Archived Posts from this Category
Archived Posts from this Category
Although expectations of record robusta coffee bean prices were set months ago, it wasn’t until last month that the price of robusta reached a seven-year high in London. What’s next? Some say arabica beans, according to an article in today’s Seattle Post-Intelligencer: Next hot commodity? Arabica coffee beans.
With record robusta prices hitting the pocketbooks of the world’s biggest el cheapo coffee purveyors (i.e., the Big Four: Nestlé, Proctor & Gamble, Kraft [Phillip Morris/Altria Group], and Sara Lee [now Massimo Zanetti Beverage USA]), suddenly the higher quality arabica beans seem more attractive. Some analysts anticipate that this will cause price waves in the arabica market.
Good luck at getting any one of them making better coffee.
Today’s New York Times reports that Folgers is planning a $20 million advertising campaign on a new line of “gourmet” Folgers: Tempting the Traditional Coffee Drinker to Move Up – New York Times.
It seems that even Proctor & Gamble can no longer ignore the McDonald’s effect. However, what’s not clear is if consumers will need to pay more for these commodity coffees because of better quality beans or because of a worldwide spike in robusta prices. Given that Folgers is simultaneously getting out of the whole bean coffee market, it’s pretty clear that quality isn’t really the main driver for change at P&G.
Yesterday the Manila Standard Today published a brief, introductory article on the lifecycle of a coffee bean: Philippines News – Manila Standard Today – The journey of a coffee bean – july05_2006.
It’s written from the perspective of Nescafé, which is part of the scary Big Four, and from the perspective of producing the lower grade robusta bean. But Nescafé, and robusta, are big in the Philippines — so you get the idea.
Today’s The Courier-Journal (Louisville, KY) featured a rather lengthy and balanced story on Fair Trade coffee: The coffee connection.
Many small-market coffee growers face an enormous challenge to earn a living wage in an increasingly competitive world market. To tell this global story, the article presents the issues from the perspective of a coffee farmer in a Guatemalan village, introduces us to predatory middlemen known as “coyotes,” and interviews an American coffee consumer at Louisville’s own Heine Brothers’ Coffee.
According to an article from Reuters UK, the new middle classes in Brazil, Russia, China, and other emerging economies are driving up the demand for coffee: Emerging middle classes wake up to coffee.
The growing middle class in these emerging economies seems to be looking West to influence their beverage habits and lifestyles (oh, do I hate that word). In response, world stockpiles of coffee have dwindled to keep up with the growing demand.
However, the greatest growth in demand has been for soluble coffees made from robusta beans. Meaning: cheap instant coffee. You can take Boris out of Murmansk, but you can’t take the Murmansk out of Boris.
That famous portal for coffee connoisseurs, DailyIndia.com (?!?), keeps the hits on coming. This time it’s the latest installment on the history of coffee: History of Coffee: Part IV – Commercialisation of Coffee.
The so-called ‘Dark Ages’ of coffee lasted from the mid-19th Century to the late 20th Century. In that time, roasted coffee went from a neighborhood (dare I say artisan?) product, often roasted at home, to a highly commercialized and industrialized commodity that looked and tasted nothing like coffee — all in the name of convenience and modernization.
Beginning with John Arbuckle in 1865, packages of ground, roasted coffee were marketed and distributed regionally. By glazing the roasted beans like an Easter ham, Arbuckle developed a method for retaining some of the roasted coffee’s freshness while transporting the product over longer and longer distances. This process was later extended to national and international distribution networks.
The pursuit of profit — rather than quality — also lead to heavy use of cheaper robusta bean stocks. Ultimately, the death of coffee culminated in the introduction of coffee’s Orange Tang equivalent, instant coffee, in the 20th Century … where the end product resembled processed grit-in-a-can rather than anything you would call coffee.
The author, James Grierson, has written four other parts in this online series on the history of coffee: Coffee Knowledge.
Today’s Seattle Post-Intelligencer reported on: The dark story of poverty in your coffee cup.
In particular, it discusses the coffee paradox — i.e., how there could be a coffee boom in the consuming countries at the same time as a coffee crisis in the producing countries. Despite citing the impacts of the Vietnamese robusta glut and the Big Four coffee retailing giants, it goes on to suggest that, “One inescapable conclusion is that the coffee paradox exists because what coffee farmers sell and what consumers buy are becoming increasingly ‘different’ coffees. It is not material bean quality that coffee consumers pay for. It is mostly symbolic quality and in-person services.”
It also makes mention of the National Federation of Coffee Growers in Colombia, which has opened retail coffee shops under the Juan Valdez name in a few U.S. locations. The truth is that the only people who believe Colombia grows “the richest coffee in the world” are the Colombians and the brainwashed marketing subjects of years of Juan Valdez TV commercials. But you cannot fault their intentions.
A Reuters poll expects coffee prices to remain elevated over worldwide supply concerns. Supplies are generally expected to rebound in the next crop year as regional markets recover from hurricanes and drought and Brazil eases the throttle on production: POLL-Funds, supply worries seen buoying coffee in 2006.
But to give you a sense of just how crude robusta coffee is, note that the industry tracks the price of robusta by the ton … not by the pound, as is the case for arabica.
According to the VietNam News, the average price of wholesale coffee in Vietnam has risen up to 80% in the past year due to a regional drought in 2004-5. Coffee supplies are estimated at 30-50% lower than normal: Coffee prices surge on demand.
Given the awful, mass production quality robusta beans that largely come out of Vietnam … who knows? Maybe this will make other specialty coffee growers around the world a little more attractive for the big coffee cartels.
Who am I kidding? You double the price of coffee sold for pennies on the pound and it costs, well, pennies on the pound. At least it hopefully won’t hurt the sustainability of quality bean growers as Vietnamese coffee dumping has in years past.
When people talk about The Big Four that are responsible for the proliferation of some of the worst, highest-volume production coffee in the world — that’s choking out the little guy growing better beans — Nestlé is definitely a named co-defendant.
The Philippines’ Sun.Star General Santos reports today that Nestle backs coffee-based sustainable farming system. Nestlé are no dummies. There’s only so much they can do without the growers of mass production crude robusta coffee that sells for pennies on the pound. They need to ensure their suppliers have sustainable crops at these market margins.
Therefore, Nestlé Philippines Inc. is pushing their “Coffee-Based Sustainable Farming System” strategy — encouraging their suppliers to stay afloat by diversifying their cash crops.