is where initiatives like CoE and Counter Culture’s book can boost awareness of Ethiopian coffee, which then helps drive interest at the farmer level to produce higherquality coffee. “CoE provides momentum to encourage the emphasis on marketing specialty coffee rather than the traditional trading of commodity coffee,” says Chesterman. “The competition places farmers in direct contact with markets and buyers and promotes the true value of the best coffees to improve farm sustainability and encourage investment in best practices.” G C R

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FEATURE Price Stabilisation

A source of stability THE COLOMBIAN GOVERNMENT HAS LAUNCHED A COFFEE PRICE STABILISATION FUND TO SHELTER PRODUCERS FROM THE EFFECTS OF LOW COFFEE PRICES, WHICH HAVE MASKED A DEFICIT IN THE MARKET.

n the face of sustained low coffee prices and continued uncertainty in the market, the Colombian Government has acted to protect its producers from volatility. On 11 July 2019, Colombian President Ivan Duque announced the creation of a Coffee Price Stabilisation Fund (FEPC), worth COL$218 billion (about US$64 million), which launched in February 2020. The fund has been a long-time aspiration of the nation’s coffee producers, Colombian Coffee Growers Federation (FNC) CEO Roberto Vélez Vallejo tells Global Coffee Report. “The fund will help coffee growers when prices come down to stabilise their income,” Vélez says. “There has been a desire from coffee growers to have a less volatile coffee price. Moreover, they want something that supports internal prices when the market falls below the cost of production.” He says it’s important to note the FEPC will not simply maintain an artificial price when the market falls. Instead, it will be used to launch a set of mechanisms that will stabilise the income of growers. While decisions have not yet been made of how to allocate fund, Vélez suggests subsidies

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for agricultural products like fertiliser or insurance premiums as one alternative. “Colombian producers are pretty excited about the fund, although I’m not sure everybody understands what this stabilisation fund is and what actions it will take,” he says. “There’s a little bit of confusion as there is not a clear image of what the stabilisation fund will do just yet. A secretariat will be appointed to propose mechanisms that can be implemented with the fund.” The FNC will play a role in handling and decisions regarding the FEPC. The federation will also contribute money from coffee growers through the National Coffee Fund (FoNC) it administers.

“About half a cent from every pound of coffee exported will go to the stabilisation fund,” Vélez says. Producers have paid a small coffee tax for every pound of coffee exported from Colombia since 1928, which is used to provide collective benefits for the industry. The FoNC was formerly established in 1940 and is the primary source of funding for the purchase guarantee, scientific research and technological development of Cenicafé, Extension Service, and marketing of Colombian coffee. “The fund provided a price support mechanism that used to collect money when prices went up and maintained a sustainable price when prices come down,” Vélez says. “That function of the coffee ended in the late 1990s or early 2000s. But coffee growers maintained the idea there should be a mechanism to support prices when the market collapsed.” The government has also contributed a majority of the money going toward the FEPC. Third parties including international donors, individual growers, and local governments will also be able to support the stabilisation fund. Vélez says he hopes the FEPC will prevent circumstances from occurring like the 2013 Colombian coffee growers strike. The high Colombian peso and low US dollar in the early 2010s led to internal prices falling below production costs. Producers went on strike from 25 February to 8 March 2013 to force government support, interrupting logistics and coffee processing in the country. “Growers were anxious for help them during those times. Eventually, the government came in and provided money to support them, but it was a difficult time for many growers,” Vélez says. “Fortunately, in recent years, our currency levels have helped growers survive low market prices. But this is the case of Colombia. In other producing countries, the situation is really traumatic. If our ideas work for Colombian producers, I hope they serve as a model for other countries to follow.”

cannot be blind to deficits in the market while paying producers below production costs. “I’m not asking anyone to cover inefficiencies. Find the most efficient coffee producer in Colombia, see their cost of production, and say ‘this is the minimum I will pay’,” Vélez says. “At the same time the industry is running low on coffee, we have several clients knocking on our door, asking us to ship immediately.” With the COVID-19 pandemic possibly complicating supply chains in the near future, Vélez says it’s more important than ever that roasters ensure their supply. “We’re facing something we’ve never seen before. It is very hard to say which way the market will move,” Vélez says. “After all this is over, the world needs to start thinking if this just-in-time system is really okay. There are many things we need to do to give the industry a sustainable future.” G C R

COMING UP SHORT Since late 2019, there has been significant fluctuation in international coffee prices. However, Vélez says that even at their highest points, prices are still too low. He adds the increasing differential between mild or washed coffees and Brazilian naturals suggests prices are not truly reflective of the current coffee market. “The differential for mild coffees is more than 30 or 40 US cents per pound. That demonstrates a couple of things we’ve been preaching for a long time,” Vélez says. “When you talk about why the price is low, people say ‘there is too much coffee’. But there’s something wrong when you see differentials going that high. It means there’s not that much washed coffee available.” He attributes this to Brazil’s heavy influence over the C Market. Brazil’s recordbreaking harvest of 62.6 million bags in 2018 rippled through the market, reducing prices across the board. “Differentials are supposed to recognise the lack of one origin against others, but the market reflects the prices or availability of Brazilian coffee,” Vélez says. “When the C Market was created, Colombia would get two US cents over the market price as a recognition of quality, but today it’s around 40 cents. It’s the market that should be 40 cents up, not the differential. Brazil’s crop is anchoring the market at US$1.” In order to address these inconsistencies, Vélez is calling for greater communication across the coffee supply chain. “We need to all sit together and talk. Had we known the needs of the industry in terms of coffee, we could have been better prepared. But the industry is not ready to talk to us,” Vélez says. “There must be a recognition that there is something wrong with the way the C Market is operating.” In order to establish a sustainable coffee supply chain, Vélez says the industry

Roberto Vélez Vallejo is the CEO of the Colombian Coffee Growers Federation.

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PROFILE Cropster

Information is power SOFTWARE SOLUTION PROVIDER CROPSTER DISCUSSES THE IMPORTANCE OF BUSINESS INTELLIGENCE AND TIGHT INTEGRATION IN THE EVERCHANGING GLOBAL COFFEE INDUSTRY.

offee is a complex product. It passes through many hands across the supply chain, from the coffee farmer to the roasting plant. Information is generated at each step, creating hundreds of data points that impact a roaster’s end product, efficiency, and bottom line. Software as a service (SaaS) company Cropster has more than a decade of experience catering to the coffee industry, learning what data is important to the coffee industry and tailoring the service it provides to it. Cropster Head of Enterprise Sales and Education Andy Benedikter tells Global Coffee Report not having access to this business intelligence is a competitive disadvantage in the coffee industry. “It is key for anyone in the coffee business – for people in production, trading, and processing – to be able to track, manage, and share important information about the coffee, its success, and its traceability, to be able to make good decisions faster,” Benedikter says. While a roaster’s existing systems may be able to gather data on their own, not collating this can result in ‘data islands’, isolated key Cropster tailors its solutions to the individual needs of its customers. information that cannot be turned into business insights. Access to this collated data can improve the transparency of a coffee business. Benedikter says this shows due diligence to customers, can help build better relationships with suppliers, and provides a clearer picture of the business to managers. “Well integrated information is important to make critical choices, whether this be buying supplies, processing coffee, or understanding the success of sales, financial planning, and growth planning,” Benedikter says. “Not having this data causes you to fall behind your competitors, and might mean making errors or not planning for the future in the best way possible. Better and faster decisions always save money.” In his role, Benedikter works with Cropster’s larger customers, ensuring its service is optimised to their individual needs. “Everybody has processes in place specific to their operation, or ways they track information about roasting, procurement, sensory, and so on,” Benedikter says. “Only how they do it differs. As a SaaS company, we approach this by providing the broadest possible spectrum of data points and customise the existing application to the needs of the user, rather than building something from the ground up. This saves them time and money.” Cropster has developed its platform in direct collaboration with the coffee industry, incorporating feedback from a variety of business of different sizes in different fields of the industry. It has also taught them how to adapt its service to different customers. “Our goal at Cropster is to make sure our customers can use the tools and systems they already have in place and tie them into our system,” Benedikter says. In a recent case, Benedikter travelled to the United States for a site visit with a prospective

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customer who wanted Cropster to track roasting information, automate the process, and tie into its quality control procedures. This information had to be shared with the enterprise resource planning (ERP) software the business used to manage inventory and the sales and logistics of the procurement process. “We asked them for their workflow goal – what they want to achieve in non-software terms – which was to determine if their production is consistent, the next coffee they buy, and how they can improve their profiles,” Benedikter says. “We integrated our interface with their ERP system to help them find the specific data points they needed. In this case, they have the green coffee stored in their ERP system, then push it to Cropster for roasting. That roast production is stored in Cropster, but is also synchronised back into the ERP system to keep things level.”

Common ERP systems Cropster comes across include Netsuite, SAP, and MS Dynamics. Not linking systems like these can become a cost burden on a roastery, as less reliable human labour is required to reduce double data entry and inconsistencies across different platforms. Though Cropster mitigates human error, the company understands the importance of staff as a source of insight. The company provides Enterprise Success sessions and classes to teach people how to use its tools, about new functionality, and train new hires. “There is a direct cost having a person sitting there making sure that inventory positions, orders, quality control information, or whatever you want to synchronise, is level in both systems. But if they make a mistake, it creates even bigger problems,” Benedikter says. “Mismatches result in bad decisions. You could buy the wrong quality at the wrong price point, there could be mistakes in accounting, and then comes the indirect costs. Once an error has occurred, it’s close to impossible to go back and figure out what has happened. A tight digital integration is not only desirable, it’s almost mandatory.” Increased business intelligence provides benefits across the company. Benedikter says CEOs and management can build solid growth plans relying on the accuracy of financial data, input versus output information, and reports from critical processes of the business. Production managers, on the other hand, can ensure good use of the green coffee, that it’s bought at the right cost, and that production is fulfilling the orders that are coming in. “If they had to manually work several different systems, they’d probably go nuts from reviewing all those data points,” Benedikter says. “But with tight integration, they can rely on the information being correct, and for it to be shared between systems.” This increased focus on connectivity and business intelligence is not unique to coffee. Concepts like industry 4.0, the Internet of Things, artificial intelligence, and machine learning are influencing many industries. Automation has captured the coffee industry’s interest in particular, in both roast production and wider plant systems. “As a roasting business, you have the ability to automatically perform roasts, and replay profiles as and when you wish. It sounds easy, but you have to run smart processes in the background

Cropster can integrate its solutions with existing ERP softwares.

Business intelligence can help companies make decisions that are quicker and better.

to make sure that the result and not just the process is replicated,” Benedikter says. “Running a plant offline is not a doable strategy any more. Now during the coronavirus pandemic, if a production manager needs to, they can review and plan their production from home, including shifts for roast production.” As a SaaS provider, Cropster is able to frequently update its software to provide its customers with more and faster business intelligence. This allows the company to incorporate new important data points, like water activity and environmental tracking of the warehouse, into its service. It can also immediately launch new tools, like the free webshop platform and directory shipsbeans.com, to help roasters mitigate the impact of COVID-19. “Systems are becoming more digital, and the coffee industry understands that knowing more about the coffee and the processes involved is not only interesting, it’s a necessity,” Benedikter says. “Businesses have more systems, more equipment, more locations, and more people. The more variables you introduce, the more you rely on gathering this data tightly together. Otherwise you waste time chasing information.” G C R For more information, visit www.cropster.com

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PROFILE Cama Group

The full package CAMA GROUP IS READY, WILLING, AND ABLE TO PROVIDE THE COFFEE INDUSTRY WITH FLEXIBLE SECONDARY PACKAGING SOLUTIONS TO MEET ITS EVERCHANGING NEEDS.

n industry as diverse as coffee requires flexibility in every part of production, from roasting numerous profiles to providing different methods of serving coffee to the end consumer. After coffee has been packaged, whether that be in capsules, bags, or sachets, it needs to be boxed and cartoned. Italian company Cama Group has provided these secondary packaging solutions to the global coffee industry – and other food and beverage sectors – for more than 30 years. Alessandro Rocca, Sales Engineering Director at Cama Group, says the company prides itself on adapting to the needs of its clients. “We are always ready to face new requests and develop customised solutions for our customers,” Rocca says. “If they are looking for a new machine, our engineering department is linked to sales and able to provide such solutions. If an existing customer wants their machine to package in a new format, we can analyse the request and determine if the machine they already have on the floor is capable of doing it.” In a recent example, Rocca says a large Italian customer came to the Cama Group with a packaging format they didn’t think would be possible with their current equipment. Cama’s engineers looked into the request and configured the packaging unit to make it possible. “The customer thought their idea was impossible without switching from one technology to

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another, but we made it happen,” Rocca says. To accomplish this, Cama introduced several robotic modules into the already flexible machine. This included robotic closing, forming, and loading, which also increased its input and output. “The machine is so modular that we are able to equip it with different components to meet this need for flexibility,” Rocca says. “We spent a lot of time in engineering to develop these sections and the market is thanking us, because that’s the level of flexibility it really needs.” The client uses Cama’s IF318 robotised monoblock loading unit, a favourite – Rocca says – in the coffee industry. “This machine embraces all of the features that our customers normally look for in a packaging machine,” he says.

The IF318 is Cama Group’s most popular model in the coffee industry.

“It’s a fully robotic system, very clean and lean in terms of design, has fast change over, high speed, and a good carbon footprint.” The IF318 is a top loader, a type of machine typically used for flat blank packaging, while side loaders and other models handle other forms of packaging. This has traditionally meant that coffee processors would require multiple packaging lines for different products. However, Cama has incorporated the capabilities of these other models into the IF318, meaning its customers can streamline their packaging operations. “The top loader possesses the biggest flexibility in terms of packaging, because you can really load most products from the top. The side loader has some advantages in terms of speed, but isn’t as suitable for a large number of products,” Rocca says. “This is why we combined the abilities of our side loader into a top loader, so one machine is capable of producing everything.” He says this is particularly important to Cama’s coffee industry clients, who sell their products in a variety of formats, flavours, and secondary packages. While Cama provides solutions for most coffee formats, Rocca says by far, its biggest foothold is in the coffee capsule packaging space.

“Capsules are huge for us and that’s where our customers are looking for machines,” he says. “Our customer base includes many coffee roasters, but the majority are co-packers. They do not have stable production because they are market driven. They need to change packaging formats often, which is why they need the most flexible machine to best serve their customers.” Another driver of the coffee industry’s desire for flexibility is the competition in the packaging space. With many businesses entering the market, distinctive packaging is key to standing out from the crowd. “Besides our technological expertise, we have a packaging department that can help our customers determine the best solution in terms of packaging design, footprint, and carton saving,” Rocca says. “Customers are always looking for new packaging configurations. We call a new one we’ve implemented ‘the flower’. It’s eight capsules in a box with two on top and a cardboard partition in between.” Coffee businesses are also looking for new, versatile ways to sell their capsules, which pose difficulties in terms of packaging. Rocca says it’s a challenge Cama is happy to accept. “Demands are changing and growing, and customers aren’t going to stop now. They will always find new ways to distinguish themselves from the others. The competition is big, so those that find good solutions in terms of packaging or flexibility can take a share of the market,” Rocca says. “A big trend in the capsule market right now is for multi-flavour solutions. They don’t want 36 capsules of one flavour in the box, but multiple flavours. This is a challenge from a loading perspective, but thanks to our work in other product categories, we already have a solution.” Though coffee is only one part of Cama’s overall business – which includes healthcare, confectionary, and pet food – Rocca calls it an important one. He says it will only increase over time. “A lot of co-packers are becoming bigger and bigger. In Italy alone, we have several clients that started with zero packaging machines and now operate 10 or 11 lines. In some cases, they are rivalling the big roasters in terms of size,” Rocca says. “Speed is another important consideration. Our customers are producing hundreds if not thousands of capsules per minute, and the machine has to be ready to create different configurations fast.” He says Cama looks forward to seeing what challenges the coffee industry brings it next. “We receive many enquiries about different formats and configurations, and we usually have two or three platforms that are ready to meet them,” Rocca says. “We have built a very good base, but in the rare case something new arises we are capable of new developments. We are a customer driven business and will always work to their requests.” G C R For more information, visit www.camagroup.com

Alessandro Rocca is the Sales Engineering Director at Cama Group.

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PROFILE Cafetto

Good hygiene CAFETTO DISCUSSES THE INCREASED IMPORTANCE OF CLEANING EQUIPMENT AND MAINTAINING HYGIENE IN THE COFFEE INDUSTRY.

Cafetto has formulated its products to work specifically with coffee equpment.

OVID-19 has illustrated to many people the importance of a clean and sanitary environment. In hospitality, this goes beyond front of house and service areas to food and beverage preparation. To help the coffee industry maintain safe hygiene and cleaning practices, Australia-based company Cafetto has developed a broad portfolio of products suited to different equipment and requirements. “At this crazy time, everyone’s concern is that they don’t want to get or spread the coronavirus,” Cafetto General Manager Christine Song says. “Cleaning surfaces and equipment as much as you can has always been good practice, but the current pandemic shows just how important it really is.” With many venues around the world turning to drive-through, takeaway, or delivery to continue operation, customer service has become less of a differentiator in the market. This means they need to focus more on quality to maintain customers. “The core reason to clean a coffee machine is to produce the best coffee possible with it. If you have residue built up where you’re extracting espresso, it affects the quality, crema, and flavour of the drink. Dirty coffee is never the best coffee,” Song says. “Hygiene may be particularly important now, but we also want to serve the best coffee possible. A clean machine is imperative to that.” Cafetto’s traditional Espresso Clean tablets and powders are designed to clean a group head through a simple backflushing process with a blind portafilter. When dissolved in water, Espresso Clean produces a foamy solution that removes built-up coffee oils and residue. After rinsing, the group head is ready for use. “This is not regular detergent. It is a specially formulated product that fits the specific demands of a traditional espresso machine,” Song says.

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“Regularly cleaning a machine will make its lifespan longer, require less maintenance, and keep the quality higher.” With many years of experience in the coffee industry, Cafetto is aware that a cleaning product that works in one role will not necessarily be able to fill another. That’s why the company consults with industry members to cater to new demands as they arise. “We don’t ignore existing or potential customers when they’re having problems cleaning their equipment. We always look at what people need and how we can provide a solution,” Song says. “Our research and development team carry out many projects where a customised solution is required to solve a customer’s problem. That’s how we went from one product to a full range that cleans different types of equipment.” Through discussions with manufacturers, Cafetto learned of the issue scaling presents to the boiler of an espresso machine. Scaling occurs when water turns to steam and leaves behind trace amounts of minerals like calcium and magnesium carbonate. Over time this can form a crust in the boiler than cannot be removed with regular filtration. “If scaling builds up, there is less room for water and it becomes difficult to create good steam,” Song says. “We support descaling as often as the manufacturer recommends. It is important to keep on top of because many manufacturers don’t provide warranty if descaling isn’t performed.” On the outside of a coffee machine, the steam wand can be soaked in Cafetto Milk Frother Cleaner to remove milk residue, needing only a wipe down and purge afterwards. Song says automatic machines, on the other hand, have a more complicated milk system and require frequent cleaning. “Milk actually runs through an automatic coffee machine and crosses over with coffee

to produce drinks like a latte or cappuccino,” she says. “This system needs to be cleaned and sanitised every day, and this is where we recommend using our Milk Frother Cleaner every day.” Cleaning the coffee components of super automatics, however, tends to be easier than traditional machines. Song says many have inbuilt cleaning cycles, and operators only need to insert a Cafetto tablet and run the process with the touch of a button. Cafetto offers a range of tablets, in different shapes and doses, for different automatic coffee machines. Different products are also available for other types of brewing equipment. Cafetto Brew Clean is compatible with a wide range of coffee brewers, such as Bunn, Marco, Moccamaster, Breville, and larger batch brewing units. Song says hot water alone isn’t enough to remove coffee oils and stains from these brewers. A missing piece in Cafetto’s product portfolio that was recently filled was a solution for cold brewing equipment. Cafetto Polar Clean can be used to clean blenders and cold brew systems, including Toddy, Brewista, and nitro units. “Most cleaning products need to be used with warm to hot water, but you don’t typically want to expose this equipment to high temperatures,” Song says. “Polar Clean works similarly to our other brewing cleaning products, but was designed to clean and sanitise with cold water.” Another niche Cafetto has filled with the grain-based Grinder Clean is the need for an Cafetto Polar Clean can be used with cold water to clean blenders and cold brewing equipment.

B E FOR E

AFTE R A coffee cup before being cleaned with Cafetto.

A coffee cup after being cleaned with Cafetto.

A grinder before using GrinderClean.

A grinder after using GrinderClean.

easy-to-use grinder cleaner that doesn’t necessitate disassembling the unit. “When the pellets run through a grinder, they break apart and take coffee with them as they pass through the burrs,” Song says. “You don’t want to use water to clean the internal parts of a grinder, so a very special kind of product was required to clean grinders.” The naturally produced Grinder Clean is part of Cafetto’s commitment to providing the coffee industry with sustainable cleaning alternatives. This is further embodied by the Cafetto organic range. Each product in the range contains sustainably sourced ingredients free from genetically modified organisms and phosphates. They are biodegradable and received several certifications for use in organic systems. “This range was really made with people using organic green beans in mind. It completes the process of being green,” Song says. “We use ingredients like tartaric acid, which are produced from food items, plants, and minerals. It’s less harmful to the environment. We want to do what we can to improve coffee’s sustainability.” With hygiene at the forefront of the industry’s attention, Song says maintaining cleaning standards, coffee quality, and equipment health is important to overcoming this temporary setback. “You need to keep your environment sanitary, and can reduce contamination with regular good cleaning,” Song says. “But long-term, if a machine is not cleaned daily, the coffee it produces is not the best that it can be. People can taste the difference, and it’s not a good feeling drinking coffee from a dirty machine.” G C R For more information, visit www.cafetto.com

M AY /J U N E 2 0 2 0 | GCR

PROFILE DaVinci Gourmet

Boost your mood DAVINCI GOURMET IS UNLOCKING THE PERSONALITY OF FRUIT, LAUNCHING ITS PUMP UP THE MOOD CAMPAIGN WITH A RANGE OF NEW AND RETURNING FRUIT-INSPIRED RECIPES.

olour psychology is the study of how colours affect people’s moods and emotions. The discipline has paved the way for countless research and scientific theories to emerge. In Western cultures, red is frequently linked with energy, excitement, romance, and passion. Green has an affinity with nature, fertility, and the environment. Blue is considered to evoke feelings of calm, intelligence, and tranquillity. Understanding the way colours influence people plays a major role in how businesses design their logos and market their products, and now, forward-thinking organisations are taking this a step further. DaVinci Gourmet is applying this concept to fruit, launching its new campaign, Pump Up The Mood, which focuses on fruit beverages and the way they impact the psychology of consumers. “Every fruit has a sort of symbolism Pineapple is linked with luck and as well as functional benefits. The fruit’s wealth in some Asian cultures. visual appeal, its colour, flavour, and experience, help to shape people’s psychology. We found fruit has such an impact on mood that we wanted to develop a campaign around it,” says Eloise Dubuisson, Marketing Director for Food Service Brands APMEA at Davinci Gourmet. “For example, grapefruit’s mood is strength. It’s known to boost immunity and its symbolism captures that. Mango’s mood, on the other hand, is energy. It has very vibrant and exciting symbolism. Some fruits have cultural importance too. Pineapple is linked with luck and wealth in some Asian cultures while strawberries are associated with love in the West. We built on these concepts while developing this campaign.” Pump Up The Mood will be launched on 1 May 2020. It will feature 10 fruits, including the launch of three totally new flavoured products. “Pump Up The Mood is designed for our customer cafés and restaurants to deliver a unique experience to their

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consumers. We really want them to play on the super fun, positive vibe that fruits create,” Dubuisson says. Professional mixologists and baristas have been assigned to different fruits to create recipes for DaVinci Gourmet’s customer cafés and restaurants. “The recipes are very exciting. Each fruit has its own ambassador, a professional mixologist who has extensive knowledge of a fruit’s flavour pairing, beverage mixing, and the overall market to create these recipes,” Dubuisson says. “One of the most important things was to ensure these recipes were super exciting but also easy to replicate and apply in an everyday scenario. We needed to ensure for cafés and restaurants who serve many customers each and every day are able to produce these drinks in a fast and consistent manner.” To decide which three new flavours would be developed and which other seven would be part of Pump Up The Mood, Davinci Pump Up The Mood is built on social media buzz from countries around the world.

Gourmet conducted heavy market research to determine what fruits were linked to what emotions, and which fruits were trending across different markets. “We have a lot of different tools to track trends and determine what will be the next big flavour is on the market. We’re using an artificial intelligence that can track the buzz generated by any food, beverage, ingredient, or flavour across social media or the web. We have been able to narrow this down into fruit categories and see what is trending and gaining influence, and others which are decreasing in market appeal,” Dubuisson says.

The three new flavours spearheading the campaign will be raspberry, a banana fruit mix, and white peach. “The three new flavours we are launching with the campaign we believe will have massive potential. Peach is the number one tea flavour across Asia so its attractive, but also very common. We found white peach is one of the fastest categories as it brings the appeal of classic peach flavour, but in a more unique and premium style – it’s delicate and sophisticated,” Dubuisson says. “Banana, unlike white peach has been used in smoothies and fruit drinks for a long, long time. It’s a classic that is making an accelerated comeback thanks to the feel-good health wave which has taken over consumer trends. Things like health bowls and simple banana smoothies are becoming really popular again. I was quite surprised to see it make such a strong comeback.” The health trend which Dubuisson says has contributed to banana becoming a staple in modern times is also proving to be a key driver for the entire campaign. She adds that Davinci Gourmet’s research revealed fruit-based beverages are the most popular beverage category in food service across the whole of Asia. “When you look at how popular tea and coffee are across Asia, it’s incredible to see that, actually, fruit flavoured beverages are the most consumed across the continent. We discovered that more than 250,000 beverages were launched in 2019 which contained fruit flavour. This includes smoothies, soft drinks, coffee, tea, or anything else that has a fruit-infused element,” Dubuisson says. Raspberry is one of the three new flavours included in Pump Up The Mood. “When we discovered this, we wanted to understand why consumers in Asia love fruit drinks so much. The health and mood components which fruits create are part of this. There’s no artificial flavours or colours, just natural energy. The fruit-infused beverage industry is continuing to grow and we predict it will gain further popularity.” To drive its Pump Up The Mood campaign, Davinci Gourmet is undertaking a digital activation strategy across its social media platforms and online. A recipe book will also be released containing the top 10 mood boosting recipes. “The recipe book involves a photoshoot with visual representation that really conveys each recipe’s mood element. The idea is to elevate people’s moods. We want to developer optimism, energy, and creativity across the campaign,” Dubuisson says. “People have a unique attachment to fruit and fruit has a special meaning to people. We believe this will be a fun, vibrant campaign and a great way to celebrate the flavours of fruit and the benefits they provide.” G C R For more information, www.apac.davincigourmet.com

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PROFILE Franke

Automating Australia FRANKE COFFEE SYSTEMS IS CATERING TO A MATURE BUT UNDERSERVED MARKET FOR FULLY AUTOMATICS IN OCEANIA.

The Franke A300 features a compact design so it can be set up in a greater number of locations.

ustralia’s coffee industry is renowned for its focus on quality and innovation. While most obvious in the wealth of micro roasters and independent outlets that contribute to the café scene, this focus on quality reaches across the wider coffee market. David Downing, Sales Director Oceania of Franke Coffee Systems, says the strength of Australia and New Zealand’s cafés has heightened the standards of consumers across the board. “We’re all kind of coffee geeks in Australia, regardless of individual levels of expertise. We live for our coffee. It’s a trend driven by the café market, but it’s expanding to everyday life,” Downing tells Global Coffee Report. “The rest of the market, particularly in the Asia Pacific, watch what we do in the café sector and the innovations roasters bring to the market. Australia is a very mature market and

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it drives a lot of what happens in the global industry, particularly in equipment and fully automatics.” Downing has helped grow Franke Coffee Systems’ presence in Oceania for more than a decade. In the last few years, he says there has been a rise in demand for reliable automatic coffee solutions. “We’ve seen an increase in the need for companies to invest in these styles of machine, particularly with innovations in the technology. The introduction of telemetry has become prolific within segments across Australia and NZ,” Downing says. “Super automatic technology has evolved to provide consistency every time you use it. There’s a lot of personal preference in coffee. We may prefer certain drinks or brands, but quality – and the ability of the machine to deliver it – is the most important aspect.” Franke’s presence in the Australian market is best seen in the corporate sector, with offices wanting to provide inhouse coffee solutions for its employees. Other growth markets include the convenience store sector, HoReCa and hospitality, retail outlets, and – unique to Australia – the mining industry. “When miners return home for breaks from work, they go to cafés and interact with their friends and families. Afterwards, they go back to their jobs at remote mining sites and still want their high-quality cappuccinos and lattes,” Downing says. Another distinguishing factor of the Australian coffee culture is consumers’ preference for milk-based coffees. Downing says this is different to the filter or black coffee-focused American and Asian markets, or the simpler European palate. With different people preferring flat whites, lattes, cappuccinos, and other beverages, automatics need to be capable

of producing drinks with different levels of foam, types of milk, and additional options like chai and hot chocolates. “That demand for variety begins at the café level and flows through to other hospitality and corporate sectors. The range within our portfolio and unique features of our machines really drives business in those segments,” Downing says. Among the latest additions to Franke Coffee Systems’ portfolio is the A300 super automatic coffee machine. The machine features a compact design, standing at 27 centimetres wide by 46.5 centimetres tall. This allows the 80-cup-per-day capacity model to be installed in a number of locations. “One of the greatest challenges we’ve faced in the corporate sector is constraint on the size of equipment. Generally, architects and designers don’t have much knowledge of coffee equipment sizes and requirements when designing a kitchen, canteen, or breakout station,” Downing says. “Franke went into its various markets and talked with distributors, end users, customers, and architects to find a solution.” The A300 features much of the same

The SB1200 combines the ability to serve hot and cold coffee options.

technology found in the rest of Franke’s A-line series, such as the FoamMaster milk and EasyClean systems. An interactive eight-inch touchscreen guides the user through a menu of six to 20 beverages, featuring photo-realistic images. Franke’s patented heating system also allows different brewing temperatures to be set for different beverages. Further improving the A300’s versatility is the option of a fixed water connection or water tank, one or two bean hoppers, or additional bean hopper and powder container. “The A300 was specifically designed to overcome the issues we’ve seen over many years of experience. We feel this system really hits the mark in those retail and corporate segments,” Downing says. The A300 was first unveiled at HostMilano 2019. At the same event, Franke also previewed the Speciality Beverage Station SB1200, a counter-wide concept highlighting cold coffee options alongside traditional hot beverages. Integrated media pump modules create cold brew without needing additional nitrogen equipment, with or without crema. Milk and syrups can be incorporated to offer a wide variety of beverages. Both machines will see a wide release in Oceania around August 2020. Downing says while the A300 offers wide appeal, the SB1200 is targeted toward certain segments with greater requirements. “There is still a relevance to corporate, mining, and hotels, but it’s the high-volume hospitality and convenience sectors that will really appreciate what the SB1200 has to offer,” he says. “The cold brew element is very unique in the market. If someone in a convenience environment wants to expand their beverage menu, the SB1200 can do that as a complete and self-contained system.” A highlight of both products is their connection to Franke’s Digital Service telemetry system. This gives the owner full control of the coffee machine and an overview of data it produces. Downing says the possibility of remote maintenance saves the operator time and money. “Franke has developed its own telemetry system, meaning we don’t rely on third party businesses. Because we’re a manufacturer, we know what our customers need in terms of data streaming and uploading capabilities. This year, we have released new features of our Franke Digital Services, which I believe are the best in the market,” he says. “We can monitor cleaning or software and mechanical issues, which allows us to be proactive rather than reactive. If we identify a problem, we can ring our customers and walk them through resolving it, saving them the cost of calling out a technician.” Franke Digital Services also allow operators to remotely upload data like images and monitor their entire fleet via cloud connection. Information including peak periods, beverage popularity, and best performing sites is collated and made accessible to the business owner, aiding decisions related to the menu and promotions. “If a customer wants to use their own reporting platform, we can integrate their API with ours and they can download all that information onto their own dashboard,” Downing says. “They can develop loyalty programs for customers in the same way.” With data collection becoming a key component of not only coffee but many industries, Downing says he anticipates the demand for super automatic machines to continue growing in Oceania. “I don’t see the market going backwards. I see it increasing. It will always develop and evolve around customer demands for innovation, reliability, quality, and consistency,” Downing says. “Australia in particular is a big country [geographically], so things that connect the market, like telemetry, will be a big driver.” G C R For more information, visit coffee.franke.com

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PROFILE Appia Life

A life of its own THE XT IS THE MOST ADVANCED MACHINE IN NUOVA SIMONELLI’S APPIA LIFE RANGE. GLOBAL COFFEE REPORT UNCOVERS HOW ITS INNOVATIVE FEATURES MAXIMISE PERFORMANCE WHILE MINIMISING ENERGY CONSUMPTION.

uova Simonelli’s Appia life range has existed for more than a decade. The machines have proved to be versatile and popular across many coffee markets around the world, and now, with its new Appia Life XT, the Italian-based business is offering the most advanced espresso machine in the series to date. “Appia model machines have become popular around the world. For many people, they are the first machines they use when they enter the coffee industry – it’s like a first love,” says Marco Feliziani, Vice President and Sales Director at Simonelli Group. “The Appia Life range is made for those who want a trustworthy and straightforward machine, while making a great drink in total confidence. It is the perfect coffee machine for large companies, coffee shop chains, or wherever there is a need to prepare great coffee and to be cost-effective.” Appia Life is a medium-range machine which has models designed to fit different coffee markets around the world. “We decided to enlarge its platform in order to give a valuable coffee machine to different markets. Appia Life standard version, which includes single-group, two-to-three groups, and twogroup compact, is the ideal machine for coffee shop chains in emerging markets that are looking for an easy to use, reliable, and cost-effective coffee machine,” Feliziani says. “Our newly released Appia Life XT version is dedicated to coffee shop chains in mature markets that demand advanced functions, such us more precision and more control.” Appia Life XT was launched globally at Host Milan in 2019. Its name, XT, acts as an abbreviation of ‘extra technology’ as the machine possesses a raft of new and improved features helping coffee shop chains with average productivity to maximise precision and to have more control of the device. “It has been built to be energy efficient while optimising functionality, productivity, and consistency,” Feliziani says. To achieve this consistency, Simonelli Group has implemented several advancements, including the Soft Infusion System (SIS). This hydraulic system progressively increases water pressure on the coffee cake, stabilising and smoothing it, heavily reducing the likelihood of channelling.

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“It’s really helpful for baristas because if tamping isn’t perfect, the coffee isn’t evenly distributed, or the ratio is off, SIS will correct it and compensate. New baristas will definitely benefit from SIS, as will established baristas, as these things can still happen, especially during busy periods,” says Lauro Fioretti, Product Manager at Simonelli Group. “In the Appia Life XT platform, we decided to introduce some technologies we use in the top-of-the range coffee machines such as Aurelia Wave, granting coffee shop chains with medium productivity in mature markets the ability to be more consistent.” For milk-based beverages, Appia Life XT’s Easy Cream Technology is completely automated and designed to consistently produce creamy milk. Air is premixed with steam and injected into cold milk to create microbubbles, the amount of which is adjusted depending on what style of beverage is being created. Easy Cream Technology controls the milk’s temperature using a PT1000 sensor, the same technology which is used in professional grade ovens. “It’s practically automating the process with the same level of accuracy that a professional, competitive barista achieves. The customer will always get the beverage at a temperature they like. The automation doesn’t take away from the barista’s creativity though, they still get to pour the milk and can make wonderful latte art,” Fioretti says. “An important and unique factor about Easy Cream Technology is that it doesn’t actually hold milk inside it. This provides flexibility for

Appia Life’s XT’s boiler system adds to the machine’s energy efficiency and helps increase coffee quality.

modern cafés who constantly change between animal milks and dairy alternatives. It also means it’s hygienic and easy to clean, saving time.” Another new technology which increases coffee quality, while simultaneously adding to the machine’s energy efficiency, is its boiler system. “Simonelli Group is a leader in the development of single-boiler technology. We have invested a lot of effort and research into temperature stability as it contributes to consistent coffee,” Fioretti says. During research and development, Simonelli Group’s engineers found they could use a type of fabric called DryTech to coat the XT’s boiler. The fabric is often found in sportswear to keep athletes warm in extreme conditions and is extremely effective at trapping heat. “We are the first to apply this sort of technology in the coffee industry. As the fabric is soft, it can be easily applied without being costly or complicated,” Fioretti says. As heat dispersion is sharply reduced and the temperature remains stable where it is required, the XT uses less energy to repetitively raise the temperature “To use the analogy of a car: cars are being built light, because for every extra kilogram it weighs, it takes more energy to move without providing any extra value. We took the same approach – reaching maximum performance with the minimum amount of energy necessary,” Fioretti says. Fioretti adds that more and more buildings are aiming to achieve a Leadership in Energy and Environmental Design (LEED) certification, part of which involves having all equipment in the building to a certain standard of energy efficiency. “The XT is dedicated to the modern coffee shop chains where reaching LEED certification is extremely important,” he says. “Our mission and vision revolve around three pillars: sustainability, education, and innovation. We need to reduce the carbon footprint that is being into the planet.” Innovation, one of Nuova Simonelli’s key values, is showcased through the entire Appia Life range. All the machines have inbuilt connectivity to some extent, while the XT takes it to an advanced level. “At Simonelli Group, we believe in the democratisation of technology – so all our machines have connective capabilities. Even the base models have these features. We understand it’s very important for our customers,” Feliziani says. Appia Life XT’s boiler system and other features can be viewed through its digital display. The functionality allows the operator to control and monitor the pressure on the boiler as well as the shot timer, a feature Fioretti says is usually only available in top-of-the-range machines. “Controlling and monitoring the shot timer is extremely useful for baristas. If the times are out of the desired parameters, you can identify this and make the necessary adjustments,” Fioretti says. The display can also be connected to the internet and controlled remotely. This is particularly valuable to collate data and information, which owners can use to better manage the business.

“You can monitor performance of your individual beverages and the overall coffee shop – things like café peak time and most popular drinks ordered – so owners can organise their resources based on data,” Fioretti says. In addition to having modern technology, Appia Life XT has a contemporary design with ergonomic functionality. It has a low profile and is built to be compact, yet durable. “Aesthetic is very important for us at Simonelli Group. The design of our machines must be clearly recognisable and unique. We studied the needs of modern coffee shops. Our architects did a great job in making it clean, simplistic, and stylish,” Fioretti says. Looking to the future, Feliziani says with the addition of the XT into the Appia Life range, the series now has a model fit for every style of coffee shop in different markets around the world. “Appia Life is a big platform. There are six different models with distinctive features. In emerging markets like India and across Africa, the base models are very popular, whereas in places like France, where cafés are usually restricted for space, the most successful machine is the Appia Life Compact,” he says. “Now with the XT, customers can get a very advanced machine without having to go into the top price categories. It will be very popular in new coffee shops and across mature coffee markets demanding more precision and control.” G C R For more information, visit www.nuovasimonelli.it/appialife

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PROFILE Probat

Coffee’s carbon footprint BASED ON THE CALCULATION OF THE CARBON FOOTPRINT OF A SINGLE CUP OF COFFEE, GERMAN ROASTING MANUFACTURER PROBAT ANALYSED AND IMPROVED THE EMISSIONS OF COFFEE ROASTING FACILITIES.

ith coffee a crop particularly vulnerable to changing temperatures, the consumption side of the supply chain is becoming increasingly aware of its own contribution. “With people around the world walking the streets, fighting for a better climate, the industry can’t ignore its carbon footprint anymore,” says Oliver Böwing, Product Manager at German roasting equipment and plant manufacturer Probat. When Probat turned 150 in 2018, it commemorated its sesquicentennial with the Connecting Markets Symposium. At the event, Böwing wanted to raise the industry’s role in climate change, and looked into the carbon emissions of coffee. Several years earlier, German coffee chain Tchibo had released a report analysing the carbon footprint of the entire coffee supply chain, from growing the plant to brewing the beverage. It determined that a cup of coffee, brewed with seven grams of coffee and 125 millilitres of water, was responsible for 60 grams of carbon emissions. “Before improving our own contributions, we have to understand what they are,” Böwing says. “For a product like coffee, which is not necessarily essential for living and can be considered a luxury, it’s even more important to understand how it can be improved.” The report determined that coffee farming contributed to more than half of its total carbon

Figure 1. Roasting and grinding makes up one-20th of a cup of coffee’s carbon footprint.

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footprint, largely due to the amount of water and fertiliser used in growing the plant. Coffee brewing factored in for roughly 30 per cent of emissions due to the energy used to heat water. Waste disposal, sales, and overseas transport totalled about 10 per cent (see Figure 1.) “What was quite surprising for us is that roasting and grinding only had a 5 per cent share of that 60 grams per cup of coffee,” Böwing says. “But I wasn’t sure what 60 grams actually meant, whether it was good or bad. I wanted to show the industry what 60 grams actually is in the grand scheme of things.” To do this, Böwing looked for information on the carbon footprint of other everyday products. A 500-gram bowl of strawberries produces 442 grams of carbon. Ten rolls of three-ply toilet paper contribute 2500 grams. His 50-kilometre roundtrip to and from work totalled 5500 grams of carbon emissions each day. “If you look at a bowl of strawberries, one cup of coffee is not a problem. In Germany, we drink about three or four cups per day and that is still way below their footprint,” Böwing says. “All things considered, 60 grams of carbon may be a lot for a luxury item like coffee, but compared to something like transport, it’s still minor.” While the report found that roasting and grinding contributed 3.18 grams of the total 60, Böwing felt that only factored in the actual roasting process and didn’t reflect the total emissions of a roasting plant. This inspired him and Probat to determine the total emissions of a complete roasting facility. With Probat’s Jupiter 3000 roaster as a base, popular in industrial roasting, Böwing used a

common European standard of calculating the carbon footprint of machinery. He then incorporated the same data on green coffee silos, grinders, and roast and ground coffee storage. Through this, he determined the typical emissions of a facility in Germany powered by natural gas to be 2608.82 tonnes of carbon emissions in its first year of operations (see Figure 2.) Böwing says a shift in perception is needed within the coffee industry in order to make improvements to these emissions. “We calculated the carbon emissions of steel support structures and compared it to wood. Wood actually results in negative emissions based on our standard, so that could be an option for roasters to consider,” he says. “From a technical perspective, there is no real drawback to using wood. It just requires a change of mind of the industry building these facilities.” Probat’s calculation factored in the emissions from the materials used in the construction of a facility. This means the figure would decrease in subsequent years, or if this was spread over multiple years. “Especially with Probat, our facilities are quite long-lasting, so the material component is just a one-off contribution,” Böwing says. “You can influence the carbon footprint of your materials, but this demonstrates that energy usage is what the coffee industry needs to focus on to reduce its impact.” Geography and governmental decisions often limit a roaster’s control of the impact of their energy sources. Böwing says countries like Sweden, with more than half of its electricity generation being renewable – fare better than solid fuel reliant countries, like China. In terms of gas, roasters – at an industrial scale in particular – have limited options to support their capacity. Böwing says natural gas is currently the best alternative, although better options could eventually arise. “You never know what new developments could take place in the next decade,” he says. “Hydrogen or biogas could be paths for the future. But these fuels will need to be created using renewable energy. Otherwise, natural gas will still be the best alternative.” Recovering or reusing energy is one the best ways an industrial coffee roaster can improve its carbon emission. Probat has identified the

Figure 2. Energy usage is the largest driver of a roaster’s CO2 emissions.

three most viable ways it can help roasters in this regard. “The roaster heats up air, makes the green coffee brown, and then afterwards, there is still a lot of heat left in the exhaust system that can be reused as energy,” Böwing says. An air heat exchanger can redistribute hot exhaust air into other parts of or throughout the facility. Böwing says, for example, facilities in countries where a significant amount of energy is needed to heat up the building could use energy from the roasting system to do so. Hot air leaving the drum could also be run back through the burner system to be reheated and used again for roasting. This recirculated air takes significantly less energy to heat than air pulled from outside the machine at room temperature. This technology is present in one of Probat’s newest machines, the Px 120 drum roaster, and is an alternative for smaller roasters also looking to improve their footprint. The third and most complex – but possibly effective – option for industrial roasters is a condensate heat exchanger. This system uses water to absorb the heat energy from a roaster and transfer it to other systems in the plant. “With a condensate heat exchanger, we can get about two thirds of the energy back to reuse,” Böwing says. “We need to discuss this with the individual customers who run the facilities to determine where they can use this energy. Instant coffee plants, for example, have other equipment that uses a lot of low heat energy. That is something we can distribute from our system.” While these are options Probat can offer to improve a coffee roaster’s emissions, roasters can take steps themselves to improve emissions. “A roaster can have its equipment be state-of-the-art, not wait too long for upgrades, and use better or more efficient motors. This is important as burner technology in particular has really evolved in recent years,” he says. Another way roasters can improve their emissions is to look at the products they produce. Dark roast profiles consume on average 13 per cent more fuel than conventional roasting. Böwing says this corresponds to more than 85 tonnes of carbon emissions per year. “However, before a roaster can make changes to their products, demand needs to come from consumers, as in the end, you have to follow the market.” G C R For more information, visit co2.probat.com

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EVENT MICE

Worth the wait THE MELBOURNE INTERNATIONAL COFFEE EXPO AND WORLD BARISTA CHAMPIONSHIP WILL HAVE ITS TIME IN THE SPOTLIGHT IN NOVEMBER 2020, UNITING THE INDUSTRY AND SHOWCASING THE BEST COFFEE TALENT TO THE WORLD.

t’s been said that good things come to those who wait. It could be Christmas, a birthday, home ownership, a luxury holiday, or in the case of coffee lovers, the 2020 Melbourne International Coffee Expo (MICE). In early March, MICE organisers were forced to move the dates of the dedicated coffee expo from May to 3 to 6 November at the Melbourne Convention and Exhibition Centre. The decision was made following the announcements from Australian Prime Minister Scott Morrison and Victorian Premier Daniel Andrews regarding the measures taken by the federal and state governments to mitigate the risk of COVID-19. “The decision was one we could never have predicted but the right decision from government directives,” says Show Director Lauren Winterbottom. “We take the safety of all our attendees, exhibitors, competitors, judges, volunteers and staff very seriously. We had no choice but to reschedule MICE2020. We also want to ensure we deliver the best possible event experience for all attendees, exhibitors, and competitors. We want to welcome thousands of visitors to our show. We want to hear the cries of supporters in packed grandstands cheering for their national barista champion, and we want to watch large gatherings from the world over join in the fun and celebrations that this event stands for. So if that meant waiting a few extra months, than that’s what we were prepared to do.” Established in 2012, MICE has become a must-attend event for everyone in the coffee community. Attracting almost 12,000 attendees in 2019, MICE connects café owners, roasters, equipment manufacturers, service suppliers, and more to facilitate real business opportunities. The expo provides a wealth of networking opportunities alongside Melbourne Coffee Week and plans to showcase more than 25 local and international roasters, and producers from across the globe. Once social distancing requirements and travel bans are lifted, the MICE team hopes to host one of the most rewarding industry events of the year.

MICE features several of the roasters that make the Australian industry as prestigious as it is.

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“We know the worldwide coffee industry is suffering. Hospitality has taken a real hit under the strict regulations underpinning service protocols. We hope the industry remains strong and resilient to withstand the economic pressures ahead and come out stronger. What’s waiting for them on the other side will no doubt be one of the industry’s largest reunions,” Global Coffee Report Editor Sarah Baker says. MICE is ‘the industry’s event’. It has and always will be the coffee expo dedicated to doing business and having the entire supply

chain represented in the one room. It’s a onestop-shop for new and exhibiting business owners to network, negotiate, and do what it was created to do – generate business. Now that Re:Co and the 2020 Specialty Coffee Expo have been cancelled for the year, Baker says it’s imperative that businesses the world over recognise MICE2020 as a pinnacle for the industry and a must-attend destination. “We’ve already seen expo cancellations and the rescheduling of major international events like the Olympics, but we have to be grateful that MICE2020 is rescheduled,” she says. “It will be the only industry expo in the Southern Hemisphere for companies to release or promote new equipment to more than 11,000 coffee industry professionals, and have the opportunity to be recognised in the MICE Product Innovation Awards in celebration of the best new products in the past 12 months. That label of authenticity and brand exposure is so important.” Of MICE2019’s attendees, 35 per cent were café owners and senior management, 11 per cent were origin representatives and traders, and 21 per cent were roasters.

Almost 12,000 people attended MICE in 2019.

“This really is a vital opportunity for businesses to target their offering to one of the largest and most sophisticated coffee cultures in the world,” Baker says. With that being said, Event Director Winterbottom adds that now is the time to secure the last remaining stalls for MICE2020. “There’s still time to be part of the Southern Hemisphere’s – if not the world’s – largest dedicated coffee expo this year,” she says. “We invite the world to join us and be part of this specific edition of MICE. Not only is it the ninth instalment of the expo, but a chance to celebrate and support our industry to get back up on its feet when this world crisis is over.” MICE last hosted the WBC in 2013, where If that wasn’t enough reason to come Pete Licata of the US came out on top. Down Under and put Melbourne on your bucket list for 2020, then experiencing the World Barista Championship (WBC) and World Brewers Cup (WBrC) should be. The prestigious competitions will still be held in conjunction with MICE2020 and have the opportunity to crown a worthy winner. “With the WBC and WBrC extended until November, national champions have more time to perfect their routine, select their coffee carefully, and mentally prepare for what is undoubtedly two of the most esteemed coffee competitions in our industry,” Winterbottom says. “We’re looking forward to the current situation improving, social distancing dispersing and uniting altogether – something we will no longer take for granted. This really will be a WBC and MICE no-one will ever forget.” G C R All purchased tickets to MICE2020 have been rolled over to the November dates. For more information on MICE2020, visit internationalcoffeeexpo.com

M AY /J U N E 2 0 2 0 | GCR

november 3-6

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OPINION Kamal Bengougam

The geometry of life

EVERSYS CHIEF COMMERCIAL OFFICER KAMAL BENGOUGAM ON HOW TO NAVIGATE THIS NEW REALITY WITHOUT A MAP. “Life is merely a fracas on an unmapped terrain, and the universe a geometry stricken with epilepsy.” – Emily Cioran.

he world as we know it has gone crazy. I have lived over half a century, travelled to more than 50 nations, met many amazing people, and been involved in some interesting adventures, and yet, I have never witnessed the madness of our day. At the time of writing this column, I had to queue for toilet paper, for the very first time, mind you. No, this was not in a faraway under-developed land, this was just a few miles north of London. I also read a story about people in the United States buying up guns and ammunition. I know that toilet paper is being rationed. It has become a premium commodity, but I am prepared to give mine up rather than take the risk of being shot. COVID-19, the virus without a brain, has confounded the wisdom of our age and wreaked havoc within our world. Scientists, politicians, and economists, our world’s greatest minds are being confounded by a spineless microbe filled with ambition. This coronavirus, birthed on distant shores, has taken over the global agenda, promoting fear in the midst of uncertainty.

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Markets are melting, hospitals are being overwhelmed, businesses are collapsing, and people are afraid. Ta- Neh isi Coates , a nat iona l correspondent for The Atlantic , sums up the situation best: “I did not know then that this is what life is – just when you master the geometry of one world, it slips away, and suddenly again, you’re swarmed by strange shapes and impossible angles.” This is the “geometry of life”, that change is inherent to our world. We must accept it without fear, and that while we cannot control what others do, or events outside of our realm, we have full control and responsibility over our response, our

actions. It is that which defines who we are and what we do under pressure. It is at times like these that heroes rise, and societies evolve, civilisations are created and justified. It is when people learn to live for a cause greater than themselves, when the human spirit rises. And yes, we may have to learn to share everything down to the soft and quilted rolls. In sociology, it is believed that ‘no man is an island’, that we were made to live in community, that communities are meant to be diverse, and that it is what makes them so amazing. As an introvert, I sometimes struggle with this truism and my wonderful wife Tracy is forever pushing me beyond my social comfort zone, embracing and nurturing all and sundry. The geometry of my world is like parallel lines striving for a common goal, and yet, in spite of their proximity, they never touch. This is my comfort. I too am struggling with current events, people losing their livelihoods, their lives. Small coffee shops, restaurants, and hotels are collapsing under this new reality. And, while governments are offering financial rescue packages, they are currently merely in the form of loans. How could small businesses that were barely making ends meet before this global threat take on the burden of greater debt? Big companies are being sustained as they represent greater numbers of employees, but it is often the smaller faces of business that contributes the most, as a group, and to the wellbeing of communities. Our coffee world is being threatened by this plague. Exhibitions are being postponed or cancelled, and the rise of the independent coffee shop is fast turning into a downward curve. Cafés are shutting down, hotels are empty, and people are losing their jobs the world over. Quarantine measures created to ensure the future sustainability of our way of life have swiftly demolished the thin walls of our market’s financial foundation. What can be done against the advance of this faceless enemy? Our choices in this instance remain the same as always: ignore, submit, or fight. Ignoring never resolves anything, and submission often leads to greater loss and pain. Fighting, to me, always offers the sole opportunity of victory. But

how can a small business win against such strong adversity? Commerce should form alliances and lobby their leaders for greater financial support, not delayed burdens. Governments should offer grants, not loans, absorb the pain and provide relief to those who have built businesses through the sweat of their brow. Governments can print money, they even gave it a ‘cool’ name – “quantitative easing” – while small businesses wished they could. Governments can unilaterally raise taxes to strengthen their balance sheets while small businesses struggle to raise prices when faced with an increasingly competitive landscape. And, if the world’s governments fail in their political mandate, the whole face of retail will be transfigured with little chance of ever coming back to the life we have grown to know and love. People, in a just society, should also contribute by volunteering, supporting their communities, and working hard in the national effort toward the common good. Entrepreneurs should create, show imagination, innovate, Kamal Bengougam says COVID-19 has taken over and assume responsibility for their businesses the global agenda but not our hope, spirit or heroes. as governments should be there to assist and lead, co-ordinate but not take over. Proletariat could never abdicate, in a free and just world, full control of their lives to politicians or risk losing their freedom. People must strive through adversity by working hard to overcome the enemy, not as individuals but as communities, neighbourhoods, companies, nations. In that geometry, lines intersect, driven by need, but may never meet again. Imagine a town without coffee shops, bars, or restaurants, places where people meet, relax, and build communities. Those establishments are the platforms of today, environments where societies interface. Without them, what would society look like? People are going to work or working from home, communicating only through virtual media. Without all of our current outdoor outlets like sports, travel, and shopping, what will become of our society? Where will all that energy be channelled? If not to build, then to destroy? One of my favourite places to visit is a bakery/coffee shop/bar in St Tropez in the south of France. It is called Senequier and has been there since 1887. It is near the seafront where all the big yachts moor. All of the chairs are facing the sea and I love sitting there with my espresso in the morning and my pastis later on in the day, watching the world go by, hiding from the scorching heat under the cover of red tarpaulin. I would find it tragic for it to not be there anymore on my next visit. It is at times like these that heroes come to the fore. Heroes, unlike popular belief, are not exceptional Hollywood-type people doted with superhuman abilities. Heroes are normal people, people like you and me who just decide to stop being self-serving. And it is with that simple gesture that these people begin to make a difference, transform by being transformed, and live life from the inside out. They ignore the impossible angles and shapes that life throws at them, see all events – good or bad – as opportunities for learning, growth, and definition of character. Heroes like great athletes thrive when they are off-balance. It is always heroes who dampen fear and promote hope and, at times like these, we need them most. G C R

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DIARY Dashboard COFFEE COFFEE AROUND AROUND THE THE GLOBE GLOBE

GLOBAL COFFEE EVENTS

THAIFEX – ANUGA ASIA BANGKOK, THAILAND 22 – 2 6 S E P TE M B E R Officially rebranded as Thaifex – Anuga Asia, this trade show presents stronger global recognition for exhibitors, visitors, and buyers. By bringing the Anuga brand to Asia, the stage is set to propel the food and beverage community into the future of food and unrivalled market connectivity. In 2019, Thaifex saw more than 67,000 attendees from 134 countries visit the event. www.thaifex-anuga.com

WORLD BARISTA CHAMPIONSHIP

AND WORLD BREWERS CUP

MELBOURNE, AUSTRALIA

3–6 NOVEMBER The World Barista Championship is the preeminent international coffee competition produced annually by World Coffee Events. The competition focuses on promoting excellence in coffee, advancing the barista profession, and engaging a worldwide audience with an annual championship event that serves as the culmination of local and regional events around the globe. www.worldbaristachampionship.org

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WORLD OF COFFEE WARSAW

WARSAW, POLAND 15 – 17 O C TO B E R Travelling to a different European city every year, World of Coffee is an essential event for coffee professionals – drawing a loyal audience from the global specialty coffee community. Organised by the Specialty Coffee Association, 2020’s event will host hundreds of exhibitors, several World Coffee Championships, and the Best New Product and Design Lab awards. www.worldofcoffee.org

INTERNATIONAL COFFEE

AND CHOCOLATE EXHIBITION

RIYADH, SAUDI ARABIA

1 – 5 DECEMBER The largest international coffee and chocolate exhibition in the Middle East will return in its seventh edition. The last edition’s visitors exceeded 98,000 within five days from around the world. The exhibition aims to develop the local coffee and chocolate culture and introduce it to the world. In addition to coffee and chocolate, barista accessories, tableware, machines, and supplies will be showcased. www. offeechoco-expo.com

EUVEND & COFFEENA COLOGNE, GERMANY

29 – 31 OCTOBER Euvend & Coffeena is a meeting place for key players in vending machines and coffee. Euvend & Coffeena provides a unique platform for automated sales solutions, professional coffee systems, coffee, hot and cold beverages, snacks and filling products, multi-payment solutions, cups, and services. Event organisers say the most important innovations and trends in office coffee service, unattended retail, and micro markets are presented here. www.euvend-coffeena.com

SPECIALTY COFFEE EXPO LOUISIANA, UNITED STATES

23 - 25 APRIL 2021 The Specialty Coffee Expo was designed to be the coffee professional’s one stop shop for everything they need to succeed in the coffee industry. As the industry’s standard setter, the SCA has built a solid reputation over the last 30 years of providing the most up to date, qualified information and providing our members the tools to succeed. www.coffeeexpo.org

MELBOURNE INTERNATIONAL COFFEE EXPO 2020

MELBOURNE, AUSTRALIA

3–6 N OVE M BE R Now in its ninth year, the Melbourne International Coffee Expo (MICE) is known throughout the Asia-Pacific as the largest and most exciting dedicated coffee event. Each year, café owners, roasters, baristas, equipment manufacturers, service providers, and more gather at this trade-oriented event to network and do business. MICE2020 will take place at the Melbourne Convention and Exhibition Centre. www.internationalcoffeeexpo.com

WORLD COFFEE PRODUCERS FORUM

KIGALI, RWANDA

14 – 15 JULY 2021 The third biennial World Coffee Producers Forum will unite coffee producers, industry leaders, and economists to address issues impacting the coffee value chain. Event organisers are expecting more than 1500 attendees from 40 coffee producing countries to participate in the event. www.worldcoffeeproducersforum.com

MAY/JUNE 2020 | GCR

PRODUCTS Marketplace

DECAFFEINATED FREEZE-DRIED COFFEE In order to continue expanding its product portfolio and reach more homes around the world, Buencafé, part of the Colombian Coffee Growers Federation, has launched its decaffeinated 100 per cent Colombian freeze-dried coffee made through the Swiss Water Process. This chemical-free process uses pure water to gently remove up to 99.9 per cent of caffeine while keeping the natural attributes of the high-quality coffee beans. Buencafé says this premium product is one of the best decaffeinated coffees in the world because of its raw material, and decaffeination and freeze drying processes that care for the product’s attributes from beginning to end. With this new product, Buencafé positions itself as one of the most recognised companies in the world of premium freeze-dried coffee and offers more alternatives for consumers to enjoy delicious caffeine-free coffee. For more information, visit www.buencafe.com

CAFETTO BREW CLEAN Cafetto Brew Clean is a perfect product to clean urn and coffee brewing equipment simply and easily for better tasting coffee. It provides a superior clean that removes coffee oils and stains from brew baskets, servers, air pots, and coffee pots in as little as 15 minutes. Brew Clean Powder is certified for organic use by the Organic Materials Review Institute, and is free from phosphate and genetically modified organisms. A safe choice, Brew Clean leaves no harmful residues, does not cause corrosion, and all ingredients are rapidly biodegradable to meet international standards. Using certified organic Brew Clean in conjunction with organic coffee beans and milk allows venues to provide an end-to-end organic coffee experience for their customers. The product is ideal for cleaning Bravilor, Marco, Fetco, Bunn, AMW, Curtis, Melitta, Animo, Grindmaster, Cecilware, Coffee Queen, and domestic coffee brewers. For more information, visit www.cafetto.com

#PUMPUPTHEMOOD Fruits can have an impact on mood, from the health boost of nutrients and antioxidants to vibrant colours and taste, not to mention powerful symbolism. Fruity beverages have greater opportunity than what can be imagined. With more than 250,000 beverages launched every year across the Asia and Australia Food Service channel, fruit is the number one beverage category. DaVinci Gourmet unveils the secret to #PumpUpTheMood with fruit, an exclusive campaign designed for cafés and F&B outlets to boost their consumers’ moods. It includes new natural fruit flavours predicted by DaVinci Gourmet’s proprietary artificial intelligence tool Trendspotter, industry-forward yet easy recipes developed by its Flavour Geniuses across Asia Pacific and the Middle-East, and off and online tools ready to apply for businesses. Fruit has a special meaning to people. DaVinci Gourmet believes this will be a fun, vibrant campaign, and a great way to celebrate the flavours and benefits of fruits. For more information, visit apac.davincigourmet.com

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FLAVOURTECH IES Flavourtech’s Integrated Extraction System (IES) is a continuous, automated processing line that allows manufacturers to produce premium aromas, extracts, and concentrates for the ready-to-drink tea and coffee market. The IES was designed to minimise flavour loss during processing by capturing the flavour of the raw material prior to it being subjected to high temperatures. The fresh-roasted aroma of ground coffee or light varietal tea flavour notes are captured at their peak, early in the process, and then added to the concentrated extract at the end, producing premium products and satisfying today’s discerning customers. The IES is capable of processing black, green, darjeeling, oolong, and rooibos teas as well as ground coffee with the flavours captured being indicative of the region of origin. By adjusting certain operating conditions, it is possible to achieve multiple flavour profiles from the same raw material enabling various product ranges to be launched around the world. For more information, visit www.flavourtech.com

FRANKE A300 With the new Franke A300, Franke Coffee Systems is expanding the portfolio of its successful A-line. With three basic models and its modular design, the A300 is a perfect entry into the world of professional fully automatic coffee machines. The FoamMaster option provides a professional milk system that can produce warm milk as well as milk foam with an individually adjustable consistency. The integrated EasyClean cleaning system ensures perfect hygiene in just a few steps. On an interactive eight-inch touchscreen, the employee or end customer is guided through the beverage menu easily with photo-realistic beverage images. It is already equipped for Franke’s Digital Services IoT solution, giving the user full control and a clear overview of all beverage sales and machine data of the coffee machine. Software and configuration updates via remote maintenance save cost- and time-intensive on-site services. For more information, visit coffee.franke.com

MAHLKÖNIG E80 SUPREME Coffee shops and individual baristas need high-quality, reproducible, and accurate grinding results. Mahlkönig’s E80 Supreme is one of the fastest and most advanced premium espresso grinders of its class on the market. It features high-capacity precise dosing and fast grinding abilities without compromising on consistency and taste. The powerful motor has active temperature management maintaining a high daily output, while ensuring uniformity in all taste parameters, which is especially important in heavy-duty environments. The E80 Supreme is a high-performing, durable espresso grinder equipped with unique 80-millimetre steel burrs and pioneering Disc Distance Detection technology. The E80 Supreme can be ordered as of March 2020. The product will be available for delivery in May 2020. For more information, visit www.mahlkoenig.de

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LAST WORD Piero Bambi

Grazie to an icon

LA MARZOCCO MOURNS HONORARY PRESIDENT PIERO BAMBI, AGED 86, WHO DEVOTED HIS LIFE TO PERFECTING ESPRESSO COFFEE AND CREATING MASTERPIECES FOR THE WORLD TO ENJOY.

n the early hours of 22 March, the global coffee community lost an icon and industry treasure, La Marzocco Honorary President Piero Bambi. Son of La Marzocco Founder Giuseppe Bambi, Piero was part of the company’s history throughout his own life, driven by his great passion for coffee, beautiful mechanics, craftsmanship, and design. “For more than 40 years, Piero Bambi has been my friend, my inspiration, my mentor, my partner, and my teacher. Not only about espresso coffee machines and ‘caffè espresso’, but also life and culture,” says La Marzocco Chairman Kent Bakke. “His contributions to the world of espresso coffee and to the lives of so many people will be remembered and appreciated. He will be missed but not forgotten. Thank you, Piero, for the gift of your spirit and the legacy that you have left for all of us to enjoy.” His love for espresso, and the technical expertise that he inherited from his father, led him to achieving significant technological innovations in an aim for the best result in the cup. Founded in 1927 by Giuseppe and Bruno Bambi, La Marzocco had its beginnings in Florence, Italy, the birthplace of the Italian Renaissance and home to such geniuses as Leonardo da Vinci, Michelangelo, and Brunelleschi, who created some of the most celebrated works of art in the world. La Marzocco joined that world renown reputation for making beautiful, high quality, and uniquely designed espresso machines, with great attention to detail. In 1939, it was La Marzocco that developed and patented the first coffee machine with a horizontal boiler and group heads arranged in a linear fashion, now an industry standard. This was the first of a series of important innovations, later to include the dual-boiler system with saturated brewing groups.

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The 1950s were characterised by lever machines, the 1970s presented the GS series with independent boilers and paved the way for the GS-2, the Linea and FB70, followed by the GB5 in 2005, FB/80 in 2006, and one-group GS3 in 2007 with PID temperature control. While deeply tied to Italian tradition and ingenuity, Piero was open to any culture that could instil new concepts concerning espresso coffee, a beverage which he considered to be magical. Intuitive and generous, he embraced the values of cultural and generational diversity, creating a deep bond with the global community as well as with his “skilled workers”, his master craftsmen. A lthough he sold the majority of the company in 1994, as Honorary President he continued to work every day, with steadfastness and devotion towards projects, and the daily life of the company. Piero oversaw the introduction of the Strada machine in 2009 with ground-breaking technology in the form of pressure profiling. And in Spring 2013, the Linea PB, named for and after Piero Bambi who designed the Linea Classic and Linea PB, was released. Then came the expansion of models such as the Strada AV, the revised Leva X and Leva S, and Straight-In portafilter machine, the KB90. La Marzocco has announced that once the Covid-19 pandemic crisis is over, a commemoration event will be organised to ensure Piero’s wife Giovanna and the extended family have an opportunity to honour him. La Marzocco CEO Guido Bernardinelli farewells his eternal friend and mentor with a quote by poet Piero Chiara from his native land: ‘Even the great deeds of great men come to an end, an end inscribed within their own vital spirit, and long prepared, even when it seems sudden.’ “Thank you, Piero, we will miss you.” G C R

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GCR May 2020

Articles inside

GRAZIE TO AN ICON

MARKETPLACE

THE GEOMETRY OF LIFE

DIARY DASHBOARD

WORTH THE WAIT

COFFEE’S CARBON FOOTPRINT

A LIFE OF ITS OWN

AUTOMATING AUSTRALIA

GOOD HYGIENE

INFORMATION IS POWER

BOOST YOUR MOOD

THE FULL PACKAGE

A SOURCE OF STABILITY

STARS ALIGN FOR ETHIOPIA

RTD ON THE RISE

THE MOTHER OF ALL CAUSES

ARABICA AT RISK

NEWS DRIP BY DRIP

EDITOR’S NOTE

THREAT OF A DIFFERENT KIND

A SWEDISH SUCCESS