Like many people, I was intrigued by the results of the Sprudge barista pay survey . Mostly people are talking about how high the wages are in Australia, and there was some comment about the low wages in London/UK. A few concerns about the survey – I’m generally not blindly trusting of self reporting of wages (in any industry). I saw numerous tweets from Australian coffee people stating that the numbers looked somewhat inflated, and that fits with the discussions I’ve had with various people over the years. I’m glad Sprudge are investigating this further too. There may well be high outliers, but I don’t believe it is representative of the industry there. I do hope Sprudge keep these sorts of polls coming and I’d love to see a future poll talking to cafe owners about this, and having them submit anonymous data would be super informative. The incentive for the cafe is they get to see how they do compared to their competitors, something almost all would find valuable. Secondly – these numbers are both gross wages (before taxes are taken out) and converted to US dollars. (Currency exchange therefore playing a role). In the case of places like Norway the tax rates are very high, while a barista’s paycheck in London will have a little less tax taken out than one in NYC (though the undeclared and substantial portion of tips may make up for this). Finally, there is no factoring for cost of living. Numerous articles recently have highlighted the increasingly high cost of living in Australia, fuelled by a mining driven economy that didn’t suffer particularly in the global financial crisis. These criticisms are not particularly relevant to the point that I want to make: there is no magic Australian bullet. I would wager (and please shoot me down if I am miles away) that the financial model of an Australian cafe looks very similar to a London one or San Francisco one. This seems like a confusing statement at first, considering the apparent vast differences in wages, but I really think it is true. If we consider wage cost as a percentage of turnover (which we should) then I would be astonished to find that cafes in Australia are outside of the 25-35% range, which I believe most healthy cafes operate within. Higher than this and the cafe will likely lack sustainable profitability, lower than this and you’ve likely got an owner (or owners) working way too many hours on the floor. If we put wage costs of 25-35% another way – if a staff member earns $12.50/hr, then you need to bank approx $35-50 for every single hour they are paid. ($280-$400 per 8 hour day, per employee.) If you have 4 full time people on each day then you need to be pretty busy – and this is counting every staff member, not just those making coffee. For an Australian barista to earn double this then they simply need to bank double the cash per hour/day. This may be possible in places where drinks are expensive – $5 to $7 flat whites seem to be popping up in the Australian media more and more. The other option when trying to find more cash to pay staff is that you could sell higher margin products, allowing the staff cost to come up to the mid thirties, without damaging the bottom line. However, I don’t think margins in most cafes are enough to allow a staff cost of even 40% to be viable long term. I think of things like $1 refills on drinks, and get depressed about how this affects a cafe’s ability to pay its staff more. The challenge and frustration of coffee is that espresso isn’t hugely scalable. To do more drinks quickly requires more people, more labour, more wage cost. Baristas could earn more if they were (in traditional terms) more productive. When designing a bar it is worth bearing in mind how it will scale from a labour perspective. How many staff to do 200, 350, 700 or over 1000 drinks? Cafe owners ought to be interested in technology that allows a barista to make more drinks per hour, as this could have a huge impact on their profitability. I think what is likely is that Australian cafes are typically a combination of productivity and better margins overall. Many people comment on the amount of food sold in Australian cafes, and with a good head chef you can have low wastage, and good cash and percentage margins on the food. Coffee, on paper, looks like it has great margins. In reality this doesn’t turn out to be true, and even when a super tight ship is being run – it is still a low cash margin product. You often need to make hundreds of drinks to pay the rent, overheads and staff before you start making any money. Lots of cafes in London don’t do a lot of food, and what they do sell is often relatively low margin food. (Items bought in each day for example). New York cafes also typically do minimal food. This isn’t a plea that we all return to food heavy cafe models, but I did want to highlight the fact that pay is typically constricted by the financial model of the cafe. The higher the costs of goods – typically through uncontrolled or unmeasured wastage (something baristas are typically directly responsible for) – the less money left over to pay them with. Increasing drinks prices to create better margins is another option – though the pressure does ultimately fall back on baristas to deliver more value due to the higher price point. I’m not really trying to offer a solution. I just thought that the Sprudge post merited some discussion and, I hope, a little explanation. I think the instances where owners are paying staff a pittance and then going home to roll around on a bed of money are incredibly rare. I want baristas/coffee people to earn more. I want owners to have successful businesses. We face a challenge as an industry, to work towards models (because there are more than one) that pays sustainably for both the payer and the payee. I hope more people throw in some thoughts on this, and I hope my explanations above make sense to people. Either way – feel free to let me know on twitter . Related posts: Cafe Review: Flat White Flat White 17 Berwick Street, Soho, London, W1F 0PT Map I’ve been visiting these guys since they opened, and make no secret of the fact that I get on well... The apathy of the barista Its something that has been on my mind quite a lot lately. I have no idea how many people work as baristas in the uk, but there must be thousands... Italian coffee culture in the UK This morning I spoke to a journalist on the phone who is writing about coffee in London, as well as the antipodean influence on our coffee scene. One of the...

One of the best bits of my Symposium this year was working with some of the speakers in the run up to this. My role on stage was to introduce and to host a couple of panel debates, and also try to offer some insight into the Symposium to those talking there for the first time. I had to try to understand the topics sufficiently to ask pertinent questions on stage. Conveniently, Professor Aaron Davis is in London and I was fortunate enough to host him for an afternoon of coffee drinking and talking about various coffea species. He’s the Head of Rubiaceae Team at Kew Gardens , and an incredibly approachable expert in his field. I learned a staggering amount that afternoon, and I was excited to hear him give this talk at Symposium. I cannot recommend enough that you put 20 minutes aside to watch this video, it is a really, really great presentation – and if you pay attention I guarantee you’ll learn some fascinating things: Keep an eye on the SCAA’s Symposium Youtube Channel for new videos that they’ll be releasing over the next few months… Related posts: The evangelical nature of training talking rubbish Originally uploaded by King Seven. I was doing a demo seminar at the Bar Show in Earl’s Court last week and as I stood before the little theatre... How to make coffee a viable career I have just returned from this year’s Nordic Barista Cup in Copenhagen, and I have to say it was a great event. I was honoured to be invited back to... UK Cupping Competition Just a quick post really about entering the Cupping competition today. I initially was told I couldn’t enter because they had 8 entrants and couldn’t possibly accomodate a 9th. Thankfully...

I know there are all sorts of conversations swirling around restaurant coffee kicked off by Oliver Strand and then intensified/exacerbated by Kevin Knox . I don’t really want to dive into that particular discussion head on, instead hoping to run parallel to this. I try not to post too much about the specific experiences I have in my working life on here, because this isn’t really a blog about my business. I must confess, however, that after nearly 5 years of wholesale coffee roasting and working with businesses across London and the UK I feel no closer to “solving” the restaurant coffee problem. As an industry we’re pretty resentful of how restaurants treat coffee. I still cringe at the memory of the NBC audience ganging up to pick on someone from a restaurant who dared to think they weren’t doing that bad of a job. Let’s look at this from a difficult angle, perhaps one that isn’t our own. Coffee isn’t important to restaurants. It doesn’t have a great cash margin, and there are other items that might be ordered. A brandy makes more money, has near zero wastage and my staff training is pretty minimal. Restaurants treat coffee that way because it simply isn’t important to them. People are booking tables because of the coffee service. The fact that, on the one hand, the coffee industry often complains that restaurants don’t take a culinary approach to coffee while, on the other hand, we’re slinging out our best tasting products in paper cups… Restaurants serve coffee because they are expected to. “Get rid of espresso!” we tell them. In the USA this may actually be viable but in cultures where espresso was used to make coffee expensive and desirable that is more difficult. I once got incredibly excited because a restaurant here got rid of espresso. They did french presses. The staff trainings were incredibly enjoyable because it was just tasting and conversation. The presentation was beautiful and the coffee tasty. For their customers, who visited relatively rarely, this was an oddity in a dining world that still proclaimed espresso to be the best. The restaurant eventually felt that the risk reward ratio wasn’t working and added espresso back to it menu. I don’t blame them at all. This restaurant had previously recognised that espresso was really hard. Staff training for a restaurant poses a challenge. Consistency is difficult. Execution is hard. Even businesses who basically just work with coffee struggle to execute consistently to a high standard, and yet we’re incredulous that a restaurant – that deals with so many ingredients and preparations – might struggle to brew a good cup. This is where Nespresso comes in. They turn up, and they understand that espresso brewing is difficult. The difference is they come with a solution. We might argue that the product quality isn’t there, but it is still a better solution than one we have. So we continue to berate the restaurant industry. We mock them for taking free equipment, instead of laying down thousands upon thousands to brew a relatively small number of low margin products. We mock them for doing a bad job with a setup that most of us already struggle on. We continue to offer the same solution to their problem, despite the fact that all and sundry can see that this solution doesn’t work. It simply doesn’t work. No matter what we do most espresso in most restaurants brewed on traditional equipment will have quality issues. How much work have we done on looking at a solution that bridges some of the challenges around ease, while retaining the characteristics of the coffees we are so excited about? None. Perhaps we ought to start… Related posts: Restaurant Coffee I don’t usually post much work related stuff on here, but taking this photo it struck how ludicrously easy it can be to do a great coffee service in a... I’m not in it for the money You hear this a lot among passionate people who start businesses, particularly coffee ones. For many of us coffee is compelling, fascinating, satisfying yet frustrating in equal measure. It is... Trust This is the first in a series of posts on quite a broad topic within coffee, that covers not only elements of brewing but sales, consumption, successes and failures and...

I’d read a couple of things about Starbucks’ Leadership Lab – including the bill for it all clocking in at $35 million. I don’t really know how that gets broken down, because I can’t imagine the staging of it all cost this much. Regardless of what I think about the coffee served in Starbucks – I would still have enjoyed visiting this thing. Have a look at the video: I have no doubt it would have inspired me as a manager/partner at the company. I can’t help but wonder what the effects would be if you put on a near identical, less brand focused, event for the public. Less about selling brands and products, and more about finding interactive ways to get people to engage with coffee. The SCAA certainly could pull something like this off – though I don’t know if the return on investment/monetary cost currently makes it viable. There is a little more about the Leadership Lab here . Interesting to also note the implied turnover of an average Starbucks store being in excess of $1m. Again, say what you will about their cups of coffee – they’re still winning on the other metrics in comparison to most independents. Related posts: Looking forward to the NBC I have to get up silly early (4am) to go and catch my flight to Copenhagen tomorrow. Really looking forward to seeing lots of people as well as finding out... A simple explanation I am extremely grateful to everyone who responded in the comments of the last post about taste and temperature. I learned a great deal and now have some more avenues... A Little Coffee News Roundup There are a few interesting pieces of coffee news floating around at the moment, that seemed worth discussing. There is a common sentiment across the three that is kind of...

Back in March of last year, I was emailing back and forth with Noah Namowicz of Cafe Imports. Around that time I had the C-market on my mind quite a lot, and was trying to get a beginners understanding of all that influences it. Back then he brought up a technical analysis tool called the Fibonacci Analysis . I’ll be honest – I understand the Fibonacci series much better than this analytical tool. It would be pretty easy to join countless others in their obsession with both the Fibonacci series and the Golden Ratio , and its appearance in nature and in aesthetics. As much I could go off on a long rant about the Golden Ratio in design, architecture or design aesthetic (as it applies to coffee), I shall skip this for the sake of this blog post. Back to trading coffee… In March 2012 the C price had just fallen below 200, and this seemed contrary to what ought to be happening. To quote from Noah’s email:1 That being said, I think the technical traders and technical theory (so just based on trend lines) give a good idea of where coffee is heading, but right now technically this market is broken, there is no technical analysis aside from Fibonacci that is indicating where this is going. Fibonacci analysis has this going down to the mid 130s. That is a huge fall, so most technical traders are not following that theory right now. Obviously there are external environmental factors like weather than can throw a wrench in technical analysis, but it is more often than not correct. (emphasis added) Even though it was a declining market, back in March last year the mid 130s did indeed seem like a huge fall. That is, however, exactly what has happened. I checked the C-market a few days ago, to see it sitting at 136.5, so I emailed Noah again. His response: What this says is…traders are using technical analysis, and in a year with mild weather swings, that analysis is most likely going to be very accurate to how the commodity is traded. This is evidenced by the fact that these traders are completely ignoring the rust issue in central America. Coffee is low now, but once the real shortage of washed milds are felt, the market will begin to trade on fundamentals again I would bet. Traders aren’t feeling that washed mild squeeze yet because there is a lot of coffee still on the table from Colombia, Peru, and Brasil, but once that fades out, the market may jump back up. A jump back up does seem increasingly likely – though if anything I’ve learned that I don’t really want to get involved in gambling on the C-market. It once agains feels frustrating to be in an industry where livelihoods are so dependent on something as fickle as this. Right now there are strikes in Colombia (not jut in coffee ), which are of course tied to the prices farmers receive. The market is paying less than the cost of production, and government subsidies aren’t closing the gap fast enough. In truth I don’t know if this post is meant to discuss the C in general, or the mechanisms that people use to trade on it and their impact on our industry. The only thing I can be sure of is that it is interesting and worth sharing. Footnotes:Emails are quoted with kind permission Related posts: Unnovation in coffee This is just what we need: Melitta’s brand new Smart Brewer. Not only does it brew coffee, but it checks the weather for you by communicating with MSN. Heaven... Coffee Leaf Rust There are many large and embarrassing gaps in my coffee knowledge, and coffee leaf rust is one of those. However, it seems that this is something that is having an... The change when coffee cools My last post on this generated some amazing comments, for which I am very grateful. It has also meant I’ve been talking about and thinking about the change in flavour...

Just as a follow up to this previous blog post , I received an email from Oliver Strand that linked me to one clear definition of a chain. It comes from San Francisco’s Planning Departmen t. Formula retail uses are commonly referred to as “chain stores.” Under Section 703.3 of the San Francisco Planning Code they are defined as “a type of retail sales activity or retail sales establishment which, along with eleven or more other retail sales establishments located in the United States, maintains two or more of the following features: astandardized array of merchandise, a standardized facade, a standardized decor and color scheme, a uniform apparel, standardized signage, a trademark or a servicemark.” In other words, retail stores with multiple locations and a recognizable “look” or appearance. There’s something pleasingly damning about the phrase “Formula retail use” for a chain. It is also pleasing to see this so clearly detailed out, in a relatively objective way. That aside – it is interesting to see how far you could go under these definitions without technically being called a chain, though you’d probably end up with a dangerously interesting business at the end of it all! (Or a completely incoherent one….) Of course – defining a chain is a pretty poor way of defining an independent. Coffee shops don’t exist in two categories – no matter how convenient or easy for us it would be if they did. Related posts: Starbucks and their plans for growth Some time back in late 2010 (I think) I made a comment on twitter about Starbucks’ direction in the US.1 An intriguing response to this turned up fairly rapidly in my direct... GCQRI Day Two – Identifying Research Projects I think a lot of people came to this event brimming with ideas for research into coffee cup quality. This part of the day was something of a data dump... Rosettas – one or more? This is something I’ve been thinking about for a while. A year or more ago I was really into doing multiple rosettas. 3 in a 5oz cup type of thing....

We all agree that when brewing coffee, that the ingredient you choose is very important. The consumer understands there is a choice, even if that choice has nothing to do with how the coffee tastes. The most successful here have been the ones that have told the simplest story: this one is traded fairly, or this one won an award for its taste, or this one is from a single farm. I think coffee has done a reasonable job of communicating the importance of grinding coffee freshly. While grinders at home aren’t as common as we’d all like, the fact that “Fresh Ground” is still used as a heavy handed piece of advertising suggests that overall people understand that freshly ground = good. We’ve all had fun with communicating brew methods and techniques, there have been some great videos – both entertaining and informative, and they’ve been seen by a reasonable number of people. While I am not going to claim that people at home all have exceptional technique, I think those interested in brewing better can be pointed somewhere simple like Brew Methods. It isn’t a difficult message to communicate, and most of the time they reinforce the first two issues. Then we have water. Water is complicated. Water makes me depressed. Perhaps because I live in London, where the water is so bad for coffee, I am disproportionately frustrated. The taste impact of London water on coffee brewing is utterly shocking to those experiencing it for the first time. Coffee brewed with great water can be alive, sparkly, sweet and distinctive. Coffee brewed with London water all just tastes…. brown. Juicy lots from Nyeri, floral coffees from Yirgacheffe, jammy coffees from Huila – all of these and more end up tasting pretty much the same with London water. I am interested in people having a great experience with coffee. I am interested in people understanding that spending more money on better coffee can produce incredible and pleasingly variable experiences. Water is a huge hurdle and a problem. So a simple message must be communicated: You should use relatively soft water, free from negative tastes and odours. It should have a little hardness, but not too much. This is already a pretty complicated message (and I’ve already massively oversimplified it). Even if it is understood we get a difficult question in return: so how do I achieve this at home? This is where everything goes wrong, and I am still stumped for a good answer. The choices are the following: - Use bottled water. You can look at the mineral content on the side of the bottle – presented as “Dry residue at 180°C”. You can pick up water from places like Tesco relatively cheaply. However, you don’t really feel good about telling people to be buying bottled water (hardly the most sustainable idea in the world) just to brew their coffee with. Those that do see a massive improvement and realise the value, but it doesn’t feel like a practical or scalable solution. - Treat the water at home. Most people working on improving their water will use something like a Brita filter. These do remove unpleasant tastes and odours, but they do’t really soften the water very much, and you’ll still have a relatively high TDS. Not recommended for optimal results. The other option for home treatment is to install a reverse osmosis (RO) unit. In a commercial environment I now consider these to be absolutely essential, and you’re opening or operating a coffee bar in London without one then I strongly suggest getting one installed as soon as possible. You can produce great water with it ,and stellar results. At home you need to do some semi-serious plumbing to install one. For many people renting this isn’t a viable option, and even if the unit is relatively cheap it is still similar money to starter electric burr grinder – though this won’t have great production capacity. RO is without doubt the best commercial solution, and I will put one in my next kitchen – but I don’t know if people want to get this involved with their plumbing just for a cup of coffee. What’s left? Not a lot really. Cafes with RO units could sell or give away the water to people (with reusable containers) if they have sold whole bean coffee to them too. I’d love to see cafes give some away, if only so people could taste what they could be brewing at home. I pose this as a question about water to anyone and everyone reading, because I don’t have a good answer. This should be a question troubling more people. If you roast coffee in an environment where the water is hard, or has a high TDS, then it is likely that your customers are having very, very different experiences in their homes compared to what you’re enjoying on your cupping table. We need a solution for this that is practical, sustainable and affordable. I desperately hope we find one soon. All ideas are welcome… Related posts: Some thoughts on brew temperature I am fully expecting to have this picked to pieces or just generally rubbished, but I thought I would jot down a few thoughts having read a post over at... We underestimated water In my coffee work my number one frustration is with water. I think it is something that has been massively underestimated, both as an industry and very much personally. To... Fear of Water I was going to do revisit an old post about why someone’s coffee might taste bad, talking about the amount of dull burrs out there, as well as a bit...

The recent coverage of Harris and Hoole has made for interesting reading. Coverage ranged from the laudable to the laughable. The one sentiment that popped up repeatedly was the idea that Harris and Hoole were being disingenuous by pretending to be an independent . This raises, in my eyes, a rather interesting question: What exactly is independence? What is it that Harris and Hoole were considered to be doing that they shouldn’t have been? Looking at the comments it appears they have been committing the cardinal sins of: - Fitting out their shops nicely, and not in an identikit kind of way. - Brewing the coffee properly on quality equipment. - Sourcing good coffee to brew and serve. - Not plastering the place from top to bottom in Tesco’s branding Essentially pretending to be an independent is simply not acting like other multi-unit operators in the sector like Starbucks, Costa and Caffe Nero. Unfortunately this point of view can easily expose one’s own hypocrisy. I’ve railed against the homogenous high street throughout the UK, the fact that everywhere I went the experience was pretty much identical, and pretty low in quality to boot. There are always going to be nationwide operators in any segment, and I certainly can’t complain if they start acting a little more sympathetically to their surroundings, or not cutting corners on fit-out or ingredient and preparation. (There are always going to be multiple unit operators because scaling is one of the very few ways to make selling cups of coffee adequately profitable – but this is a subject for another day!) In the past I’ve defined independence through access to capital for expansion. ”Independent” is an incredibly annoying term to use and define, but I think access to cash is at the root of just about everyone’s definition. People seemed angry about Harris and Hoole because they felt like they were lining the profits of Tesco, which has more than enough money already. People were indicating that their decision-making about which coffee shop to frequent was massively influenced by who they considered the ultimate beneficiary was. This is extremely interesting in and of itself. However, it quickly leads us into murky waters again. Every business requires startup capital – should part of a businesses identity be where this money came from. We like the plucky underdog in this country, and we do love to cut down the tall poppy. This would imply that people should avoid taking on serious investors (as they’ll expect a return, which of course will result in the destruction of quality because any form of profitability obviously requires “selling out.”)1 Yet, if we truly want independent entrepreneurs to have a greater chance of success, or even limited profitability, then surely we should encourage them to take on sufficient funding that they can open a business capable of that. (This is yet another topic for another day.) This other Guardian piece on Harris & Hoole in the Guardian was somewhat annoying, or mildly amusing – depending how satirical you take the tone to be. One particular sentence tickled me – talking about how you can spot a corporate business pretending to be an independent one: Low prices is another, since one of the main advantages of corporate ownership is improved negotiating power with suppliers. Seems like this might work with anything but coffee. Our industry’s tendency towards a kind of false competitive pricing – where an independent with limited buying power prices the product comparably to a multiple outlet, or even multinational, competitor. In the short term this seems sensible, but of course the long term effect is that the consumer doesn’t see pricing being a suitable differentiator of quality, and the business doesn’t make enough profit to be sustainable. (One day I promise I’ll stop ranting about this stuff – perhaps when our industry doesn’t have one of the highest failure rates of new businesses.) In Summary This post isn’t really about Harris and Hoole. It is about how consumers perceive our business. We talk a lot about the things we think matter in the decision making process when someone chooses a coffee shop: location, quality, convenience, price and brand are all discussed. We don’t really talk about how the financial transactions involved actually make people feel. We don’t talk about what people expect of the financial transparency of a coffee shop. Has the independent coffee shop culture sold an image of the independent coffee shop as a begging bowl, a place to spend away our guilt over how we much most of us spend with corporate giants like Amazon, Tesco, Walmart or Coca Cola? Will this image turn from a boon to a shackle as we try to professionalise our industry, in the hopes of making it financially sustainable? Footnotes:I am hopeful that people’s sarcasm detectors are turned on here…. No related posts.

There have been an increasing number of news reports about the impact of leaf rust on coffee producing countries, specifically those in Central America. I’ve been a bit overwhelmed by the information, and felt like I lacked some context. I am writing this to try and organise and contextualize some of the available information. (For myself as much as anyone else! Also – this is a long article, the Read Later button may be useful!) A number of countries have declared agricultural states of national emergency as a result, including Honduras, Guatemala and Costa Rica . El Salvador and Nicaragua are also badly affected, and Colombia has been struggling with the impact of leaf rust on its production for a number of years. Over the last few years I hope people have noticed that there has been an increase in focus on topics like the effects of climate change on coffee production, as well as the issue of the lack of genetic diversity within coffee. Leaf rust is a great example of why we should be deeply concerned. Most coffee plants are susceptible to leaf rust, because we’ve been commercializing a fairly narrow strain of arabica for our consumption. One question I’ve seen popping up is how this will affect the price of coffee. We’re seeing dramatic drops in production in countries we might consider major producers. Yet the C-market price considers to trend downwards. To understand this in the short term it might be worth looking at the numbers more closely: Projected losses to leaf rust in Central America total 184 million kg . This is approximately 3 million bags of coffee (bags being the preferred unit for production/export statistics). Last year the total production globally was around 134 million bags, about 5 million bags below consumption (the gap was filled by existing stocks – not everyone is concerned about past crop flavour!). This year the projected production is 144 million bags, producing a surplus of coffee, even with global consumption set to rise by around 1% (based on an increase of 4.7% between 2008 and 2011 inclusive). Stocks in producing countries currently total around 15 million bags – the lowest since records began. Stocks in consuming countries are more difficult to track.1 Much of this increase is due to Brazil, whose production alternates between relatively high and low – and this year is the higher production year. Last year Brazil produced 43 million bags. This year it is set to produce just under 51 million. Other countries are seeing increases this year – Indonesia is up with a 2.3 million bag increase, and Africa’s total production is expected to be up by about 2.1 million bags. Effectively the losses to leaf rust are simply reducing the size of surplus this year, but we’re still going to have a surplus. So in the short term, the supply vs demand relationship that we expect to see impact the C-market has no reason to do anything other than suppress the price for coffee. In the short term… To quote from the summary of the ICO report from December: In conclusion, it should be noted that coffee prices continued to fall during December, reinforcing the downward trend since October. As a result, calendar year 2012 ended with the ICO composite indicator price 25.7% lower than the previous year, although the average price for 2012 is still higher than most of the previous decade at 156.34 US cents/lb. However, costs of production continue to increase, reducing good agricultural practices in a number of exporting countries. Vietnam is unlikely to repeat its record crop of 2011/12 this year and Colombia is also yet to recover to its previous production levels. Consumption remains reasonably resilient to macroeconomic concerns, and there is strong potential for growth in exporting countries and emerging markets. With certified stocks and inventories at relatively low historical levels, there seems to be limited potential for further downwards price corrections. (emphasis added) The future is a different story. I don’t know exactly what will happen, but there are a few things worth considering: Leaf rust isn’t a short term problem. It impacts trees and their ability to produce over several years. If not controlled and aggressively managed it will pretty much destroy a coffee farm. You don’t bounce back from rust damage quickly. Secondly – we (as in specialty coffee people) don’t think of coffee as being a commodity. Most of us aren’t really excited by more commodity grade Brazils and coffees from Indonesia filling the gaps coming from rust losses. Moreover, it is likely that Brazil and others could ramp up production if needed, should rust continue to reduce crops from Central America. Adding to a bleak trend: Robusta production is also up significantly – over 2 million bags (around 4%). Prices for robusta remain healthy, indicating a matched demand for this new production from roasters who are still struggling with what they consider too high of a price for arabica. They’re blending in more robusta to stay competitive, at the expense of cup quality. (Source for graph) While we’ve seen this trend before where quality dips because of price, in the US especially, with an eventual recovery – I don’t think the conditions are exactly the same and we’d be foolish to expect the entire coffee market to correct back towards quality the way it did in the past. Let’s turn our attention back to quality coffee. As leaf rust is more likely to attack higher yielding trees, grown at lower altitudes, you might think that the speciality end of the market is likely to be less affected. It is still going to affect pricing longer term – for a farm nervous about rust and trying to prevent it there are a number of costs, which are significant. I’d recommend reading Tom Owen’s recent excellent post from Guatemala for some idea of the work necessary to prevent rust, let alone treat it. To quote from it: As with most disasters, it will be the poor and unprepared who suffer the most. The little farms I saw that were most affected aren’t the sole income of the farmers, so it’s not that they are being pushed off an economic cliff. But it is going to hurt badly. I’d also hazard a guess that differentials within those countries would be affected. Demand for coffees from Honduras specifically are unlikely to dramatically shift, but if production there has been reduced by 25% then scarcity of those particular coffees may drive up price! Again – differentials are based on the C-market, and would in theory be unconnected to speciality buying/the cost of producing specialty, but farmers are generally very much aware of what is happening with the C and its differentials within any coffee growing country. Farm producing high quality coffee are being affected. We’ve seen this discussion going on in Colombia for a little while: would we rather a producer grows a rust resistant variety, and still has a crop, or grows something like Caturra which has a better cup quality but is a massive gamble where one possible outcome is no coffee to sell? Read this for some farmer responses to Castillo. (In fact, I hope you’re already reading this blog as this post is part of a great series on rust in Colombia.) Those of us who work within genuine speciality rely on a higher cup quality as the basis of what we do, making many cautious to embrace varieties like Castillo in Colombia or Batian in Kenya. It would be prudent to presume that climate change isn’t going to go away. (also worth remembering that climate change adds to the Broca problem too.) While there is still some debate as to whether it is rain generally, or specific types of rainfall that cause the problem – I think we should expect rainfall patters to continue to promote the spread of rust. Some would argue that increased use of fungicides aren’t going to solve the problem either because fungicides also kill a fungus called White Halo fungus that actually prevents leaf rust. This leaves those of us on this side of the coffee industry at something of a loss as to what to do. Hopefully the value of World Coffee Research is increasingly clear and supporting it seems worthwhile. I don’t believe that the spread of information on treatment and prevention is suddenly the responsibility of green coffee buyers. Producing countries have infrastructure for outreach and development, and way more experience in it. I believe our responsibilities lie on our side of the supply chain. We need to make sure we can bear the increased costs, and be willing to pay the increased costs of production necessary to allow producers to invest in prevention. We need to champion diversity, and not take the easy way out of buying cheaper, lower quality and less interesting coffees. Equally I don’t expect anyone to suddenly have a solution to climate change, but we do have a duty to clearly and simply explain the issue to our customers and those around, and to spread awareness of it as a problem. A critical mass of desire is necessary for change of policy and genuine efforts to work on the problem, so I guess every little helps. I’d also look to bodies like the SCAA for leadership on this issue.2 On a related note: There is going to be some interesting information presented at the Symposium this year which relates both directly and indirectly to this topic. Ultimately – I don’t know what to do. I’d love some input from others, be it through blog post responses or on Twitter. I am not trying to scaremonger, simply understand this issue. Footnotes:All data comes from the ICO Summary Report for December 2012 As a side note one might expect leadership from the SCAE here, but I don’t think we’re going to see it. No related posts.

I’ve had the poll running for a while now, and several hundred of you took the time to respond. My thanks! However, some people clearly thought this was a competition to be won, and clearly tried to game the poll. For this reason it is pretty much impossible to do any sort of ranking.1 Plus that would be silly, by its very nature. I’m not really sure how I feel about the results I had. Interestingly, though not surprisingly, they were very much skewed in favour of cafes that happen to serve good coffee. I had hoped more people would look past the terrible coffee served to identify interesting design, or important design, and nominate that. However, the readership of this blog unsurprisingly frequent cafes that work hard on their coffee program – hence the results looking the way they do. So instead I offer up a list of several cafes that had repeated mentions. The list is alphabetical, and ultimately meaningless. 49th Parallel, Vancouver, CANADA Barista Parlor, Nashville, USA Caffe Streets, Chicago, USA Coava, Portland, USA Coffee Collective Roastery, Copenhagen, DENMARK Four Barrel, San Francisco, USA Handsome Coffee, Los Angeles, USA Heart Roasters, Portland, USA Intelligentsia Venice, Los Angeles, USA Market Lane, Melbourne, AUSTRALIA Ozone Coffee, London, UK Patricia, Melbourne, AUSTRALIA Prufrock Coffee, London, UK Revolver, Vancouver, CANADA Seven Seeds, Melbourne, AUSTRALIA Sightglass, San Francisco, USA Tail0r Made, Athens, GREECE Workshop Coffee, London, UK I am surprised less by the cafes that are on the list, more by the ones missing. Also, looking at the distribution across the different countries – this very much reflects the distribution of readership of this site around the world. I’m not going to post up my own picks, but I should confess that none of them made this list.2 Footnotes:Seriously, I am disappoint…I did consider adding a google images search link to each cafe, but I figure if you’re interested then you’ll probably work it out yourself. No related posts.