State of the Industry 2021 Issue

THIS ISSUE: RECOVERY AND REBUILDING IN 2021

STATE of the INDUSTRY 2021 | Vol. XXXIII No.8

State of the

x1

Industry 2020

CONTENTS STATE of the INDUSTRY 2021

08 10 12 THE VIEW Pivot or Perish

06

KERRI GOODMAN

IN RETROSPECT 2020, A Year Like No Other

Finding a Brand Voice JENNI MORSE

WWW.COFFEETALK.COM

Reconnecting in 2021 JAKE LEONTI

RELIEF IN RWENZORI Creating Value in a Challenging Time RICK PEYSER

A DIFFERENT BREED Roasters Rolling with the Punches ROCKY RHODES

THE CHALLENGE

20

Sustainable Coffee Packaging CHRIS BURGER

14

KEN SHEA

OUT OF CHAOS

MOVING IN PLACE

HELP OR HINDER

Abnormal Times Require Abnormal Responses

22

DUB HAY

16

SOCIAL 24 Stay Connected After a Disconnecting 2020 JEN STONE

STATE of the INDUSTRY | 2021

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Advertisers { INDEX } PUBLISHER

Add A Scoop / Juice Bar Solutions Inc

(415) 382-6535 | ADDASCOOP.COM 13

Cablevey Conveyors

(641) 673-8451 | CABLEVEY.COM 5

Costellini's

(877) 889-1866 | COSTELLINIS.COM 19

Don Pablo Coffee Roasting Company

(305) 249-5628 | DONPABLOCOFFEE.COM 11

KERRI GOODMAN kerri@coffeetalk.com { 206.686.7378 x1 }

EDITOR-IN-CHIEF

ART DIRECTOR

JAKE LEONTI jake@coffeetalk.com { x2 }

JUSTIN GOODMAN justin@coffeetalk.com { x3 }

ADMINISTRATION

PRINT DESIGNER

MEAGAN GOODMAN meagan@coffeetalk.com { x6 }

Fres-co System USA Inc.

MARCUS FELLBAUM fellbaum@me.com

MEMBERS OF

(215) 721-4600 | FRESCO.COM 7

Huhtamaki

SEE WEB | US.HUHTAMAKI.COM/COMFORTCUP 17

International Coffee Consulting

(818) 347-1378 | INTLCOFFEECONSULTING.COM 21

Leatherhead Coffee

(707) 696-1853 | LEATHERHEADCOFFEE.COM 25

NuZee Inc DBA Coffee Blenders

(760) 216-8464 | POUROVERCOPACKING.COM 2

Primera Technology Inc.

(800) 797-2772 | PRIMERALABEL.COM 23

Texpak Inc | Scolari Engineering

(856) 988-5533 | SCOLARIENG.NET

9, 15, 26

MAILING INFO HNCT, LLC 25525 77th Ave SW Vashon, WA 98070

CONTACT P: 206.686.7378 F: 866.373.0392 www.coffeetalk.com

DISCLAIMER CoffeeTalk does not assume the responsibility for validity of claims made for advertised products and services. We reserve the right to reject any advertising. Although we support copyrights and trademarks, we generally do not include copyright and trademark symbols in our news stories and columns. CoffeeTalk considers its sources reliable and verifies as much data as possible. However, reporting inaccuracies can occur, consequently readers using this information do so at their own risk.

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UPCOMING INDUSTRY EVENTS

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Coffee Week

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1–5

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DUBAI, UAE

VIRTUAL

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21–25

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2021 | STATE of the INDUSTRY

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COFFEETALK MAGAZINE

From the Publisher

THE VIEW { Pivot or Perish }

KERRI GOODMAN | COFFEETALK MAGAZINE

{

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020 is quickly coming to a close, and NEVER have I seen so much change compressed into such a short period.

The concept of “normal” no longer exists. Remarkable adaptation has taken place to address the need for physical distance and safety. Ingenuity and outside-the-box thinking have allowed some businesses to survive and even thrive. Hopefully, soon many activities will return to precovid conditions, but many more will never be the same. What come’s next is the question of tremendous significance to every business.

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On a positive note, this is the perfect opportunity for businesses to try new things, re-create identities, and renew connections. CoffeeTalk is no different.

Our mission has always been to create connections in the coffee industry. In 2021, those connections will be more precious than ever! And so, we are taking this opportunity to “pivot” in our industry role and create new ways for you to communicate, connect, and collaborate with your established and new customers. We will be announcing our cutting-edge opportunities through expanded editorial focus, podcasts, video, and more. The heart and soul and CoffeeTalk have always

been about creating connections throughout the industry from crop to cup. Though the magazine will keep its focus on business to business connections and editorial, our website is expanding significantly to include information and opportunities to connect to consumers who are passionate about coffee and the related products.

This issue is the launch of our new look and feel of the Magazine and our website expansion is only weeks away!

2021, let it be a year of passion, success, and connection!

COFFEETALK MAGAZINE

MOVING IN PLACE { Reconnecting in 2021 }

JAKE LEONTI | EDITOR-IN-CHIEF, COFFEETALK

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e have heard the buzz words of 2020: pivot, adapt, change, new-normal, digital, etc. This year the entire world isolated, avoiding local cafes, grocers, restaurants, and bars. We’ve stopped driving, commuting, and abandoned Main Street. We went online and shopped like never before. COVID affected us all, and this shared experience has bonded us as we cross the threshold of what was to enter the era of what will be. We have witnessed just how interdependent our countries, economies and heath are. The world has grown smaller.

The challenge of 2020 saw companies crumble while others were able to stabilize and weather the storm. All were forced to go without on some level, and the survivors were those able to adapt to the situation’s fluidity.

For some, change was already in the works, and the pandemic merely accelerated timelines, while others were happy doing business the way they had for decades. For OCS and purely retail brick and mortar businesses, this was not possible. Conversely, the CPG market grew, making it worth dealing with the arduous grocery buyers’ process. Yet, they had to assimilate to increased demand, pressure on margins and production, and delivery systems adjustments.

Cafes and distributors were likely not selling bags of coffee. Producers, roasters and manufacturers were selling directly online or through grocery channels. Businesses were closed, so consumer-direct was the only channel, and B2B bulk suppliers suffered. Though those channels are opening up again, they are narrower and still limited.

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Some companies like illycaffè were affected yet not necessarily negatively.

Though their foodservice and office business declined, grocery and web sales soared; their 2019 sales matched their previous year, no easy feat! By quickly redesigning their factories and production lines, they kept up with the demand in specific product categories.

Change on this level can be a terrifying prospect to many yet fascinating to others. Psychology students out there are familiar with Maslow’s hierarchy of needs stating all human beings have the same needs starting with the Basic: food, water, shelter, safety, etc. After these are met, the more interesting Psychological ones come into play: Belongingness, including friendships and intimate relationships; Esteem needs, including the need to be known by one’s self and others as competent, capable, and strong. Finally, at the top of the needs pyramid, Personal Fulfillment or Self Actualization is the loftiest of goals.

According to Maslow, these are the drivers for our behavior. Given the timeline of the economy and eradication of the virus being out of our control, the best strategy is making plans around that which we can predict: human behavior.

Back to the needs hierarchy, we crave human connection and social interaction even more than caffeine. However, it may take a while to feel safe enough to enjoy our cafes, restaurants, and other gathering places. And basic safety outweighs psychological connections.

Abating this competing need is why restaurants and cafes are focusing so hard on creating a secure environment.

So why is establishing a strong web presence essential? More than ever, people

are spending time on their computers and surfing the web. Web sales are up, subscriptions are up, and more people brew coffee at home than ever before.

To sell directly to your customers, you will need a robust digital presence and visibility beyond your website. This is essential to compete for people’s attention above Amazon and even other competing coffee companies.

Will people live completely online forever? No, people still need connection and want to experience the real world.

However, new habits are being formed, and people are finding that online shopping saves time, adds convenience, and can even be fun. Many people will continue with their new habits. Online shopping is not a phase.

You must help your customer achieve their other goals! If convenience gives them time to focus on self-actualization, great! If you give them valuable information and compelling stories, they will fill a cognitive need for knowledge and curiosity. If you share beautiful images and provide attractive packaging, you fulfill our requirements for aesthetic beauty and even our self-esteem as it relates to status. Even by indirect means, the more needs you meet, the better chance you have of joining them along their journey.

At CoffeeTalk, we have been a print and digital magazine since 1994. To remain valuable, we must continue to grow with our audience and meet their ever-changing needs. Providing exceptional support in our marketplace is the critical factor in our decision to make coffeetalk. com an online platform with unique content and multimedia storytelling beyond what a magazine alone could do.

CONTINUED on PAGE 22

RELIEF IN RWENZORI { Creating Value in a Challenging Time } RICK PEYSER | SR. RELATIONSHIP MANAGER, COFFEE & COCOA, LUTHERAN WORLD RELIEF

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he growing volatility of coffee prices and the impacts of climate change affect coffee farming families around the world. While farmers work to mitigate and adapt to these shocks, the fundamental hard work of improving yields, quality, and access to markets remains daunting for many farmers and their organizations, especially in this era of COVID-19. Despite these challenges, there are examples of organizational success from tree to cup - including Uganda’s Bukonzo Organic Farmers Cooperative Union, Ltd. The Rwenzori Mountains, often referred to as “mountains of the moon,” run along much of the western border between Uganda and the Democratic Republic of the Congo (DRC). Towering above the Rift Valley, the Rwenzoris include glaciers and snow-capped peaks that reach close to 17,000 feet in elevation.

In the foothills, less than 12 miles from the border with the DRC, is the town of Kasese, Uganda, home of the Bukonzo Organic Farmers Cooperative Union, Ltd. (BOCU).

BOCU started in 2006 as a consortium of six NGOs promoting organic agriculture in Bukonzo County. The consortium shared a vision of helping farmers improve their livelihoods through a sustainable income. To reach this vision, the consortium saw that the most sustainable path was to strengthen cooperative societies to better access the market for sustainable products. From this consortium emerged the Bukonzo Organic Farmers Cooperative Union Ltd., which was officially founded in 2009. Today, 5,000 small-scale farmers are producing high-quality arabica coffee in the rich soil found in the foothills of the Rwenzori mountains, between 1,000 and 2,000 meters above sea level. BOCU has 1,978 farmer members who are organic and Fair Trade Certified; 1,025 members

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who were expected to complete their conversion to these certifications by the end of 2020; and another 2,000 farmer members who intend to start their conversion process this June.

In August 2017, BOCU and Lutheran World Relief (LWR) started working together to help farmers improve the quantity and quality of their coffees and strengthen the Union’s processing infrastructure and capacity to access specialty coffee markets.

Since working with LWR, BOCU has nearly tripled its sales volume and its number of buyers while vastly improving its financial performance.

Also, the Union has expanded its full- and part-time staff by 50%, enabling it to better serve its farmer members. In the process, BOCU has renovated 40 washing stations with more effective depulpers. Before LWR started working with BOCU, the cooperative was annually exporting two containers of coffee; that volume has tripled to six containers per year.

These changes have contributed to improved cup quality, with the average scores increasing from 82 to 85. With the addition of a cupping laboratory and training from Mountain Harvest, a Ugandan company owned by LWR’s for-profit impact investing unit known as Ground Up Investing, LLC, BOCU now can conduct its own

quality analysis and is no longer solely dependent upon buyer evaluations. The cooperative is focused on continual improvement to further reduce the number of defects. Besides, to better transport its coffee, BOCU has purchased a more suitable truck for the area’s terrain than the small vehicles it relied upon in the past.

It also added a new warehousing facility that will better store and secure members’ coffee. To improve its micro washing stations, the cooperative plans to invest in water storage tanks and fermentation tanks that will further improve the coffee’s quality.

While many farmers have needed to travel long distances to process their coffee at the micro washing stations, the cooperative’s new truck will make these stations more accessible.

Along with these infrastructure improvements, extensive efforts have taken place in the field, including farmer training. With LWR’s support, BOCU has trained 100 model farmers who will help their neighbors improve their yields and the quality of the coffee they deliver to the cooperative.

As BOCU looks ahead, the cooperative sees additional opportunities. In addition to continued improvements in quantity, quality, and market access, the cooperative is considering roasting coffee for local consumption to add value to its members’ coffee and keep this value in the communities. Given the tremendous progress that Bukonzo Organic Farmers Cooperative Union has made over the past 2 ½ years despite market and climate volatility, the value creation from tree to cup will likely continue to benefit its 5,000 members well into the future.

COFFEETALK MAGAZINE

Roasters Rock

A DIFFERENT BREED { Roasters Rolling with the Punches }

ROCKY RHODES | CEO, INTERNATIONAL COFFEE CONSULTING

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hen thinking of an article that encapsulates the State of the Industry as seen through a roaster's eyes, it is hard not to see the catastrophe that is COVID. It also showed us the difference between someone elected to lead and someone that has to take care of their employees, customers, and communities.

Coffee Roasting companies and roasting professionals are a different breed.

A roasting professional can focus on the color, sound, and smell of a roast and know that adjustments need to be made, the roastery owner knows how to read their community and do the right thing for everyone involved.

Roasters solve problems and adjust solutions as necessary. They might be scared but are not ruled by fear.

Early in 2020, roasters reached out to each other for ideas, support, a shoulder, and strength. One of the first ‘truisms’ discovered through this group support was that people were not going to stop drinking coffee. They will just change how they get their coffee. Roasters identified the problem, “My customers need my coffee but can’t get here to buy it” and found terrific solutions.

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Bicycle delivery. Hiring people just laid off from cafes and restaurants to do deliveries—curbside pickup. Ap based ordering and stocking up on home brewing devices so coffee can be made at home. Creating RTD products.

Coffee was reaching their customers.

These solutions led to the realization that business had to adapt or die. The customer’s daily routine are new and the Health Department rules unique.

The reality that your establishment could be a spreader of the deadly was new. Not so new but simply amplified was the caring and sense of responsibility that roastery owners felt for their employees, customers, and community. After all, every good coffee person knows that the industry exists to create connections between people.

Owners and managers digested information day after day from sources that didn’t know what to do either. Rather than wait to be told, cafes started investing in outdoor customer seating areas. Many took over mall walkways, parking lots, streets, and parks to get responsible seating arrangements. Politicians soon caught on and said, “Yeah!

That’s a good idea!” and outdoor dining flourished. Masks, temperature Photo by Trish Rothgeb

checks, plexiglass, hand sanitizer… they did whatever it took to get open and stay open while protecting people.

A good businessperson is always on the lookout for opportunities in chaos.

Coffee businesspeople are no exception. You must deal with the realities of today, but you can also look out into the future and see tremendous opportunities. Interest rates are at all-time lows. Retail space is being abandoned left and right. Restaurants are going under, leaving inexpensive equipment available. If customers are going to continue to drink coffee, but the places they might go to get it are closing down, an opportunity for expansion is enormous. The pandemic will end. We will learn to live with it in our lives without the fear of 2020, just like they did with Polio, Measles, H1-N1, and even the seasonal flu. When that happens, and people emerge from their isolation, the smart shop owner will be there to serve their community.

Some roasters are building out new retail spaces, some expanding into areas underserved, and others have found a new market online and need to expand roasting facilities.

For Roasters, whatever the future holds, it will be different than 2019.

CONTINUED on PAGE 18

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Coffee Service Corner

IN RETROSPECT { 2020, A Year Like No Other } KEN SHEA | KEN SHEA & ASSOCIATES

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n preparing for this recap of the Coffee Service Industry’s 2020 experience, I reviewed empirical data addressing COVID’s impact on our industry and the markets. While the data is for quick reference and perspective, here are some numbers from then and now as reported by the Johns Hopkins Center for Systems Science and Engineering:

PPP SUPPORT

MARCH 16, 2020

MENU MANAGEMENT

250,000 worldwide cases of COVID-19.

(Dow was at 19,500.)

JUNE 26, 2020

10,000,000 cases worldwide.

(Dow was at 25,000.)

DECEMBER 14, 2020

72,000,000 cases worldwide.

(Dow is at 30,000.)

PERFORMANCE NUMBERS

Historical annualized industry revenue reporting has always been nebulous. There is a significant delta between what different entities have reported. Many, if not most, operators guard their data and inconsistencies in how operators track revenue exist.

Some operators lump all of their sales into “OCS” while others separate traditional OCS revenue from “resale” OCS (C store; foodservice; hospitality, pantry, etc.). For this article, let’s assume that for 2019, annual OCS revenue was $5 billion.

From a percentage perspective, finding OCS operators generating sales above 50% of pre-pandemic numbers is rare. Many anticipate an EOY sales tally at 40% or less vs.

2019. Unprecedented and life-altering. This would result in industry annualized revenue of ~ $2 billion!

No one could have anticipated this.

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THE HUMAN TOLL

One of the more painful observations from 2019 (once you move beyond the mind-numbing death toll) is the job eliminations and resulting departure of many talented people from this industry. At the operator level, every position has been impacted from route persons, to department heads. Manufacturers, distributors, brokers, and consultants have also faced compensation adjustments, layoffs, and terminations. Very few have been spared. While some have landed on their feet outside of the OCS/Vend industry, many are still searching for opportunities and have exhausted any monetary support they had been receiving.

WHAT LIES AHEAD?

Amidst this chaos, what stands out is the positive spirit exhibited by every person with whom I remain in contact. Confidence has been bolstered by the beginning of the Covid vaccine injections. No one can predict with certainty how soon or at what economic level the OCS industry will return. This journalist can report meaningful operator input regarding what they have been doing in preparation for a return to some sense of normalcy. Over the last few weeks, here are some topics and comments related to this subject that I have explored with some operators:

Many have applied for and received Paycheck Protection Program monies. Most have completed the loan forgiveness paperwork, the critical first step moving forward.

During the pandemic slowdown, smart operators have been extremely busy working on their operational efficiencies. Inventory management has been at the top of many lists.

Dramatic inventory write-offs called attention to redundancies, non-critical line extensions, and swollen inventory levels. Reductions in numbers of SKUs have been cut in half in some cases.

Kirby Newbury of DiscountCoffee. com, pioneer in E-Commerce Coffee Service, shared that his inventory mix and relative volumes have changed significantly since Q1, along with his customer base with so many new customers shopping online. Says Kirby, “None of us can accurately forecast because today there is a whole new customer with new behaviors and demands.

It’s difficult even to know who our current customer is and what the demographic will look like in 2021.”

PPE PRODUCTS AND WORKPLACE SAFETY

Many operators and manufacturers quickly responded to the demand for PPE and solutions. The good news is our industry is now equipped to include these items as an on-going part of their portfolios. Unfortunately, these products report a top-end impact of less than 5% revenue increase.

CONTINUED on PAGE 18

OUT OF CHAOS { Finding a Brand Voice }

JENNI MORSE | CO-FOUNDER, SIMPLI PRESS

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uring a year of worldwide upheaval due to the coronavirus pandemic, we all learned one vital lesson — sometimes, there is no playbook to follow. An unprecedented change to the way we live and work has led to significant shifts in the coffee world on retail and hospitality fronts.

While we haven’t had the kind of growth this year that we were anticipating, we’ve learned a lot about our mission and our customers — lessons that we’ll bring into the future.

As the owner of Simpli Press, a small product-based coffee business, I found that we had to remain agile and change our plans dramatically if we hoped to survive. Instead of the growth that I planned for my company, we had to regroup, re-prioritize, and rebrand.

LOOKING FORWARD

We learned in the process that a renewed focus on our customer’s needs and values led to deeper connections, better understanding of our buyers, and a superior overall experience.

the country to display the product and let distributors and resellers feel the press's quality with their own hands. In-person demonstrations would have shown how easy it is to use, and the attendees could taste the resulting coffee. There’s nothing like an in-person experience, especially for a food and beverage related product!

But, as we all learned back in March 2020, had other plans.

CHANGING COURSE

THE ORIGINS OF SIMPLI PRESS

The Simpli Press is a reimagined French press for the at-home coffee lover. When I designed the product, I was looking for a way to get a rich, clear, smooth coffee brew out of a single device — at home — without a messy cleanup.

My resulting design was the Simpli Press, an update to the classic press that keeps grounds in a special basket and can bring the best flavors out of our Specialty coffee. It’s a simple solution for busy coffee lovers who savor their morning coffee ritual and enjoy crafting a fantastic cup of coffee every day.

THE PLAN FOR 2020

Pre-pandemic, we had big plans for 2020. Didn’t we all!

The plan for Simpli Press was to focus our efforts on B2B growth. I anticipated visiting trade shows across { 16 }

2021 | STATE of the INDUSTRY

It wasn’t long before we realized that in-person demonstrations were off the table for this year. Developing new relationships over Zoom is challenging and removes that personal connection that we sought.

Instead, we refocused our efforts on improving our relationships with our B2C customers. To start, we wanted to understand our buyer in a more profound way than we did before. We dove into the big questions. Who is the customer? Why are they buying?

How does the Simpli Press make them feel? How could the Simpli Press coffee ritual add to their lives?

With these answers, we developed a strategy to ensure our brand was resonating with the consumer. We redesigned our website and social advertising to be more interactive.

With updated copy, imagery, and videos, we’ve managed to increase our website's conversions.

In 2021, we plan to revisit those B2B relationships when the time is right. For now, we are focused on learning as much as possible about the coffee lovers we serve and providing the best experience we can to improve their morning routines.

To other businesses in the coffee space trying to navigate this difficult time, I recommend taking this opportunity to get to know your end consumer better.

Focus on how to convey your story and your mission. Consumers are more interested than ever in buying from brands that share their values, so it’s vital that you make your values clear.

This, in turn, will also strengthen your own will and resiliency to “simpli press on,” as we like to say.

Always keep your mission and values at the forefront of your brand, so your website, social media, packaging, and other consumer touchpoints share the same messaging. This is how the consumer starts to see themselves as part of your brand, so you become a team working toward the same goal. And just like them, we are also always evolving.

It’s a more genuine, authentic way of operating a business, and it has the added benefit of building customer loyalty.

Keep Calm and Simpli Press On!

COFFEETALK MAGAZINE

COPYRIGHT 2020 HUHTAMAKI INC. ALL RIGHTS RESERVED.

THE LEADING LINEUP

NEW PRINT! Now available in three stock designs with custom branding available.

The Comfort Cup® Hot Cup combines style with sturdy, double-wall construction for a to-go cup that can’t be beat.

Visit us.huhtamaki.com/comfortcup to get your hands on it today.

A DIFFERENT BREED Continued from page 12

Cleaner, more efficient, wider distribution, and new business models.

People will still need their coffee.

SUPPLY CHAIN

While the roaster and retailer are adapting, so too are coffee producers. The solutions and problems faced at origin are exponentially more challenging due to a lack of infrastructure, communication, and education. Imagine all of our Covid issues without adequate health care, a CDC, or access to useful information.

In reality, the problems at origin could very well become one of the more challenging problems to solve here at home – the availability of high-quality Arabica in 2021. You may have seen a story out of Colombia of migrant workers not wanting to get together with strangers, live in

IN RETROSPECT Continued from page 14

One significant improvement in workplace safety was the number of equipment manufacturers introducing touchless brewing and water dispensing. Concern for workplace safety will remain with us well beyond 2021.

As businesses reopen the vast numbers of brewers and POU water coolers left on location in vacated offices is a concern. Many manufacturers have already developed specific procedures to flush and sanitize the equipment before brewing and dispensing.

Whether operators decide whether to do this on location or return the { 18 }

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dorms, eat, work, and sleep in the same space. Their fear is real. Being sick with no access to a clinic, much less any drugs to provide comfort, increases the risk of death from Covid.

A lockdown during harvest could mean no harvest. Breaking the lockdown could mean getting sick, fined, or arrested in some countries.

No harvest, no coffee. So far, this situation has not reduced much of the Arabica flow, and the commodity prices reflect that. Anything we can do to contract coffee and stabilize things for them will help.

IN 2021, HOW DOES THIS PLAY OUT?

Lives have been lost; businesses closed. People are missing the company of others. However, if you are a coffee roaster or a roaster retail store, and you are still open, 2021

equipment to manufacturers’ facilities, this will be a labor-intensive process.

could be your best year ever. As we start back to work, we need coffee.

As we get back into school campuses, we need coffee. When we get to see our friends and family again, we will do it over a cup of coffee.

Warm up the machines! Stock up on green. Take what you learned about reaching your customers and keep doing that while your ‘normal’ business comes back online.

Doctors, nurses, and scientists were our frontline for battling the disease. You will be the front line for building us back up in 2021!

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

Look to the specialists for guidance.

NAMA TRADE SHOW

A TIME FOR DIVESTITURE?

Very little acquisition activity was reported during the pandemic. It’s difficult to gain insight into whether or not we might see an operator roll-up. Still, I have heard several operators have ample cash and are actively exploring acquisition opportunities in Coffee Service and Vending/MM. Conversely, I have spoken with a few operators pondering divesting, but virtually all comment they believe that a valuation today would produce offers well below what they would see should they await a return of pre-pandemic revenues.

The NAMA has announced a combined Vending/Coffee and Water trade show in New Orleans August 2021. With high hopes Covid-19 will have subsided significantly, this will be an excellent meaningful opportunity for industry members to convene and share perspectives on where our industry is headed and how to optimize opportunities.

I hope you remain safe and healthy to all of the readerships and that 2021 will be a great year both personally and professionally.

COFFEETALK MAGAZINE

THE CHALLENGE { Sustainable Coffee Packaging }

CHRIS BURGER | COFFEE PACKAGING, FRES-CO SYSTEM USA, INC.

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hen thinking of the topic ‘Rebuild and Recovery,’ we tend to turn our gaze and focus on the future, especially after the unprecedented year we have endured. However, there are times where it is equally important to look back at the challenges before looking forward to find solutions.

Close to 30 years ago, I started working in coffee, selling premade high barrier coffee bags to small companies like Starbucks. I still remember one of my first calls from a coffee consumer in Seattle asking if she could put recycle her empty coffee bags. I explained each layer of the coffee bag's importance and how the layers could not be separated to be recycled.

She was disappointed and asked that we work on a solution to this problem. This conversation has stuck with me as the industry has grown.

WHAT IS THE SOLUTION?

The two main camps most coffee bag providers are working on, recyclable and compostable, each present challenges.

1

We need to preserve the coffee.

If we have a material that does not keep coffee fresh for the amount of time required from packing to the time the consumer opens the package, what have we accomplished other than to offer stale coffee?

2

The material needs to be able to run on packaging equipment.

Many medium and large roasters use form, fill and seal machines to package their freshly roasted coffee. The material

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utilized by these machines is typically high-performance structures engineered to run well on the machines, preserve the coffee, look nice on the retail shelf and offer the retail features the coffee customer has come to expect. Many of the new “sustainable” materials being engineered have proven to be difficult to provide all of the above attributes.

3

One-way Coffee Valves. By now, most of us are familiar with one-way degassing valves. Without this high-quality rigid valve, the whole process of growing, shipping, roasting, and packaging coffee might have been wasted. This critical component of the f lexible coffee bag is often overlooked.

The current rigid degassing valve was engineered with materials installed on the same inner bag layer. Once we change this inner layer to a “sustainable” solution, we now cannot use this standard valve.

So, a new valve made of sustainable materials needs to be engineered. This new valve must be proven to be reliable in operation and applied during bag manufacturing. More than likely, there will be required machine modifications.

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Empty coffee bags? Ok, we have developed an ultra-high barrier material that can either be recycled or composted, proven to run on a fully automatic form, fill and seal machine at speeds close to that of current materials.

A high-performance ridged coffee valve has been applied. The bags look and feel nice, so the consumer will not notice a discernable difference. The bag has beautiful graphics, and all the consumer features expected. The bag has performed as well or close to the current material.

Now, what do we do with the empty bags? This is one of the largest issues.

If the coffee bag materials are “recyclable,” theoretically, it could be combined with like materials at the recycling centers. One issue is there is not a widespread capability of separating this type of material as it works its way down the conveyor in the recycling centers; thus, more than likely, it will end up on the landfill trash truck. If the materials were collected in the recycling centers, there is no demand for the contaminated mono plastic material, and there would be a considerable cost to recycle.

If the coffee bag material is made of “compostable” materials, in theory it could be composted. There are significant issues. First, easier certification for compostable materials for industrial composting. The more considerable challenge is that most North America regions do not offer industrial composting. The other solution is home composting. This presents a problem as the materials that will compost in an industrial setting may not work in home composting, causing more confusion. Also, home composting is not available in many urban communities.

I have outlined a few challenges in developing a genuinely sustainable coffee bag and our industry is aggressively working on. However, it will take all the stakeholders to come together to accomplish this herculean task including material/machine manufacturers, coffee roasters, coffee retailers, coffee consumers, and the industries that will utilize the empty packages. The current set goal of having a truly sustainable package by 2025 is attainable if all the stakeholders work together.

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Get your Professional game on!

International Coffee Consulting, the globally recognized leader in CQI “Q” and “R” instruction, roaster training,coffee business development consulting, and supply support is ready to help you be a coffee industry leader NOW!

Whether you are looking for new skills, or to build on your current skills, ICC has the people and the depth of real world experience to help you excel and prosper in the challenging coffee industry Rocky@INTLcoffeeconsulting.com +1.818.347.1378

HELP OR HINDER

{ Abnormal Times require Abnormal Responses } DUB HAY | CO-FOUNDER, LEATHERHEAD COFFEE

{

N

o one will argue that 2020 has been more than a challenge. Our challenges have been even more significant in California, as wildfires from 2017-2020 have ravaged 7.5 million acres, killed 185 civilians and firefighters, and displaced 464,000 families who lost everything, my family included.

In 2016, Mike Medeiros, a Fire Battalion Chief, met me for coffee with an idea for a coffee brand built around improving mental, physical and emotional health for first responders.

Firemen, police, and medical professionals have been overwhelmed by wildfires and now by COVID. Leatherhead Coffee discovered a nonprofit, First Responders Resiliency Inc, (FRRI) that developed a unique

MOVING IN PLACE Continued from page 8

We connect with our audience on their phones because that is where they are comfortable and feel recognized. We are expanding our social media presence to share more beautiful images and engage in direct conversation to create a sense { 22 }

2021 | STATE of the INDUSTRY

approach to treating and preventing Post Traumatic Stress Disorder (PTSD). Their by-line is “Putting PTSD out of Business.” Susan Farren was a paramedic who saw first-hand the effects PTSD had on responders.

She researched the numerous ways stress manifests itself, including some specific cancers; that became her story. After recovering from her kidney cancer, she launched FRRI and developed training methods to prevent PTSD at the time of a stress event to not later develop into PTSD. She has successfully trained first responders all over the world.

A portion of Leatherhead Coffee’s profits goes to support the work of First Responders Resiliency and to help in any way we can to help FRR build a stand-alone training facility in Northern California.

of connection, even beyond the industry to the ‘prosumer’- those DIY consumers passionate about coffee. The addition of our podcasts and coffee reviews are there to educate, share stories, and provide that resource for personal growth.

The good news is these are all the things that we love too.

You can learn about the work of FRR at www.Resiliency1st.org.

Leatherhead Coffee is now in the process of providing Cal Fire Training with all of their coffee, building an online fulfillment program for the public, and eventually moving into grocery channels that value a cause-driven brand. We know consumers value brands that hold themselves to a higher purpose.

As the challenges of wildfires, and inevitably new virus outbreaks, put more pressure on first responders, Leatherhead strives to respond, help them recover, and reimagine how a coffee brand can make a difference for those who suffer from the effects of PTSD.

The world has gotten smaller.

We have become more unified by our shared experiences, creating tremendous opportunities to provide connections throughout the industry and even beyond to the passionate coffee consumer.

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Print and Apply Coffee Labels to Your Products

View more product information at www.primera.com/coffee-tea-labels

1-800-797-2772 | www.primera.com | sales@primera.com Š2018 Primera Technology, Inc. Primera is a registered trademark of Primera Technology, Inc. All data and company names used in sample labels are fictitious.

SOCIAL

{ Stay Connected After a Disconnecting 2020 } JENNIFER STONE | LICENSED Q GRADER, COFFEE SPECIALIST

{

I

magine you spend every hour of the entire month of January staring at your phone, toggling between eight social media accounts and platforms. No need to imagine; it's social reality. The average user has 8.6 accounts and spends almost 2.5 hours a day on social media, 36.5 days a year!

impacting our audience and the leverage point for sales and future engagement through purpose, calls-to-action, and leading participants through the desired journey.

The great news is your customers and prospects (which increased by another half billion this year) are staring at their screens, waiting for you to get their attention. As we assess the big moves and pivots in 2020, we look to 2021 as the new level playing field for communicating with customers and prospects with Instagram, Facebook, Twitter, YouTube, LinkedIn, TikTok, and more.

So, what can you do to prepare for your highly social 2021? Here are a few tips from Gini Dietrich, author, and CEO of Spin Sucks. In her recent comments to Erin del Conte of CStore Decisions, she notes that we can all get stuck or lose focus on the next new post or campaign. She recommends finding five brands that you admire and respect and look at how they are engaging. Then take a look at five brands that you don't care for or that don't resonate with you, and this helps guide you back to new ideas on how you can creatively engage.

Her top tips for social media in 2021:

Boutique equipment brands like Synesso espresso machines have shifted to client-focused Instagram postings. A curated approach to featuring their espresso machines is a big part of creating community and celebrating the wins. Prospects engage with the tech-savvy team and other end-users several times per week. VP of International Sales, Sarah Palmer, stated that while she misses the tradeshows and in-person communication, the biggest challenge has been gathering user feedback. "As an innovative company, understanding the end-user's experience with our equipment is vital so we can continue to develop

both the technology and functionality of our equipment. I'm inspired when I see comments from our audience from around the world and how they engage with our brand. We are looking forward to the upcoming year and feel like it's going to be our best year yet!"

On the front line, cafes and roasters are feeling the lack of direct customer interaction the most. Campaigns around TO-GO and online selling has shifted to the primary focus of creativity and marketing efforts.

Many brands didn't even have eCommerce on their websites before this past March. The quick pivot was shored up by sincere communication via social channels. "Live" events, from tastings, reviews, even music, are posted in tandem to encourage interaction from the audience, with surveys, Q&As, and LOTS of emojis.

Instagram makes it pretty easy to create distinct and fun images for our audience to enjoy. All the likes we get aren't just vanity metrics‌ they are proof that we are

1 2 3 4

Test all kinds of content.

There is no cost and negligible risk—test, Test, Test.

Have fun! It's "social" media, after all.

Make sure that the information you share is accurate and factual.

Regarding influencers, do research and make sure you're not guilty by association with some of their actions.

As we consider the industry's state and new ways of doing business, it's clear that social media is an essential tool for interacting with our prospects and clients. It's an excellent way to visually share information, without email threads, and costs far less than a round trip ticket plus hotel. So, let's eagerly toast to the incoming 2021 with a great cup of coffee! { 24 }

2021 | STATE of the INDUSTRY

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