I like to put up a few thoughts out regarding an increasing dilemma in the coffee trade. And need as much input as possible to interpret and predict trends. It should not be a your against my opinion, but more like a brainstorm from various perspectives.

At heart of the issue is Specialty Coffee from a single origin, compared to the generic Commodity Coffee, traded at stock exchanges.

The fundamental difference in it is that specialty coffee (Kona, Blue Mountain, Yauco Select, Kenya AA, Antiqua e.g.) is traded on SCARCITY base. Like diamonds or gold- there's simply only so much produced, and can trade therefore at a higher price. 

Commodity coffee is traded on GROWTH base. If one needs more South American robusta, they will sell, grow and plant more and more.

To illustrate my point: One can open a coffee shop or even chain, and will never run out of coffee (GROWTH model). One can not open a coffee shop and build it solely on Kopi Luvak coffee. High price, restricted availability, the very peculiar story of this single origin coffee would make this a bad business idea.

Here are some random thoughts:

The price difference between e.g. Jamaican Blue Mountain coffee and generic coffee is very tempting for scrupulous marketer to label it as such. The actual comparison in taste is not able to most first time buyers, because what would they compare it to? I know, buying from reliable sources, check the label, yadayadayada. Most purchases are not being made that way! Most coffee growing regions don't even have proper certification possibilities! 
Should there be a centralized laboratory where samples can be send? The technology to check isotopes and stable trace elements against a particular regional soil profile exists at the USDA.

A lot of explaining has to be done to the customer to point out often subtle differences, but large price margins. Coffee drinkers know so much more than a few years back, but not as fast as we all want to. Price per pound of coffee is a big hurdle to overcome, even when they buy generic robusta by the store cup at many times that price. Folks got used to ultra-cheap coffee prices at the shelf for way to long. What are your key points when in conversation with a curious customer/buyer? What do they want to know? 

Single origin regions are controlled in somewhat better ways than generic green coffees. Beyond cupping, what pesticides, herbicides are used? How much chemical residue is contained in the beans? How are the workers treated? Child labor? Is coffee smuggled into the region from neighboring areas and what do I have to look out for there? How old is the coffee available? All that is much easier to find out, when you are dealing with only one region-the smaller, the better. What happens if there's a food scandal in generic or regional coffee i.e. a pollutant like, let's say, mercury detected? Are regional coffee more vulnerable like generic coffees? 

I know little about the Commodity market for coffee. Yet I have an inkling that it does next to nothing in terms of consumer- or coffee growers protection. But capitalizes on regional hardships and who can exploit rain forests, workers, governments best. As coffee beans change ownerships hundreds of times before ending in a cup, care by the short term owner of stock in it, can't add to quality in any possible way. Should coffee be eliminated as a commodity trade maybe? 

SCARCITY vs. GROWTH in agricultural products is bigger than just coffee. Farmers all around the world can not compete against the whole world on price alone. Especially not when individual countries subsidize for political reasons their agriculture. It is always the chase for the subsidized/cheaper product, and the whole planet's farmers go bankrupt.  Hopefully we can garner some insights from all of our combined expertise on coffee on this board. It might be helpful for understanding what i.e. a Tanzanian rice farmer has to go through to be able to compete with all of the other rice growing regions in the world. 

Added value farm products, enabling SCARCITY as a marketing tool by regional protected origins is in my opinion a viable opportunity to protect coffee farming and most agricultural production in the world. Idaho potatoes, Gouda cheese, Kobe beef show this. We are living on a small, crowded planet. GROWTH has run its course for agriculture on many levels. 

Views: 42

Reply to This

Barista Exchange Partners

Barista Exchange Friends

Keep Barista Exchange Free

Are you enjoying Barista Exchange? Is it helping you promote your business and helping you network in this great industry? Donate today to keep it free to all members. Supporters can join the "Supporters Group" with a donation. Thanks!

Clicky Web Analytics

© 2023   Created by Matt Milletto.   Powered by

Badges  |  Report an Issue  |  Terms of Service