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December 2017 | Vol. XXX No. 12 www.coffeetalk.com

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Special Is

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WHAT'S THE PROBLEM? WHAT'S THE SOLUTION?

An insider's view on what is happening in the specialty coffee industry, directly from its own members.

2018 ISS

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Welcome

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• The Necessity of True Stories in a Rapidly Growing Company, Miles Small, International Coffee Consulting

here to begin? 2018 brings our industry to a challenging new time where technology and change far outpaces anything we’ve ever seen before. Being informed, looking for new ways to do the same old thing, being competitive in the new world, without exploring these there is no chance for survival.

• I Am Young at Origin, Craig Holt, Founder, Atlas Coffee Importers • What’s the problem? What’s a solution?, Bill Fishbein, Founder & Executive Director The Coffee Trust • Don’t Leave Water Quality to Chance, Jim Franceschetti, Marketing Manager, Pentair Everpure

For 2018 state of the industry issue, we are honoured to provide articles from such diverse topics as educational expectations, fourth wave, beyond coffee, the science gap, and craft coffee. Please enjoy the stories and thank you again to the industry icons who care and share.

• Coffee’s Science Gap, The board of directors of World Coffee Research • Does Decaf Really Matter?, Andrea Piccolo, Swiss Water Decaffeinated Coffee Company

• Great Educational Expectations, Spencer Turer, Vice President, Coffee Enterprises

• Education Key to Helping Small Coffee Farmers Respond to Craft Coffee Demand, Brandon Bir, Education and Sustainability Director, Crimson Cup Coffee & Tea

• ‘Fourth Wave’ or Not, Sustainability is the Future of Coffee, Kathy Burfield, CoFounder, Aurai Air Extracted Water

• The Legend of Joe Mattingly, Ken Shea, President of Ken Shea & Associates and V.P. of Coffee Service for G&J Marketing and Sales

• 2018; Specialty Coffee Business Opportunities and Challenges, Ed Arvidson, President, E&C Consulting

• Tips to Reduce Employee Turnover & Absenteeism in Your Coffee Shop, John Waldmann, CEO, Homebase

• Beyond Coffee, Rick Peyser, Senior Relationship Manager, Lutheran World Relief • Brand Yourself, David Gross, President, Add a Scoop Supplements

Kerri Goodman, publisher coffeetalkMAGAZINE

March 2017 | Vol. XXX No. 3

February 2017 | Vol. XXX No. 2

January 2017 | Vol. XXX No. 1

April 2017 | Vol. XXX No. 4

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November 2017 | Vol. XXX No. 11

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Contents

2 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38

Welcome

Calendar

Advertiser Index

From the Publisher Kerri Goodman

Great Educational Expectations Spencer Turer, Vice President, Coffee Enterprises

'Fourth Wave' or Not, Sustainability is the Future of Coffee Kathy Burfield, CoFounder, Aurai Air Extracted Water

Specialty Coffee Business Opportunities and Challenges in 2018 Ed Arvidson, President, E&C Consulting

Beyond Coffee Rick Peyser, Senior Relationship Manager, Lutheran World Relief

Brand Yourself David Gross, President, Add a Scoop Supplements

The Necessity of True Stories in a Rapidly Growing Company Miles Small, International Coffee Consulting

Tips to Reduce Employee Turnover & Absenteeism in Your Coffee Shop John Waldmann, CEO, Homebase

I Am Young at Origin Craig Holt, Founder, Atlas Coffee Importers

“What's the Problem? What's a Solution?” Bill Fishbein, Founder & Executive Director The Coffee Trust

Don’t Leave Water Quality to Chance Jim Franceschetti, Marketing Manager, Pentair Everpure

Coffee’s Science Gap The Board of Directors of World Coffee Research

Does Decaf Really Matter? Andrea Piccolo, Swiss Water Decaffeinated Coffee Company

Education is Key to Helping Small Coffee Farmers Respond to Craft Coffee Demand Brandon Bir, Education and Sustainability Director, Crimson Cup Coffee & Tea

The Legend of Joe Mattingly Ken Shea, President of Ken Shea & Associates and V.P. of Coffee Service for G&J Marketing and Sales


SLEEVES

VACUUM CONTAINER

Need to update your subscription or address? Visit http://coffeetalk.com/forms

WHO WE ARE JAVA JACKET 800.208.4128 WWW.JAVAJACKET.COM

TIGHTPAC AMERICA, INC. 888.428.4448 WWW.TIGHTVAC.COM

Java Jacket provides the best insulation of all sleeves on the market. Protects customers from hot or cold to-go beverages, and provides a more grippable surface than other coffee sleeves.

We offer the largest selection of vacuum sealed containers in the world! We have developed a patented vacuum open and close system that acts exactly the same way as a one-way degassing valve, allowing natural gasses to escape without allowing oxygen in. Perfect for Coffee & Tea, guaranteeing freshness & flavor. Simplicity that works.

FRAPPES

DAIRY ALTERNATIVE

Phone: 206.686.7378, see extensions below

Publisher / Advertising Inquiries Kerri Goodman, ext 1 kerri@coffeetalk.com Director Educational Publishing Shane Gillispie, shane@coffeetalk.com Managing Editor Libby Smith, ext 8 libby@coffeetalk.com Ad Art & Accounting Laurie Veatch, ext 4 laurie@coffeetalk.com

COSTELLINI'S 877.889.1866 WWW.COSTELLINIS.COM

Delight your taste buds with our delicious Chocolate and Vanilla Frappes!

BREWISTA WWW.MYBREWISTA.COM NutraMilk™ by Brewista® • 2 liters of dairy free milk in minutes • Use only nuts, seeds, or grains and water • Excellent frothability • No overnight soaking or straining • Commercially rated info@mybrewista.com

Calendar

6

For complete and updated show information visit our online calendar: http://magazine.coffeetalk.com/industry-calendar/

January 20-24 January 21-23 January 27-Feb 11 January 29-Feb 02 February 2-4

Sigep 2018, Fiera di Rimini, Italy Winter Fancy Food Show, San Francisco, CA USA Roasters’ Guild Tour, Yunnan, China Pu'er International Specialty Coffee Expo 2018, Yunnan, China CoffeeCon LA 2018, Los Angeles, CA USA

March 2-4 March 4-6 March 7-11

Salon du Chocolat, Brussels, Belgium International Restaurant & Foodservice Show, NY USA Natural Products Expo West, Anaheim CA USA

March 15-17

NCA Annual Convention, New Orleans, LA USA

March 16-18 March 21-23

Coffee Fest Baltimore, MD USA NAMA One Show, Las Vegas NV USA

Web Design Justin Goodman, ext 6 justin@coffeetalk.com Print Design Marcus Fellbaum, ext 5 marcus@coffeetalk.com Mailing Info Mail: HNCT, LLC, 25525 77th Ave SW Vashon, WA 98070 Phone: 206.686.7378 Fax: 866.373.0392 Web: www.coffeetalk.com Disclaimer CoffeeTalk does not assume the responsibility for validity of claims made for advertised products and services. We reserve the right to reject any advertising. Although we support copyrights and trademarks, we generally do not include copyright and trademark symbols in our news stories and columns. CoffeeTalk considers its sources reliable and verifies as much data as possible. However, reporting inaccuracies can occur, consequently readers using this information do so at their own risk. Postmaster: Send address changes to HNCT, LLC, 25525 77th Ave SW, Vashon, WA 98070 Subscription: The cost of a subscription in the U.S. is $47.50 per year; in Canada, the cost is $72.00. Free to qualified industry professionals. Non-qualified requests may be rejected. Publisher reserves the right to limit the number of free subscriptions. For subscription inquiries, please call 206.686.7378 x1 or subscribe online at www.CoffeeTalk.com. Copyright © 2017, HNCT, LLC, All Rights Reserved

December 2017


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Sponsors Index Company

Phone Web

Page

Add a Scoop Supplements.............................................................(415) 382-6535.............................addascoop.com.......................................................................................21 Brewista............................................................................................(307) 222-6086.............................mybrewista.com....................................................................................... 6 Cablevey Conveyors.......................................................................(641) 673-8451.............................cablevey.com...........................................................................................15 Coffee Holding Company.............................................................(800) 458-2233.............................coffeeholding.com................................................................................... 9 Costellinis.........................................................................................(877) 889-1866.............................costellinis.com.......................................................................................... 6 Curtis................................................................................................(800) 421-6150.............................wilburcurtis.com....................................................................................11 Don Pablo Coffee Roasting Company........................................(305) 249-5628.............................cafedonpablo.com..................................................................................23 Fres-co System USA Inc................................................................(215) 799-8032.............................fresco.com................................................................................................. 7 Fuji Electric Corp. of America......................................................(732) 560-9410.............................americas.fujielectric.com......................................................................19 International Coffee Consulting Group......................................(818) 347-1378.............................intlcoffeeconsulting.com......................................................................37 Java Jacket.........................................................................................(800) 208-4128.............................javajacket.com........................................................................................25 Java Jacket.........................................................................................(800) 208-4128.............................javajacket.com.......................................................................................... 6 JoeTap...............................................................................................(855) 456-3827.............................joetap.com...............................................................................................17 Mukilteo Coffee Roasters..............................................................(888) 890-9800.............................mukilteocoffee.com...............................................................................31 NAMA..............................................................................................(312) 346-0370.............................TheNamaShow.org.................................................................................39 Oubu Jamaica Blue Mountain Coffee..................................................................................................oubu-coffee.com....................................................................................33 Primera Technology Inc................................................................(800) 797-2772.............................primeralabel.com...................................................................................27 Shore Measuring Systems..............................................................(765) 769-3000.............................moisturetesters.com..............................................................................35 Swiss Water Decaffeinated Coffee Company.............................(800) 668-9981.............................swisswater.com......................................................................................... 5 Texpak Inc | Scolari Engineering.................................................(856) 988-5533.............................scolarieng.com......................................................................................... 3 The Coffee Trust..............................................................................(505) 670-9783.............................thecoffeetrust.org...................................................................................29 Tightpac America Inc....................................................................(888) 428-4448.............................tightvac.com............................................................................................. 6 Vessel Drinkware............................................................................(855) 833-7735.............................vesseldrinkware.com.............................................................................13

8 December 2017


To our 2017 Advertisers: Thank You WE COULDN'T HAVE DONE IT WITHOUT YOUR SUPPORT. WISHING YOU A WONDERFUL 2018!

ADD A SCOOP SUPPLEMENTS

GAVINA GOURMET COFFEE

PENTAIR-EVERPURE

AEROPRESS INC.

GENERAL PACKAGING EQUIPMENT CO.*

PLANETARY DESIGN

AFINIA LABEL

GPI SOLUTION LLC

PLITEK

AGTRON INC.

GREY FOX POTTERY

PRIMERA TECHNOLOGY INC.

AHLSTROM CHIRNSIDE LTD

GROUNDS FOR HEALTH

PRINTPACK

ALADDIN PACKAGING

HOLIDAY HOUSE DISTRIBUTING

PROMAC - USA

ASHE INDUSTRIES LLC-FLUID BED COFFEE

IFILL CUP | UNITED HOME TECHNOLOGIES

RED BULL NORTH AMERICA

ROASTERS

LLC

BOXED WATER IS BETTER

INTERNATIONAL COFFEE CONSULTING

BREWISTA BUHLER INC CABLEVEY CONVEYORS COFFEE ANALYSTS COFFEE HOLDING COMPANY COFFEETALK MAGAZINE COLOMBIAN COFFEE GROWERS FEDERATION COSTELLINIS CURTIS DIEDRICH ROASTERS LLC DON PABLO COFFEE ROASTING COMPANY DORIE HAGLER PHOTOGRAPHY DUNKIN' BRANDS E&C CONSULTING INC. EASTSIGN FOODS (QUZHOU) CO. LTD. FLEXICON CORPORATION FOLLETT CORPORATION FRES-CO SYSTEM USA INC. FUJI ELECTRIC CORP. OF AMERICA

GROUP JAVA HOUSE JAVA JACKET JAVALYTICS BY MADISON INSTRUMENTS

ROVEMA NORTH AMERICA INC. SATAKE USA INC. SELECTO INC. SERVICE IDEAS INC. SHORE MEASURING SYSTEMS

INC

SONOFRESCO LLC

JAVAU TRAINING CENTER

STATE FARM INSURANCE

JOETAP

SWISS WATER DECAFFEINATED COFFEE

KLATCH COFFEE ROASTING KYUEMON LACAS COFFEE COMPANY LEE HAYS & ASSOCIATES MONDELEZ INTERNATIONAL MOTHER PARKERS TEA & COFFEE INC. MUKILTEO COFFEE ROASTERS NAMA NATIONAL COFFEE ASSOCIATION OF USA

COMPANY TEA TRADE MART TEKPAK SOLUTIONS TERRANOVA PAPERS TEXPAK INC | SCOLARI ENGINEERING THE COFFEE TRUST TIGHTPAC AMERICA INC. TIKI TEA UPAC2 INC.

(NCA)

VESSEL DRINKWARE

OUBU JAMAICA BLUE MOUNTAIN COFFEE

VITA-MIX CORPORATION

PAC COFFEE CONSULTANTS LTD.

WALKER COFFEE TRADING LP

PACIFIC COAST COFFEE ASSOCIATION

WATERLOGIC

PACIFIC TRADEWINDS COFFEE CO.

WESTROCK COFFEE COMPANY

PBFY FLEXIBLE PACKAGING

XELTRON S.A.

10 December 2017


Brewers built by the power of the sun.

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Great Educational Expectations by Spencer Turer, Vice President, Coffee Enterprises

I

t’s an unfortunate fact that businesses fail. That being said, the functional question for specialty coffee is: are we correctly preparing coffee entrepreneurs and professionals for success? Businesses fail for lots of reasons - lack of planning, poor operational management, lack of business focus, poor financial controls, ignoring customer’s needs, and/or the inability to learn from mistakes. These are the business and management topics that are not popular in specialty coffee classes; which are all functional classes on cupping, roasting, buying, and barista skills.

Learning by doing, on the job training, apprenticeship, or just working your way up the company ladder can be inefficient, can lack focus, be haphazardly organized or simply present an indirect and time-consuming route to desired career goals. The coffee industry and coffee professionals would benefit immeasurably from peer-to-peer apprenticeship and mentor programs, but most businesses lack the infrastructure to support experiential education and our trade associations and guilds have not yet developed mentor programs.

The cost of entry for specialty coffee businesses is relatively low compared to other businesses. The popularity of coffee, coupled with the everyday experience of preparing and consuming coffee at home, presents a career in coffee as an easily achievable goal. The repetitiveness of coffee preparation and consumption develops familiarity, which over time increases to confidence. For those seeking a career in coffee that confidence can evolve into an unrealistic perception of expertise.

When the coffee industry was narrow and deep, fewer coffee companies had the large staffs that we find in today’s companies. They had more levels of management which in turn created defined roles for succession planning. Practical on-the-job training enabled expertise to pass from senior to junior professional, from mentor to apprentice. This system was a de facto apprenticeship providing junior staffers with the expertise needed to become middle managers by acquiring experience and job knowledge.

Our enthusiasm, passion, and internal drive to make superior coffee, combined with a good ethic, is to be respected. However, the low cost of entry into the coffee business and the lack of formal educational or experience can be a recipe for disaster. Emerging coffee entrepreneurs and industry professionals search for training combined with answers to business-related questions.

Today’s industry is broad and shallow; coffee companies typically have a smaller cadre of employees in any department (or even just a single professional) responsible for a function. Employees are often trained externally, or simply hired with the desired expertise already obtained.

For example, a bachelor’s degree from a university in food service management will provide the academic training to operate a coffeehouse. A barista or roaster certification provided the experiential training for a functional process but not the comprehensive training to operate the business. Educational Problems Today’s coffee industry lacks comprehensive experiential educational programs that are commonly found in other industries – internships or apprenticeships provided by mentors. We have educational classes taught by trade associations and private consultants, both theoretical and practical hands-on product training. These academic classes provide an often optimistic classroom view of operational 12 process, terminology, product flow, and quality controls.

Educational Solutions Traditional academic learning that keeps students in their comfort zone does no one any favors for career development. Hands-on classes which teach technical skills, set in controlled environments, have very few risks, and do not adequately prepare learners for employment. Experiential learning purposefully places the students in actual professional situations to increase practical knowledge, enhances skills, and develop the competency to contribute to a business. Apprenticeships are experiential and require students to work in an enterprise to learn the business in exchange for a period of professional employment, and these apprentices experience all aspects of a business - including the joy of success and pain of failure. Adversity is the catalyst for professional growth, and leaving one’s comfort zone facilitates both positive and negative experiences.

December 2017

The Guilds of the SCA and other trade associations have the opportunity (and perhaps the obligation) to develop mentorship programs to facilitate formal practical peer-to-peer professional training throughout the coffee business. Experiential learning is commonly conducted over a defined time period. For example, an introduction to gain familiarity with a business may take 750-1000 hours, as is the usual time for a cooperative education program or educational internship. Deliberate practice and putting learning into action over an extended time period is required to become gain competency, not simply 10,000 hours as is commonly recognized for a single task. Apprenticeships and mentoring goes beyond giving directions on how to complete tasks; it includes the transfer of professional wisdom to anticipate complex situations, help control risks, and to develop the judgment to make business decisions and contingencies plans. As the old adage goes, anything worth doing is worth doing well. Managing expectations for both academic and experiential learning is a critical component to success. Overstating educational benefits that impact one’s career, after completing a training program, just contributes to the educational problem. Yes, success is built from education, but education itself does not guarantee success. Certifications and diplomas are respected in as much as the person is competent to perform professional duties and job requirements, but the question of competency includes understanding operational and financial risks and proficiency for decision making. Spencer Turer is Vice President of Coffee Enterprises in Hinesburg, Vermont. He is a founding member of the Roasters Guild, a Licensed Q Grader, and received the SCAA “Outstanding Contribution to the Association Award.” Spencer is an active volunteer for the Specialty Coffee Association of and the National Coffee Association USA.


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‘Fourth Wave’ or Not, Sustainability is the Future of Coffee by Kathy Burfield, CoFounder, Aurai Air Extracted Water threaten to lay barren some of the world’s top coffee-producing regions, like Africa and Latin America. Bottom line: sustainability is the most pressing issue facing coffee – and our world—today.

O

ver the past few years, there’s been a lot of debate about what the next era of coffee—the so-called ‘fourth wave’— might look like. There’s no shortage of ideas: maybe we’ll order our morning coffee on our smartphones and have it delivered directly to where we are; maybe robot baristas will elevate latte art to new heights; maybe our cars will have coffee makers installed in them; or maybe ‘bad coffee’ will be eradicated entirely, and we’ll never have to worry about the quality of our joe ever again. Maybe.

It’s not as if coffee is the only industry that should be doing more to reduce its environmental footprint. Having spent almost my entire career in food and beverage services, I’ve seen firsthand how our consumption habits are damaging the planet. But encouragingly, I’ve also seen consumers go out of their way to make

Since we’re spit balling, I’d like to offer my own idea of what the fourth wave might look like—and it’s rooted more in what we already know than what we don’t. But first, let’s consider the tenets that have come to define coffee’s current era: the ‘third wave.’ There’s quality, obviously—getting coffee away from the tin can and aligning it with other artisanal foodstuffs. New (or new again) brew methods with specialty beans. Shorter supply chains with closer ties to coffee producers themselves. Improved concern for environmental sustainability, and a better understanding of how the industry is impacting our planet. The third wave has made consumers care about their coffee in ways that they never did before. They want to know where their coffee comes from. They want coffee with a story.

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Still, the third wave didn’t go as far as it could (and perhaps should) have gone, particularly when it comes to sustainability. Sun cultivation is still responsible for deforestation at a massive scale. Chemicals used in processing continue to pollute waterways and threaten fragile ecosystems. Pod-based coffee is quickly becoming a major contributor to plastic waste. Although individual companies are taking steps to reduce their impact, the industry as a whole hasn’t done enough to protect the environment on which it relies. Meanwhile, rising temperatures and growing water scarcity

positive changes through their purchase and consumption decisions. It’s those experiences, in part, that motivated us to found Aurai, an entirely new source of bottled water. This is an industry that is infamous for its detrimental environmental impact, and we knew that our eco-friendly air extraction process could play an important role in making bottled water more sustainable. It wasn’t just the right thing to do—we also recognized that consumers are actively looking for better alternatives to the choices they have available to them today. In short: there’s a lot of similarity between the concept of a fourth wave in coffee and the next wave of drinking water. Which brings us back to coffee. What’s clear to me, in speaking to retailers around the country, is that consumer demand for green products isn’t going away—it’s actually increasing. The world’s changing climate and growing public concern are also pressuring the coffee industry to take greater steps to protect our planet. If there

December 2017

is going to be a fourth wave, environmental considerations will be at the core. Sustainability is the future of coffee, and it will be the driving force behind innovation in the coming decades. If there’s one thing that was missing from the third wave, I think it’s accountability. Coffee companies—the growers, the distributers— should be held accountable through their transition towards sustainability. They should be transparent about their sources; they should be searching for complementary products that are also ethically produced; they should demonstrate that they’re working towards improvement in everything they serve and everything they do. This is the criteria by which fourth wave coffee drinkers will evaluate coffee brands: ethical production, sustainably-sourced products, and a real commitment to ongoing improvement across the board. And so here’s my vision for the fourth wave: a truly sustainable coffee experience. One that extends beyond even the coffee itself. Yes, the beans are ethically sourced from producers that pay fair rates for their labor. The coffee is shade-grown and delivered via boat or rail so as to reduce transport emissions. More than that, though, companies ensure that the products and services around their coffee are sustainable, too: the cups, the cup accessories, the cream, the sugar, the stir sticks—everything. Maybe they offer sustainably-sourced bottled water to sip alongside the coffee, which might have even been brewed with the same water. But hey, we’re just spit balling.

Kathy Burfield, CoFounder, Aurai Air Extracted Water


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Specialty Coffee Business Opportunities and Challenges in 2018 by Ed Arvidson, President, E&C Consulting

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s we approach another new year, it is once again time to reflect upon where the Specialty Coffee industry has come from, and where it might be headed. Over the last 25-years, I’ve watched this industry develop, change, and mature. Concepts that were a “slamdunk” back in the early ‘90s, may no longer be as viable today. However, dependent upon the market, business concept, and the skills of the operator, I’m happy to say that the industry is alive, well, and growing! Competition is one of the biggest challenges facing those who are starting coffee businesses today. To put it simply, when you are first in the market, when you are the only game in town, you have a distinct advantage. Anyone who wants a superior coffee beverage is likely to come to your business. However, if you are entering a market that already has a significant number of Specialty Coffee outlets, then the potential consumer base has already been fragmented. Because the average sit-down café or drivethru might require 300 to 400 customer transactions per day to yield an acceptable profit, a fragmented customer base can present challenges. If you can only generate 100 to 200 transactions per day, you will most likely be suffering monthly losses. This means the minimalistic concept of serving only coffee beverages and simple pastries will probably result in insufficient sales. The solution to a lack of daily customers is increasing the average customer purchase through other sources of income, most commonly, the addition of more food items. Serving breakfast, lunch, snacks, and even simple dinner items might increase the average purchase by a few dollars, making up for a lack of customers. Likewise, the addition of alcohol can also increase sales significantly. Offering micro-brewed beers and fine wines makes sense, especially if your business is open into the evening hours. After all, in Italy, where coffee business competition is fierce, most coffeeserving establishments also offer alcohol. Think about it, your most expensive coffee beverage may sell for about $5, however, a glass of fine wine might sell for $8 or $9, and some customers will undoubtedly have a second glass, boosting their beverage purchase to $16 or $18!

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is not possible because of a lack of space, equipment, or bureaucratic restrictions, or you just find this option to be unappealing, then there are other ways to generate additional revenue. Creating a hybrid concept, where you offer another line of products or services in addition to your coffee business, can generate significant extra income. Hybrid concepts that I have seen over the years included, the espresso bar/wine shop, espresso bar/micro-brewed beer store, espresso bar/antique store, espresso bar/ book store, espresso bar/bicycle shop, etc., etc. My suggestion is, that when you are considering another business concept to merge with your coffee business, pick something you can be passionate about, that won’t cost a fortune to establish, and that won’t require a significant amount of additional time to manage. While expanded coffee business concepts have become a trend, I should mention that the purist concept, also known as the “3rd wave,” has remained a successful formula for some. This concept focuses on coffee quality and little else. The owners of these establishments have sourced the finest green beans, they roast them in small batches, and prepare them into beverages with care and precision. Food offerings are usually limited to a few morning pastries and desserts. The challenge with this concept is that it typically only generates a modest per customer check average. But, if it is established in a sophisticated coffee consuming market, at a densely populated urban location, it can attract enough daily customers to be a success. “Stump Town” and “Blue Bottle” are two companies that have prospered from this “back to the basics” concept. In fact, the original owners of these companies have cashed-in on their success, with Stump Town selling to “Peet’s Coffee” (JAB Holdings Co.) in 2015, and “Nestle” purchased a majority stake in Blue Bottle in 2017. Beyond the traditional and hybrid coffee business concepts discussed, new, innovative concepts have emerged over the years, and gained strong followings. “Philz Coffee,” established in 2002, has opened multiple locations around the San Francisco bay area. This Specialty Coffee company serves no espresso beverages. Instead, they roast gourmet coffees from around the world, create unique blends, and concentrate their efforts on

December 2017

preparing drip coffee to order. Many of their drinks are infused with spice blends, creating new and intriguing flavor profiles. From a menu category standpoint, “nitro cold brew” coffee is continuing to gain popularity. If you are unfamiliar with this product, it is nothing more that cold-water extract coffee, placed in a stainless-steel canister, and then driven through a draft beer tap with pressurized nitrogen gas. This produces a cold coffee beverage with a creamy head, similar in appearance to a stout beer. If you purchase a multiple-head draft beer refrigerator, you can offer variations infused with sweeteners, flavored syrups, or spices. One additional factor that is negatively affecting our industry, is “coffee leaf rust disease.” This destructive fungus is devastating coffee trees in many parts of the world. Difficult to control, applying fungicides, and in many cases replanting entire farms with disease-resistant trees, is costly, reducing yields, and driving prices to all-time highs. For retailers, this means that coffees may be in short supply, driving prices even higher. These price increases will need to be passed on to consumers. Hopefully their love for great coffee will outweigh increased menu prices. You’ll need to be at the top of your game, so that customers will be willing to pay higher prices, justified by your beverage quality. As has always been the case in this industry, business success is achieved through executing the fundamentals properly. Find a great location, develop a viable concept, be sufficiently capitalized, provide great products and service, maintain an attractive store ambiance, and your prospects for success are good!

Ed Arvidson is a 25-year veteran consultant to the Specialty Coffee Industry. He is the President of E&C Consulting, and the Coffee Business School of the Cascades. Ed released a new E-book in 2017, “How to Get Profitable in the Coffee Business” www.coffeebizhelp.com


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Beyond Coffee by Rick Peyser, Senior Relationship Manager, Lutheran World Relief

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he list of challenges faced by small-scale coffee farmers and their families including food insecurity, access to clean water, access to medical care, access to often volatile markets, an aging farmer population, an over-reliance on a single crop for income, youth migration and more - continues to lengthen. Add in a little climate change, a dash of la Roya, a drought or two, hurricane force winds and rain, and we have to wonder if there are other ways for farmers to sustain themselves. As global warming nudges specialty coffee production higher and higher up mountainsides, many farmers at marginal altitudes who have been producing coffee of a quality that has just reached into the specialty sphere are being left behind. As temperatures increase, their land is less suitable for the production of high quality Arabica beans, so many are actively looking at alternative crops to sustain themselves and their families, rather than sell the farm or move. One such alternative crop that is receiving farmer interest is cacao. It is a product grown in most coffee producing countries around the world, with some similarities to coffee and some distinct differences, particularly in post-harvest processing. Nevertheless, at a high level, coffee and cacao share many similar links along the supply chain. The demand for fine-flavored cacao like that used in high quality chocolate bars with a high cacao content, is growing rapidly. Some relatively low lying areas of Nicaragua, for example, which have traditionally produced borderline quality specialty coffee, are now gaining international recognition for producing high quality cacao. One such municipality is Waslala, an area that was heavily affected by the Nicaraguan

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Revolution. One large coffee cooperative, CECOCAFEN, has been active in the municipality for years. However given the area’s marginal altitude and gradually increasing temperatures, cacao is rapidly developing with the support of a few cooperatives that have developed to serve the increasing number of small-scale cacao farmers. One such cooperative is CACAONICA, with 295 cacao farmers. One woman small-scale cacao farmer, Berenda Manzanarez Perez is an auxiliary Board member of CACAONICA, which entered her cacao in Nicaragua’s National Cacao Competition organized by the Cacao of Excellence program (CoEX) and Lutheran World Relief. In December of 2016, Berenda learned that her cacao was one of six samples selected as Nicaragua’s finest, and that it would be entered in the 2017 International Cocoa Awards competition celebrated in Paris at Salon du Chocolat in late October. Salon du Chocolat is one of the world’s most prestigious chocolate tradeshows. This August, Berenda was notified by CACAONICA that her cacao had been selected as one of the world’s top 50 samples, and she was invited to Paris to accept this esteemed award. This year, the International Cocoa Awards competition included 162 cacao samples from 40 producing countries that were processed into cocoa liquor and un-tempered chocolate. These samples were carefully evaluated by the CoEX technical committee which narrowed the field down to 50 of the world’s finest cocoa samples. To date the Cocoa of Excellence program has focused its efforts on providing farmers and their cooperatives with well-deserved recognition. While the program does not yet have the online auction platform that has been so successful for

Berenda Manzanarez Perez, cacao farmer with Zoi Papalenxandratou of Zoto

December 2017

coffee’s Cup of Excellence program, many Cacao of Excellence Awards winners have received two to three times the going market price per pound for their cacao. Berenda’s recognition has also helped to enhance the standing of CACAONICA as a cooperative that is capable of producing world-class cacao. Unlike coffee, no uniformly accepted global evaluation standards exist for cocoa, however serious efforts are underway to develop such standards. In the meantime, to further support small-scale cacao farmers like Berenda, Lutheran World Relief teamed up with Guittard Chocolate, Zoto, and the Cocoa of Excellence Program to identify the distinctive sensory characteristics found in the cacao grown in areas of El Salvador, Honduras, and Nicaragua. This effort led to the publication of the first online Regional Cocoa Flavor Map that helps cocoa buyers identify cocoa with the specific organoleptic profiles they are seeking in these countries. This online guide (http:// cocoaflavormap.cacaomovil.com/) features 32 cocoas, with information about each including the origin, varietals, processing, and flavor notes. This guide, which was unveiled at Salon du Chocolat, includes Berenda’s award winning cacao. Cacao is certainly not the only diversification path for small-scale coffee farmers. However for those with land at the right altitude, and with fertile soil and good growing conditions, it represents an opportunity to participate in a different supply chain with similarities to coffee. Like specialty coffee, the fine flavored cocoa industry is focused on high quality, growth, and aspires to insure higher earnings for farmers and their families. In doing so, it may contribute to improved livelihoods for coffee farmers at marginal altitudes who are vulnerable to the impacts of the increasingly warmer temperatures.

Rick Peyser, Lutheran World Relief


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Brand Yourself by David Gross, President, Add a Scoop Supplements

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ow are you trying to brand yourself? This is the problem facing the independent coffee concept. Are you strictly a “Coffee” shop, or are you a little bit more? These days good coffee can be bought inexpensively at any McDonalds drive-through. But the solution is easy, convenient, and already proven effective. Creative entrepreneurs know that you need a little something extra to get people out of their cars and into your shop. Many coffee shops are now offering supplement boosts to the blended beverages. Offering late afternoon customers the option of a nutritional pick-me-up, or the addition of an herbal relaxation supplement. This is a great way to keep customers coming in at all times. Looking for more customers? Healthy options are the big draw. Health is a major concern for many and with our busy lifestyles, we are looking to get a little extra nutrition wherever we can. This is where quality nutritional supplements can add to your bottom line. Customers are looking for perceived value so this is an excellent opportunity to talk with them; to help them understand what you are selling. Nutritional supplements, added to beverages, have been trending for a while now, and the profit in meeting that market demand is yours for the taking. Recent studies show that half of Americans claim that added-vitamins and minerals is one of the top functional attributes

they look for. Even bottled water is getting loaded up these days with added health benefits: protein, vitamins, antioxidants, energy, and relaxation, to name the ones at the top of the sales charts. Getting the most value for the money: this is what people have their eye on when choosing where to spend that money. On the other hand, trends show that people expect functional beverages to cost a little more. Consumers who are on the hunt for value have learned that getting a vitamin boost added to their beverage will save them the expense of buying multivitamins at the store later. The coffee concept, which offers the addition of a nutritional supplement in their blended beverages, will soon gain the reputation of being the place to go for an afternoon pick-me-up. Undeniably, the most-sought boost is energy, and a B vitamin based energy source is the choice which powers them best. What today’s consumers are looking for will vary based on age and personal goals, so the important task is to keep several options on the menu board. As mentioned a above, antioxidant, energy, protein, multi-vitamins, and relaxation boosts make a good selection. Another great seller would be a boost geared towards weight control: a boost which helps the belly feel full so as to cut down on the craving later. The opportunities for a coffee shop to grab their fair share of the consumer traffic passing by

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are as simple as catering to the already-existing demand for nutritional supplement boosts. Even the inherent perception of a healthier choice will drive up your numbers. Be sure to put signage on your windows and counter tops which promotes and explains the benefit of what you offer on the menu board. People wanting to look smart when meeting up with friends or business associates will naturally choose the smarter looking coffee shop with smarter options on the menu board. Key in on the smartness by adding a niacin-based boost (niacin triggers the brain functions). Admittedly, you might come across people who think adding boosts to the blended beverage is only going to make them spend more money. This misconception could prove to be an uphill battle, but with an effective, well-designed, and easy-on-the-eyes Point-of-Sale system, the positive benefits of the added supplement boost will result in a more positive acceptance by the customer. Today’s consumers are smarter than ever. They’re drawn to coffee concepts which are up-to-date and slightly advanced. They are conscious of nutrition, wary of gimmicks, keen on gaining knowledge, and statistically prone towards choosing the innovative, creative, and unique blended beverages. By choosing nutritional boosts; by training your key personnel to promote to the nutrition-minded consumers; and by putting up POS that the consumer can comprehend in a glance, you can capture your fair share of the booming coffee-with-addednutrition market.


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The Necessity of True Stories in a Rapidly Growing Company by Miles Small, International Coffee Consulting ‘from little acorns grow big oaks’ story. It is the understanding of why we are where we are now based upon the foundation built before.

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tories have almost mystical power. Since before the beginning of history stories have shaped our opinions, our universal beliefs, and our prejudices. From raising goosebumps around a fire to defining our personal and community identity, stories are the foundation of our “truths.” The ‘Story’ is at the core of what makes specialty coffee special. Inside of every thriving café or roastery there is an origin story that anchors the company. This is not to say that a business cannot be successful in specialty coffee without a vibrant and relatable origin story, but it is very unlikely. Even the largest companies in our culture have, at their core, powerful origin stories – Great-Grandfathers who sold coffee from a pushcart in the back alleys behind the homes of the rich and powerful; a moment of awakening of a young adult roaming around Central America; a Peace Corp volunteer seeing a burning need; a passion for excellence finding expression in coffee. Even Starbuck’s traces its roots to a small dark storefront in Seattle’s Pike Place Market. An origin story becomes the genesis of a company’s daily mantra. Origin stories are powerful, but very brittle and once broken are very difficult to repair. When a company is just one person, or a small group of friends, it is easy to keep true to the dream but as the company grows, adds new people, and expands out from their core true believers, the origin story can change. Whether those changes are controlled and evolutionary or are abrupt deviations is elemental to the sustainability of the organization. This article is about these changes. It is important to define what is an origin story and what is a message. An origin story 22 is the beginning; the ‘once upon a time’; the

Messaging is within the character of the materials, opinions, visual presentation, personality, and public communications we send out every day. A company’s messaging must not be far removed from the core lessons of the origin story. The coffee industry is unusually sensitive to the authenticity of the story and the message. Coffee is a very close-knit industry with many true believers and long memories. In that way coffee is very different from other industries – for example, the auto industry which has so few truthful legends. (For example, the Dodge company is currently portraying the Dodge brothers as testosterone fueled frat boys with a need for speed when, in reality, they were both stodgy bankers who withdrew their investment in Ford Motor Co. because they just couldn’t believe in Henry Ford’s vision. They went on to found Dodge which built cars the old fashion way – slowly, poorly, unreliably, and expensively.) In the pistol hot ‘awareness’ universe of the numerous social media channels keeping a clear vision of origin and message is even more difficult, and all the more necessary. As a company grows, the responsibility for messaging can shift toward low level staff without grown-up supervision. Keeping an authentic and consistent long-vision message on track becomes increasingly hard. Piano playing kittens, videos of skateboard pratfalls, pictures of pretty machines, and rainbow unicorns may engage your audience in a casual way but provides no positive message of who you are or what you stand for. Without a great deal of care, your company’s core values will no longer be authentic to an audience that has decided that your company is just ‘meh.’ Years of achievement can evaporate in one buying cycle; your carefully built Mercedes-Benz will become ‘just another car’ overnight. The noise and immediacy of today’s communication channels does not lend itself toward careful thought and crafting messages, but it is necessary to resist ‘just posting something’ without thought. In many ways the Marketing world has done themselves a disservice by adding “message” to our jargon. It’s cool and hip, and we know what it means but, to the wider world the meaning is

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lost. To others, ‘messaging’ refers to the things you say or write in ad copy and, unfortunately, that is partially true. However, it is only a bit of the total. Your origin story and the messaging that evolves from it, are anything and everything you have done and will do as a company. It is the design of your facility and cafes; it is the charitable organizations you support; it is the feel of your paper stock and letterhead; it is the logo and the tagline; it is the way you prepare packages for shipping; it is the cleanliness of your floors; it is customer service, engineering, and vendor relations; it is employee satisfaction; it is the guy who cleans the toilets; it is all this and more. Every bit of this will reflect what the company believes and considers appropriate and will be judged by your audience – your customers, your employees, your vendors, your outside industry opinion leaders, your financial providers…everyone. The establishment of a company’s Origin story begins at the ‘C’ level executive suite starting with the big questions first and working its way to the small implementation questions. Understanding who you are and how you got to today as a company can be very tough but necessary before development can begin toward tomorrow. Any size organization can do this on their own and in my opinion, must. Marketing consultants are facilitators and extractors of stories only you can know. Growth means rising and reaching farther and farther from your roots, but an organization can never lose touch with its base or something vital dies. The modern coffee industry is still relatively young, commercial roasting for consumers began around 1890. People remember, and will call you out if your origin story is not authentic and truthful. An authentic origin story is priceless. You must always quietly tell, and show, the world your vision, your history, your values, and your proof through action. Straying from the straight path is to flirt with losing your way, forgetting your purpose, and reducing your company to just becoming a meme. Miles is a specialist in Strategic Partnerships for International Coffee Consulting. Previously he was Chief Marketing Officer for Diedrich Roasters as well as Strategic Relationships Director. Miles has been in coffee for 20 years and has seen a lot of brown water, jungle, and board rooms. He is a frequent presenter and writer about Specialty Coffee. You can find him at miles@ intlcoffeeconsulting.com.


Tips to Reduce Employee Turnover & Absenteeism in Your Coffee Shop by John Waldmann, CEO, Homebase

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our employees are your business. They greet and serve your customers, they open and close the shop, they handle the money, and they work alongside you at the coffee shop. Each night, they leave, and each morning, you hope they come back. There are a lot of other employers that would love to hire your employees. In the city of Houston, there are around 650 job postings a day just on Craigslist for hourly workers. In Los Angeles, there are 800. Each day! You’ve got to ensure that your employees are happy, or they might look elsewhere. So what are the driving motivators for employees to change jobs, and what can you do to improve employee retention? 1. Create flexible working hours There’s a lot of chatter about millennials and how to manage them. Over two-thirds of all service-industry employees are under 35 years old, and 3 out of 10 are between ages 19 and 26. Often, they’re students balancing inconsistent study schedules or people working multiple jobs. Millennials value flexibility, and being flexible to your employees’ personal obligations when building a schedule will greatly improve their satisfaction. Better yet, provide them the ability to give input into their start and end times.

3. Offer training Professional development is a powerful way of keeping employees happy and productive. Can you offer your employees training in some new skills? Can they work in another department one day a week, or move over entirely, in order to see a new part of the business? Is there a relevant seminar or class they want to take that might also improve their work? Think outside the box, and you’ll watch your employees’ contentment and productivity rise. 4. Incentivize results Even when times are busy (always), don’t forget to reward your star performers. Results that go unnoticed can be very deflating to employees and gives them a reason to start looking elsewhere. Look at ways to keep track of employees who consistently perform. For example, acknowledge their on-time arrivals (some software solutions like can track this automatically) and reward them with a small token of appreciation. Your employees will appreciate the recognition and feel inspired to continue their efforts.

2. Be consistent Recently, Reuters profiled an employee at McDonald’s whose work hours fluctuate almost weekly, which is a common practice now getting attention. Last-minute changes can make income and life unpredictable for workers, and is now getting attention from politicians in states like Oregon and New York. Creating consistent weekly schedules, weeks in advance, is a big win if you’re looking to improve employee retention. Look for a software provider, like Homebase, that enables you to create reusable scheduling templates, can inform your employees of their schedule weeks in advance, and can enable them to submit requests for time off or trade a shift with a colleague.

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5. Communicate! Last, but definitely not least, communication is fundamental to any relationship, and it is particularly important in the workplace. Some messages need to be communicated verbally and in-person, like feedback on how an employee is doing at their job. But other messages can be delivered electronically. Most small businesses still handle time-off or shift trade requests on paper or verbally, and these can easily get lost or forgotten. Putting systems in place that improve the ability to quickly and clearly communicate with employees can have a huge impact on their output. Reducing employee turnover should be a goal for all coffee shop owners and managers. If you follow these suggestions, your employees will want to remain with you. And you’ll be glad they did. John Waldman is the co-founder and CEO of Homebase, (www.joinhomebase.com), which provides a new free real-time software solution that helps over 60,000 small businesses eliminate the paperwork of managing their hourly employees, help manage overtime and curbs absenteeism and turnover.


I Am Young at Origin (And that’s just not right) by Craig Holt, Atlas Coffee Importers This isn’t revelatory information. Most of us have heard the statistics. Estimates put the average coffee grower somewhere between 54 and 56 years old. Lots of people I talk to would say that’s on the low side, but let’s go with it for now. That statistic by itself is only mildly surprising at first glance. 56, after all, isn’t exactly the ragged edge of senility. The number looks worse, though, when you consider that the average retirement age here in the United States is around 63 years. And here’s the real bummer part of the story – no one is replacing these coffee growers when they walk off into the proverbial sunset.

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etting old is, generally speaking, a pain in the butt. When it comes to coffee farming, aging is one of the major issues facing our industry. When I go to coffee events in consuming countries, I suffer the unpleasant realization that I’ve become The Old Guy. While I like to think I’m still relevant, the simple fact remains that our segment of the coffee industry is driven by young people. This is a good thing. Hell, you could even say that’s how it’s supposed to be; as the old guard becomes set in its ways, a new crowd comes along to revitalize the industry. This is how the Specialty Coffee Association of America arose several decades ago, and it’s what drove the creation of the Roaster’s Guild, the Barista Guild, etc. The infusion of fresh blood means new ideas and healthy change. If it also means I end up feeling like a crusty old codger at the parties, so be it. But here’s the problem; the only two places I still feel like The Young Guy are on cruise ships, and coffee farms. I’m not saying the air at origin has magical healing powers, or that I found the fountain of youth in the Andes, somewhere near the Huila/Cauca border, on the banks of the Rio Paez. I’m telling you that, quite literally, I’m younger than most of the coffee growers with whom I work. And while it’s fun for me to not be the grandad in the room once in a while, it’s a major issue for the coffee industry.

The children of coffee growers don’t want to stay on the farm because, in simple terms, it’s too much work for not enough profit. The effort required to grow specialty coffee is massive, cost of production is constantly rising, and whether or not the farm will be profitable in any given year is uncertain. In short, coffee growers don’t get paid enough for the work they do. We don’t pay them enough to keep the younger generation in the business. Again, this shouldn’t surprise you. If you’re even remotely informed of the industry we work in, you’re aware of this problem. And yet… And yet, the problem persists. Even as the specialty industry thrives, the prices we pay for the product on which our success is founded are, in a word, crap. Sure, people can point to the amazing high prices being paid at auctions, but the volume of coffee sold in those auctions is a rounding error in the context of the overall specialty trade. There’s also a huge push toward relationship coffees, and development work at origin. And while all of that has been helpful to a small subset of the coffee producers, the fact remains that young people aren’t staying on coffee farms.

of the supply chain. By showing young people that growing coffee makes them a vital part of a global industry, and keeping them in contact with the people who buy – and consume – their product, we can mitigate the isolation involved in coffee farming. The work will always be hard, but having a better sense of the results of your work can make it more gratifying. The government of Antioquia ran a very successful program for the children of coffee farmers a few years ago, which could serve as a great model for this kind of effort. Finally, and most importantly, we need to pay a better price for the quality of coffee we need. All the other stuff – the development work, the relationships, the education, the righteousness and the teary-eyed good intentions - is just pissing in the wind if we’re not willing to give coffee growers the money they deserve for their hard work. Historically, even in specialty, we ask, “What’s the lowest price possible for the quality I need?” If we’re going to inspire the next generation of coffee farmers to stick with this industry, we need to ask, “What’s a fair price for the quality I need?” And maybe, if we can manage that crucial paradigm shift, the average age of coffee farmers will start to drop - and I’ll get to feel just as old when I visit origin as I do when I go to trade shows up here.

So what can we do? First of all, we need to continue to make coffee education available to growers. The more growers understand about agronomy, processing, cupping and the trade itself, the more aware they will be of the value of their product. Armed with this knowledge, they can be better prepared to negotiate a fair price for their coffee. Secondly, we need to focus on connecting the next generation of coffee growers to the rest Craig Holt, Atlas Coffee Importers

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“What’s the Problem? What’s a Solution?” by Bill Fishbein, Founder & Executive Director The Coffee Trust result, young people are leaving their family farms and the average age of coffee producers is getting older. While the specialty coffee trade breathes, who will produce the next generation’s coffee?

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he Problem The greatest problem facing specialty coffee today is that half of our industry is lucrative and the other half is impoverished. The problem is complicated further as merchants see themselves as separate from the problem, not part of it. Merchants thrive in an industry wildly more lucrative for them than for farmers. Yet, it is next to impossible for merchants to see that, as part of the whole trade, they thrive at the expense of farmers. The roots of the problem, and the blindness to it, lie in the soil of the trade, rich in nutrients for merchants while parch for producers. In fact, one could claim that producers represent one of the richest nutrients in that soil. From this rich soil, merchants have developed skills that are focused on earning profits. Producers have developed skills that are focused on quality and productivity. While higher quality coffee commands higher prices, greater production results in a larger the supply, lowering the price. Businesses operate with the natural advantage of the continuously falling coffee prices. In the coffee trade, the price is like the air. The trade breathes the price in and breathes the price out. It is fundamental to doing business. Yet, it is rarely acknowledged that today’s C-Price remains perilously close to the C-Price a generation ago. In fact, considering inflation over these many years, the C-Price has been eroding ever since. While true specialty coffee businesses rarely pay the C-Price, most premiums are based upon it. The entire trade is based upon a price for coffee that has been in a free fall for generations. This free fall in coffee prices has been a constant in the trade, a constant that heavily favors 28 merchants at the expense of producers. As a

Complicating matters further, many merchants believe they can solve the inequities at origin, unaware of their co-dependency upon those inequities. Some merchants believe young people must be trained to become coffee producers, thus promoting another generation of producers dependent on continuously falling prices and another generation of lucrative businesses for merchants. This effort may appear to help producers. However, it will only perpetuate the current conditions and keep things the same. Some merchants address the issue through their own supply chains. The intent is there. However, the problem is much greater than the few merchants making these efforts. These merchants also believe they have the skills to undertake their own development efforts at origin. Of course, there is a huge gap between business skills and development skills. Few merchants have development skills, and all too often cannot see the conflict they bring along with their best intentions. There are a few commercial ventures that make a deep, and concerted efforts to place producers on a level playing field, right alongside the merchants. Unfortunately, those merchants represent the exception rather than the rule and are drowned out by the dominant trade. Despite all of these efforts, the specialty coffee playing field remains heavily tilted in favor of merchants. And, the industry’s most important nutrients are being drained from the soil of the trade. The Solution There are no silver bullets, and the solution is elusive, to say the least. However, the steps toward a solution may begin with humility, and the recognition that merchants cannot change conditions on their own. It will require a great deal of cooperation, the cooperation of the entire trade. The overall goal must be to transcend the conditions in which producers are nutrients

December 2017

for the trade to a higher vision with producers as equal beneficiaries. This cannot be done one merchant at a time. Can there be a great cooperation and agreement among merchants who are the greatest beneficiaries of the trade and who also who have the most to lose? Cooperation will be required, which is antithetical to doing business in a competitive environment. Sadly, we learn competition from a very young age. In kindergarten we are playing musical chairs, a game where there is one winner and all the rest losers. We have been weaned on this game. Has there ever been a game of musical chairs in which the players organize themselves to ensure that each one gets the last seat at least from time to time? Of course not, and that wouldn’t be any fun anyway. However, in specialty coffee, producers never get the chair. With the entire trade built upon competition this is a Herculean task. But, if we continue business as usual, the nutrients of the trade will run out and the greatest problem facing the specialty coffee trade will materialize before we know it. There will be no one to grow, care for or harvest coffee. Reality dictates that merchants and producers are co-dependent. They are intimately connected to each other and not separate parts of the specialty coffee trade. Intimately connected to every aspect of the trade, and intimately connected to the greatest problems facing the specialty coffee trade, merchants cannot solve the problems by out competing their rivals. This will only perpetuate the problem. It will require a great deal of cooperation amongst competitors to begin to address the challenges faced by specialty coffee. And, it will require a great deal of humility to nourish the soil of the trade without a profit motive. Is that possible? Only by striving with our last ounce of courage.

Bill Fishbein, Founder & Executive Director The Coffee Trust


Maria Raymundo is a mother, grandmother, and head of the household. Maria manages all the household responsibilities, including raising chickens, growing worms to feed the chickens, and tending her family garden. She is a role model for her children and granddaughter who have watched as Maria incorporates the knowledge she has acquired through our Food Sovereignty Project to provide a financially sustainable and healthy future for her family.

Maria’s Accomplishments • Maria has 25 baby chickens and 29 medium and large chickens. • She gets 5-6 eggs from her chickens to feed her family. • In her family garden she grows: chard, cabbage, kulish, onions, chiles, pumpkin, chaya, celery, tomato, cassava, squash, and medicinal herb plants. • She has three wooden boxes for worm composting. • She raises worm larvae to feed her chickens. • She cooks for her family on an efficient stove in her home, which she built and maintains herself.

Join Us Together, Change Happens ®

www.thecoffeetrust.org


Don’t Leave Water Quality to Chance by Jim Franceschetti, Marketing Manager, Pentair Everpure

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ater quality can be the problem getting in the way of a successful specialty coffee business, or the reason for its success. Pentair Evepure has been providing premium quality ingredient water to the global coffee market for more than 85 years. With a wide range of filtration solutions, our mission is to ensure you always deliver the perfect cup and your customer’s experience is always the best one! Below, we are proud to provide 5 potential water related “problems” and solutions to help you be successful! DID YOU KNOW? Five things you need to know about the perfect cup. 1. Coffee is 98% water and espresso is 95% water! Water, the main ingredient in coffee and espresso is oftentimes the most overlooked ingredient. The water you use to make coffee can impact the taste, appearance and aroma of your favorite beverage. If you’re into coffee, you should be into water.

2. What’s in your water plays a part in the taste! Water quality can be vastly different depending on where in the country - or even city -you are brewing. That’s why you might prefer a brew from SoHo over the one at the diner down the street from your home. Hard water, soft water, high levels of total dissolved solids, low levels of total dissolved solids, high pH level or low pH level –it all makes a difference! In order to make sure you are getting the best water for your beverages, have it tested or contact your local municipality to find out exactly what you are working with. This will help to tell you if you are leaning towards a bitter cup, a weak cup or the perfect cup. Regardless of your source water’s quality, there is a solution to address your specific water challenges, you can tailor a water recipe unique to your definition of that perfect cup. 3. Water is important for your equipment, too! Proper water quality can ensure your coffee equipment is operating in the best condition possible which can help drive down service and replacement costs. Are you experiencing these alltoo-familiar issues that can be caused by poor water quality: scale, corrosion, channeling? Using the proper filtration for your water can extend the life of your equipment, prevent costly maintenance and increase energy efficiency!

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4. The proper water filtration system makes a difference! You wouldn’t leave your bean or brewing equipment selections to chance, would you? The same level of care that goes in to those selections should go into the water filtration system you use. Oversizing may leave you with a costly system that far exceeds your needs and takes up too much valuable space; an undersized solution may not be large enough to handle the volume of water you need to feed your equipment… right-sizing a system can make all the difference. Sizing your filtration system properly will not only reduce water waste and save you money on replacement filter cartridges, but also provides you with the proper ingredient water needed to make the perfect cup of coffee, espresso or tea! Technology spans a wide range of solutions from reverse osmosis, to water softening, to mineral blending. 5. Pentair Everpure is here to help! It’s safe to say that by now you understand the need for proper water filtration but may be wondering where to begin? From water testing, to product sizing and selection, to troubleshooting, we have the resources and water expertise to help ensure you have the best coffee- brewing experience possible. Our team’s calling is to deliver the premium quality ingredient water to get you there! Now on to working together to make that perfect cup!


Coffee’s Science Gap by The Board of Directors of World Coffee Research

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y 2050, if coffee consumption continues to rise at roughly 2% per year, the world is going to need to produce twice as much coffee as it does now on significantly less land. Every year, there are more coffee drinkers in the world than there were the year before—these days, that’s thanks to consumption growth in Asian markets. Many of those new coffee drinkers will want to drink specialty coffees, the fastest growing market segment, fueled by high quality washed Arabicas. And those are precisely the coffees the world is increasingly challenged to produce. Climate change in particular is putting unprecedented pressure on Arabica coffee farmers, especially those at middle altitudes (about 800-1200 meters). Farmers are facing more disease pressure and more extreme weather events, at a time when the profitability of farming is already so low that many producers are losing money on their farms. Who, against challenges like these, would want to farm coffee—or want their children to farm coffee? The coffee sector cannot sustainably prosper in the long term without addressing the significant predicted gaps between coffee production and demand, in the midst of challenges including climate change, labor shortages, low profitability, soil degradation, and chronic low yields. While it is impossible to predict with any certainty the size of this gap by 2050, it is clear there will be a gap. One of the most robust and successful avenues for achieving economically (and

environmentally) sustainable farming and increasing global supplies of quality coffee is agricultural R&D—the continuous development of improved farm technologies and practices. Ag R&D has been a precondition for profitable farming for the last 150 years, and it works— the average rate of return in investment is an astounding 43%. There is no shortage of scientific expertise to tackle the challenges facing coffee producers. The fundamental issue is funding that research. Historically, coffee agricultural research has been undertaken by individual producing countries, and has been funded by public budgets in those countries. This system has delivered some very important results, especially in advanced countries like Colombia and Brazil. But it is not enough. First of all, the burden shouldn’t be on producing countries alone. Secondly, the old system is highly fragmented, and the results of research don’t reach enough farmers. Thirdly, many producing countries have few or no systems at all to support R&D for their coffee producers—those producers are left to fend for themselves. Because of this combination of factors, coffee remains one of the most under-researched and under-innovated crops in the world, despite its global economic value. World Coffee Research came into existence in recognition of the fact that there is a role for industry to play in correcting this imbalance. The organization enables the global

World Coffee Research estimates that there will be a significant production gap by 2050 if increased investments are not made in agricultural R&D for coffee globally. The graph shows possible scenarios for global production at 2050 if the global rate of increase were to continue as it has the last two decades (approximately 2.5% per year; black dotted line); predicted production if climate change 32 significantly decreases production area, as expected (red dotted line); and predicted global need by 2050 (green dotted line).

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coffee industry to invest in precompetitive, collaborative agricultural R&D to transform the coffee sector into one that is productive for industry, profitable for coffee farmers, and sustainable for the world. That can only happen by working directly with national coffee institutes in the producing countries and the supply chains from farm to roaster. This allows the coffee industry to guide a coordinated global approach that can be tailored for local needs and simultaneously grows R&D knowledge and capacity within coffee producing countries. We believe it will be impossible for our industry to address its critical sustainability challenges without significantly increasing the investment we collectively make in agricultural R&D. There is a critical path to achieving sustainability. First things must come first. If we don’t provide coffee producers with the tools, knowledge, and plants they need to succeed, our own businesses will founder. The global coffee industry has an unprecedented opportunity to make strategic investments in agricultural research, extension and education to address the gap and ensure that the coffee sector is productive for industry, profitable for farmers, and sustainable for the world. We believe the return on that investment will be high. But investment must begin now. Research takes time. (The typical return of benefits on agricultural R&D is 20+ years.) If we hope or expect our businesses to be thriving in 2050, we need to be working now to develop the next generation of improved coffee varieties. Signed, the World Coffee Research Board of Directors Tracy Ging, S&D Coffee & Tea Shawn Hamilton, Java City Mike Keown, Farmer Brothers James McLaughlin, Intelligentsia Eric Poncon, ECOM Agroindustrial Corp. Edwin Price, Center on Conflict and Development, Texas A&M University Ric Rhinehart, Specialty Coffee Association Matt Saurage, Community Coffee Tim Schilling, World Coffee Research Marc Schonland, Royal Cup Coffee Brett Smith, Counter Culture Coffee Furio Suggi Liverani, Illycaffè Jim Trout, J.M. Smucker Company Doug Welsh, Peets Coffee & Tea Keith Writer, Bettys & Taylors of Harrogate Monique Oxender, Keurig Green Mountain Colman Cuff, Starbucks Frank Dennis, Swiss Water


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Does Decaf Really Matter? by Andrea Piccolo, Swiss Water Decaffeinated Coffee Company coffee shops to date, interview, work, break up, make up, be with friends, be alone, you name it. For this reason, they are diverse in their coffee consumption habits. They drink coffee in all kinds of ways – brewed, lattes, iced coffee, cold brew. However, Millennials are also the demographic MOST concerned with their caffeine intake. Over two-thirds say, “It is important to limit my caffeine intake” versus just 58% who say “coffee wakes me up and gets me going.” offee is amazing. Its aroma, fragrance and flavor are what we wake up to and what motivates us throughout the day. And as an industry, we spend an inordinate amount of time obsessing over coffee quality.

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So what happens when high frequency of coffeeshop visitation meets up with an equally high concern over caffeine consumption? A need for great tasting decaf. Understanding this, then, what’s important to consider when offering decaf?

Does coffee without caffeine qualify for the same obsession? Think about it for a minute. Arguably, those who drink decaffeinated coffee are in it just for the taste, not the jolt – so in many ways, they’re the truest of coffee lovers. Are we, as an industry, meeting their needs?

First, these “dual drinkers” enjoy both regular and decaf. What this means is that they expect their decaf to taste just like regular coffee. So, for roasters and coffee shops, offering decaf that tastes just as good as your other coffee selections is critical.

There’s a big shift that has happened in the decaf category, and it’s time to shed some light on what’s happening. Let’s dig in a little to who is drinking decaf these days, why are they interested in coffee without caffeine and what business benefit this can bring to coffee roasters and retailers.

Second, Millennials are the “Transparency Generation” – they value knowledge and authenticity; they care deeply about provenance, purity, and preparation. In fact, in a recent survey of 1000 coffee drinkers2, the two main triggers to increasing decaf consumption were the assurances that it would taste great, and be free of chemicals.

You might be surprised to know that the age group drinking the most decaf is younger Millennials – 18 to 24 years old. And, their consumption is increasing, rapidly – in terms of the percentage of Millennials that drink decaf – an 8 % increase in the last five years (from 11-19%), and 5% (from 14-19%) just since last year. Another interesting shift is that overall decaf consumption tends to skew a little heavier male (20%), but the percentage of females drinking decaf is increasing more quickly. In fact, amongst all consumers, decaf consumption increased more rapidly in 2016 than at any time in the last 15 years, from 0.19 cups/person/day to 0.39 cups/person/day.1 What’s driving this renaissance of decaf? As we know, Millennials love coffee just as much everyone else (maybe even a little more). To them, coffee is not a beverage, it’s an occasion. 34 This is the coffee shop generation. They go to

With this in mind, how do we best connect with decaf coffee drinkers who care about taste, quality, and sustainability?

Finally, remember, coffee without caffeine doesn’t take the place of regular coffee sales, it can be incremental business in the afternoon and evening. Instead of customers needing delicious coffee for a jolt of caffeine in the morning, they’re now interested in trying new origins, relax in the afternoon or evening and not worry about caffeine. There’s no need to bring in smoothie programs or get a liquor license to serve beer and wine – focus on what you know, and what you’re thriving at – coffee! But, consider that this might be a different kind of assortment - think about decaf affogatos, decaf espresso beverages, even decaf coffee mocktails. Consider the benefit of being able to serve coffee without caffeine to all those people who say, “No, I’ve had enough coffee today.” If they were able to enjoy one more cup of coffee during the afternoon or evening, think about the impact this could have across the supply chain and those who dedicate their lives to producing quality coffee. Coffee challenges us to think about new and innovative ways of brewing, serving, even processing and harvesting. Without any hesitation, decaf can do the same. We can explore, innovate and grow our coffee sales to the benefit of everyone involved. Above all else, what decaf offers us is a chance to include all coffee lovers who thirst for the ritual and enjoyment that a carefully crafted cup of coffee offers. I’ll drink to that! 1. 2.

National Coffee Assocation 2017 Coffee Drinking Trends Report Studylogic Consumer Research on behalf of Swiss Water

If you have a coffee, or decaf that has sustainable sourcing information, be sure to let your customers know. Share the same coffee story and details about the provenance of your decaf as you do your regular coffees. And, give it the attention it deserves - is your decaf just “house decaf ”? Or are you serving Guatemala Organic Palo Blanco with more beautiful and detailed information that your customers will appreciate? Don’t forget to tell customers how the caffeine is removed. This is an important detail that all coffee drinkers are becoming more curious and concerned about. Consumers expect to be informed about what’s in their food and drink, and develop greater loyalty to brands that they trust.

December 2017

Andrea Piccolo, Swiss Water Decaffeinated Coffee Company


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Education is Key to Helping Small Coffee Farmers Respond to Craft Coffee Demand by Brandon Bir, Education and Sustainability Director, Crimson Cup Coffee & Tea

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oday, specialty coffee markets worldwide demand higher quality and better traceability for their beans. Still, production of high-point coffees has not kept pace with demand, and average Arabica prices are down 13 percent from a year ago. Because many small farmers in coffee-growing countries lack knowledge and financial resources to produce exceptional coffees, they remain at the mercy of C-market forces. Year in and year out, they barely cover the costs of fertilizer and production, with little left over to invest in improvements or efficiencies. At Crimson Cup, we believe farmer education is crucial to improving coffee quality and helping smallholder farmers earn more for their beans. Yet, in travel to origin, we’ve found a majority of farmers have little access to information concerning specialty coffee quality. Without a grasp of the sensory qualities that separate an 80-point coffee from one scoring 90 points or higher, they lack crucial skills needed to divide coffee into micro-lots or to make decisions about crop improvements.

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Each country’s coffee culture is different, so for the purposes of this column we’ll focus on Peru, which has the right conditions to produce exceptional coffees. In fact, of the 27 coffee finalists for the 2018 Good Food Awards, only one was grown outside of Ethiopia – Metric Coffee Company’s Peru El Willay. The inaugural Cup of Excellence auctions also highlighted some phenomenal Peruvian coffees. Unfortunately, typical Peruvian coffees currently yield scores in the low 80s – average coffees that generate average prices. Like most roasters, we use these beans in blends.

Over the past five years, Crimson Cup has been working with smallholder farmers in Peru in partnership with NARSA (NEGOCIACIONES AGROINDUSTRIAL AREVALO S. A.), a private co-op headquartered in the town of La Merced in the Junin Region. Don Julio Abel Arevalo Tello founded NARSA in 1988 to help indigenous coffee and cacao farmers in Peru’s Central Highlands and Amazon areas to market their crops throughout Peru and internationally. NARSA’s affiliated COOPERU organization promotes better farming practices among a network of approximately 3,000 coffee and cacao farmers. One challenge facing Peruvian farmers is that traditional milling and drying methods produce coffee of uneven quality. A percentage of the harvest is often lost to rot and fungus. Still, many local farmers see no incentive to change the way they’ve always done things. To address this problem, in 2016 Crimson Cup partnered with COOPERU to build solar dryers on top of NARSA’s building. The moveable plastic panels atop the solar dryers help coffee dry more evenly during sunny and cloudy days. The goal, of course, is to produce higher-scoring coffees that can command higher prices for farmers. During our 2016 sourcing trip, Crimson Cup coordinated the first quality competition among NARSA farmers. Our goal was to help farmers understand the qualities that are more prized in coffee beans and that command a higher price. Our winner was an 89-point coffee from Damien Conde in Alto Palomar. In April 2016, Don Julio traveled to Columbus, Ohio to tour Crimson Cup’s SCA-certified

Innovation Lab and local coffee houses. He served samples of Crimson Cup’s Peru La Merced Mundo Pache at two Crimson Cup Coffee Houses. The sampling offered an opportunity for him to meet American coffee consumers and learn more about what they thought about coffee produced by NARSA. He returned home armed with more information to guide the partners of his co-op in improving growing and processing practices. Most recently, we helped NARSA and COOPERU win a grant from the Peruvian Ministry of Production’s National Innovation Program for Competitiveness and Productivity. Through this grant, Don Julio, his wife Denise and several farmers will travel to Crimson Cup’s Innovation Lab in December for a four-day course on improving coffee quality, including brewing, cupping and roasting. They will use their new knowledge to guide co-op farmers in better understanding the expectations of American coffee consumers. Their goal is to help farmers make decisions that will improve quality and, ultimately, increase the price of their coffee. Having seen how the focus on quality in countries like Ethiopia and Kenya has supported sustainable markets, I’m excited about the progress we’re making in Peru. As NARSA executives and farmers make changes based on their growing understanding of coffee quality, we’re starting to see micro-lots with scores in the high 80s, commanding prices of as much as $5 a pound. This coming year, we are investing in a coffee quality lab inside the NARSA coffee facility to help Don Julio and his team come full circle in applying the information they received in the United States to coffee in Peru.

December 2017


The Legend of Joe Mattingly by Ken Shea, President of Ken Shea & Associates and V.P. of Coffee Service for G&J Marketing and Sales

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s I deliberated on possible topics for this State of the Industry issue of CoffeeTalk, my focus gravitated to the Coffee Service industry’s abounding and expanding opportunities which are being chronicled by many. Operators are experiencing accretive sales and profits as their office accounts expand their menus of approved amenities. Many others are looking beyond traditional Office Coffee Service for sales opportunities and having success in more food service types of accounts with C-stores, restaurants and the hospitality trade. Others are in expansion mode, both organically and by acquisition. And with these changes there appears to be a growing gap between the progressive operators that are evolving with the times and those that for various reasons resist change. A significant attribute that is common among many of these successful, progressive operators pertains to their cultural similarities and those individuals who affect these positive company cultures and work environments. And that brings me to Joe Mattingly. I have long been fascinated with men and women who have demonstrated those special leadership qualities that allowed them to positively influence others within their respective companies and their company’s clients regardless of their official titles. The impact of some of these special people has been such that the rank and file as well as department leaders were influenced more by them than their bosses or even their CEO. It wasn’t that these influential people were usurping the authority of others, far from it. They proved to be loyal advocates that made their company (and their CEO) better. This was Joe.

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Team before Self – I had the opportunity to work with Joe while he served as V.P. of Marketing at Standard Coffee Service. He consistently demonstrated a keen ability to recognize the talents of those around him, nurture that talent and allow his subordinates to develop and implement programs and receive the credit for their many accomplishments, all the while minimizing his own significant contributions. Joe had been a very talented high school and collegiate football player and applied those experiences wisely. His support for the

team was inspiring. His quest for ever higher performance constant. The Calming Effect – As in most route based businesses, Office Coffee Service can be a whirlwind. With Standard’s nationwide footprint of more than 400 field personnel and 100,000 plus customers to support, there was a perpetual high sense of urgency to each day. A bank chain threatens to terminate service….a multi-location car dealership demands brewer upgrades and brew station refresh…yesterday! It was amazing to witness Joe’s ability to rally the multi-departmental troops and problem solve so efficiently. Perhaps this was him reliving a two minute drive downfield to score as he did as a quarterback. When a company is in high growth mode, obviously human resources are pushed to the max. Maintaining the balance of providing premium service and taking care of current accounts while driving new business is critical. Without strong, clear-thinking leaders directing the troops and their activities, an operator can witness more business going out the back door than what is coming in the front.

was thinking of you. Just wanted you to know how much your friendship means to me. I hope you and the family are having a great Thanksgiving…I am.” That was about it. A two minute call at most but it was worth so much. I write this article on November 29th. Tomorrow I will be in Covington, Louisiana with many others for Joe’s Memorial Services as we lost him this week after a long courageous battle against cancer. I smile as I recall our texts and phone conversations over the multi-year battle. Every time we connected, Joe’s mission was to keep ME upbeat! And he would fuss at me if I continued on in a melancholy fashion, so with a smile on my face I now offer a toast to my great friend Joe Mattingly. “Thank you Joe for the impact that you have had on my life, personally and professionally. A lot of us will miss you my friend!” Until next time, Ken

Attention to Detail – Whether it be a client presentation, new product rollout or web-site enhancement, the deliverables from Mr. Mattingly’s team were always spot-on. He had the ability to see everything that his departments produced from the eyes and mind of the recipient. He also had the ability to this with a great economy of words. He was able to develop these skill amongst his team. I found that working with Joe seemed to make my job in operations easier. Maybe he just helped make my job more fun because his end of the business was always in tip top shape and his production was well in front of the need. Thoughtfulness – On a personal level, Joe made it a point to say meaningful things when he felt them. He would never squander time and miss an opportunity to connect with folks. One of my fondest memories was Thanksgiving Day in 2013. My phone rang and it was Joe. He said, “Ken, I’m out here washing my dog and I

December 2017

Ken toasting Joe earlier this year


December 2017  

INFORMATION IS POWER - Do you know as much as your competition? Do NOT give them the competitive advantage! CoffeeTalk makes it easy to stay...

December 2017  

INFORMATION IS POWER - Do you know as much as your competition? Do NOT give them the competitive advantage! CoffeeTalk makes it easy to stay...