State of the Industry 2020 Issue

December 2019 | Vol. XXXII No. 8

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CREATING & CONTRIBUTING TO A SUSTAINABLE FUTURE FOR THE INDUSTRY

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

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2020

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changes to start traveling down the road to survivability. Let’s have meaningful discussions among us to craft this long-range vision for equitable global coffee trading and collaboration.” This sentiment of equity is shared by Michael Boyd (page 12). who has grown up in a multi-generational coffee family. “To me, to be a ‘Coffee Person’ is to be committed to this seed and to have a deep passion for both the product and the people. So, what is going to be the catalyst that shifts the focus of the coffee industry to ensure that the rising tide of coffee can lift all boats and not just the roasters boats?” Rocky Rhodes (page 26) suggests, “Get yourself to origin and listen, add value through education, and have you, or someone you help find, buy the ripe red cherries at a premium. Be a partner in their success, and the industry moves up a notch.” Finally, David Browning begs us to act! “Ask yourself, what can I do? How can I use my unique role and influence in the coffee industry to do more than just what my day-job demands of me? Am I doing enough, contributing enough, to the industry that is providing my livelihood, paying for my mortgage, my vacations, my flat-screen TV? I believe we are all capable of much more.”

elcome to CoffeeTalk’s 2020 State of the Industry issue. Every year we invite passionate professionals to share their insights on the coming year, each with a particular theme. After witnessing 26 years in the coffee industry, it is incredible how many challenges remain even more overwhelming than ever. This year’s theme, “Creating a Sustainable Future,” is expressed in a variety of ways, and it is a joy to see where the journey leads each of our writers. The stories weave an intricate and perilous journey our industry faces. As David Browning (page 10) states, “There is no shortage of challenges.” Bill Fishbein (page 8) begins our issue by challenging a well-established assumption. “At the risk of losing most of my friends in the trade, I wonder if the level of quality attained is sufficient enough to ease up on that quest, not necessarily stop, but ease up, in lieu of a more human dimension of equal, if not more value at this time.”

Your stories are inspiring, and summarizing a few, “Climate change seems to be the topic of choice for many. I (David Beeman, page 22) see the problem more as a people problem.

Farmers are not making a livable income.” Marla Gamze (page 14) agrees and eloquently presents her case, “Scientists, farmers, entrepreneurs, and public, private, and NGO industries need to coalesce to create dynamic and significant

Thank you to all of our industry professionals for sharing their insights and challenging us to be better. I invite all of you to join the journey.

January 2019 | Vol. XXXII No. 1

Winter 2019 | Vol. XXXII No. 2

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Specialty Coffee’s Moral Dilemma

Contents

Kerri Goodman

Are We Done Yet?

10

The Next Right Thing

12

Coffee People Changing Coffee

14

The Long Game toward Survivability and Stability

16

An Adaptive Approach to Direct Trade

One Size Does Not Fit All

The Answer to Big Challenges in Coffee May be Something Small

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Impacting smallholders’ outcomes through targeted education

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Moving Beyond Coffee's Perfect Storm

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Sustainability in the coffee industry in 2020 and beyond.

Less Talk More Action

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Properly Preparing for the Future

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What One Person Can Do to Change the Industry

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The next wave of coffee consciousness in a busy world

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Creating a Sustainable Future for Your Coffee Service Operation

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Creating and Contributing to a Sustainable Future

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Sustainability Movement Shaking up Coffee Industry in Asia

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Can Digital Technology put relationships back at the center of an increasingly fractious business?

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Investing Your Heart and Mind

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Shifting from a linear economy to a circular economy through upcycling

Do You Have an Exit Strategy?

5th Wave Coffee

Coffee, Relationships & Digitization

Creating a Triple Bottom Line in the Coffee Industry

WHO WE ARE Phone: 206.686.7378, see extensions below Publisher Kerri Goodman, ext 1 kerri@coffeetalk.com Administrative Director Laurie Veatch, ext 4 laurie@coffeetalk.com

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Phone: 206.686.7378 Fax: 866.373.0392 Web: www.coffeetalk.com

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Visit http://coffeetalk.com/forms 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.

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Sponsors Index Company.........................................................Phone........................... Web................................................................ Page Add A Scoop / Juice Bar Solutions Inc..........................(415) 382-6535........................ addascoop.com.............................................................................25 Brewista........................................................................................(307) 222-6086...................... mybrewista.com............................................................................23 C2 Imaging/ Identabrew.......................................................(888) 872-7200...................... c2spark.com/beverage-dispenser-branding/................... 21 Cablevey Conveyors................................................................(641) 673-8451......................... cablevey.com.................................................................................... 5 Cirqua Inc.....................................................................................(310) 428-8726....................... cirquainc.com.................................................................................33 Coffee Holding Company.....................................................(800) 458-2233...................... coffeeholding.com........................................................................15 Costellini’s....................................................................................(877) 889-1866........................ costellinis.com................................................................................ 27 Don Pablo Coffee Roasting Company............................(305) 249-5628...................... cafedonpablo.com........................................................................19 Fres-co System USA, Inc.......................................................(215) 721-4600........................ fresco.com..........................................................................................7 General Packaging Equipment Co.*.................................(713) 686-4331......................... generalpackaging.com................................................................. 9 Grounds for Health..................................................................(802) 876-7835....................... groundsforhealth.org...................................................................13 International Coffee Consulting.........................................(818) 347-1378......................... intlcoffeeconsulting.com............................................................ 17 Primera Technology Inc.........................................................(800) 797-2772....................... primeralabel.com..........................................................................29 Simpli Press.................................................................................(424) 237-8818........................ simplipresscoffee.com.................................................................31 Texpak Inc | Scolari Engineering........................................(856) 988-5533....................... scolarieng.net................................................................................... 3 Wilbur Curtis Company Inc..................................................(800) 421-6150........................ wilburcurtis.com.............................................................................. 11

Calendar

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January 9-11 Cafe Malaysia 2019, Kuala Lumpur, Malaysia January13-15 Winter Fancy Food Show, San Francisco, CA USA January Sigep, Rimini, Italy 18-22 February Coffee, Tea & Cocoa, Winter EPPS, Chicago 21-23 USA February Café Asia 2020, Singapore 20-22 March 13-15 The Amsterdam Coffee Festival, Amsterdam, The Netherlands March 8-10 Coffee Fest New York, NY USA March 8-10 International Restaurant Show, New York, NY USA March 3-7 Natural Products Expo West, Anaheim, CA USA March 5-7 NCA National Convention 2020, Austin, TX USA March 18-22 China International Specialty Coffee Expo 2020 March 20-22 International Coffee & Tea Expo, Singapore March 20-22 Jamaica Blue Mountain Coffee Festival, St. Andrew April 2-5 The London Coffee Festival, London, UK April 21-23 Re:co Symposium, Portland, OR USA April 23-26 Specialty Coffee Association, Portland, OR USA APRIL 19-20 The Northwest Foodservice Show, Portland, OR USA

For complete and updated show information visit our online calendar: http://coffeetalk.com/industry-calendar/ May 6-8 May 16-19 June 18-20 June 17-18

The NAMA Show Nashville, TN USA National Restaurant Show, Chicago, IL USA World of Coffee, Warsaw, Poland 4C Global Sustainability Conference, Warsaw, Poland June 8-11 World Tea Expo, Denver, CO USA June TBA GCA Convention June 26-28 Coffee Fest Chicgo, IL USA June 28-30 Summer Fancy Food Show, New York, NY USA August TBA SCA Coffee Roasters Guild Retreat August 9-11 Coffee Fest, Anaheim, CA USA August 9-11 Western Foodservice & Hospitality Expo, Anaheim, CA USA August 25-27 Healthy Food Expo West, Anaheim, CA USA September Cafe Show China, Bejing China 4-6 September Midwest Tea Festival TBA September Golden Bean TBA September 89th PCCA Convention Aptos, CA USA 17-19 September The Canadian Coffee & Tea Show Toronto 20-21 Canada September Florida Restaurant & Lodging Show Los 22-23 Angeles, CA USA September Expo Cafe Mexico Mexico City, Mexico 24-26

December 2019

Are We Done Yet?

by Bill Fishbein, Executive Director, The Coffee Trust

Specialty Coffee’s Moral Dilemma

Instead, because things continued on the same unfettered course, as if the trade is simply in a state of denial. Oh, there have been many conversations about low coffee prices, climate change, and aging coffee producers, and there have been many efforts by numerous organizations like my own, to address them.

I

have written numerous articles for Coffee Talk Magazine’ State of the Industry edition over the years. Each has, in one way or another, expressed my concern for the wellbeing of the producers who have continuously faced challenge upon challenge yet always manage to provide the most excellent quality coffee the world has to offer. My concern is for the longevity of our trade so dependent upon the labors of these coffee producers.

This year, my concerns have deepened, not because things have taken a turn for the worst.

There has been significant action in the marketing departments, the cupping rooms, and the counter service creating exquisite new beverages, computer programs that roast, and online deliveries services that bring your coffee to your door moments after it is roasted. Far more time and energy have been spent exalting the praises of coffee than taking the essential steps to ensure that coffee producers can sustain themselves, raise healthy families, and live a life of dignity, life at the roots of the trade.

I started in coffee in 1978 when quality was

the fundamental building block upon which specialty coffee was built. Specialty coffee was all about quality, and anyone who strayed from that path eventually soon discovered the perils of doing so. Quality! Quality! Quality! More valid coffee words had never been spoken. Yet now I am left to wonder if there is a limit to those words.

A few years ago, Rabbi Waskow of Philadelphia was asked about the words to “be fruitful and multiply” in contrast to the explosion of the world’s human population and the demands it is placing upon, well, upon the earth. I will paraphrase his reply. “We’re Done! Great Job! We were Fruitful, and We Multiplied! And now, we’re done”.

At the risk of losing most of my friends in the trade, I wonder if the level of quality attained is sufficient enough to ease up on that quest, not necessarily stop, but ease up, in lieu of a more human dimension of equal, if not more value at this time.

Producers are moving higher up the mountains to outrun the fungus, the changing climate, the changing flowering seasons, the changing rainy season, and the changing dry season. All to grow coffee while cutting down more forests, and dumping yet more carbon into the atmosphere, exacerbating the changing climate even more and sooner or later running out of mountain.

Maybe we’re done! And, we need to focus our time, our energies, our money on a more significant challenge. Maybe we’re done!

Most recently, I read about a new way to produce coffee in a laboratory without the need for producers at all. Am I supposed to be relieved that despite the moral challenges facing the trade, we will still survive? Really?

Bill Fishbein, Founder & Executive Director The Coffee Trust

8 December 2019

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The Next Right Thing

by David Browning, CEO, Enveritas Inc.

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s 2019 draws to a close, there is no shortage of challenges facing our world. Climate change, rioting from Hong Kong to Paris, polarization in the US, fragmentation in Europe, the list goes on. Within the coffee industry, lack of training, inadequate schooling, and a host of other issues conspire to keep millions of farmers and their families in poverty. If we ask ourselves, “What can be done?” it’s easy to feel overwhelmed.

Earlier this year, I gave a talk at Re: co and discussed a painting by British artist William Turner. The painting depicted an actual event in 1781, where 132 men, women, and children bound for slavery were thrown overboard alive, not far from Jamaica.

They were thrown overboard because commercial rules made it more profitable for companies to drown children and collect the insurance than to run the risk that they might die on board, and receive nothing. The captain was brought to trial but was acquitted by a jury.

If the business community had been pressed on that day, they might well have responded, “It’s regrettable, and our thoughts and prayers are with the families, but we don’t make the rules, we just play by them. Everything was in order”.

to drown as a necessary and predictable price for commerce. We would have seen the moral imperative, and, like Turner and Albert and Lincoln, we would have done more than what was expedient.

As I was giving this talk in April, Óscar Ramírez was heading north from his home in El Salvador with his 2-year-old daughter, Valeria, in search of a better life. They both drowned trying to cross the river to get into the United States. It was a tragedy, regrettable, and our thoughts and prayers are with the Ramírez family.

What will the future say about us?

I suspect that the future will look back and say, “You didn’t do enough. Yes, it was the way things were, yes, it was not your fault, yes, it was business as usual. Still, you did not invest enough emotional energy. You did not ask enough questions, you did not strive hard enough for creative solutions because you were too busy, too comfortable, and it was profitable to remain so”.

Business is efficient at allocating resources, but it is indifferent to human suffering and blind to morality. For that, you need people. People like William Turner, people like Prince Albert, people like you, to say, “This is not right, and this will not stand.”

Coffee is a fulcrum for human dignity. The industry offers a rare opportunity to make

progress on issues of poverty and human rights by virtue of the vast wealth it generates, combined with the impoverished state of most of the families that supply its raw material. There is opportunity, but no guarantees. Maintaining the status quo is certainly the easier path.

We tend to simplify progress to single heroic actors, “Edison invented the light bulb, James Watt the steam engine, Marie Curie radioactivity.” But on closer inspection, there are always more actors, often unheralded, who made the headline achievement possible. If we view progress less as a miraculous heroic leap up a sheer cliff, but more as a series of patient contributions tracing a steady course towards the peak, then “what is required” can seem less daunting. If the question is, “What is to be done?” the answer might be, “The next right thing”.

Ask yourself, what can I do? How can I use my unique role and influence in the coffee industry to do more than just what my day-job demands of me? Am I doing enough, contributing enough, to the industry that is providing my livelihood, paying for my mortgage, my vacations, my flat-screen TV? I believe we are all capable of much more. The environment and the world’s smallholder coffee farmers are waiting for us to act.

It was business as usual.

Turner unveiled this painting to coincide with an anti-slavery convention where Queen Victoria’s new husband, Prince Albert, was scheduled to speak. Albert went on to become a committed anti-slavery campaigner, not part of the job description for which he had signed up. The world eventually agreed with him and drowning children to improve quarterly earnings went from being business as usual, to abhorrent, to illegal. Albert’s actions may well have inspired Abraham Lincoln a few years later also to do more than his office required, more than practical politics would advise, to advance the abolition of slavery.

It is reassuring to look back at this chapter in history, safe in the knowledge that we would have done the right thing. If it had been us on that jury, we would never have condoned such 10 injustice. We would never have allowed children

(Julia Le Duc/AP)

December 2019

Coffee People Changing Coffee

by Michael Boyd, R&D Manager Coffee Heartland FPG

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rowing up in and spending the majority of my life in the coffee business, I’ve come to use the term “Coffee Person.” I don’t know if it’s as frequent as I think it is, but when I use it around friends and colleagues, we all know what it means. To me, to be a Coffee Person is to be committed to this seed and to have a deep passion for both the product and the people who make our daily rituals and livelihoods possible. Not everyone who works in coffee is a coffee person (yet), but once you are, you will do almost anything to keep working in the industry.

We as Coffee People cannot make the needed changes to the industry on our own; we will need assistance from someone with size and breadth. Projects like the Specialty Coffee Price Transparency Guide has shifted the sustainability conversation towards farmer livelihoods and away from the traditional certification and green business plans. If coffee farmers are not able to make a positive ROI on their investment into their land, time, inputs, and all their efforts, they need to change/ diversify what they grow on their land, which is not a good outlook for Specialty Coffee.

With that said, we need to remember how the coffee consuming public perceives the fruits of our labors, and at its core, this quote from a classic coffee book defines it.

A Sense of Value Coffee is not bought or consumed for nutrition.

It may be purchased by bag, pound, or cup, but the weight (the quantity measure) has value only insofar as it has acceptable flavor (the intensity measure). Coffee has only one value: to give the consumer pleasure and satisfaction through flavor, aroma and desirable physiological and psychological effects — Coffee Processing Technology © Copyright 1963 Sivetz and Foote The roasting side of the industry has been able to grow dramatically in the last 30 years to the point where coffee roasters are being bought up by non-coffee focused companies for valuations that would have seemed unheard of 20 years ago.

12 This is happening as those outsider companies

see the value and potential that coffee brings.

This growth, though, has been massively uneven as those that grow and create the quality aspects of our livelihoods have not realized the same financial returns.

So, what is going to be the catalyst that shifts the focus of the coffee industry to ensure that the rising tide of coffee can lift all boats and not just the roasters boats? I think back to what McDonald’s did to the industry almost 20 years ago when they launched McCafé in the United States. This sudden change from what had been a large consumer of commercial-grade coffee to one that was focused on making a better cup of coffee for its customers caused ripple effects through the industry. The most pointed of which is convenience store coffee, which back then was coffee brewed who knows how long ago sitting and slowly degrading on a burner. The McCafé change forced c-stores to adapt and improve the quality of their coffee. Today weary travelers can find great coffee made to order in high-end Bean to Cup machine and, in some cases, a live barista in these same locations. These stores realized that coffee is the fuel that can and does drive growth, just as the Private Equity companies are today in their acquisitions of roaster brands.

Having been a coffee buyer and knowing how much scrutiny goes into what cost of goods, I would deliver my large national account customers. I know the angst that managing a coffee position book brings and when working with a customer knowing that the $0.25 cost increase in coffee due to market conditions would have million-dollar bottom line impacts on their financial results. As the roaster, I didn’t make more or less as the market went up or down, as the price was driven from a formula. Though what I did do was partner with my customer, help then understand their costs, and what was necessary to brew a good cup of coffee. The most significant impact though was showing them how profitable each cup of coffee was and how serving better coffee

December 2019

and charging more for it helped their bottom line.

It is this collaborative approach of a roaster partnering with their customers to educate them on how successful they can be in selling better and more expensive coffee. As an example, for every $1 per pound increase in roasted coffee per pound at a café/c-store, the associated cost on a 16 oz black cup of brewed coffee at a brewing ratio of 18:1 is about $0.055 per cup.

This increased cost could easily be covered by a $.10 per cup increase, and the location can be more profitable and allow those at the other end of the supply chain to be profitable as well. (On an espresso-based drink the added cost is less than $0.04 per beverage) This next generation of coffee needs its “McCafé” event that will drive forward this need to change.

Who will be the catalyst for this change?

The Long Game toward Survivability and Stability

by Marla Gamze, CEO & Managing Director, Kaltja International, Inc.

I

t used to be enough to say that your company had a sustainability plan or a track record of growing organic coffee beans. It used to be remarkable to be a conscious business. It used to be to sufficient to donate portions of your profits to NGOs. It used to be valuable to offset or reduce the number of greenhouse gases that your coffee production emits to be Carbon Neutral.

What used to be enough to attain voluntary environmental, social, and economic sustainability standards is no longer suitable or sufficient for long-term survivability and stability of healthy land and soil of coffee farms, profitability of coffee growers, viability of farmers’ families and communities, traceability of coffee beans, or ability to fulfill the needs of global coffee consumers.

The future of the coffee industry is beckoning for fusion and trajectory of ideas, actions, and technologies.

The complexity of global coffee production calls for a set of integrative responses, with solutions that cut across sectors to address numerous issues simultaneously. Viable solution sets decompose waste; create energy and soil nutrients; handle water and waste management, and boost agricultural production and logistics.

When designed and implemented together, bio networks can synergistically develop efficiencies, lower costs, reduce environmental impacts, create economic development, and reduce Greenhouse Gas Emissions.

A comprehensive and efficient, neutral platform will also bring more income to the growers.

This is critical in these current times when the livelihoods of coffee farmers are threatened, and many are struggling. The industry is addressing the long-standing “C” pricing methods to aim for more equitable compensation for coffee growers. While this discussion is taking place, coffee producers, nations of coffee farmers, as well as communities of coffee co-ops can take action to decrease risks and build resilience on 14 the road to survivability.

Kaltja International addresses these challenges through our Sustainable Parametric Ecosystem, which focuses on technology that boosts sustainably inspired coffee supply chains— resulting in enriched social, economic, and environmental impacts. Our novel IT and blockchain facilitate sustainable coffee production, energy, and trade to strengthen economic development in underserved and remote coffee-growing communities. This closed-loop or circular ecosystem reduces costs and environmental impacts as well as helps to improve the livelihoods of farmers and their families and communities.

-Protect the environment and implement best practices: Optimize the use of natural resources, like energy and water, implement sustainable operating and agricultural practices.

Scientists, farmers, entrepreneurs, and public, private, and NGO industries need to coalesce to create dynamic and significant changes to start traveling down the road to survivability. Let’s have meaningful discussions among us to craft this long-range vision for equitable global coffee trading and collaboration.

Some organizations are aiding farmers with sustainable concepts and programs. Some are in local communities, agriculture and energy programs of nations drive others, and still, others are global resources to be sought out via the Internet. Collaborate with viable and vetted organizations throughout every stage in the production and logistics chain.

Climate change, agricultural practices, and environmental protection issues shift quickly.

It’s important to take measures and not stay stagnant. Stay relevant and seek out companies that will work with you and understand your farm size and experience levels. Here are some steps you can take: -Improve the health of the soil: Kaltja’s Biotics technology can convert the pulp/waste from the fresh coffee cherries into a viable organic soil nutrient and potable water. Other companies offer different options for soil amendments.

-Use technology, data analysis, the Internet of Things, and Blockchain: Blockchain technology can help bring changes to the coffee value chain and aid coffee farmers by speeding up their compensation. The use of blockchain facilitates smart contracts, firstmile-to-last-mile transparency, and traceability in the value chain processes: from growers, traders, processors, and roasters to consumers.

Its traceability and immutability will prove to consumers the quality and origin of the coffee they are drinking. Consumers can gain assurances of the coffee growers’ ethically sourced practices and know the provenance of the coffee and the stewards of the lands on which the coffee was grown.

December 2019

Kaltja’s Sustainable Parametric Ecosystem is a fusion of actions that helps to reduce costs and environmental impacts and improves the livelihoods of farmers and their families and communities.

One Size Does Not Fit All An Adaptive Approach to Direct Trade

O

everyone to enjoy in 50 or 100 years. To help farmers earn a fair return for their hard work.

And to connect consumers with farmers so they can appreciate one another.

Each farmer has unique goals and challenges.

They all want to earn more for their coffee to build better lives for their families, workers, and communities. But how they approach markets and roaster relationships hinges on diverse cultural factors.

We want to reach our goals without imposing our values on the local culture. Some African communities have grown coffee since the Kaldi of legend roamed local mountains with his goats.

Growers of many cultures follow centuries-old propagation and processing techniques. Who are we to tell them they must do it our way?

In one country, children go to school or child care while their parents work in the fields.

In another, a daycare building sits empty because children have gone with their parents into the fields for centuries. Yet certification requirements force some co-ops to erect daycare centers.

Technology Strengthens Connections.

My first direct trade forays involved getting on a plane to a large city. From there, I took a bus or van into the mountains where coffee grows.

Sometimes I used a mule or walked to a remote farming village. I have been one of the first American roasters to visit some farmers.

Many organizations approach direct trade and sustainability by making all farmers or relationships conform to a single model. In my experience, an adaptive program better supports both grower and roaster needs.

Today, many farmers have cell phones. With the Internet and social media access, we’re finding it easier to meet and stay in touch.

ver the past decade, I’ve traveled to meet coffee farmers in Central and South America, Africa, and Asia. Of the resulting 50-plus direct trade relationships, no two are alike.

Meaningful Relationships Begin with Effective Communication.

At Crimson Cup, each direct trade relationship begins with a personal connection. We get to know farmers and their local culture. We stay in their homes, break bread together, roast, and cup coffee. Sometimes we try local beverages or sit around campfires and exchange stories.

As trust builds, farmers and community leaders reveal their needs and challenges. Trust allows us to probe and ask questions. With openness and candor, we arrive at mutually beneficial agreements.

Like most roasters, we want to source the best coffees. To ensure that coffee survives for Jose Julian Giraldo standing in front of his coffee fields near Armenia, Colombia.

Jose and Brandon met using social media app, Instagram

16

by Brandon Bir, Education and Sustainability Director, Crimson Cup

We still travel nearly 80,000 miles each year to make and sustain relationships, but calls, e-mails, messages, and chats fill in the gaps between visits.

A couple of years ago, I chatted with a Columbian producer via Instagram. He talked about his company, Café 1959, and the local market. I introduced him to Crimson Cup. When Jose told me about rare Bourbon mutual Mokka trees growing in the Armenia region of Columbia, I knew I had to cup it. A visit to his farm and processing facility yielded my favorite coffee of 2018.

Technology also allows farmers to share expertise and innovation. For example, a grower in Guatemala shared his formula for honey

Brandon Bir leading a sensory analysis class in Barranaca, Peru. Most visits to coffeegrowing countries produce opportunities to share education with local professionals.

December 2019

processing with a co-op in Peru. They stayed in contact via Skype and WhatsApp while experimenting.

Transparency from Farmer to Roaster to Consumer.

We believe that adaptive direct trade programs support radical transparency, growing the demand of today’s consumers. They want to trace their coffee to a particular farm and feel confident that farmers earned a fair return for their hard work.

Farmers are just as curious about consumers.

They want to know who drinks their coffee and how they can grow coffee that better meets the consumers’ tastes.

Transparency grows through more effective communication and even more travel. Several of our farming partners have journeyed to our Columbus, Ohio headquarters. They visited our coffee houses and talked to our customers.

These exchanges give consumers insight into a farmer’s life, and farmers an opportunity to see consumers enjoy their finished product.

Empathy Bridges the Gaps.

Our most successful direct trade relationships grow on a foundation of empathy. By listening, being open, and considering other viewpoints, we identify areas of mutual interest and benefit.

Sharing and understanding create a level of honesty that helps protect growers and roasters by distributing risk, which growers too often shoulder on their own.

Adaptive direct trade agreements respect local needs and cultures. They fuel transparency and ensure that all parties win. Because with farmer relationships, one size does not fit all.

Brandon Bir talks with local agronomist Leonel Pinto Torres about issues with the current varieties in the Villa Rica area.

The Answer to Big Challenges in Coffee May be Something Small Impacting smallholders’ outcomes through targeted education

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t should come as no surprise that the Coffee Quality Institute (CQI) looks to education as an effective pathway to supporting sustainable coffee communities in 2020 and beyond.

CQI works internationally to improve the quality of coffee and the lives of those who produce it.

For more than twenty years, CQI has been developing rigorous evaluation standards and establishing a shared language of coffee quality through the Q Grader Program. In recent years the addition of the Q Processing Program, addressing post-harvest management, was developed to ensure standards to enhance the crop’s quality to increase value. This program’s scientific and technical approach to processing coffees focuses on improving quality, proposes good practices, and aims to increase producers’ competitiveness and reduce their risk.

Q Processing is acknowledged as the first global certification of professional competencies for coffee processors, and its formal approach is valued by industry and other stakeholders. In the just over two years since its inception, more than 500 individuals have been certified as Q Processing Professionals. While this may feel like a small number now, in the big picture, these individuals will have a significant impact, and this program is shaping CQI’s next expression of coffee education, which will be intentionally small.

The Q Processing Program’s formal approach is not always accessible to smallholder producers who face financial and educational barriers.

While it is an appropriate curriculum for medium-to-large producer segments, the fact that smallholders are not successfully served concerns CQI, as their livelihood is at the core of our mission.

To support sustainable coffee communities, CQI

18 understands an innovative approach is needed

to share good practices, improving coffee quality

by Lisa Conway, Executive Director, Coffee Quality Institute

and the livelihoods of those who produce it. An example of this on-the-ground education model is under development now in Colombia.

Working in Colombia with project partners through USAID, CQI piloted a “Microprocessor’s Certificate.” The objective of the pilot was to train smallholder coffee producers in appropriate good processing practices and develop a valuable certification for washed coffee micro-processors. Following the training, adoption of good practices is being verified by technicians, and producers adopting the practices will receive a certificate issued by the program. This certification and follow up will measure and verify the adoption rate of proper implementation among the participating producers. These practices are taught through a corps of technicians who, with additional training, are also certified as CQI Q Processing Professionals. Even though the pilot will not conclude until early 2020, there are outcomes to evaluate, good and bad, already.

What did we discover when we put our vision to the test? That there are specific, replicable modules that can be developed for microprocessors, including a set of 25 good processing practices that form a standard. A one-day, accessible adult education workshop for smallholders emerged, along with a three-day “Training of Trainers” workshop that results in excellent peer-educators. And finally, a suite of educational tools developed, and those will be the basis of future in-class materials, adapted to a variety of coffee growing contexts.

As this smallholder program continues to mature, CQI acknowledges serious challenges, including the innumerable unique landscapes in which coffee producers work, the sheer number of presentations that would have to be facilitated,

December 2019

and the related amount of follow up. Like all valuable things, a new training program comes with plenty of hurdles to overcome.

We think about this small program on little farms when we think big about sustainable coffee communities in 2020 and beyond.

Because despite the challenges, the lessons learned during the nascent microprocessors’ program are valuable and encouraging. The program will change coffee quality for the better.

It is replicable in related aspects, like farming, through the addition of training modules, and adjustments can be used around the world.

The model is deeply rooted in Coffee Quality Institute’s mission, targeting smallholders training and providing recognition of producers who strive to improve their coffee quality. It is also a program that can work effectively in concert with other coffee community partners, and there is necessarily call for collaboration as we look to the significant challenges on our horizon.

Moving Beyond Coffee’s Perfect Storm

by Rick Peyser, Sr. Relationship Manager, Coffee & Cocoa, Lutheran World Relief

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his year coffee prices have once again punished coffee farmers, large and small. In Central America, this punishment has been particularly harsh. In the dry corridor and beyond, smallscale coffee farmers have had to contend with lower quality and yields due to drought that has intensified the impact of the “thin months” of chronic seasonal food insecurity, which usually arrive every year with the rainy season. This year, in many areas, the rains did not arrive. The combination of low coffee prices, low yields, drought, and hunger have created a “perfect storm” that has left many families with few options other than to leave their farms. Many have headed north to the Mexican-U.S. border — not only for better economic opportunities but also for food — putting additional pressure on the already overwhelmed capacity of U.S. Customs and Border Protection. This migration has been exacerbated by the U.S. Government’s policies, including the curtailing of aid to Northern Triangle countries just when this aid was most needed.* For well over two decades, many of us in the specialty coffee industry have been proud of our industry’s progress toward sustainability.

We often read that coffee may be the first “sustainable” supply chain. While many of us have worked hard for years to make this a reality, we still have miles to go before we can rest. Over these decades, there are a few things we have learned, including: • Coffee prices have failed to provide farmers with an income necessary to meet the basic needs of their families and their coffee.

Farmers have been left behind as our industry has grown and prospered. Adjusted for inflation, farmers are getting poorer as our industry continues to flourish.

• Many small-scale coffee farmers are overly dependent upon income from coffee, with few if any other sources of income, leaving them highly vulnerable to the impact of low prices and more frequent climate-induced events (i.e., la Roya).

• Various well-intended programs funded 20 by public and private sector organizations

•

• •

•

continue to promote improved coffee quality and yields. These programs often feed farmers’ overdependence on coffee without considering on-farm income diversification as a strategy to improve earnings, resilience, and the farmers’ capacity to invest in their own coffee.

Many small-scale farming families continue to lack access to clean water, to medical services, to educational opportunities for their children, and lack financial resources to deal with an emergency.

Families continue to face food scarcity during the “thin months.”

Coffee farmers are aging, with the average age approaching 60 years-old, while many young people are leaving the farm for urban centers or are migrating to seek better opportunities.

Global warming will leave an increasing number of coffee farmers behind, as highquality coffee production gradually moves to higher altitudes. This will impact their livelihoods as well as the quantity and quality of coffee grown and delivered to their cooperatives. Change is coming, and the pace is accelerating.

Perhaps the most significant hurdle we have faced in our learning has been the lack of data for the actual net income of coffee farming families, the resources they need for a dignified quality of life, and the gap that may exist between these two. Fortunately, several organizations are now taking a hard look at a concept known as Living Income. GIZ (German Society for International Cooperation), the ISEAL Alliance and The Sustainable Food Lab have established a Living Income Community of Practice (living-income.com) defining Living Income as “The net annual income required for a household in a particular place to afford a decent standard of living for all members of that household.” A “decent standard of living” is defined by the Community of Practice as including: “food, water, housing, education, healthcare, transport, clothing and other essential needs including provision for unexpected events.”

This concept uses methodologies that put to work in cocoa, tea, and coffee. In coffee, Living Income benchmarks are being developed in several countries. These benchmarks identify what an average-sized household needs to earn to reach a decent standard of living in a specific

December 2019

geographic area. With the benchmark identified, researchers then work with farmers within this area to determine their actual incomes and the gap between their actual incomes and the Living Income benchmark for their area.

Knowing the gap and the contributions of the various sources to farmers’ incomes, farmers, their organizations, and funders can identify opportunities to close the gap. This may be accomplished through further investment in coffee production or higher prices for their coffee. Or by investing in other crops that can be grown on the farm reducing the family’s dependence on one crop while improving its income, diet, and overall resilience to economic and climatic volatility. At Lutheran World Relief, we are joining this effort to obtain more precise data to understand better what constitutes a fair price for coffee so that we can help farmers determine how best to close the gap.

In my conversations over the past three decades relating to sustainability, everyone has wanted coffee farmers in our supply chains to have a dignified quality of life. The key elements of Living Income, as described above, have been our aspirational North Star. We could continue to view Living Income simply as an aspiration, but now it needs to be more than that. For farmers — and their daughters and sons — to remain engaged in coffee, there needs to be a business case that provides, at a minimum, a dignified quality of life. As we continue to push for the sustainability of our industry, enabling coffee farmers and their families to earn a Living Income is essential if we are genuinely interested in the long-term sustainability of specialty coffee. *Please take two minutes to watch this documentary that aired on the NBC Nightly News on September 21, 2019: https://www. nbcnews.com/nightly-news/video/migrantsfled-guatemala-for-u-s-after-droughtand-food-shortages-government-reportfinds-69583941618

Rick Peyser, Sr. Relationship Manager, Coffee & Cocoa Lutheran World Relief

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Less Talk More Action Sustainability in the coffee industry in 2020 and beyond.

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ustainability has many definitions depending on your perspective and personal motivations. Working in the coffee world for 42 years gives me a broad view of what I consider the most pressing issues the coffee industry faces in the years ahead.

Climate change seems to be the topic of choice for many. I see the problem more as a people problem. Farmers are not making a livable income. This factor, if left overshadowed by climate change, may be the industry’s most significant issue for the immediate future. We have all seen news of entire villages left abandoned by immigrants seeking a better life in other countries.

The price of coffee for many farmers is below the cost of production. Not since the crisis of 1999-2003 have prices been so devastating to the 100+ million people that rely directly and indirectly on producing coffee. Coffee farmers with no other income are a humanitarian crisis demanding action.

In the specialty coffee industry, most people seem to be aware of the problem, and considerable effort is devoted to solutions. Outside of the specialty coffee world, little of the plight of the coffee farmer is known, and this creates a tremendous challenge facing the specialty coffee retailer.

Current evolutions in coffee trading One method of coffee trading that might be utilized in a way to assist the farmer is “coffee chain or blockchain technology.” Blockchain technology, derived from the technology behind cryptocurrency, allows for traceability back to the grower giving the consumer a feel-good attitude about the grower but does little to assist in raising the price paid. If technologies such as this could be allowed to add a living wage index for the consumer to judge how they spent their money, three issues might be achieved.

One, the consumer can choose only to buy ethically based on a livability scale, let’s say, cost of production plus profit, for example.

Two, the farmer, based on how his coffee sells, has incentive and income to produce a better grade of bean. Three, as a consortium, these farmers are joined together worldwide to a knowledge base currently shielded from them. Empowerment evolving from this type of advancement in technology is an essential feature for growth and sustainability.

Tip the Farmer Another concept I think has merit along with risk is a program, “tip your farmer.” I have not interviewed actual retailers offering this, but the idea is to directly “Tip” the farmer at the cash register that grew the coffee being served. At first, I thought, Well, for god’s sake, just charge more for the damn coffee. Then reality set in, and I realized as much as the retailer may have wanted to, there is a disadvantage to his business for charging over the going rate as competition in a free society dictates its price controls. The other side of the equation which would benefit both the business owner and the “feel good” for the consumer is when the ethical consumer knowing his “TIP” actually helps, frequents the retailer that cares enough to pay it forward. There was once a coffee company that touted that 10% of profits went to charity.

It built a corporation up rapidly with excellent public relations. It didn’t last, but the essence of caring is stronger today in a good economy than ever before for a program like this to be wildly successful. The risk for a program such as this is in the misuse of the money. I can address that by saying the reward outweighs the potential risk.

Controls on how the money is put to use by the farmer may motivate him/her to produce better beans.

Knowledge is Power The media needs to devote more time to inform the public of the plight of the farmer. Knowledge is power, and the consumer needs to be made aware of the financial plight of the coffee farmer.

Consumer ignorance helps no one and hurts everyone. The recent waves of immigrants leaving their towns and villages are lack of income, not they freely choose to leave their ancestral homes.

22 December 2019

by David Beeman, CEO, Cirqua Inc. Need for innovations on the farm Cascara is an exciting innovation in the coffee business. As it pertains to sustainability in coffee, it achieves several significant goals. First, it reduces the biowaste problematic on farms when the husks compost. Second, it has become a secondary profit margin farmers can desperately use. The expanded marketing of Cascara would greatly benefit the environment as it constitutes a secondary use product. The fact that consumer acceptance seems to be high when Cascara is marketed properly would ultimately benefit the farmer.

Move it to the farm Ways to move segments of the coffee industry into the growing regions need to be developed.

Farming is an industry of intense work and downtimes. Solutions for that downtime or seasonal workload need to be balanced. The coffee industry needs to look for ways to move the allied industry into the growing regions to supplement the seasonal aspects of coffee production. Cascara is a great start. I say this as a challenge. Great ideas arise when people are given a sense of urgency to help.

Sustainability is defined as achieving present needs while ensuring future needs. I have realized that I need to do more to see the future I envision.

David Beeman Water Wizard Cirqua Inc. 310-428-8726 The Creator of the Original “Coffee Water,” AB Formula, Easy Series, No Waste R.O. Author SCA “Water Quality Handbook” Follow us on Instagram: @cirqua_inc

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Properly Preparing for the Future Do You Have an Exit Strategy?

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020 is a fascinating time to be in our industry. The economy is strong, the interest in specialty coffee is vibrant, there is exciting innovation taking place and there is a meaningful opportunity to be achieving strong earnings and cash flow. Savvy business owners must be aware of the significant consolidation taking place across all sectors of our industry. Private equity firms are looking to put vast amounts of available capital to work; major industry consolidators are expanding their corporate portfolio, and larger sector players are acquiring smaller firms to expand geographically, achieve greater economies of scale and reduce specific areas of competition.

Just a few examples of companies sold in the recent few years...

Roasters: Whole Coffee Company, Cameron’s Coffee, Beverage Solutions Group, Tazo Tea and Boyds Coffee.

Equipment Companies: Grindmaster and UNIC acquired by Electrolux Professional, Wilber Curtis acquired by SEB the French consolidator and owner of WMF. Joe Tap and Synesso were acquired by Middleby.

Cafe Chains: Blue Bottle by Nestle. Peets, Caribou, Intelligentsia, and Stumptown now all rolled up under JAB. his begs the question: How and when should a business owner begin preparing for the sale of their company? The short answer: today. Even if you plan to own and operate your company for many years into the future. The reasons are simple: Understanding the process an owner will go through to sell their company and how buyers will value it, allows smarter and more strategic decisions for the future to optimize your financial return when you finally do sell. The other reason is that one never knows when a buyer shows up serendipitously and unexpectedly. Trust me – it happens! Part of one’s leadership responsibility means being prepared for opportunity when it presents itself.

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by David Isett, Managing Director, First Hill Partners

certified public accountant (Income statement, balance sheet and cash flow statement). Also, realistic financial projections for the next year or more are critical to support a sales effort and to guide the management and planning activity.

You and your accountant should be able explain all of the figures, any anomalies or prior issues, major one-time expenses, and any loans, or long term financing/debt agreements. Buyers will also review all federal, state and local tax filings for completeness, accuracy and to identify any potential outstanding obligations. Also, identify what expenses would NOT continue should the business be sold (e.g., dividends/withdrawals by the current owners). All inventory records should be current and accurate at all times, as well as the accounting basis for inventory valuation.

Legal Records: Be sure to include your articles of formation (Corporation, LLC, Partnership, etc.) All vital records should be available electronically and include Board of Director meeting minutes, cap table (full detail showing ownership shares/percentages including outstanding stock options, if any,) employment agreements, supply chain contracts, vendor agreements, leases, loans, as well as any past, present, or anticipated litigation. Additional records of interest include customer sales contracts, service agreements, and all banking documents.

Staff and HR Policies: Few areas affecting a company’s on-going success are more important than the team. Accordingly, buyers will often take a close look at your managers and staff.

They will review your employee handbook and policy manuals. Are there any union agreements? It is essential to understand your own succession plan. Do you plan to stay with the business after it is sold? If so, how long?

Can the business succeed without you or who could take your place to carry on? Do you have all documentation for any 401(k) or employee investment or incentive programs? Payroll records and tax filings?

Preparing Experienced buyers will conduct “Due Diligence” – the process of thoroughly researching and understanding all aspects of the targeted company. Due Diligence looks at everything necessary to accurately determine a value the buyers are willing to pay for your business and assess the strategic fit with their own company. Being prepared for this process and making it easy for prospective buyers can help ensure the smoothest, quickest sale at the best valuation. Just some of the items examined during Due Diligence include:

Valuation: Most operating companies are valued (priced) for sale as a multiple of their EBITDA. This is simply Earnings before Interest, Taxes, Depreciation and Amortization. The multiple paid by buyers depends highly on the type of business, whether a distributor, manufacturer, or café chain as well as other vital factors such as uniqueness in the market, intellectual property rights, brand recognition and power. It is an extremely complex process to assess value and outside experts should generally be retained to guide this activity.

Accounting Records – ideally a company will have a minimum of 3-years of audited or reviewed financial statements by an outside

Choosing a Buyer: Not all decisions are financial. When considering a sale of the business you have worked so hard to build,

December 2019

selecting the ideal buyer is not just about the money. That matters. So does one’s legacy.

Critical is the merging of cultures between buyer and seller. What will the impacts be for your valued employees, your customers, your community and the on-going role within our industry?

Your Advisory Team: Regardless of the size of your company, I can tell you from personal experience, you cannot sell your business by yourself. Well, you could, but it is a terrible idea.

It is beneficial to have a trusted professional team that includes an Investment Banker, your CPA firm and a transaction attorney - that will work together to ensure all aspects of the sale go smoothly. Investment Bankers or Business Brokers manage the actual sales process, much like a realtor in selling your home. They are responsible for the strategy of how to sell the company, identifying all appropriate buyers, leading the negotiations, coordinating all parties to the transaction, and guiding the process all the way through the closing and transfer of funds. Your accounting firm will help organize and manage the financial statements and tax matters. Transaction attorneys specialize in the unique aspects of buying and selling businesses.

They understand different transaction types (stock sale vs. an asset sale), “reps and warranties”, regulatory issues and deal structures.

Pitfalls and Deal Killers Selling your business is a complex, lengthy and emotional process. Achieving a successful exit is not easy, and there many ways for a deal to fall apart. The most common reason is unrealistic pricing expectations by the seller. This is followed by business partners and/or family members not being in alignment with a sale, or the discovery of surprises during Due Diligence that were not disclosed early on by the seller.

Proper planning from this day forward can help you achieve long term success in your company and a successful transition to the next set of adventures whenever and however they present themselves.

David Isett is a veteran of more than 20 years in the specialty coffee industry, having served as the president and CEO of Concordia Beverage Systems. Today he is Managing Director of First Hill Partners, a Mergers and Acquisitions advisory firm, as well as an industry consultant, speaker, and author. For comments, feedback and questions, please contact: david@firsthillpartners.com

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What One Person Can Do to Change the Industry

by Rocky Rhodes, CEO, International Coffee Consulting

C

offee people are community-oriented, socially responsible people. When thinking about our industry, it is easy to see that one end of our supply chain benefits more than the other end. We are not trying to take advantage of anyone, and yet poverty and hunger still exist in an abundance of places coffee is being grown. Coffee people want to make our industry ‘better,’ but knowing what to do can be daunting to consider.

We all want to ‘help the farmer.’ To solve that problem should be easy; just send more money for the coffee. If problems were that easy to solve, they would be solved. Perhaps we need a better understanding of the problem so we can understand some solutions.

As a roaster, you should create opportunities to touch the far end of our supply chain. Going to an organized estate or cooperative gives you one perspective of what a farmer needs. It’s altogether different to get a bit further out in the fields where backyard farmers live and hear their stories and walk in their flip-flops.

Wisdom is required to find the comprehensive solutions needed to start to address the concerns of those that grow for a living. The following advice is gathered from those that spend time at origin.

Shut up and listen.

What an ego it must be to tell anyone how to solve their problems if you are not living in their situation. What you think is the problem might not be what their concern. An open ear and good observation will almost always reveal the following about these farmers and communities: • God, Family, and Community are the

26

anchors with which a village can stabilize and hold together. Any problem will be about addressing one or more of those anchors that are getting weak. It is rare to talk with a single farmer, but rather the whole family or more likely with the community. They don’t grow coffee alone, they grow together, and they are looking to help each other. If one farmer’s family prospers more than the others in the village, it could strengthen her family but weaken the community.

• It’s not just money but rather predictable partnerships that will help them earn more money. You will only be asked for money by beggars on the way to these communities you hope to serve. Farmers are hard-working, proud of their crops, and just want to get more money for their work. They will ask for a better price (who wouldn’t), but they are just as likely to ask if you can guarantee to buy the crop year after year.

• Just because they don’t know how the supply chain works once the cherries are picked does not mean they are stupid, it means they have not learned it yet. When explained how value is added to coffee along the way to the cup, they get the idea that if they can work differently, they can add more value to the existing crop. Taking time to share YOUR needs like ripe red cherries is more likely to get the message across.

• Coffee is not their life. Coffee is one of many crops used to provide for the family and community. If coffee is not working, they will rip it out and grow something else. They are growers, not urban coffee wonks that need more blueberry in their natural process flavors. If you can make coffee more of a focus by making it a higher value crop for them, we can all win.

Rocky Rhodes with Kachin farmers of Northern Myanmar after negotiating higher prices for red ripe cherries and scheduling ongoing education for quality improvement.

December 2019

It is rarely the farmer at issue.

It is the lack of access to the market. Many communities sell to the one person that will buy the cherries and take them away to some distant mill. Pick, sell, done. Imagine if you roast coffee, and there is just one buyer. You get paid whatever they want to pay for your coffee. What incentive do you have to improve your craft? For a farmer, it has to make a difference in income to change from strip picking to selective picking.

You can provide that incentive and pay more than the current collector of commercial coffee.

SO what is the solution: 1) Understand what price coffee has to get for them to keep growing coffee. Then find out if increasing the value of that coffee is worth it, and if not, what would it take?

2) Increase access to the market so they can negotiate a better price for their coffee. Be the competition to the ‘other buyer’ and drive the price up. Rarely will you drive it so high you couldn’t recoup your cost for the coffee?

3) Be consistent – this is a long term relationship, not a one time purchase.

Build-in an increasing value based on increased quality benchmarks and PAY UP when achieved. Don’t overpromise, and don’t break a promise. That’s worse than not showing up in the first place.

4) Educate as much as possible how the ‘system’ works. Often lower prices of coffee hinge on not knowing a) what the current value of the crop is, b) how to increase value, c) where to find buyers. They don’t necessarily need you to do all this for them. They need to know the rules of the game so that they can play better.

So you can change the ‘state of the industry’! Get yourself to origin and listen, add value through education, and have you, or someone you help find, buy the ripe red cherries at a premium. Be a partner in their success, and the industry moves up a notch.

Rocky Rhodes is an 18 year coffee veteran, roaster, and Q-Grader Instructor, and his mission now is to transform the coffee supply chain and make sweeping differences in the lives of those that produce the green coffee.

Rocky can be reached at rocky@ INTLcoffeeConsulting.com

Photo by Trish Rothgeb

5th Wave Coffee The next wave of coffee consciousness in a busy world

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he ritual of grinding fresh beans and the smell of ground coffee is intoxicating. Pouring hot water over a bed of grounds and watching the two mix and mingle is magical. There’s not another drink that matches the complexity, aroma, and familiarity of a cup of coffee. We’re in love with coffee for the clarity and stamina it provides to push through long days of work, parenting, and adventures. Billions of people around the world are just as passionate about this fantastic drink, but its future is uncertain.

The majority of the coffee consuming nations do not produce coffee and are blissfully unaware of the historic lows the coffee market has been experiencing. If the NASDAQ or S&P dropped significantly, it would be global news. Still, coffee, the world’s second most traded commodity, was hovering around $1.30 this December and experienced an alltime low of nearly $0.90 a year ago. Despite an approximately 40% increase from last year, the speculative market price of coffee is not sustaining vulnerable coffee farming communities. Millions of coffee farmers sell their coffee based on the C-market price, which does not reflect the actual cost of production. In the 1980s, coffee farmers received nearly four times the price they are receiving today.

To better understand this disparity, I traveled to Colombia in October to meet with producers and speak with these farmers in person.

The producers I met with, both large and small, primarily growing specialty coffee, are experiencing market pressure to sell their coffee for less. The coffee cherry pickers I met and interviewed, shared that the long-term outlook of coffee was not sustainable if they continue to receive less and less money for their hard work.

Thousands of coffee pickers have already decided to leave the industry altogether, abandoning their farms for potential opportunities elsewhere. Other countries where coffee farming is a significant export, such as Guatemala and El Salvador, are also experiencing hardship.

Farmers have begun to search for jobs in the larger cities, while others left their homes in search of sustainable work for their families in Mexico and the US. The state of the coffee industry is in flux.

Consumers are demanding more transparency, and some producers, roasters, and cafes are willing to oblige them. This positive trend may not save the entire industry, but it does help some farmers. Other proposed short-term solutions, including creating billion-dollar emergency funds or donating millions of dollars toward coffee plants, education, and efficiencies, can also help a small portion of farmers.

As we enter this new decade, we are entering the 5th Wave of Coffee, where all specialty and commodity coffee are sustainable. More coffee

28 December 2019

by Kabir Gambhir, CEO, Bevea is being produced than any time in history, while producers are experiencing downward price pressure, local politics, and the effects of climate change. Additional income streams can immediately benefit farmers by utilizing what is typically overlooked and discarded. For example, the seeds (beans) of the coffee cherry are sold but the valuable fruit known as cascara is thrown away. Cascara can be dried and made into delicious teas, supplemental powders, and flour that provide consumers with natural antioxidants and health benefits. Cascara can also be used for compost, growing mushrooms, and component ingredients of lotions and makeup. The leaves of the coffee plant can also be harvested to make delicious teas.

If we only focus on harvesting the seeds of the coffee cherry, coffee farmers and their communities will not thrive. It’s in everyone’s best interest to continue sustainable farming practices, which include Fairtrade, Rainforest Alliance, and organic coffees, but we can do more. Let’s also focus on sustainably utilizing as much of the coffee plant as possible. This has the potential to create abundant products from plant material that’s typically discarded. Additional money from large organizations and companies can ease farmers’ short-term burdens. Still, if our industry focuses on long-term sustainability, we will indeed have a positive impact on millions of farmers’ lives. Let’s continue our long-term love affair with coffee by harvesting the full potential of the coffee plant.

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Creating a Sustainable Future for Your Coffee Service Operation

by Ken Shea, President, Ken Shea and Associates

I

write this article from the perspective of any Coffee Service operator seeking to prepare for whatever the future might bring for his or her company. And as many of my cohorts who have been subjected to a buy-out or consolidation will attest, the term “future” can often be quite vague. Having been on both sides of the buying and selling negotiating table myself, the ultimate question for either party is, “Has this operation been built and run to optimize value?” The answer to this question is equally essential to either a potential buyer or next-generation leadership that might be part of a succession plan if divestiture is not the objective.

As an operator, ask yourself, “Should I employ differing operating tactics based upon my predisposition to sell or keep?” In my experience, I believe one’s business should be run “the right way” in either scenario. If you are considering selling, then an efficiently run business will help you to realize top proceeds.

If you are developing a succession plan, you will have a solid foundation upon which nextgeneration leadership can build.

Within the limited confines of this article, I offer highlights of my perspectives on potential pitfalls and solutions in optimizing one’s business.

Company Environment and Culture – Begin here. Having experienced both toxic as well as favorable work conditions, I can confidently attest that the latter consistently results in better outcomes, short and long term. A positive and nurturing environment should not connote weakness nor absence of discipline. On the other hand, empowered, supported, appreciated teams will stimulate each other to produce at high levels and respond well to collective accountability.

Work environments are never perfect. However, when a team member reveals him or herself to be a continuing source of negativity and disruption, do not hesitate to make a change. It’s not the people that you terminate that keeps you up at night but rather those that you failed to terminate but should have.

Goal Setting – Do your departmental goals align with your corporate objectives? Are they written? Are the results consistently reviewed, evaluated, and remedied? In my work with operators, It is not uncommon to discover departmental objectives that are in direct opposition to the goals of other departments.

Envision a dozen people attempting to move a 30 large boulder out of a roadway. The only way the boulder moves is if everyone is pushing the same side of the rock!

Prioritization – In a leadership position during my second tour of duty as an operator, my team’s objective was to develop measurement and management tools that supported our corporate objectives. Secondly, we wanted to ensure that everyone clearly understood what was most important, so we developed a system of relative “weight values” assigned to each Key Performance Indicator.

Next, we built our bonus and incentive programs around these performance factors. If the individual “wins,” the department wins, and the company wins. Lastly, we developed a program that was fun for the participants, published company-wide every four weeks, and here’s what happened: Power Ranking Index was created. For senior field leadership, there were approximately 40 KPIs. Front line field management had 24 KPIs, every one being the most important objectives of their supervisors. Route Professionals had 8 KPIs, again each being the eight most essential categories of their managers. And since Sales Representatives were members of each front line management team, sales performance was incorporated into the PRI along with operational metrics.

Then the fun began. The good-natured smack talk started within minutes of the first publication of the results. I have always understood and appreciated the value of competitive spirit, but I did not envision that this tool would create such an invigorating, stimulating environment. Even better, it proved to be a mostly self-managing tool. Without much prompting, participants would employ their own methods to move the needle.

No one wants to be last. So, to avoid having embarrassed losers, we developed the PRI tool in a manner that was not a zero-sum game.

In our system, one could be in last place as a field manager in a field of 24 but still have an acceptable “score.” Again, no fun to be in last place.

What to measure? – Article size limitations do not allow for all KPIs to be discussed now, so I submit what our team deemed to be the most critical metrics: 1. Account Retention – Maintaining a profitable business is most important. We found it essential to look at each brew site as its own profit center, hence “machines on location” was the basis of this metric. Secondly, we captured profit and longevity. Losing a “MOL” is never an equal denominator. One MOL might be worth $1,000 profit dollars annually

December 2019

while another might be worth $10,000.

Other service-centric performance metrics supported this objective. Keep in mind that pulls are as costly as installs.

2. Building Same Account Profit – What better way to build company value than by creating the monthly invoice at each account. This metric allowed our company to stimulate new sales and profits in various ways, such as adding new menu items, upgrading brew systems, and products and pushing higher-end offerings. The focus was always on incremental gross profit dollars. For instance, brew by pack systems (K-cups and Flavia) might result in lower GP percentages, but the gross proceeds versus a batch brew system were typically more than double.

3. Adding Profitable New Business – Assuming that your company is doing a great job serving the customer and your account retention rate is high, writing new accounts should be an accretive endeavor, not one developed just to replace lost business. Look equally at monthly profit dollars, along with your service commitment. Accounts do not always warrant weekly service. Some need less service...some need more. Stakeholders want to see a growing business, not one in a state of atrophy.

Remember, these 3 KPIs, while the most important to our operation, were part of a deck of 40. The remaining KPIs, while not as heavily weighted as the top 3, remained important to us.

Developing and executing PRI was one of the most enjoyable and rewarding periods of my operator life. Work should be productive AND fun. If you want to learn more about the PRI system, reach out to me at sheaathome@msn. com.

One last thing you might wonder about….how did my 20 year run as an operator end? We were acquired.

Until next time, Ken

Ken is President of Ken Shea and Associates, providing specialized solutions to operators and suppliers in the Coffee, Tea and Water Industries.

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Creating and Contributing to a Sustainable Future

by Robert Babington Smith, InterContinental Coffee Trading

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CT Coffee is a medium-sized specialty green coffee importer in San Diego and a subsidiary of Hamburg Coffee Company in Germany. In the October 2019 report “Ensuring Economic Viability and Sustainability of Coffee Production,” the Colombia Center on Sustainable Investment claims that coffee provides livelihoods for about 60 million people. The report also states that coffee is experiencing a sustainability crisis from unsustainable economic, social, and environmental aspects of production.

Serious questions are facing the industry. What are the top challenges to survival, and what are the best solutions? In a down market, where coffee prices are low, most producers don’t have the income to invest in sustainability. How does ICT tackle what is inherently a massive global issue as a medium-sized importer? ICT humbly does its part with integrity, by taking small but impactful steps with localized strategies that contribute to the big picture one relationship at a time.

We buy from long-term origin partners, import into North America, and sell to a wide range of roasters nationwide and in Canada.

The majority of our preferred suppliers are independent producers and exporters who reinvest in local communities. They also offer a counterbalance to multinational offshore profits and consolidation. We believe ICT is an example of how a medium-sized company can create and contribute to a sustainable future through 5 critical strategies:

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1. Business Chain – We are part of a business chain that connects markets to production and ensure that logistics and financing run smoothly. We also promote the value and quality of the coffee produced by our preferred suppliers. We tell their stories throughout the marketplace, creating a brand, and educating the market of the real value and quality of the coffees they produce.

2. Ideal Partnerships – We look for markets and suppliers that share in the same business ideals and passions: high-quality coffee, exceptional service, and a sustainable environment. A shared passion creates a consensus around common goals. For example, Salt Spring Coffee in Vancouver and Rise Up Coffee in Maryland are both passionate organic roasters that actively seek out and support long-term relationships.

Byron Corrales is a leading Central American producer that began organic farming in the early ‘90s. He started by planting a woodland area to renew water sources, and as the natural springs re-developed, he started the planting process. Today he has a vibrant bio-dynamic operation with some of the best coffees in Nicaragua. ICT connects the parties each year as Salt Spring, Rise Up, and ICT return to Byron’s farm to undertake new projects and deepen connections.

3) Profitability – The business chain needs to be profitable, and in today’s NY “C” market, fluctuating between 90 to 115 cents per pound, production of commercial coffees has become one of survival. Simultaneously, the rapidly growing specialty market is paying above-market prices and enabling a significant level of innovation. In particular, the Fairtrade minimum price has given many suppliers a strong base to pay above the cost of production. COMSA in Honduras is an excellent example of how a supplier manages during a “coffee crisis” to be profitable and continue to reinvest into their communities.

During our visit in March 2019, we found COMSA in the middle of building a large mill and constructing multiple innovative projects, including the development of organic fertilizers and a considerable recycling project to turn waste products into valuable products.

They also established a very progressive school to build a “can do” positive mindset for future generations.

4. Special Projects – The best production units and markets are consistently adapting, pushing boundaries, and seeking to improve.

In buying into projects and supporting innovation, our origin partners can invest energy into an increasing number of sustainable projects. In Guatemala, ICT is working with Bicafe as they establish a robust

December 2019

micro-lot/farm direct program for 2020. This program works with individual producers on parcels of land set aside expressly to produce ultra-high-quality coffees. The higher values and branding of entire farms create additional incomes that are needed to reinvest back into farms. In Colombia, ICT is working with Lohas Beans as they establish organic coffee production with ex-FARC guerillas in the Tolima region. This project is helping to bring peace to a region of high conflict, enabling communities to focus on sustainable/organic coffee production.

5. Global Community – We have partnered with World Coffee Research and The Coffee Trust, among others, who serve sustainability within the coffee industry. The World Coffee Research is a global collaborative non-profit research organization working to ensure the future of coffee in the face of threats like climate change. The Coffee Trust works with coffee producers and their families in the Ixil region of Guatemala by helping them empower themselves to choose their futures based on priorities, values, and culture.

At ICT Coffee, we have chosen our path through specialty coffee to create and contribute to a sustainable future. We are a growing business with a 20% increase in sales year after year.

In 2016/2017, 24% of our sales were certified organic, and we nearly doubled in 2018/2019 at 42%. We project we will reach 50% for 2019/2020. Through our support of sustainable coffees, ICT Coffee is contributing to its global impact in awareness and growth in the production side as well as in the marketplace.

We know we need to do more and remain committed to continuing to do our part in creating a sustainable future in the coffee industry.

Sustainability Movement Shaking up Coffee Industry in Asia

by Cadence Sim, Emery School of Coffee

almond, and coconut milk, are already proving popular with coffee drinkers worldwide, and we are now seeing the emergence of other plant-based alternatives, including oat milk and macadamia milk. Consumers need not worry about compromising on taste; some of the trending blends are best suited to plant-based milks.

Both the Sustainable Coffee Institute and the Specialty Coffee Association are organizations doing fantastic work to drive conversation and actively promote sustainability awareness within the coffee industry on a global scale. But while this is a good start, as an industry, we cannot afford to rest on our laurels.

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n Asia, our coffee scene is booming. The global coffee market is expected to grow by almost six percent year-on-year for the next five years, with the Asia-Pacific being the fastest-growing region1. When we think about countries that are known for growing some of the most flavorsome coffees, traditionally Columbia, Indonesia & Ethiopia are the first to spring to mind.

But in recent years, Asian regions and countries like Yunnan, Myanmar, Chiang Mai, Laos, and the Philippines have put themselves on coffee drinkers’ radars for engaging, high-quality and great-tasting coffee that they currently are producing.

Asian consumer tastes have evolved, so much so that we can now consider ourselves a continent of coffee connoisseurs. Over time, we become more open-minded and are ready to try new things, which is fantastic – but as the market matures, we become more discerning and expect more of our local cafes and baristas than ever before. We are always on the lookout for the latest coffee processing techniques, the latest auction lot, fresh ideas, and new experiences.

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Embracing sustainability However, we are facing a huge, looming challenge, which threatens to derail our industry – climate change. The imminent threat of climate change is not unique to our industry, but the impacts global warming can have on coffee production are uniquely devastating.

For example, rising temperatures can leave coffee plants more susceptible to fungal disease infestation, while unpredictable rainfall can interfere with harvesting, or result in substandard fruit.

It is up to us old hands to educate the future generation of coffee industry professionals on sustainable practices, so there is an industry for them to inherit. For example, we should be knowledgeable about the latest and greatest energy-efficient equipment and energyconserving methods and techniques for baristas.

It is up to us – the café managers, business owners, and hospitality educators – to upskill so we can pass on our skills and future proof of our industry.

The happiness and productivity of the world’s growing coffee-drinking population depend on all of us – both industry players in the coffee scene and consumers. ___________ https://www.mordorintelligence.com/industry-reports/ coffee-market 1

So, how, as an industry, can we embrace the sustainability movement to protect our planet and preserve our industry? We can start by simply having the conversation.

We need to see a better exchange of knowledge throughout the coffee supply chain, whether that be encouragement to minimize resources through the adoption of reusable cups or ecofriendly packaging or to source coffee from smaller family-run businesses rather than exclusively from large industrial operations.

We can also educate our consumers by showing them that coffee does not necessarily need to be served with cow’s milk to taste its best. Soy,

December 2019

Cadence Sim is the owner of Malaysia based training laboratory and coffee lounge, Emery School of Coffee. Cadence will be the Head Judge of FHA-HoReCa’s Barista Super Duo Challenge and Latte Art Showdown, taking place from 3 March to 6 March 2020 at the Singapore Expo.

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Coffee, Relationships & Digitization Can Digital Technology put relationships back at the center of an increasingly fractious business?

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or many, if not most roasters, purchasing decisions are a mix of slow thinking and fast decision making, i.e., long term purchasing plans and targets, paired with swift decisions based on the alignment of exchange rates, prices in New York or London and a host of other factors. Producers are often unprepared to meet the demands of this purchasing context. Without the language to communicate in it, they are left out of a real relationship to consuming markets. Digital technology could change that, and it might be for good.

Coffee has, for a long time, been said to be a relationship-based business, roaster-trader, and trader-producer. Thus, the trader became the gatekeeper, using the strength of their network to understand the market, taking on quality management and default risk, thus justifying their margin. Essentially this was relationshipbased risk management.

That structure arose because of a lack of opportunity for communication from producer to roaster. The means didn’t exist. It is the same context that gave rise to certification standards or the New York exchange. Without direct communication, you needed a standard point of reference.

Digital communication in the ‘00s killed that low communication context. For producers, a greater flow of information has meant cultivating real relationships to roasters has never felt more vital - and yet progress has been glacial. Why? Producers have strived to engage in new ways with the final customer for a clearer understanding of the value of their product and to generate business. The process of reaching out, however, was and often continues to be messy and filled with miscommunication.

Growers and roasters without experience have tried to form relationships, often with the wrong

by Richard Bliault, Trade & Relationship Development, Algrano AG

partners. Like using a dating app without a filter for age, or interests, good people simply missed each other. The result being many roasters retreat to buying from the trade, mainly only talking at and asking things from producers.

That disorganized process also served to add legitimacy to the push back from trade that without them, roasters would be taking on undue risk.

In this context, where producer attempts to form direct links have been pushed back, many origin producers seem increasingly angry and desperate, particularly about the current low price context, which doesn’t feel fair or well understood.

And if I, a producer, can supply the required information, contact history, I should be able to offer coffee Instore in Bremen or anywhere else. There might be trade-offs, but it should be my choice as a producer to take them or not, facilitated by an ability to provide a digital track-record. That freedom of choice is what will become a bridge from grower to roaster.

Equally, if a grower can then see the cost of these services, traders were acting as service providers should have a stronger hand to negotiate a margin.

Most of the above is being tackled. Perhaps as an industry, we were left behind because fewer people handle those processes than in other businesses, but their inefficiency affects millions.

So where could we go in the near future? I hope that much like dating applications, effective use of digital technology could do several things, which would serve to make the industry more sustainable in the broadest sense by facilitating relationships coming back to its center.

Digitally facilitated direct relationships between growers and roasters won’t kill off the trader, and it’ll just add valuable diversification to the range of potential sourcing models. Hopefully, with this, we’ll get a better exchange of information, better decisions, and better engagement.

The first would be that technology begins to act like a combination of a dating and translation application. Helping roasters and growers find the right potential partners and then assisting both sides to understand each other. Managing the common cultural and legal misunderstandings in real-time, so what should be minor, doesn’t, through misunderstanding, become major. That process is already underway in parallel industries and has begun to be recognized as possible in coffee; we already did it once with cupping scores and the SCA Quality standard, that kind of thinking just needs to be taken off paper and made digital.

The trade primarily takes speculative decisions on the direction of the market and provide much-needed liquidity. At times the best price for a producer in the market will be from a trader. Traders also act as merchants aggregating qualities and many other services. The idea that the trader is somehow a fundamental part of every supply-chain as opposed to a service provider to be used when needed is questionable.

The second is the availability of differentiated service offers and a reduction of time spent on activities that simply don’t need to take as long as they do. Why should a warehouse release take half a dozen calls and the best part of a day to organize? Why are offer lists multiple pages long when we only need to see three qualities?

Why, as a producer, can’t I see a breakdown of the costs, which explains why my client says they need x price FOB when they buy INSTORE? More time to spend talking to each other and less on managing the mundane.

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A sustainable industry won’t be born out of higher prices, but it might come from farmers and roasters being in real conversation, discussing what is a workable price, and feeling able to walk away from it. For that, they’d need to speak and know that whom they’re talking to is worth having the conversation. With digital technology, we’re within sight of that. What is better risk management there than really knowing your buyer or your supplier?

Investing Your Heart and Mind

by Randy Martin, Chief Encouragement Officer, Covenant Coffee

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o shape this sustainability discussion, I want you to use your imagination. Please invest your heart and mind these next few moments.

Imagine turning eighteen. Imagine instantly becoming homeless. There is no birthday party.

No family is celebrating your life and helping you become a successful adult. There is no safety net of friends and family. There is nowhere to lay your head.

Unfortunately, this is the future that awaits many youths exiting foster care in the United States.

It is not an exercise but a reality. The prospect that awaits foster youth exiting foster care is one of homelessness, substance abuse, domestic violence, mental illness, incarceration, and unemployment. But, it doesn’t have to be this way. There are solutions, and they involve you and the coffee industry.

Before you leave the imagination station, please ask yourself these questions. If the above story had you at the center of the plot, what would eighteen-year-old you do? Who would you turn to for help? Where would you go? Would you go to a local coffee house? Probably not, but maybe that is part of the problem.

The coffee house has always been the birthplace of incredible ideas, revolutions, and solutions.

Let’s not stop the tradition. Let’s build on it. As the topic of sustainability usually focuses on our planet and environment (and it rightfully should), it may seem odd to discuss foster youth. But, if we think about a sustainable coffee operation and workforce, it should be a discussion point.

It would be easy to fill every position with a young, vibrant, successful youth ready and willing to learn the coffee trade. Most shops, roasters, cafes, and mobile units are doing this now. What is we all carved out a small niche in

our labor opportunities for foster youth? What is one of every ten positions was a staff member that you “took a chance “on? Could that make a difference? Could that move the needle in the “sustainability” of foster youth and their future?

The answer is yes.

Here is the reality. Each year, over 20,000 youth exit the foster care system in the United States.

These youth have negative and horrific statistics awaiting them unless good people get involved and try to make a difference. Good people like you. We can sit on the sidelines, as people and industry, and complain about the problems, or we can engage in the solution. We have the movement to make change happen. We need to take the risk and engage.

According to a report from Allegra World Coffee Portal, there are over 35,000 coffee shops in the United States. The simple math tells us that there is more than enough opportunity to extend an offer to foster youth for employment, training, mentoring, and building caring relationships. Is it difficult? You bet. Since 2010, Covenant Coffee has employed over 80 foster youth and former foster youth and paid out over $1,000,000.00 in payroll to foster youth. It has been one of the most challenging things I have ever done.

Operating a coffee house, roasting company, and providing #hopeinacup are some of the most challenging things I have done. Nonetheless, this endeavor has been one of the most rewarding things I have ever done. I am not going to tell you this is easy. I am telling you it is hard, very hard. But it is very worth it.

As the issue of homelessness is hitting the doorsteps of coffee shops and neighborhoods, and we need solutions. It is time we get back to the revolutionary roots of coffee shops and cafes. We need to be a part of the solution and the sustainability of life in our communities.

We do this by becoming the first employer of a

wayward and hopeless youth. We do this as we lay our lives on the line to mentor, teach, train, and support a vulnerable human in need.

Sustainability is the ability to be sustained.

Sustained is defined by Merriam-Webster as “maintained at length without interruption or weakening.” I want to see our industry help foster youth maintain an adult life without interruption or weakening. I do not want a future for foster youth where they survive. I desire a future where they thrive. It will be to the benefit of our shops, our communities, our nation, and our world. We, the coffee industry, can be a part of the solution by using targeted methods in hiring and by having a corporate consciousness of revolution against the awful statistics and outcomes facing our most vulnerable youth. What will you do to make a difference in 2020?

Randy Martin is the founder and CEO of Covenant Community Services, Inc. (Covenant) in Bakersfield, California. In 2010, Covenant Coffee was birthed to mentor, train, and employ foster youth. Covenant also operates affordable housing, educational and vocational services, mentoring, life skills education, mental health services, and transitional housing. You can reach Randy at randy@covenantcs.net and follow @ covenantcoffee on Instagram.

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Creating a Triple Bottom Line in the Coffee Industry Shifting from a linear economy to a circular economy through upcycling

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riple bottom line is more than a business buzz term.

Triple bottom line is a framework to evaluate a company’s performance in three parts: people, planet, and profits.

A company’s commitment to this is increasingly impacting the purchasing decisions of consumers, particularly Millennial and Gen Z consumers. It’s also frequently the business ideology of many companies that coffee suppliers and coffee industry affiliates work with, including PepsiCo, Mars, and Unilever.

Achieving a triple bottom line is tied to transitioning from a traditional Linear Economy - resource extraction, production, distribution, consumption - to a Circular Economy. Taking part in this transition holds significant benefits for the coffee industry and the opportunity to proactively address challenges with positive actions benefitting all stakeholders throughout the supply chain. It is not an easy, or quick, transition, but immediate steps can be made to make strides in 2020 and beyond.

With approximately 30% of all food wasted globally and nearly 40% in the United States, upcycling food waste plays a meaningful role in the shift from a linear economy to a circular economy.

by Carole Widmayer, SVP Marketing & Sales, The Coffee Cherry Co.

on improved agricultural practices and better resource management, they have not fully offset the environmental, political, and economic hardships faced by coffee farmers.

The relatively new and growing business of processing coffee cherry byproduct into a flavorful, nutrient-dense ingredient in beverages and foods can offset some of the economic hardship for coffee farmers. Coffee cherry production generates a new, and growing, revenue stream for participating farmers, who are now being paid consistently for the weight of the fruit. As demand grows, so will the annual revenues for farmers, and the available jobs at mills.

Planet If the planet is not healthy, coffee trees cannot effectively grow and bloom, which threatens the development of whole cherries. Upcycling the outer pulp and skin of the coffee cherry can measurably benefit the planet. The more coffee cherry or cascara produced, the higher the benefit.

Upcycling this fruit before it becomes waste in landfill reduces greenhouse gas emissions that are emitted by decaying foods. With nearly 50 billion pounds of coffee cherry byproduct created each year globally, if 100% of that fruit were instead upcycled, that alone could reduce global greenhouse gas emissions by approximately 0.20%.

Source: Dr. Christian Voight, The Maker Movement and the Disruption of the ProducerConsumer Relation, Nov. 2017

Whether called coffee cherry, coffee fruit, or cascara, upcycling this byproduct of green coffee bean production before it becomes waste facilitates a shift from a Linear to Circular economy for the global Coffee industry.

People Much has been written about the economic plight of coffee farmers given the fluctuations of commodity coffee bean prices, rising global temperatures negatively impacting growing cycles, and increasing rains causing more instances of molds and diseases like rust to take hold with increasing frequency. While 38 there are several programs in place focused

In addition to coffee industry stakeholders at the origin, Consumers benefit from access to more nutritious, flavorful beverages and foods that meet their individual needs for taste, health, and the satisfaction of being a part of making a difference.

The processing of coffee cherries creates new jobs at mills to handle side-by-side production of beans and fruit. Many of these jobs are open to women for the first time, as the weight of dried coffee cherries in the same bags is less than the weight of beans, making it physically more accessible for women to be employed by mills on those lines.

December 2019

Profits Companies must make profits to be viable; shareholders want returns; employees want to be paid and receive benefits. A triple bottom line structure ensures these profits are not sacrificed or deprioritized.

Demand grows through the introduction and adoption of innovative coffee cherry tea-based beverages, whole cherry coffee blends, and foods such as nutrition bars, cookies, muffins, bread, and chocolate creating additional profitability for all stakeholders. Farmers will have new income, mills at origin increase profits through reduced costs for waste disposal and new revenue through production contracts for coffee cherry/ cascara, cascara suppliers generate profit through sales to food & beverage manufacturers or directly to consumers at retail, food & beverage manufacturers make profit selling innovative new products that consumers prefer.

The future of the coffee industry is a triple bottom line win for everyone: People, Planet, and Profits!