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Mick Wheeler’s Blog 24/03/10 – Can we rescue the industry at origin and keep the supply of great coffee?

Zambian farmer pouring red cherries

One of the more frightening issues raised at the recent ICO World Coffee Conference in Guatemala was the whole question of where we are going to get our future supplies of coffee from.

Demand continues to grow virtually unchecked, rising by around 2% per annum, reflecting world population growth and rising real disposable incomes, especially in emerging markets. However, at origin we see real problems, as pressure from population growth and urbanisation takes its toll, with coffee lands taken out of production to provide real estate for urban sprawl and greater food production for growing populations. You might say that the market will eventually redress the balance, as prices will rise to ensure the correct allocation of resources to the production of various commodities. That is true, but the transition might well be very painful—for all of us involved in the coffee business.

Do you realise that one of the biggest problems facing the industry at origin is its failure to attract young people into growing coffee? In Uganda, for example the average age of a coffee grower is 58—and getting older by the day. Young people are just not interested in subsistence farming, and they certainly have no time for what they see as an industry stuck in a time warp. There is an urgent need to commercialise coffee growing at every level, and to introduce greater technology in an effort to make coffee growing attractive to young, well-educated professionals.

And this is where I think we can play a major role. Coffee has become the beverage of choice for many of the young, well-educated professionals in the developed world. As an Association, we need to transfer that enthusiasm and passion for great coffee to origins, and assist with the development of internal markets, so that potential coffee growers don’t see coffee as something their fathers were involved with, but as a modern, dynamic industry, centred on excellence, in which they have a future.

Maybe I’m just too optimistic but, for me, this is a matter of enlightened self-interest. If we want great coffees in the future, then we have to invest in all parts of the industry today—and nowhere is this investment needed more than at origin. To an extent, we are already doing this, as more and more origins get involved in our championships, and a lot of the initiatives and programmes such as Cup of Excellence focus on the production of great coffees. I must also take my hat off to the many World Barista Champions who have travelled to origin to transfer their skills and knowledge to the fledging baristas in those countries. But can we and should we not be doing more?

Mick

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SCAE Guest Blog 3 – Hugh Gilmartin introduces the SCAE ‘Olympians’

So, Ireland for the Triple Crown this year? England for the World Cup? Inter Milan for the Champions League? Or SCAE for most improved online team?

I often enjoy using sporting analogies and metaphors when running businesses and projects, because it is a great thing to model excellence on. After all it is usually only in sport that:

- The best talent actually plays every time

- It doesn’t matter about politics or if anybody likes them

- The biggest contributor gets paid the most

- The best players don’t get promoted to manager

- You are only as good as your last few games

- You are measured in a very transparent way

- You have to deliver—or you are out

We at the SCAE, like all teams, recognise the need to reinvent ourselves, perhaps sign a few new players, look at the coaching staff and drive ourselves to become a driving force in a few new arenas. We want this year’s award for Leadership in Coffee Education through our courses and programmes, networking through our events (including our “Cup Final” at Caffè Cuture in June), and we are making big strides to be a true voice in Speciality Coffee and lead the communications through our new web and social media platforms. More on all this in the coming weeks . . .

So, continuing the sporting and competition feel, let’s just take the last big sporting event, the Winter Olympics, and match our players and teams to theirs for a bit of fun:

Downhill
Gwilym Davies, Current World Barista Champion (http://prufrockcoffee.com)

Slalom
Valentina Kazachkova, Current World Cup Tasters Champion (http://www.world-cuptasting-championship.com)

Ski Jumping
Peter Hernou, Current World Latte Art Champion (http://www.world-latteart-championship.com)

Giant Slalom
Marta Piigli, Current World Coffee in Good Spirits Champion (http://www.world-coffee-in-good-spirits-championship.com)

Alpine Combined
Christina Koumpouni, Current World Cezve/Ibrik Champion (http://www.world-cezve-ibrik-championship.com)

Cross Country
Stephen Morrissey 2008 World Barista Champion (www.stephenmorrissey.org)

Freestyle
James Hoffman, 2007 World Barista Champion (www.jimseven.com)

Speed Skating
Steve Penk, WBC Chairman (sgp@laspaziale.co.uk)

Figure Skating
Cindy Chang, WBC Executive Director (http://www.worldbaristachampionship.com)

Snowboard
Steffen Schwarz Chair, Competitions Committee (steffen.schwarz@coffee-consulate.com)

Short Track
Mick Wheeler , SCAE Executive Director (mwheeler@scae.com)

Bobsleigh
Barista Champions, World Barista Championship (http://www.worldbaristachampionship.com)

Four-man Bobsleigh
Gold Cup Brewmasters, Gold Cup Programme (http://www.scae.com/the-scae-gold-cup-programme.html)

Luge
Latte Art Champions, World Latte Art Championship (http://www.world-latteart-championship.com)

Skeleton
Cupping Champions, World Cup Tasters Championship (http://www.world-cuptasting-championship.com)

Biathlon
Cezve/Ibrik Champions, World Cezve/Ibrik Championship (http://www.world-cezve-ibrik-championship.com)

Ice Hockey
UK Team, Best Nation Competition (http://www.scae.com/news/gallery/category/17-best-nation-prize-2009.html)

Curling
SCAE Communications Committee (colin@smithscoffee.co.uk)

Nordic Combined
Nordic Barista Cup (http://www.nordicbaristacup.com)

The main point is to see how many of our ‘players’ you know or recognise. You might decide to look a few of them up and see what they are doing, how good they are and perhaps how they could help your business or organisation.

Above all, we are asking for your support because—again, like all great teams—we are only as good as our supporters. I hope you can see progress.

Hope you all had a Happy St Patricks Day.

From Hugh Gilmartin, who has helped deliver the new Online Strategy with a great team – Mike Segal, Victoria Bishop, Mick Wheeler and Dean Salisbury.

SCAE Guest Blog 2 – Stephen Hurst, Mercanta The Coffee Hunters

Where can I get the inspiration for this update? The Black Eyed Peas? Love the music but that is not going to help me develop a specialty coffee theme, so I think I will look to the recent World Coffee Congress event that Flori and I attended (together with Christian from Mercanta Central America) – held last week in Guatemala. Mick Wheeler from the SCAE was also there and overall it was a great event. For a specialty coffee merchant such as Mercanta, there were few ”customers” there, yet we had the chance to meet virtually all the growers that we work with in Guatemala who shared time at the booth with us, as well as a few other partner producers from neighbouring countries. In this sense alone, this event was well worth the time.

The fact that the Presidents of the Republic of Guatemala and Republic of El Salvador called at the booth on the final day and this story ended up in the national Guatemala newspaper the following day was just a bonus.

But this article in the newspaper stems from a person unknown to me who visited the booth. This fellow was very well informed, sharp, intelligent and competent. I did not know who he was, or who he worked for. We started talking.

It transpired that he worked for a huge multinational trading company – one I must confess I had not heard of but since I have learned that they are the very definition of major players in many ”commodities” such as coffee – even if that is a world away from Mercanta’s business. I used to be a commodity trader myself for an investment bank – we were one of the five biggest coffee trading companies in the world. So I knew where this guy was coming from, figuratively speaking.

We got to talking about how many of the giants had bought out some of our competition – whether known or not to the coffee buying community at large, many of the green coffee importers are parts of far larger concerns, some obviously and openly so, and some much less evidently part of larger groups. All of these giant coffee trading companies also own substantial origin milling and exporting operations, where it must be said they have been very successful maintaining a distinct specialty coffee feel for their operations which appeal to the buyers of differentiated products where variety, provenance and ethics are all a key part of the total sourcing package.

Yet, the same cannot be said of the multinational giant’s efforts when it comes to the importing, sales and distribution of specialty coffees. This statement may be highly controversial given the readership of this blog – but I stand by it and our visitor at the booth concurred. Our visitor used a great expression that I know I will shamelessly use myself in future. The DNA of sales and marketing specialty coffees to artisan roasters is something that huge companies have not yet unlocked.

•    3 bags here, 26 cartons there
•    Cup of Excellence
•    Micro lots
•    Varietal differentiation, processing differentiation
•    Coffee pricing completely de-coupled from the commodity and Fair Trade price structure
•    The treatment of unroasted coffee beans as a perishable product (in the quality sense if not the consumable sense)
•    Dealing with high maintenance customers
•    Success not defined by hundreds of thousands of bags traded
•    Small scale deliveries to discerning roaster clientele all over the world where variety, quality of service, intimate product knowledge are essential
•    Recognition of the fact that when customers know more about choices when it comes to specialty coffee – the vast majority of them make a much more informed (better) decision thus investment in education is rather more important than investment in sales and marketing.

This list could go on forever, but it helps underline the fact that the commodity and genuine specialty coffee businesses are growing apart at an increasing pace and they are not going back together again.

I believe the future coffee world (probably like the vast majority of other products) will become one of successful giants and successful and dynamic niche specialists. Those in between may find the going tough.

Stephen Hurst, Mercanta The Coffee Hunters,  Specialty Coffee Merchants

Mick Wheeler’s Blog 05/03/10 – Will mechanised harvesting damage the world’s quality coffee supply?

The ICO’s World Coffee Conference in Guatemala has been a great success, with twice as many delegates attending than had been anticipated. The presentations have been of the highest calibre and, for the most part, they were well researched, serious and thought provoking. I have enough material to blog about for weeks to come!

I will start off with the presentation made by Carlos Brando from Brazil. He highlighted a serious dilemma for the coffee world: that manual or selective harvesting of coffee was not sustainable over the longer term and, indeed, was hardly sustainable even now.

He pointed to the fact that strip picking (where all cherries on a branch are picked in a single sweep of the fist down a branch) was five times as efficient as selectively picking only ripe red cherries. In fact, he said, selective picking in many cases did not result in a significantly better proportion of ripe cherries in the final harvest. Meanwhile, he said, hand-held picking devices increased harvesting efficiency by a factor of 20, and fully mechanised harvesting was up to 200 times more efficient than selective hand picking.

Of course, he did acknowledge that mechanical harvesting significantly increased the proportion of green or unripe cherries being picked, but, he argued, it was more effective to sort the cherries out post-harvesting, than to sort them while they remained on the branch.

The argument is powerful, because it is clear that selective manual harvesting is labour intensive—and, given that many countries already experience severe labour shortages at peak harvesting times, the trend towards mechanical harvesting will only accelerate.

You might say “So what?” But there was a clear message here that needs to be acknowledged and addressed: what are we going to do with that low quality coffee produced from the green cherries? Possibly more importantly, will this impact or limit the quantity or proportion of good quality coffee that will be available in the future?

Carlos argued that the world would be able to absorb this increased quantity of low quality coffee in instant and other low quality markets, but I am not so sure. We already know that the increased use of lower quality depresses demand. What could be even more important is that if the trend towards mechanical harvesting were to increase the production of low quality coffee, it inevitably would also mean that the quantity of high quality coffee produced in future would be reduced. While I may disagree about the rate of adoption of mechanical harvesting, I cannot argue against its inevitability. That means that this issue is a serious wake-up call for the industry, and one that we ignore at our peril.

Mick