GCR Sep 2013

September/October 2013

CONSPICUOUS CONSUMPTION What drives Korea’s coffee scene

TO CERTIFY OR NOT TO CERTIFY?

For Laos’ organic farmers, that is the question

EQUAL OPPORTUNITIES Unlocking Robusta’s full potential

50 YEARS ON

ICO’s Roberio Silva focuses on the future

PREMIUM TERRITORY

ILLYCAFFÈ’S GENERAL MANAGER GIACOMO BIVIANO ON HOW THE COMPANY HAS BECOME ONE OF CHINA’S DOMINANT COFFEE BRANDS www.globalcoffeereview.com 29.00

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CONTENTS September/October 2013

31

COVER STORY STARTING AT THE TOP

10

Illycaffè’s General Manager, Giacomo Biviano tells Global Coffee Review about the company’s long history of expanding into new markets, and its approach to emerging Asia.

“THE PREMIUM SEGMENT CAN ACHIEVE AN IMPORTANT POSITION, ESPECIALLY [IN MARKETS WITH] NO HISTORY OF ROBUSTA CONSUMPTION.” Giacomo Biviano illycaffè General Manager

IN THIS ISSUE FEATURES

COFFEENOMICS

10 STARTING AT THE TOP

31 ROBUSTA GROWTH

How illycaffè is taking a love for premium coffee to the developing markets in Asia

15 COFFEE, GANGNAM STYLE

A look at the coffee culture in one of Asia’s most developed markets and what direction it can take from here

21 A NEW DAWN FOR UKRAINE

The coffee industry is moving fast in the Eastern European nation, and tastes are changing with it

24 UNFINISHED BUSINESS

The ICO’s Roberio Silva on what the organisation is focusing on in its 50th year and beyond

47 MILAN GETS SET TO HOST

What to expect when the wold’s biggest hospitality, retail and catering trade show kicks off in October

Robusta coffee is breaking free of its image as Arabica’s poor cousin

ORIGIN 37 LAOS’ ARABICA RUSH

Laos’ growers are split on whether to focus on exporting their organic beans to Asia or other markets further abroad

42 RAIN AND DROUGHT LEAVE BRAZIL IN DOUBT

Bumper harvests have been predicted for Brazil’s current crop cycle, but extreme weather could affect the final output

REGULARS 04 EDITOR’S NOTE 07 NEWS DRIP BY DRIP 52 GUEST COLUMNIST 54 DIARY DASHBOARD 56 MARKETPLACE 58 LAST WORD

37

21

RESEARCH & TECHNOLOGY 27 IN FOR HALF A PENNY

World Coffee Research are calling on roasters to join their new scheme to raise funds for their various projects

S E P TE M B E R /O C TO B E R 2 013 | G C R

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EDITOR’S NOTE Global Coffee Review

PUBLISHER John Murphy john.murphy@primecreative.com.au EDITOR Christine Grimard christine.grimard@primecreative.com.au ACTING EDITOR Nick Sheridan nick.sheridan@primecreative.com.au



ASSISTANT EDITOR Sarah Baker sarah.baker@primecreative.com.au

GROWING UP

In every challenge there is an opportunity.

This is evident in the ever-shifting landscape that is the global coffee industry.

While conventional wisdom has it that emerging coffee markets are initially won over by instant coffee and then mature to espresso and specialty coffee consumption, at least one company is bucking that trend in the world’s most enticing new market.

Italian roaster illycaffè has made its mark as the leading premium coffee brand in China, with the company’s General Manager, Giacomo Biviano, telling us that he believes it is never too early to introduce new consumers to premium coffee (see page 10).

According to Biviano, illycaffè’s mission is about more than selling coffee, it is about selling a culture and an appreciation for the finer things in life. As we well know, there are plenty of people among China’s rising middle class who are looking for exactly that, which bodes well for anybody in our industry with a desire to expand.

Of course, illycaffè is not the only industry player with its eye on China. The International Coffee Organization (ICO), which celebrates its 50th anniversary this September, also has its sights set on the Asian nation. The ICO’s Executive Director, Roberio Silva, shares his plans to get China on board as a member of the ICO, and discusses the other issues affecting the global industry that the ICO is focused on addressing (see page 24).

While we examine the shift to premium coffee in Ukraine (see page 21) and the growth of Arabica production in Laos (see

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page 37), we are also seeing a Robusta renaissance in some corners of the industry. In this issue’s Coffeenomics feature, we examine the growing reputation of quality Robustas and what this means for the overall balance of coffee production (see page 31).

Finally, we take a look at a new program to raise funds for World Coffee Research (WCR). This group exists to find ways of improving coffee production techniques and coffee quality around the world. It should go without saying that their work is in the interest of all of us who work in the industry.

The group has now come up with a simple and comprehensive way for our whole industry to help fund its research. With its new check-off program, WCR is calling on roasters to contribute one half of a US penny per pound of coffee bought (see page 27).

This program could be a game-changer for our industry, but only if people get on board. Now it’s up to you.

ART DIRECTOR Michelle Weston DESIGN Blake Storey, Alice Ewen, Sarah Doyle, Michelle Weston BUSINESS DEVELOPMENT MANAGER Steve Roberts steve.roberts@primecreative.com.au GROUP SALES MANAGER Brad Buchanan brad.buchanan@primecreative.com.au PRODUCTION CO-ORDINATOR Michelle Weston michelle.weston@primecreative.com.au ADMINISTRATION MANAGER Hayley Richert hayley.richert@primecreative.com.au PHOTOGRAPHY Marino Sterle, Malte E. Kollenberg, Maja Wallengren, Bernie Rosenbloom, Eugene Gerden CONTRIBUTORS Malte E. Kollenberg, Maja Wallengren, Bernie Rosenbloom, Eugene Gerden HEAD OFFICE Prime Creative Pty Ltd 11-15 Buckhurst Street South Melbourne VIC 3205 Australia p: +61 3 9690 8766 f: +61 3 9682 0044 enquiries@primecreative.com.au www.globalcoffeereview.com SUBSCRIPTIONS +61 3 9690 8766 subscriptions@primecreative.com.au

Global Coffee Review Magazine is available by subscription from the publisher. The rights of refusal are reserved by the publisher

ARTICLES

All articles submitted for publication become the property of the publisher. The Editor reserves the right to adjust any article to conform with the magazine format.

COPYRIGHT

Christine Grimard Editor

Global Coffee Review is owned by Prime Creative Media and published by John Murphy. All material in Global Coffee Review Magazine is copyright and no part may be reproduced or copied in any form or by any means (graphic, electronic or mechanical including information and retrieval systems) without written permission of the publisher. The Editor welcomes contributions but reserves the right to accept or reject any material. While every effort has been made to ensure the accuracy of information Prime Creative Media will not accept responsibility for errors or omissions or for any consequences arising from reliance on information published. The opinions expressed in Global Coffee Review are not necessarily the opinions of, or endorsed by the publisher unless otherwise stated.

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NEWS In Brief

NEWS DRIPBYDRIP 

ASIA

Italian roaster illycaffè is the leading premium coffee brand in China.

However, with a 0.6 per cent share of the total market, the company is planning to continue its growth there.

According to business analysts Euromonitor International, the Chinese coffee market is currently worth almost US$1.3 billion annually.

Euromonitor estimates that the market will grow by an annual average of 9 per cent until 2017, when it will be worth US$1.76 billion.

Illycaffè’s General Manager Giacomo Biviano says that while Asia still only represents 10 per cent of the company’s global business [Europe still accounts for 80 per cent, with the rest of the world making up the remaining 10 per cent], it remains a priority for the company.

“All of Asia is booming, we are growing above double digits every year,” he says.

And of those, the jewel in the crown is undoubtedly China. “China is the best Asian market for us at this moment,” Biviano says.

See page 10.

South Korea is home to one of the most developed coffee markets in Asia. With more than 500 Starbucks stores and numerous local chains including Caffe Bene and Holly’s Coffee, many retired baby boomers are using their wealth to invest in franchises.

While instant coffee became a part of the Korean culinary culture in the post-war years, it is Koreans under the age of 35 who are embracing café culture, motivated largely by its associations with a celebrity lifestyle.

Chains dominate the Korean market, however there is an emerging specialty coffee scene. Market analyst Euromonitor predicts that new opportunities for growth in the market exist in the value segment.

See page 15.

Laos’ coffee industry exported 25,000 tonnes of coffee worth US$80 million in 2012, a 25 per cent increase on 2011’s 20,000 tonnes, which brought in US$65 million.

Arabica currently accounts for 10,000 tonnes of that, up from just 200 tonnes in 1997. Domestic consumption accounts for just 5 per cent of the harvest.

According to the World Bank, Laos’ gross domestic product reached US$9.29 billion in 2012 and the coffee industry is one of the top 10 revenue generators in the economy.

Local sources say about 90 per cent of Laos’ coffee is grown

organically, but only 5 per cent of that is certified.

See page 37.

The Melbourne International Coffee Expo 2014 [MICE2014] is set to host the World Latte Art Championships.

World Coffee Events announced the decision at the Specialty Coffee Association of Europe (SCAE) World of Coffee event in France in June.

MICE2014 will also host the World Coffee in Good Spirits, and World Cup Tasters Championship.

“The ability to foster the growing and vibrant coffee community in Melbourne is an exciting opportunity by continuing our partnership with MICE in their third edition of the event,” says Carl Sara, Chair of the World Coffee Events’ (WCE) Board of Advisors. “In line with the mission of WCE to produce premier coffee events around the world, our organisation is continually seeking to

23%

The rise in Ukraine’s coffee consumption in the past 10 years. This figure could have been higher if the domestic coffee market had not fallen by 20 per cent in 2011. See page 21.

SEPTEMBER/OCTOBER 2013 | GCR

7

NEWS In Brief

build long-standing relationships with global partners, such as MICE.” MICE2014 will take place from 15 – 18th of May at the Royal Melbourne Showgrounds.



Ukraine’s coffee industry is growing again after being stalled by the negative effects of the Global Financial Crisis.

Over the past 10 years, coffee consumption in Ukraine has increased by 23 per cent, according to data from one of Ukraine’s leading coffee analysts, Research and Branding Group. This figure could have been even higher if not for a disastrous 2011, when the domestic coffee market fell by 20 per cent in volume terms. This was mainly due to rising prices and the lasting effects of the global economic slowdown.

Research and Branding Group’s figures show that in 2012, the Ukrainian coffee market grew by 15 per cent on 2011. Overall the nation consumed about US$200 million worth of coffee, which translated to about 45,000 tonnes.

See page 21.

The world’s biggest trade show for the hospitality, retail and catering industries will take place in Milan, Italy, in October.

Host will run from 18 – 22 October and feature more than 1600 exhibitors from 45 countries. More than 125,000 visitors are expected to attend the event.

To celebrate this year’s 14th edition of the World Barista Championship (WBC), World Coffee Events (WCE) will thrill visitors at Host with a WBC all-stars event. The lineup will feature present and former WBC

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baristas including 2013 champion Pete Licata, 2010 champion Michael Phillips, 2009 champion Gwilym Davies, and 2007 champion James Hoffman, along with other WBC finalists. The champion baristas will gather in a rare opportunity to see them interviewed live with feedback on their award-winning performances.

Over the five days, the baristas will also challenge each other in an on-demand signature beverage performance, judged by public members.

See page 47.

AMERICAS

$US3M

The amount World Coffee Research needs per year to fund its programs in variety development, climate change, genetic diversity and sensory research.

See page 27.



EUROPE

World Coffee Research (WCR) is calling on roasters and importers around the world to join the effort to improve the quality and supply of coffee globally by paying a small levy on every pound of green coffee they purchase through an importer.

The organisation says that the Check-Off Fund, which was launched in July, will enable coffee roasters across the entire spectrum of the coffee industry to contribute to the WCR’s work on genetics, disease treatment and prevention, and variety trials, among other goals.

Roasters can sign on through participating importing companies

to participate in the program, committing to contribute US$0.005 cents per pound of coffee purchased to the fund.

The organisation needs contributions of US$3 million per year to fund its programs in variety development, climate change, genetic diversity and sensory research.

This equates to the check-off being applied to just 4 per cent of the coffee imported in the year between May 2012 and April 2013, based on ICO figures.

See page 27.

Conab, Brazil’s official crop supply agency, said in its second forecast released for the 2013-14 harvest in May that it expects the current Brazilian coffee crop to be the biggest off-cycle yield on record.

However, estimates vary wildly, from Conab’s relatively conservative estimate of 48.6 million 60-kilogram bags to Volcafè/ED&F Man, which has pegged Brazil to produce close to 58 million bags.

The broad gap in estimates is causing uncertainty in the market as to how much coffee can realistically be expected ahead of the onset of the main roasting season in the US in late September.

See page 42.

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COVER STORY illycaffè

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RTING A T

T H E

T O P

ITALIAN ROASTER ILLYCAFFÈ IS THE LEADING PREMIUM COFFEE BRAND IN CHINA. GENERAL MANAGER GIACOMO BIVIANO TELLS GLOBAL COFFEE REVIEW HOW THEY DID IT.

T

he looming potential of China’s coffee market has lent the Asian nation a status akin to the mythical El Dorado among many in the global coffee industry. But while nobody ever found the fabled city of gold, China is clearly on the map and many intrepid coffee companies have already planted their flags in the shopping centres and supermarket aisles of the emerging superpower.

The Chinese market is dominated by instant coffee. Euromonitor puts the market share of the top four players there, which all sell instant coffee, at 86.2 per cent. However, there is one premium coffee company that has been pursuing China’s high-end consumers from very early on.

“At the time we were the first,” says illycaffè’s General Manager, Giacomo Biviano. “Many others arrived after that.”

Illycaffè made its first forays into Chinese territory some 20 years ago, entering the Hong Kong and Taipei markets in 1993. It wasn’t until 1997 that they began selling their products on the mainland, but it was still very early days for the coffee industry there.

Illycaffè is now the fifth largest coffee company in China by market share. While their sales represented just 0.6 per cent of the market in 2012 – just shy of US$7 million, according to Euromonitor – it puts the company in the box seat in a rapidly maturing market. The Chinese coffee market is currently worth almost US$1.3 billion annually, but Euromonitor estimates that it will grow by an annual average of 9 per cent until 2017, when it will be worth US$1.76 billion.

Biviano says that the earlier Chinese consumers are exposed to premium Arabica, the better.

“The premium segment can achieve an important position, especially in these growing markets in which there is no history of Robusta consumption,” he says. “In Italy, for a variety of reasons, there is still a lot of consumption of Robusta coffee, because it is a very cheap product. This is in the culture and the taste of the Italian consumer. They are not used to premium coffee.

“When a coffee country starts from scratch like in China, there are many more possibilities for the premium product as coffee consumption grows,” he says.

S E P TE M B E R /O C TO B E R 2013 | GCR

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COVER STORY illycaffè

China has a middle class of some 300 million people, which is almost as large as the entire population of the world’s biggest coffee consumer, the United States. As a fledgling coffee culture, the race is on to capture the loyalty of the Chinese market.

“There is a lot of interest in premium coffee, because of course there are a lot of Chinese people who are looking for premium brands,” Biviano says.

Biviano adds that this preparedness to explore new territories is not new for illycaffè.

“Illy has always looked to expand into new markets,” he says. “Our first subsidiary was opened in Holland in the 1960s, in Germany in the 1970s and we opened our American subsidiary in the 1980s. Our ambition and our mission to expand is part of our DNA.” However, establishing itself in the Chinese market was not a quick process for the company.

“It was quite a gradual approach at the time,” Biviano says. “We started with some distributors in China, and then slowly we built up some restaurant customers and then we were able to expand into the broader HoReCa [hospitality, restaurant and catering] segment.”

Underpinning illycaffè’s expansion has been an almost evangelical commitment to educating new consumers about the joys of high quality coffee. As such, in 2006 they set up an arm of their global Università del Caffè, a program of courses and workshops for people in all aspects of the coffee industry, in Shanghai.

“For us it was fundamentally important to have a facility in which we could train our customers in our approach and our culture,” Biviano says.

Illycaffè opened a subsidiary in China in 2011 and just last year they opened a temporary Galleria store in Beijng. Described in the Chinese English-language press at the time as a “cafè pop-up on steroids”, the store hosted cultural events and exhibitions from artists and writers, as well as acting as another outpost of the Università del Caffè.

“Locations like the Galleria are very important for this market because it gives

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illycaffè has long been committed to linking its coffee with art, such as with its signature coffee cups that feature the work of established and emerging artists.

US$1.76B The Chinese coffee market will be worth US$1.76 billion by 2017, according to Euromonitor International.

people the opportunity to get the illy experience and sample our product,” Biviano says.

The company has a long history of pairing its product with art, as evidenced through its 20-year tradition of featuring the work of prominent artists on the cups used in their stores.

Over the past two decades this has turned illycaffè’s cups into canvases for artists such as Anish Kapoor, Michelangelo Pistoletto and Marina Abramović. Illycaffè has also worked closely with renowned Brazilian photographer Sebastião Salgado for the past 10 years, producing a series focusing on the stories of coffee producers at origin.

This approach, says Biviano, is informed by the company’s mission to not just sell coffee, but to sell a culture of appreciation for the finer things in life.

“For that reason we try to engage our consumer not just in tasting the coffee, but also enjoying beauty,” he says.

With its product range limited to 100 per cent ground Arabica coffee, illycaffè has unapologetically pitched itself as a premium coffee company throughout its 80-year history.

The company’s strategy is primarily focused on the promotion of its signature Arabica blend, although it also sells three single-origin coffees – from Brazil, Ethiopia and

“ILLY HAS ALWAYS LOOKED TO EXPAND INTO NEW MARKETS. OUR FIRST SUBSIDIARY WAS OPENED IN HOLLAND IN THE 1960S, IN GERMANY IN THE 1970S AND WE OPENED OUR AMERICAN SUBSIDIARY IN THE 1980S. OUR AMBITION AND OUR MISSION TO EXPAND IS PART OF OUR DNA.” Giacomo Biviano

illycaffè’s General Manager

Guatemala – which are all packaged in the pressurised cans that have become an unofficial trademark of the company since they were introduced in 1935.

Illycaffè’s coffees are sold through the full range of channels – HoReCa, retail and domestic.

While the HoReCa segment is illycaffè’s primary distribution channel, accounting for about 70 per cent of the company’s business, Biviano says different markets demand different approaches, something that has been particularly evident in the company’s experience in Asia.

“All of Asia is very different,” he says. “In Japan, for example, people drink a lot of coffee from cans.”

As such, illycaffè has adapted its approach in each market accordingly. The Japanese market’s predilection for pre-mixed coffee drinks is one of the factors behind the development of illycaffè’s own offering in that segment, illy issimo.

Other markets, such as Korea and Vietnam, have a more developed appreciation of espresso and café culture, which aligns well with illycaffè’s business strategy.

Biviano says that while Asia still only represents 10 per cent of the company’s global business (Europe still accounts for 80 per cent, with the rest of the world making up the remaining 10 per cent), it remains a priority for the company.

“All of Asia is booming, we are growing above double digits every year,” he says.

And of those, the jewel in the crown is undoubtedly China. “China is the best Asian market for us at this moment, it’s even better than Japan now,” Biviano says. “It’s really growing very, very fast.”

With the single-serve segment of the coffee market demonstrating such strong growth in recent years, it is perhaps of little surprise to learn that illycaffè sees strong potential for its capsule system, Iperespresso, in China.

“One opportunity is in coffee capsule systems,” Biviano says. “Salaries are going to continue to rise there, so there is the opportunity to promote the consumption of premium coffee at home.”

Illycaffè has developed the patented Iperespresso single-serve system based on a special capsule with an extraction chamber that makes the coffee in two phases (hyperinfusion and emulsion) to make the most of their signature blend.

While Biviano says ground beans still represent the majority of illycaffè’s business, the capsule segment is growing fast, and illycaffè has found a use for capsules that goes beyond

the home, capitalising on its strength through HoReCa channels.

Illycaffè now supplies capsules to their smaller HoReCa customers as a way to help ensure freshness of their product.

“The capsule system is the best way to make sure we are always providing the best quality in the cup,” he says.

All of this, Biviano says, amounts to more than simply spreading illycaffè’s products.

“We are not only selling coffee, we are trying to sell a general culture, “he says. “We think that our coffee should be a moment of joy and relaxation – a moment in which you can take your time and think about what you like. That is what we try to transmit to our consumers.” G C R

S E P TE M B E R /O C TO B E R 2013 | GCR

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FEATURE Korea

COFFEE,

GANGNAM STYLE BEING OSTENTATIOUSLY ON-TREND IS THE DAILY BREAD OF THE NOUVEAU RICHE IN SOUTH KOREA, AND COFFEE IS AN ESSENTIAL PART OF THAT IMAGE.

BY MALTE E. KOLLENBERG

Local chain Caffe Bene has cemented its popularity in Korea through a shrewd strategy of product placement and associations with celebrity lifestyles.

S E P TE M B E R /O C TO B E R 2013 | GCR

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FEATURE Korea

Seong-il Choi is in the vanguard of the growing number of specialty coffee advocates in South Korea, though chains like Starbucks and Caffe Bene are still the outlets of choice for most coffee-drinking Koreans.

A

t first I drank Starbucks coffee because it was a symbol of being rich and luxurious,” says 22-year-old student Jeong-eun Chang.

As with many other Korean women her age, Chang spends many hours each week chatting with friends in coffee shops in South Korea’s capital, Seoul. Chang’s peers call the student “Korea’s biggest Starbucks fan”.

Stereotypically for young Korean women, Chang is into almost everything that makes her look good. In South Korea, even a paper cup from the right coffee chain is a part of that mix. In a society where status symbols are everything, the branded paper cup is the coffee equivalent of a Gucci or Prada bag for many.

The district of Gangnam best expresses this mindset. Forty years ago, Gangnam was little more than rice fields and farmers. Today Gangnam is home to the country’s leading entertainment companies, to movie and pop stars and to those who just want to be like them.

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Korean rapper Psy famously portrayed the district, including its coffee shop culture, in his record-breaking hit Gangnam Style.

Starbucks was the first coffee shop franchise to target the Korean market successfully. Starting with a few coffee shops in Seoul in 2001, the American chain expanded to almost 500 shops in 2008 when domestic player Caffe Bene entered the scene.

Caffe Bene, which is currently the largest Korean coffee shop chain with almost 900 stores all over the country, links its success closely to the culture industry coming out of Gangnam.

Contracting starlets and actors as ambassadors for Caffe Bene products, the company has built a brand image that appeals to many Koreans. Watching TV dramas at home, potential customers have been bombarded by images of Caffe Bene on their screens.

“We used PPL [Product placement] strategies in famous sitcoms, dramas, etcetera in order to target our main customers – young people – and to naturally create brand awareness,” says Caffe Bene spokesperson Ju-hye Hong.

Taking an existing product, copying it and developing it further to better fit customer needs is the formula that has driven the Korean economy for decades. Caffe Bene took that concept to coffee shops and overtook Starbucks within two years. Caffe Bene’s CEO, Sun-kwon Kim, saw the potential of the market and localised the Starbucks success story to fit a broader customer taste in South Korea.

Korean consumers are as partial as their Western counterparts to the now-familiar coffee shop formula of a cozy atmosphere, easily accessed internet connections and power outlets close to every table.

Most domestic brands do not only serve coffee. Their menus often include ice cream, pretzels and even alcoholic beverages. This fact turns coffee shops like Caffe Bene into a competitor to not just Starbucks, but to food chains and bars as well.

While specialty coffee is on the rise in Korea, many consumers are primarily motivated by the image associated with coffee, rather than the drink itself.

THIS COMMITMENT TO COFFEE AND THE KNOWLEDGE CHOI HAS ACQUIRED OVER YEARS OF BREWING, ROASTING, TASTING AND SELLING COFFEE IS WHAT CHOI BELIEVES SEPARATES HIS SHOP FROM WHAT HE SAYS IS “COMMERCIAL COFFEE”.

“Koreans are fast followers,” says Daniel Schwekendiek, an economics professor at Sungkyunkwan University in Seoul. He says the strategy of coffee shops like Caffe Bene, Holly’s Coffee or Tom n Toms, all Korean domestic brands, are an example for the bandwagon effect.

The expansion of coffee shops is driven by the socioeconomic change that has taken place in South Korea in the past decade. The recent enormous expansion is closely linked to the baby boomer generation approaching retirement age. “This generation has accumulated a significant amount of wealth,” Schwekendiek says. “They have the money to invest in a franchise.”

Considering that most people usually head to coffee shops close to their workplace or around their homes, the high degree of urbanisation in South Korea, standing at around 85 per cent, has also contributed the fast expansion. Almost 50 per cent of Korea’s citizens – approximately 25 million people – live in the greater Seoul area.

Coffee in South Korea has quickly advanced from cheap instant coffee with added sugar and milk replacement, to coffee shop chains on every corner. This change has also heralded a growing sophistication about the types of coffee being served.

The biggest buzz nowadays is around specialty coffee shops like Choi Espresso Coffee Shop in southern Seoul, which is owned by certified Q-grader and World Coffee Events judge, Seong-il Choi. In easy reach of the Gangnam district, Choi serves brews imported directly from coffee farms around the world.

That coffee consumption is often less about the taste and more about seeing and being seen is something that Choi finds regrettable. However, he and a few others like him have found their own niche. Instead of assembly-line like production of coffee and milk-based beverages, cafés like the Choi Espresso Coffee Shop are putting the emphasis on taste. They are the slow food equivalent to the franchised coffee shop system and passion for the product is their unofficial motto.

“You have to drink an espresso within one minute otherwise the crema disappears,” Choi says, illustrating his point by pouring a shot down his throat. “I’ll make another one,” he says.

This commitment to coffee and the knowledge Choi has acquired over years of brewing, roasting, tasting and selling coffee is what Choi believes separates his shop from what he says is “commercial coffee”.

Choi also has found an additional source of income by opening a barista school, which was established in 2006. So far 1200 students have graduated from the school, Choi says. The majority of them start out with plans of opening their own coffee shop one day. “Just 10 per cent reach that goal,” he says.

Choi’s daily commute to his business now takes him past a Starbucks and a Coffee Bean & Tea Leaf store. “I never thought that within a decade we’d see as many coffee shops as we actually do these days,” Choi says.

According to the Seoul Coffee Expo, the number of coffee shops in Korea has risen almost 900 per cent between 2006 and 2011, totalling almost 13,000. Sales in the same period skyrocketed almost 1600 per cent.

And Choi believes there is more room for growth, at least for highly specialised shops like his. He adds that this growth might also be the reason why the players in Korea’s coffee industry have left the specialty coffee shops alone at this stage. Choi expects a saturated specialty coffee market within 10 years. Market research provider Euromonitor International is more conservative about the potential in this segment, however. The firm predicts the trend will reach its peak in 2017.

S E P TE M B E R /O C TO B E R 2013 | GCR

17

FEATURE Korea

While coffee shops in all variations are almost ubiquitous, coffee consumption still has space to grow. The younger generations are more drawn towards brewed coffee based on ground beans and are drinking less instant coffee compared to their parents and grandparents.

Estimates by instant coffee maker and Kraft contractor, Dong Suh Foods Corporation in Seoul, show an average annual growth rate of 5.6 per cent for coffee mix products between 2008 and 2013. Soluble coffee, targeting more or less the same customers, has seen a 9.9 per cent decline in the same period, while readyto-drink coffees available in cans at convenient stores in Korea grew 11.2 per cent on average and sales of roasted and ground coffee increased by 17.5 per cent.

Dong Suh Foods’ signature product, Maxim coffee, in all kinds of variations, has been around for decades. Cheap and easy to make, instant drinks became the product of choice in the industrialisation period of South Korea.

But as competition from coffee shops and home appliance importers specialising in ground coffee heats up, Dong Suh Foods as well as their direct competitors are coming up with new products.

“We have developed more high-end instant coffees,” says company spokesperson Kyoungtae Choi.

Choi says that what the company wants to “incorporate the lifestyle of brewed coffee into an easy-to-use instant product”.

Yet the target markets for the different coffee products available are just loosely overlapping.

On the one hand, Koreans older than 35 have been socialised with instant coffee. The availability of hot water dispensers in almost every part of Korean life, from homes to offices, made it easy to have an instant shot of sweet creamy caffeine while taking a break.

People under 35 are the ones frequenting coffee shops. They have largely been exposed to Western culture while studying and traveling abroad and they have actively participated in the growth of coffee shop franchises in South Korea.

Sociology professor at Chung-Ang University, Kwang-yeong Shin, calls the rapid growth “a globalisation of taste” that is happening in Korea. “Drinking coffee is middle-class culture,” Shin tells Global Coffee Review.

With the increase of money available for spending in Korean households, so-called ‘coffee-mania’ has started to spread. The most recent development is foreign coffee brewing machinery making it into the apartments of South Koreans in Gangnam and other upscale districts.

Euromonitor analyst Minji Kim says that at this point the only opportunity for a new player to enter the Korean market would be to “carve a niche, if it is able to differentiate itself from the competition”. Kim says the key would be “to spend a lot on marketing brands to consumers”.

Economist Schwekendiek sees another opportunity. “I say the best way to penetrate the market is over price,” he says.

So far there is little price difference between competing players. Many market experts believe that prices should drop as the supply side has reached its peak already. Schwekendiek compares the coffee market to the replacement of luxurious clothing brands like Prada, Gucci and Louis Vuitton by big manufacturers such as H&M, Zara and Uniqlo. These clothing giants have managed to successfully open shops alongside the premium brands in Gangnam, despite its gold-plated demographic.

For student Jeong-eun Chang, that would count as an argument to draw her attention away from Starbucks. “Coffee shops in South Korea have a negative image with many people because they are so expensive,” she says. Though she does not like the taste of Caffe Bene and others she also admits that a cheaper coffee shop, if around, would be her choice. “Taste comes second, after price,” she says.

Price could be key to driving the spread of coffee and making it available even to those who have been excluded from a lifestyle that many view as Gangnam style. G C R The majority of students at this coffee school dream of opening their own coffee shop. According to the owner, just 10 per cent will succeed.

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G C R | S E P T E M B E R / O C T O B E R 2013

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FEATURE Ukraine

A NEW DAWN FOR

UKRAINE

THERE ARE PROMISING SIGNS FOR THE COFFEE INDUSTRY IN UKRAINE AS ECONOMIC CIRCUMSTANCES, AND CONSUMER TASTES, ARE CHANGING.

BY EUGENE GERDEN

U

krainians have had a hot and cold relationship with coffee in recent years, but this has little to do with peoples’ attitude towards the beverage itself.

After a rocky few years for the local economy, brought about by the effects of the Global Financial Crisis, the population is now resuming its love affair with coffee.

Over the past 10 years, coffee consumption in Ukraine has increased by 23 per cent, according to data from one of Ukraine’s leading coffee analysts, Research & Branding Group.

This figure could have been even higher if not for a disastrous 2011, when the domestic coffee market fell by 20 per cent in volume terms. This was mainly due to rising prices and the lasting effects of the global economic slowdown.

Research and Branding Group’s figures show that, in 2012, the Ukranian coffee market grew by 15 per cent on 2011. Overall the nation consumed about US$200 million worth of coffee, which translated to about 45,000 tonnes.

Natalia Revika is the Head of Marketing for Kraft Foods Ukraine, one of the leading players in the local coffee market. She says that the recent growth is just the beginning.

Taras Lukachuk, Head of Kraft Foods Ukraine, which is the nation’s leading coffee company by market share.

S E P TE M B E R /O C TO B E R 2013 | GCR

21

FEATURE Ukraine

A typical coffee chain in Lviv, Western Ukraine, which is Ukraine’s leading city in terms of coffee consumption.

Maxim Belik, Head of Procurement for Furshet, says there is still room for limited growth in freeze-dried coffee.

“The growth of the market is being driven by the development of the fledgling culture of coffee consumption in Ukraine,” Revika says.

“The average per capita coffee consumption in Ukraine is estimated at about 1.5 kilograms per annum, which is five to six times lower than in the European Union. This makes the market extremely attractive for manufacturers and importers.”

In addition to Kraft Foods, other leading players in the Ukranian coffee market include Nestlé, Strauss Group, and local producers including Galka, Videnska kava, Odessa Food Factory, Dnepropetrovsk Food Factory and Ukrkofe. As with neighbouring Russia, instant coffee accounts for the largest share of the local market. According to data from Kraft, instant coffee sales in 2012 represented 63.8 per cent of the value of the market. At the same time the share of ground coffee was 21.4 per cent, while pre-mixed coffee drinks were 14.4 per cent.

About 70 per cent of the coffee in Ukraine is purchased through retailers for home consumption, while about 20 per cent of the market is accounted for by the hospitality, restaurant and catering (HoReCa) segment, with the remaining 10 per cent of coffee consumed in offices.

Ground coffee is mostly consumed in the west of the country, while more than 90 per cent of citizens of southern and eastern parts of Ukraine prefer instant coffee, according to

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G C R | S E P T E M B E R / O C T O B E R 2013

CHANGING TASTES The ratio of instant and ground coffee in the Ukraine is estimated at 70 per cent to 30 per cent, but it could be 60 per cent to 40 per cent by 2015-16.

Nestlé Ukraine’s Senior Public Relations Specialist, Lesy Ščihol.

“Citizens of Lviv [a central city in the western part of the country, where Nestle’s Ukraine headquarters is located] prefer more bitter, gound coffee, while preferences of eastern citizens are quite different,” Ščihol says. He adds that this is an important factor for Nestlé to consider when installing their vending machines.

Alena Tyndyuk, a senior Purchasing Manager of one of Ukraine’s leading food retail chains, Metro Cash & Carry, says that while the industry is growing, it is still dominated by the major foreign players.

“Rioba and Black Map are the most popular brands in the category of ground coffee, while the instant coffee segment is currently dominated by Jacobs and Nescafé,” Tyndyuk says.

“Almost 90 per cent of the entire Ukrainian coffee market is accounted for by imports. Most of coffee is supplied from Russian and European coffee plants of leading players, which currently do not have their own full-cycle production within the country.”

In recent years domestic production has increased, however, mainly through the launch of a new coffee plant in Odessa by the local company, Ukrkofe.

Both Nestlé and Kraft import their products to Ukraine from their Russian plants. But just last year Nestlé invested US$3 million to establish two new packaging lines at its factory in Lviv, expanding the range of its local production under the Nescafé brand.

One of the distinctive features of the Ukranian coffee market is the growing share of private label brands. According to analysts from Ukranian business paper, Kommentarii, private labels will be able to compete with Kraft and Nescafé’s instant coffee brands in the local market in the middle or long-term.

In recent years, the role of the world’s leading coffee chains in the local market has also increased. However, there is still

ABOUT 70 PER CENT OF THE COFFEE IN UKRAINE IS PURCHASED THROUGH RETAILERS FOR HOME CONSUMPTION, WHILE ABOUT 20 PER CENT IS ACCOUNTED FOR BY THE HORECA SEGMENT, WITH THE REMAINING 10 PER CENT CONSUMED IN OFFICES. McDonald’s CEO in Ukraine, Ian Borden, at the opening of a new McCafé in Kiev.

room for their further growth. Currently there are about 300 chain stores in the western part of the country and some 200 in the eastern and central regions.

McDonald’s McCafé brand is one of the most prominent players in the Ukranian market. The company has been established in Ukraine since 2011 and now has more than 20 outlets.

According to the President of McCafé Ukraine, Sergey Terpilo, instant coffee will continue to dominate in the local market during the next few years due to its affordability and ease of preparation.

However, he says, while at present the ratio of instant and ground coffee in the local market is estimated at 70 per cent to 30 per cent, by 2015-16 it could be more like 60 per cent to 40 per cent.

“The Ukranian coffee market will continue to develop rapidly in the coming years, with the consumer demand expected to shift to premium quality coffee blends,” Terpilo says. “The structure of the Ukrainain coffee market will change gradually, along with the local culture of consumption.”

Maxim Belik, Head of Procurement for Furshet, one of Ukraine’s leading retail chains, says that instant coffee still shows potential for growth.

GREAT GROWTH It is estimated that the Ukrainian coffee market will grow by an average of 15 to 20 per cent per annum over the next several years.

One of the largest players in the Ukrainian market, Nestlé spent $US3 million upgrading its factory in 2012.

“The biggest growth segment of the instant coffee market is freeze-dried coffee, which, in contrast to other segments of the instant coffee market grows by 3 per cent annually,” he says.

However, many people predict stagnation in the domestic market of instant coffee in the coming years due to a gradual shift in the preferences of local consumers towards more quality products.

“Consumers have become more picky in food and beverages,” says Svetlana Ivahova, a Senior Manager from illycaffé Ukraine.

“According to our expectations, the local coffee market will develop towards the consumption of ground coffee.”

She also predicts the start of price wars for consumers among the producers from different segments of the market.

At the same time representatives of Nestlé Ukraine predict significant growth in singleserve coffee capsules. So far, the major players in this segment are such companies as Nestlé, with its Dolce Gusto, Kraft Foods’ Tassimo, as well as Strauss’ Totti Caffe.

At present sales in this segment remain low. However, according to Ivahova, the annual growth rates of the Ukrainian coffee market will average between 15 to 20 per cent per annum over the next several years.

While this will provide plenty of room for growth in the premium market, it is also likely to lead to and intensification of competition between domestic and foreign producers. G C R

S E P TE M B E R /O C TO B E R 2013 | GCR

23

FEATURE ICO

UNFINISHED NOW IN ITS 50TH YEAR, THE INTERNATIONAL COFFEE ORGANIZATION IS FOCUSED ON MAKING THE MOST OF NEW OPPORTUNITIES, AND HANDLING SOME FAMILIAR CHALLENGES.

F

ew would disagree that 2013 has been a testing year for the global coffee industry.

With the memories (and effects) of the South American coffee leaf rust outbreak still fresh in everybody’s minds, Central America has now been hit by the worst outbreak of the disease in that region’s history. While the toll of the Central American outbreak continues to be counted, the global price of coffee refuses to stabilise, adding to uncertainty for many farmers who are already struggling with the increasing unpredictability of growing conditions due to climate change.

Amid all of this turbulence, the International Coffee Organization (ICO) is marking its 50th year. The anniversary is being acknowledged at a five-day conference in Belo Horizonte, Brazil, from 9 – 13 September. Some 500 representatives from member countries and the industry are expected to attend.

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G C R | S E P T E M B E R / O C T O B E R 2013

But, as the ICO’s Executive Director Roberio Silva tells Global Coffee Review, the occasion will not be given over solely to celebrations. Instead the organisation will focus its attention and resources on overcoming the challenges currently facing the industry.

“Our biggest priority is the question of price stabilisation,” Silva says. “We want price stabilisation at a remunerative level for the producers and a fair price for the consumers.”

BUSINESS

The fact that the ICO was established in 1963 to address this exact issue is not lost on Silva.

He says one of the main reasons for the current instability is the proliferation of contradictory analyses of the market from many of the trading and roasting houses.

“This is what makes the markets astonished and makes the market go absolutely crazy, because someone says that the crop is going to be very big, when we [the ICO] say that the crop is going to be absolutely within the estimates of the consumption,” Silva says. “It is very difficult, that’s why you need a central institution to try to give some orientation to the market.”

The ICO brought together analysts from many of the big traders and roasters for an informal meeting in London in July to try to figure out why there is such a big contradiction in the figures being released by all of the different parties. Silva says dialogue of this sort is essential, and is something the ICO will continue to facilitate, including at the meeting in Brazil.

“At the 50th anniversary meeting we are bringing together all of the actors in this process,” Silva says. “For example the big traders and the big roasters are going to be present in Belo Horizonte and we are going to create special mechanisms for talk between the farmers themselves, members of government and these big industries.”

Aside from recalibrating the market information out there, Silva points to risk management instruments as essential tools for farmers and the rest of the industry. This issue is going to be addressed in the Consultative Forum on Coffee Sector Finance at the Belo Horizonte meeting.

The Forum will present information about cooperatives as a platform to access to finance and risk management more effectively.

However, Silva acknowledges there is more to the pricing problem than just the plethora of different market data.

“What we can say is that the markets are not properly functioning,” he says. “What we see now is that farmers are not getting [the prices] they should be getting for their coffee, and the customers are still paying the same price [that they usually do]. So there is a big disconnection on the ground.”

Silva says that ensuring the financial sustainability of the coffee industry is about much more than just the effective flow of coffee beans.

“It is important because coffee provides the livelihoods of millions of farmers around the world,” he says. “They depend on coffee for their survival, and this is what makes it so important.”

The other big issue at the front of many peoples’ minds is the Central American coffee leaf rust outbreak. The ICO published a report on the Central American situation in May this year that identified the cost of the outbreak at US$500 million and some 400,000 jobs in the region.

More ominous yet was the warning that the worst of the impact is not expected to be seen until the coming 2013-14 coffee year.

The ICO has an action plan that includes raising public awareness about the outbreak; promoting more sustainable growing practices; a coffee plant renovation program; and assisting the World Bank in developing a study looking at how improved risk management across the coffee sector, in particular for small coffee farmers, might result in better access to finance.

Despite this outbreak being acknowledged by the ICO as the worst to ever hit the region, Silva is optimistic that it will be addressed.

“I am absolutely clear in my mind that we can handle it,” he says.

“The ways to go forward with solutions to this is to first of all help recovery in prices, to improve husbandry, and to address the impact of climate change – there is no doubt that

ICO’s Executive Director Roberio Silva wants China to become a member of the organisation.

climate change is a factor in this crisis.”

To this end, the ICO will present its first World Coffee Outlook, which contains a comprehensive overview of the global coffee sector spanning over the past 50 years.

The other big work ahead is on the issue of expansion, particularly in the developing economies of Asia. One market in particular that the ICO is focused on is China.

“We are going to present a study on China,” Silva says. “We are going to tackle this question on how to get there and how to improve the growth of the coffee market.”

It is estimated by traders MTC Group that some 200,000 bags of coffee will be produced in China in the 2012-13 coffee year.

While China is a coffee producing nation as well as a consumer, it is not yet a member of the ICO, a situation Silva hopes will change.

“It’s an ongoing conversation with the Chinese authorities and with a lot of people who are involved in the coffee industry in China,” he says.

It is work like this, Silva says, that will guarantee the future of the industry.

“We have to continue the growth of the coffee sector. We have to stimulate new markets coming into the coffee sector,” he says. G C R

S E P TE M B E R /O C TO B E R 2013 | GCR

25

RESEARCH WCR

IN FOR HALF A PENNY . . .

WORLD COFFEE RESEARCH HAS LAUNCHED A NEW PROGRAM TO RAISE MONEY FOR RESEARCH INTO THE MANY ISSUES AFFECTING COFFEE CULTIVATION.

W

orld Coffee Research (WCR) is calling on roasters and importers around the world to join the effort to improve the quality and supply of coffee globally.

By paying a small levy on every pound of green coffee they purchase, the organisation says that coffee roasters across the entire spectrum of the coffee industry can contribute to the WCR’s work on genetics, disease treatment and prevention, and variety trials, among other goals.

The Check-Off Fund enables roasters to contribute US$0.005 cents per pound of coffee purchased to WCR. The inspiration for the

Check-Off Fund comes from long-standing financial support systems utilised by other agricultural industries in the United States.

“Almost all commodities in the US have a check-off fund,” says WCR’s Executive Director, Dr Timothy Schilling. “They utilise that fund on research or for promotion. The ‘Got Milk?’ campaign [a famously effective advertising campaign promoting milk consumption in the US] was paid for with check-off funds.”

Christy Thorns is the Director of Sourcing and Quality Control for US roasters Allegro Coffee, which was the first roaster to sign on for the program. She says the recent coffee leaf rust crisis in Central America, which has affected more than 50 per cent of the region’s coffee growing areas and cost more than US$500 million so far, is a prime example of why a check-off program is needed.

“I think this current rust situation should be a wake-up call to us all to work on solutions to the high quality coffee shortages that are sure to come in the future,” she says. “WCR’s focus on coffee variety development certainly seems like the right place to focus first.”

The program will be facilitated by importers, who will apply the levy to individual itemised invoices that are submitted to the roasting partner. That way, WCR says, the cumulative, incremental contribution will seem nominal to the roasting company. The funds are collected, managed, invoiced, and delivered to WCR by the importing company once or twice annually, and will be eligible

S E P TE M B E R /O C TO B E R 2013 | GCR

27

RESEARCH WCR

“THIS IS URGENT. EVERYBODY IS TALKING ABOUT IT BUT NOBODY IS DOING VERY MUCH. TIME IS A-WASTING. FARMERS ARE GOING OUT OF BUSINESS. THERE IS A REAL THREAT OF LOSING SOME INCREDIBLE SPECIALTY COFFEES.” Tim Schilling

Executive Director, World Coffee Research

will not only be facilitating the payment of the levy by roasters, but has also pledged to match the contributions on coffee that they import, dollar for dollar.

“I believe this program will be more successful than others I have seen come and go,” he says. “The main reason being the variety, size and quality of companies that have joined so far, and the leadership of the WCR’s board of directors that has pushed the agenda forward. Another main difference is the current curiosity around conscience-based consumption. Never before have our industry’s consumers been more empowered to demand information about where their coffees come from and how they are contributing to the health of the supply chain.”

Nietlisbach says that the average cost for a medium-sized roaster that goes through 500 69-kilogram bags per year would be $US380. While he acknowledges the need for every business to tightly manage their expenses, he says that this contribution

Tim Schilling says the fund urgently needs to raise US$1 million per year to address the Central American rust crisis.

as ‘cost of doing business’ tax write-offs for participating companies.

Schilling says that WCR’s immediate priority is to address the crisis in Central America.

“For focused research on rust in Central America we are working on a special program with USAID [the US Agency for International Development] where we hope every dollar put in by a roasting company will be matched by a dollar from USAID,” he says. “That program is a US$4 million program over four years to get things where they need to be in Central America and prevent other disasters like that [rust] from happening.”

To raise the US$1 million per year required for this project, the check-off would need to be applied to just 1.4 per cent of the 110 million 60-kilogram bags of coffee that were imported between May 2012 and April 2013, according to the International Coffee Organization.

Schilling says that this is achievable, but only if the industry acts now.

“This is urgent,” he says. “Everybody is talking about it but nobody is doing very much. Time is a-wasting. Farmers are going out of business. There is a real threat of losing some incredible specialty coffees.”

Alan Nietlisbach is the Senior Vice President of the Specialty Coffee Division at green bean importer, Olam Americas. Olam

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Christy Thorns says she signed up to the program to support the development of more robust Arabica varieties.

US$3M WCR needs to raise US$3 million per year to fund its activities

will help ensure a healthier quality supply chain in the future. “If you think about it, it’s really one and the same,” he says.

Christy Thorns says that Allegro Coffee made the decision to be the first roaster to sign on out of concern for their industry.

“We looked at the challenges facing the future of our coffee supply chain, the possibility of a diminishing availability of specialty coffee, as well as the ongoing sustainability of small coffee farmers. The decision to support WCR’s research seemed like the right bottom-line approach,” she says. “WCR research is largely focused on developing higher-yielding, great tasting, disease-resistant Arabica varieties, which potentially would address many of our concerns. ” So far six roasters have signed on to the program, and WCR’s Schilling says that new roasters can easily join through the organisation’s website.

He says that the program needs contributions of US$3 million per year to fund WCR’s programs in variety development, climate change, genetic diversity and sensory research. This equates to the check-off being applied to just 4 per cent of the coffee imported in the year between May 2012 and April 2013, based on ICO figures.

If the program is able to raise this level of funds, Schilling says that it could draw attention from government agencies and private backers who could see fit to match contributions.

“There is also great potential for coffee roasters in their packaging of check-off coffees,” he says.

“They could include a message declaring: ‘This coffee supports coffee research’.”

Christy Thorns says that she believes the program will be accepted by small to medium-sized roasters. “I think everyone will accept that we need to look at this type of research funding as a cost of doing business,” she says. “We can’t stick our heads in the sand forever and hope the challenges facing coffee regions like disease and diminishing natural resources will just go away.”

For more information about the Check-Off Program, visit www.worldcoffeeresearch.org. G C R

WCR’s programs focus on variety development, climate change, genetic diversity and sensory research.

coffee network

COFFEENOMICS Robusta

AS ROBUSTA DEMAND

GROWS, SO DOES ROBUSTA QUALITY

GLOBAL COFFEE REVIEW EXAMINES HOW THE DEMAND FOR ROBUSTA HAS BEEN GROWING HAND-IN-HAND WITH SIGNIFICANT IMPROVEMENTS IN ITS QUALITY.

S E P TE M B E R /O C TO B E R 2013 | GCR

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COFFEENOMICS Robusta

T

Vietnam is the world’s largest exporter of Robusta coffee, forecast to produce between 22 to 23 million bags in crop year 2012-13.

here are many reasons why Robusta has gained popularity in the past few years.

Setting aside the fact that it is the Robusta-fed soluble industries in emerging markets and producing countries that have driven an annual average increase in the global coffee market of 2.4 per cent for the past 14 years, the answer is, quite simply, quality.

“We are starting to see Robusta coffee playing an increasingly important role in the overall coffee market,” says Manuel Diaz, one of the world’s leading cuppers of Robusta coffee. “As more people are getting educated about coffee, it is becoming clear that Robusta coffee is very much where the future consumer is centred.”

Diaz says it is exciting to see that Robusta coffee is finally starting to get the recognition it deserves.

“We have known for years that when it comes to developing new coffee markets, growth comes primarily from instant coffee consumption. Robusta is the type of bean most widely used in the soluble industry because of the higher extraction rate and lower price,” Diaz says. “But in the last five years we have started to realise that not only do we not know very much about Robusta to start with, but Robusta coffees actually have cupping profiles that in many cases can be far superior and more complex than Arabica coffees.”

Robusta has long been known for its higher caffeine content, with levels up to more than double those found in Arabica coffee. But even the name is often reported wrongly. Robusta beans are the most popular commercial variety of the canephora coffee species. Robusta beans are to the Canephora what varieties such as typica and caturra are to Arabica.

The Robusta tree is taller than Arabica trees, has significantly larger leaves and its cherries grow in much more concentrated clusters than those seen on Arabica trees. As the name indicates, Robusta coffee is much more ‘robust’ and resistant to crop diseases. It also grows easily at lower altitudes in more tropical and humid climates, and produces higher net returns than the much more vulnerable and attention demanding Arabica tree.

In the current 2012-13 harvest year, which won’t be wrapped up until the end of September, the

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G C R | S E P T E M B E R / O C T O B E R 2013

International Coffee Organization (ICO) has forecast the boom in both Robusta production and demand to continue in a crop year that is forecast to produce about 145 million 60-kilogram bags.

“World production of Robusta coffee in 2011-12 reached a historical record,” the ICO said in a special report on consumption trends released at the end of 2012. “The most significant change was observed in Robustas.”

The report added that Robusta in the 201112 crop cycle represented close to 40 per cent of total production of a little over 134 million bags, while world exports of 108 million bags in the last cycle showed Robusta beans climbing to 42 million bags. With that market share, the growth in Robusta coffee is one of the most significant changes seen in the past decade.

Even as the price margin between Arabica and Robusta coffee has narrowed considerably in recent months, the ICO says there is no indication of demand for Robusta starting to cool off.

“The arbitrage between Arabicas and Robustas has also narrowed further, with the

ARABICAS

ROBUSTAS 60

100

50

80

60

MILLION BAGS

MILLION BAGS

40

40

30 20

20

10

0

0

2009-10

2010-11

*FORECAST

“THE ARBITRAGE BETWEEN ARABICAS AND ROBUSTAS HAS ALSO NARROWED FURTHER, WITH THE PRICE DIFFERENTIALS BETWEEN THE THREE ARABICA GROUP INDICATORS AND THE ROBUSTAS GROUP INDICATOR ALL AT THEIR LOWEST LEVEL SINCE DECEMBER 2008.”

Roberio Silva

ICO’s Excecutive Director

2011-12

*2012-13

2009-10

2010-11

2011-12

*2012-13

Source: International Coffee Organization

price differentials between the three Arabica group indicators and the Robustas group indicator all at their lowest level since December 2008. Furthermore, certified stocks on the London futures market have fallen to their lowest level since October 2007, indicating a sustained appetite for Robusta coffee,” said the ICO’s Excecutive Director, Roberio Silva, in the July 2013 market report.

Robusta output alone is forecast to rise 8.1 per cent to 56.6 million bags in the 2012-13 harvest – or 39 per cent of the total market – while Arabica production is seen rising 7.4 per cent to 88 million bags thanks primarily to the on-cycle in the 2012-13 crop in the world’s largest grower Brazil, which ended in May. “I am bullish on Robusta and I have been bullish on Robusta coffee for quite a while now,” says commodity analyst Judith Ganes-Chase, from J.Ganes Consulting Co. Ganes-Chase, like many other veterans in the coffee industry, cites the awakening of coffee consumption as the main reason behind the newfound industry interest in Robusta coffee. She says this is not just fuelling demand, but is becoming increasingly vital in order to keep supply in line with demand. This has become problematic as producers in many traditional Arabica producing countries struggle due to multiple socio-economic factors such as low yields and dwindling land size per family, which has led thousands of small growers to abandon the land.

Raising output in Robusta-growing regions, ultimately, is easier and faster because growers don’t have to struggle with crop pests like leaf rust, which is currently causing a severe impact on the new harvest in Central America.

“It’s been fascinating to be able to discover so many good Robusta coffees,” says Ted Lingle, one of the founders of the Specialty Coffee Association of America and recently retired Executive Director of the Coffee Quality Institute (CQI).

“As the quality has improved we are realising that the Robustas that are well processed and well picked, just like Arabicas, can be completely neutral in their flavour attributes while the best robustas also can have very good cupping profiles.”

Lingle says one of the many surprises found during a special Robusta cupping project undertaken by the CQI was to discover that Guatemala has “extraordinary” high quality Robustas, even if the

S E P TE M B E R /O C TO B E R 2013 | GCR

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COFFEENOMICS Robusta

Robusta cherries grow easily at lower altitudes and are more resistant to crop pests than Arabica coffee.

share of overall Robusta coffee from Guatemala is only minor and hardly shows up in statistics.

“Guatemala is a model for what producers should be doing to move to toward a better valuedadded pricing and marketing of their coffees,” he says. “The only advice I would have for them at this point is to start looking a bit more at Robusta now because they are growing some phenomenal Robustas in the lands that are too low for quality Arabica coffee.”

Some officials in Robusta growing countries have felt as though they have been snubbed by the ‘Arabica elite’ in the specialty market. That lack of focus was one of the reasons why, at the height of the coffee crisis in the 1990s, Uganda started the World Alliance of Gourmet Robustas.

“We decided it was unfair we couldn’t compete in the specialty market just because we grow mostly Robusta coffee when many of our growers for years have produced high quality washed Robusta coffee, which is very well sough after in the market,” says the Managing Director of the Uganda Coffee Development Authority (UCDA), Henry Ngabirano.

Historical research by the UCDA points to Robusta coffee first being found growing close to the upper Nile region in Uganda around the 1860s. Botanists reported the discovery of wild plants that resembled the Arabica species that had been found in Ethiopia some 1000 years earlier. Between the 1930s and 1940s, Robusta was increasingly introduced as a cash crop in West Africa, while in both Sri Lanka and Madagascar Robusta had almost entirely replaced Arabica by the 1950s after a century of problems with leaf rust that wiped out most of the original Arabica plantations.

While Robusta beans from both Uganda and Mexico have stirred interest for their high-quality cupping profile, it is the history of Madagascar that in the past year has gotten coffee buyers all wired up, and it’s not just because of the higher caffeine content.

“One of the greatest surprises of all was when we came across a coffee from Madagascar with truly unique characteristics. It had a lot of acidity yet an incredible soft cup and there were so many different flavour attributes, from floral notes and notes of cardamom that we had a room full of traders wanting to buy it on the spot when we first presented the findings,” says Robusta expert Diaz.

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To Brazilian coffee columnist Lucio Caldeira, coffee lovers should not be so surprised or worried about the core ingredients in the coffee they drink as long as they get the flavour they like in the final cup.

“The idea of a blend can be found in many popular products,” Caldeira says in his column on Portuguese-language website, CafePoint.

“Whiskey, for instance, has been blended since 1853 and nobody complains about that. In coffee, from the harvest to everything else, the roaster will make the blend according to how he can extract the best coffee with what he has available, combining flavours with aromas, acidity and body to produce the perfect cup of coffee.”

The coffee market in the past few years has seen increasing volatility caused by a variety of factors from prices to macro-economic indicators for the global economy. This has made flexibility the name of the game, says Caldeira. And that, he says, is exactly what roasters get with better quality Robustas, while delivering to consumers their daily cup at a reasonable price. G C R

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ORIGIN Laos

LAOS’ ARABICA RUSH ARABICA IS ON THE RISE IN LAOS, BUT THERE IS DISAGREEMENT AMONG THE ORGANIC COFFEE GROWERS ABOUT WHETHER THE NATION’S BEST EXPORT MARKETS LIE IN EUROPE OR CLOSER TO HOME.

L

aos’ coffee industry has enjoyed a renaissance in recent years, with the volume of Arabica cultivated in the South-East Asian nation climbing sharply since 2009.

In 2012, Laos exported 25,000 tonnes of coffee, worth US$80 million, a 25 per cent increase on 2011’s 20,000 tonnes, which brought in US$65 million. Arabica currently accounts for 10,000 tonnes of that, up from

BY BERNIE ROSENBLOOM

just 200 tonnes in 1997. Domestic consumption accounts for just 5 per cent of the harvest.

According to the World Bank, Laos’ gross domestic product reached US$9.29 billion in 2012 and the coffee industry is one of the top 10 revenue generators in the economy.

According to General Manager of local coffee company Sinouk Pathana Sekong (SPS), Sinouk Sisombat, about 90 per cent of Laos’ coffee is grown organically, but only 5 per cent of that is certified. Among this 5 per cent are the beans from his modest 35-hectare plantation, which are a mix of Robusta and Arabica, though he plans to solely grow an assortment of Robusta varietals in the coming years.

“Certification shows I am different,” says Sisombat, who is also and President of the Lao Coffee Board (LCB). “It’s not that my coffee is any better. But the certification raises the sellable value of my coffee, and opens up new markets.”

Certification for Organic and Fairtrade practices is touted by some local non-government organisations (NGOs) as a key selling point in European markets, where Laos’ main export destinations are Poland, Germany, Belgium, and Switzerland.

Other producers, however, do not see the value in the extra expense for the various certifications for several reasons. First, Europe is not their main market. Asia is where they do the bulk of their business, and their purchasers know from personal inspections the quality of Laos’ coffee and its process.

S E P TE M B E R /O C TO B E R 2013 | GCR

37

ORIGIN Laos

Laos’ Arabica output has grown from around 200 tonnes in 1997 to some 10,000 tonnes today.

Laos’ coffee industry seems to have come full circle since French colonials first harvested Arabica in the south of the country in the 1930s, with annual yields approaching 5000 tonnes. They found the fertile volcanic soil on the 250,000-hectare Bolaven Plateau, sitting between 800 and 1300 metres above sea level, perfect for growing the prized cherries.

Plantation owners in Laos’ southernmost Champasak province, the Bolaven heartland, focused on the Bourbon Typica variety, but rust disease decimated most crops just before World War II. The turbulent revolutionary decades from the 1950s to 1975 halted Laos’ coffee production, but the ensuing peace found stateowned plantations cropping up, with Cuban and East German experts reintroducing Catuai, Catura, and small amounts of Liberica Arabica varieties. However, in the early 1990s, the government embarked on a land redistribution program, giving small farmers ownership.

Until the mid-1990s, most coffee farmers

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G C R | S E P T E M B E R / O C T O B E R 2013

CERTIFIED? Some 90 per cent of Laos’ coffee is organic, but only 5 per cent is certified.

in Laos grew Robusta. The majority belonged to cooperatives, while others sold directly to coffee traders.

Meanwhile, Sisombat, who had been living in France for more than 30 years, found that in 1992 scientists had discovered Catimor, a new rust disease resistant variety of Arabica. In 1995, he took these beans to his childhood home in southern Laos, with a vision to make coffee a flagship product.

By 1997, Sisombat had established a modest Arabica plantation with top quality equipment. At that time, Laos’ national Arabica output stood at around 200 tonnes.

According to the 2007 Groupe de Travail Café report, Participative analysis of the coffee supply chain in Laos Peoples’ Democratic Republic, while throughout the 1990s and into the new millennium annual yields and prices were quite erratic, overall the price of the predominant Robusta rose.

Then came the Arabica rush of 2009. As Sisombat explains, local farmers watched the Arabica price more than double from US$3000 to US$6580 that year.

“People went crazy. They wanted to plant,” Sisombat says.

“They began cutting down and uprooting trees to cash in on Arabica.”

Sisombat says many farmers did not fully comprehend that traders at London’s commodity exchange set the global price for

Robusta, while their New York counterparts set Arabica’s rate. In fact, he does not feel that speculators have a fine-tuned calculator for setting a realistic coffee price.

“What’s their math? They have none. Beans grown organically in Laos or fertilised in Columbia aren’t factors. The tonne price is the same, and speculation governs the rate. Bottom line, will more people consume coffee? This leads to a volatile playing field,” Sisombat says.

“Forecasting coffee prices is like predicting the weather. You may come close, but nothing is certain. Speculation amplifies everything. If the price starts moving up, it rises too high, and a slight downturn can trigger a plummet.”

As for the Arabica rush, farmers now face uncertainty. Those expanding the growing area and planting Arabica seedlings in 2009, expect to start seeing more cash during the 2013 harvest season after waiting three years for the plants to produce beans.

However, Arabica export prices sank 60 per cent from US$6800 per tonne in 2011 to June 2013’s US$2800. Add in Arabica’s harvest time (October and November), and futures trading into the equation, Sisombat says, and pricing strategies turn into a dice toss.

He adds that although traders set the global price, retailers, restaurants, and cafes are making the money. “The [end] consumer price…is steady. When was the last time you paid less for a cup of coffee? Yet the trade price is falling. On the other side are local producers, whose situation is quite unstable.”

Among Laos’ non-certified producers is the Dao-Heuang Group’s Dao Coffee division, which farms some 250 hectares in southern Laos’ Champasak Province. The company reports its average annual harvest yields at about 500 tonnes, which brings in at least US$1.1 million per year.

Singapore-based Olam international, one of the largest coffee traders in the world, incorporated Outspan Bolavens Limited (OBL) as the group’s Lao coffee production subsidiary in 2009, the first year of the Arabica Rush. Of its 3000 hectares sitting at 1250 metres above sea level on the Bolaven Plateau, the company has planted 1857 hectares, while the remaining land will be sown in phases.

Certification doesn’t seem to appear on the cards, probably because there’s no need as Olam exports certified coffee from other sources to Western countries. In 2011, Sawan Muthanna, Olam’s Plantation Manager of the

The majority of Laos’ organic Arabica is sold in Vietnam, while its popularity is also growing in Japan, China and Korea.

Bolaven Plateau farm, told the press that with 12 years of managing plantations under his belt, the growth he saw after two years was phenomenal. “[The coffee] you see here, at this level, I don’t think I’ve seen anywhere else,” says Sawan, who expects more big-scale corporate plantations plan to open on the plateau in coming years.

This has attracted criticism from some rural development organisations and NGOs, which often target specific villages or community clusters for micro-sustainability projects that create boutique brands for sale locally and overseas. Environmentalists also voice their concerns, as does the government.

Established in 1994, Lao Farmers Products (LFP), which guarantees organic origins and fair trade practices for growers, is among the more outspoken. The LFP believes monoculture businesses such as coffee are too risky. They have encouraged some 200 farming communities to work with aid groups and social enterprises to export their jams, honey, juices, and herbal teas.

Lao Mountain Coffee in the Bolaven Plateau took another path. Established in 2001 by Master Roaster Steve Feldschneider, Lao Mountain Coffee runs as a mix between a retail and wholesale

S E P TE M B E R /O C TO B E R 2013 | GCR

39

ORIGIN Laos

Sinouk Sisombat says that certification will open up more opportunities for Lao Arabica in European markets.

“FORECASTING COFFEE PRICES IS LIKE PREDICTING THE WEATHER. YOU MAY COME CLOSE, BUT NOTHING IS CERTAIN. SPECULATION AMPLIFIES EVERYTHING. IF THE PRICE STARTS MOVING UP, IT RISES TOO HIGH, AND A SLIGHT DOWNTURN CAN TRIGGER A PLUMMET.” Sinouk Sisombat

General Manager of Sinouk Pathana Sekong (SPS) President of the Lao Coffee Board (LCB)

business, roasting and selling high-grade coffee grown by farmers certified by the World Fair Trade Organisation and Fairtrade Lao. “We work directly with farmers and agriculture groups to insure the beans are processed according to specialty coffee standards: ripe, fresh cherries, disciplined processing, and professional grading and sorting. We sample all of our beans before we buy them to assure quality and consistency, and for the best beans, we pay the highest prices in Laos,” Feldschneider says.

Rather than peddle the standard 60-kilogram sacks filled with beans, Lao Mountain Coffee packages its roasted products for the shelf with 200-gram gift packs and 1-kilogram bags, or wholesale orders of more than 500 kilograms. Their selection includes 20 distinct beans and a choice of unique blends targeted for Europe.

Seeing the varying industry perspectives, SPS’s Sisombat took the lead in forming the Lao Coffee Association, which morphed into the LCB in 2010. The 40-odd members include a range of stakeholders: growers, national and local authorities, distributors, processors, and exporters. According to Sisombat, the LCB is playing a pivotal role in

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G C R | S E P T E M B E R / O C T O B E R 2013

prompting the government to embark on a three-point national strategy for the corporate sector.

The cornerstone of this three-prong approach is to simply produce more coffee. The plan calls for an increase in the volume of higher-yielding Robusta production, while expanding the amount of land to be earmarked for Arabica. Sisombat says Arabica production volume is closing in on Robusta, and the aim is to continue placing more weight on the milder, more sought-after beans.

Of course higher production assumes an equal rise in exports. As such, the second pillar is ensuring the quality of Lao Arabica continues to climb, making it more attractive on the global stage. This leads to promotion, with the aim of pointing the world’s spotlight on Laos’ quality organic coffee.

The circle now returns to certification, the gateway to Western markets.

However, Sisombat says the steep cost of certification acts as a significant deterrent. Meanwhile, the single-digit percentage of Lao coffee sold in Europe continues to shrink.

According to LCB, the vast majority of non-certified Lao Arabica and Robusta beans simply cross the border to known trading partners in Vietnam, while a growing volume is heading to Japan. Sisombat adds that Laos is currently eyeing the Chinese and Korean markets, where certification plays a lesser role.

“I still firmly believe in certification and promotion to tap deeper into the more discerning European market,” says Sisombat. “It adds value to the Lao brand…almost like a bonus.”

However, expanding to nearby Asian markets without the need for certification appears to be the more promising route in the short-term.

Should global market demand pull Lao coffee to Europe, Sisombat wins.

But as long as regional demand stays high, regardless of any upscale marketing spin in the near future, the majority of Laos’ coffee farmers will keep their eyes firmly set on Asia. G C R

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ORIGIN Brazil

&

RAIN DROUGHT LEAVE BRAZIL IN DOUBT

BRAZIL’S 2013-14 COFFEE CROP IS PROJECTED TO BE THE BIGGEST OFF‑CYCLE HARVEST EVER. HOWEVER, THERE HAVE BEEN ISSUES WITH THE ROBUSTA CROP THAT COULD PULL THE FINAL FIGURE DOWN SIGNIFICANTLY.

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G C R | S E P T E M B E R / O C T O B E R 2013

S

peculation about the size of Brazil’s annual coffee crop is nothing new.

Brazil supplies between 35 and 38 per cent of the entire world supply of coffee in any given average cycle. Even in off-cycle years, which traditionally have produced lower volumes as trees are stressed and recovering from high yields in the on-cycles, the arrival of the Brazil crop traditionally eases pressure on the market.

This year has been no different. But from the first round of flowering for Brazil’s 201314 harvest, the signs pointed to an unusually healthy crop. Even Conab, Brazil’s official crop supply agency, said in its second forecast for the new harvest released in May that it expects the current Brazilian coffee crop to be the biggest off-cycle yield on record.

Figures vary wildly, however, from Conab’s relatively conservative estimate of 48.6 million 60-kilogram bags to Volcafe/ ED&F Man, which has pegged Brazil to produce close to 58 million bags.

Even for Brazil, this is speculation at “a whole different level”, says one physicals trader in the US green coffee market, speaking to Global Coffee Review on condition of anonymity. More than that, the broad gap in estimates is causing uncertainty in the market as to how much coffee can realistically be expected ahead of the onset of the main roasting season in the US in late September.

As always in the coffee cycle, when it comes to weather, timing is crucial.

“I was astounded during my trip to see this year’s off-cycle crop. It’s the best offcycle crop I have seen in 12 years of visiting Brazilian coffee growers,” says Carl Leonard, Vice President for Green Coffee at US roaster, Community Coffee. He attributes the high yields to better crop husbandry and increased use of fertiliser thanks to the high prices in 2010 and 2011.

“It’s evident that producers have utilised excellent weather, with ample investments to maximise quality and production. Competent Brazil suppliers continue to advise that 58 million is a real possibility. I observed what was on the trees at the beginning of harvest, it does appear to be a real possibility,” says Leonard.

“I WAS ASTOUNDED DURING MY TRIP TO SEE THIS YEAR’S OFF-CYCLE CROP. IT’S THE BEST OFF‑CYCLE CROP I HAVE SEEN IN 12 YEARS OF VISITING BRAZILIAN COFFEE GROWERS.” Carl Leonard

Vice President for Green Coffee, Community Coffee.

The broad gap in estimates for Brazil’s yield in the 2013-14 crop year is causing uncertainty in the market.

But hopes for what started out as the potential perfect crop in Brazil have since been dashed.

First came the heavy unseasonal rains in the second half of June. Even the most optimistic market players in Brazil who initially had been pointing toward a harvest of at least 54 million bags, now say these rains did indeed cause significant damage to quality and some losses. Then came the frost in southern Parana in July. While this is one of Brazil’s smallest growing regions, producing about 2 million bags, this nevertheless added to the losses.

“The widespread rains that are mitigating the effects of the cold front in the region could hurt the quality of coffee now being harvested as it interrupts the drying process of the beans and infuses a bitter taste, reducing its value on the market,” German analyst F.O.Licht said in a July market report.

“While most coffee regions were spared from frost in the period under review, the state of Parana did see some frost on coffee plantations in the middle of the month. The Centre for Advanced Studies on Applied Economics [Cepea] sees the next 2014-15 [April to March] crop [in Parana] being reduced by up to 20 per cent due to the frost, while the current harvest

S E P TE M B E R /O C TO B E R 2013 | GCR

43

ORIGIN Brazil

Officials from the world’s largest coffee cooperative, Cooxupe, have noted that the average bean size of the current Arabica crop is significantly smaller this year, reducing the overall harvest volume.

of roughly 1.7 million 60-kilogram bags is expected to be left unaffected,” the report said.

But the most significant damage factor goes back to January and February this year, when excessive dryness hit the top producing regions in Brazil’s largest Robusta coffee belt in the east coast state of Espirito Santo.

While traders and exporters at the time played down the impact of the dry-spell, the damage from the drought has been so extensive that Brazil will be unable to produce more than 49.4 million bags, says John Wolthers of Santos-based exporters, Comexim.

Wolthers says the company cut its forecast for the new harvest by a whopping 3.8 million bags, all for output from the new Brazilian Robusta crop, also known as conillon, for which harvesting had been fully completed at the time of publication.

“Concerning conillon, we originally estimated a crop of 16.8 million bags, which we are forced to reduce to about 13 million bags. This volume reduction was due to lack of rains in January and February of this year, which also caused a reduction of yield. Beans are smaller than in normal years due to lack of humidity at the right time,” Wolthers says.

“As for the Arabica crop, the harvest is of not so good quality because of the long and constant spells of rain during June. We maintain the overall expectation for the Arabica harvest to be of 36.4 million bags, but with the lower conillon number, we reduce our overall Brazilian production to 49.4 million bags,” he says.

Not all industry stakeholders in Brazil are so optimistic as far as the Arabica crop is concerned. Officials at the Cooxupe Cooperative, the world’s largest coffee cooperative based in the Southern Minas town of Guaxupe, have noted that bean size in the new Arabica crop has been significantly smaller this year, which in turn reduces the harvest volume.

“According to the reports we had received by 24 July, the bean size is much smaller this

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G C R | S E P T E M B E R / O C T O B E R 2013

year, and only 22 per cent of all the coffee processed to date reached bean size screen 17, compared to 35 per cent last year,” says an official from the grading department at the Cooxupe Cooperative.

The good news is that with less Brazilian Robusta in the market, and additional weather problems reported to have cut down on Robusta supplies from Vietnam and Indonesia, the overall quality of the coffee available to consumers is up.

Analysts expect that part of the shift by roasters from Arabica to Robusta, which the market witnessed following the 14-year-high prices in 2010 and 2011, will shift back this year to higher quality blends based on an increased share of Arabica beans.

In Brazil, roasters are already reporting the development of this trend. As consumption continues to rise in the local market, with Brazilian demand pegged to rise to about 21 million bags in the 2013‑14 marketing year, some analysts even

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speculate that this could drive domestic consumption even higher.

“Brazilian coffee consumption is rising 3 to 3.5 per cent,” says Chris Narayanan, a financial analyst with Societe Generale. Narayanan adds that this, combined with the current lower prices for consumers, would likely “encourage more consumption” and an even higher increase in consumption in the year ahead.

And as the increasing consumption in Brazil is not already adding pressure on the local Brazilian market, exporters will also have to deal with the impact of a price support program which Brazil’s President Dilma Rousseff approved in August.

“Growers who need resources in the short term can now get them,” Roussef told coffee growers in Southern Minas. The program comes after months of nationwide protests by coffee farmers demanding government support in the face of the four-year-low prices seen in most of June and July. Even in cost-efficient Brazil, this erosion in prices has pushed prices below the cost of production. Brazil’s government now plans to buy up to 3 million bags of coffee at subsidised prices through an option program to keep pressure on prices.

Market reaction to the Brazilian President’s comments was almost immediate, leading to gains of 4.1 per cent in the week following the news. Traders expect prices to remain buoyant in the face of the Brazil price support. But as always, with a new Brazilian crop starting to reach the market, a lot can still happen and uncertainty remains.

Analysts say roasters should keep a close watch on export figures from Brazil as the pace of shipments will likely be the best indicator as to how much coffee will be available in the months ahead. G C R

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REVIEW Host 2013

MILAN GETS SET TO

HOST

THE LEADING TRADE FAIR FOR THE HOTEL, RESTAURANT AND CATERING WORLD WILL SEE 125,000 PROFESSIONALS GATHER TO DISCOVER THE LATEST IN INDUSTRY PRODUCTS AND BUSINESS OPERATIONS.

S E P TE M B E R /O C TO B E R 2013 | GCR

47

REVIEW Host 2013

T

he world’s retail hospitality industry will descend upon the second largest city in Italy for a five-day extravaganza of coffee, business and culture at Host 2013.

Taking place from 18 – 22 October, the biannual exhibition will feature more than 1600 exhibitors from 50 countries at the Fiera Milano complex in Rho, just outside of Milan.

Michele Perini, President of Fiera Milano, says this year’s event promises to be a global business platform like no other. “Host is just the right place to present market previews of new products needed to face an increasingly discriminating and demanding market,” says Perini.

In 2011, 1600 exhibitors from 40 countries worldwide participated at Host, an increase of 10 per cent compared to the previous edition. These buyers, stakeholders and distributors met more than 125,000 professional operators, of which 33,000 were foreigners from 153 countries.

At this year’s Host, exhibitors will exceed the 1600 mark set in 2011. Two months ahead of the event 330 new entries had been received from 172 foreign companies.

Representatives will travel from 45 countries, with 10 new countries represented at the 2013 event including Bahrain, Brazil, Egypt, Hungary, Israel, Japan, Romania, Slovakia, Venezuela and Vietnam.

Foreign companies will account for 38 per cent of the total attendance, an increase of more than 50 per cent on 2011.

Host will be organised into three macro-areas including food service equipment, coffee and tea, and furniture and tableware.

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G C R | S E P T E M B E R / O C T O B E R 2013

Host 2013 will attact more than 125,000 professional operators from 45 countries.

Foreign companies will account for 38 per cent of the total attendance.

Perini says it’s Host’s “four milestones”, including the launch of new products, new ideas, services and business, that attracts such large-scale attendance and makes the event one of the most internationalised exhibitions in the world.

“Besides being the leading marketplace for the sector, Host stands as the unrivalled trendsetter for the entire HoReCa (hospitality, restaurant, catering) world,” Perini says. “Host is where the pulse of the market can truly be taken, where one meets the competition as well as new and loyal clients.”

The eight traditional segments of the HoReCa market will be organised in three macro-areas that optimise synergies between overlapping specialisations: food service equipment with bread, pasta and pizza; coffee and tea with gelato, pastry, bar and coffee machines; furniture and tableware.

The exhibition layout will be complemented by a rich calendar of training and information events and special areas.

This year is the first time that Host is opening up to the world of tea, with a dedicated area to meet continued market demand. From teahouses to bars, restaurants to hotels, tea is now spread across the HoReCa sector. As a result of such interest, Host will dedicate an entire section to this business in synergy with the coffee sector for the first time.

Perini says that the coffee segment of Host remains a large and important division not only to the event, but to the European market. Figures from the Italian Federation of Public Establishments highlight why Milan is the perfect place to host this leading trade fair for the HoReCa and the retail world. Aaccording to November 2011 figures, Italians drink as many as 7 billion cups of coffee a year in coffee bars, which adds up to an average of 171 cups a day for every bar in Italy.

“Italy boasts a coffee culture that has been exported to the world, increasing its business potential,” Perini says. “Italy is the world’s third most important exporter of ground coffee after Germany and Belgium, and one of the most important green coffee importers.”

A 2012 study from Italian business publication MarkUp indicates that approximately 266,000 tonnes of coffee are consumed in Italy each year, half of which is consumed away from home, 38 per cent through the HoReCa channel and 10 per cent through vending. The single-dose sector (pods and capsules) currently accounts for only 6 per cent, but is experiencing double-digit growth rates, up by as much as 65 per cent.

On the other hand, Perini says espresso machine technology is on the rise too.

“Technology has made the espresso brewing process more and more automated, and this has helped to further enlarge the market,” he says. “Among other trends [we are likely to see at Host], sustainability is paid special attention, in terms of organic beans, energy saving, and environmentally friendly materials for capsules, packaging and machines.”

Host will operate a busy schedule of training and information opportunities on coffee research, quality control and professional training. At the designated coffee bar, the Specialty Coffee Association

of Europe (SCAE) will host 10 workshops, including sensory and cup tasting and their application in businesses, and barista skill workshops for basic, intermediate and advanced levels that will cover brewing coffee through to techniques for milk and barista menus. Participants will also have the opportunity to take exams for SCAE qualifications.

The Italian Federation for businesses will host a series of focus groups, seminars and trade events each day. In the Coffee Village, experts will run training and information sessions, seminars and practical workshops with some of Italy’s most authoritative industry associations.

Visitors will also be able to witness an attempt to make the biggest cappuccino in the world and see performances of top coffee masters creating crafted coffee and espresso-based drinks.

To celebrate this year’s 14th edition of the World Barista Championship (WBC), World Coffee Events (WCE) will thrill visitors at Host with a WBC all-stars event. The lineup will feature present and former WBC baristas including 2013 champion Pete Licata, 2010 champion Michael Phillips, 2009 champion Gwilym Davies, and 2007 champion James Hoffman, along with other WBC finalists.

The champion baristas will gather in a rare opportunity to see them interviewed live with feedback on their award-winning performances. Over the five days, the baristas will also challenge each other in an on-demand signature beverage performance, judged by members of the public.

Whether it’s the latest espresso machine, cocktail maker or gelato invention, Perini says there will be something for everyone to discover at Host. GCR

BUNN A PROFITABLE ESPRESSO beverage program that delights customers requires equipment that is embraced by staff, safe to use, intuitive, consistent, and easily maintained. The Espress Sure Tamp superautomatic espresso machine by BUNN ensures a fresh new canvas for successful beverage innovation and execution.

BUNN has dedicated their best engineering and materials knowledge to designing their exclusive Sure Tamp process in the brew system assembly. Its all-metal construction uses a proximity sensor to assure correct compaction and precise tamping pressure to achieve the best shots of espresso.

The 18-centimetre Build-a-Drink touchscreen is an easy-to-use control console that gives the operator what he or she needs to produce a full menu of espresso-based beverages.

Michele Perini, President of Fiera Milano says Host stands as the unrivalled trend setter for the entire HoReCa world.

WWW.BUNN.COM/ESPRESSO HOST LOCATION: PAVILION 9 STAND 12A Milk production and steam wand control are easy to nagivate on the touchscreen. Baristas and more experienced operators will enjoy the manual steam function that enables a self-programmed milk steaming process.

Daily cleaning does not have to be a chore. Picture-prompted cleaning on the Espress Sure Tamp is a new approach to this daily requirement for great drink execution.

High-resolution photograph tutorials are displayed on the large touchscreen to guide the operator step-by-step in less than seven minutes.

Customer investments are also backed by a post-purchase support program. The BUNNlink Wellness Program won’t let unexpected costs erode profitability.

Discover what’s possible with BUNN at Host 2013.

S E P TE M B E R /O C TO B E R 2013 | GCR

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REVIEW Host 2013

QUALITY ESPRESSO HOST IS ALL about discovering new and innovative products, and Barcelona-based Quality Espresso has just the thing to impress the large crowds interested in commercial espresso machine technology.

Quality Espresso have designed and patented a unique temperature control technology that delivers the same results as multi-boiler systems, while avoiding high electricity costs and service issues associated with such equipment. The new technology, called Grouptronic, is a simple evolution of the thermo-siphon principle.

Grouptronic technology allows the temperature of each group head to be independently programmed with a precision of +/- 0.2°C. Probes continuously monitor the temperature of each group, controlling the flow of water in the thermo-siphon circuits. This allows the espresso brew water to be fine-tuned to each blend, independently of the temperature programed for the boiler or the other groups.

Available in a tall cup or regular group

WWW.QUALITYESPRESSO.NET HOST LOCATION: PAVILION 11, STAND E39 – E45 height, the F3 Grouptronic is the machine of choice for the busy coffee serving professionals seeking to bring out the subtleties of different blends or single origins in a repeatable and consistent manner.

As well as presenting Grouptronic machines serving espresso on their stand at Host, Quality Espresso has built a see-through model of the system to demonstrate its simplicity to visitors.

The Grouptronic technology is available on all flagship models made by Quality Espresso, including the Futurmat F3, the Italcrem IT4, and the Visacrem V6 (branded Gaggia G6 in countries such as Spain, Portugal, Mexico, Chile and Argentina). It is also available with full ETL certification for North America.

Quality Espresso has been manufacturing and distributing coffee machines since 1952.

With more than 60 years of experience, the company looks forward to sharing their vast knowledge with 125,000 expected visitors at Host 2013.

SCHAERER FOUNDED IN 1892, Schaerer is one of the world’s leading manufacturers of fullyautomatic coffee machines. Located in Zuchwil, Switzerland, Schaerer aims to provide the right solution for any coffee machine feature or performance requirement.

Customers from the world over appreciate the simple handling, the wide bean-to-cup beverage selection and the excellent coffee quality afforded by a Schaerer machine. As the inventor of the fully-automatic cappuccino system in 1997, the long-established Swiss company has positioned itself as a leader in the area of integrated coffee and milk solutions.

Schaerer is represented internationally by its subsidiaries in Germany, Belgium and the United States, and by partners on each continent.

As well offering coffee machine performance solutions, Schaerer’s disposable NcFoamer (non cleaning foamer) concept is the simple answer to coffee machine cleaning.

This new disposable solution, launched at the

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WWW.SCHAERER.COM HOST LOCATION: PAVILION 11, STAND C64 – D63 end of 2011, provides a solution to one of the key problems with preparing coffee using fresh milk on a day-to-day basis.

The NcFoamer makes it possible to simply replace the parts of the machine that conduct milk – doing away with the time-consuming process of cleaning them. This product is user-friendly and combines hygiene and sustainability at a favourable price.

As such, Schaerer has achieved huge success with its NcFoamer cleaning concept, proving that the finer details of machine care are everything when it comes to creating innovative products. The Swiss coffee machine manufacturer is particularly winning over users who value convenience when going about their daily activities.

From the start, Schaerer has endeavoured to unite superior technology with the quest to indulge the senses. Schaerer’s NcFoamer and complete range of fully automatic coffee machines will be available to view at Host 2013.

Romance of Monsoon winds with Coffee beans

Specialty Coffee Mild, Sweet, Mellow tones of straw, Dark chocolate, Hints of musty earth and Baking spices.

Unique to Malabar coast of Karnataka and Kerala in India.

indiacoffee.org

///////////// GUEST COLUMNIST



Photo: Pham Thi Diep Giang

ESTABLISHING VIETNAM’S BUON MA THUOT AS A GLOBAL COFFEE CAPITAL Đặng Lê Nguyên Vũ

Chairman of Trung Nguyen Group

IN RECENT YEARS, Trung Nguyen has proposed many initiatives to promote the coffee of Buon Ma Thuot – the capital of Vietnam’s chief coffee region, Dak Lak – to the world.

I feel that Vietnam’s coffee industry is currently limited by the focus on exporting raw material with low value, and that the reputation of Vietnam’s coffee does not match its stature as one of the world’s largest coffee exporters. This limits the long-term economic benefits for our coffee farmers.

I want our coffee to carry with it to the world the fascinating cultural values of the people and the land that produced it. I want to put not just Vietnamese coffee, but Vietnam’s coffee culture, on the map. I also want to make the Dak Lak province an international role model of sustainable and community-friendly economic development.

As the capital of Vietnam’s Central Highlands, Buon Ma Thuot is the cradle of some of Vietnam’s oldest and most remarkable indigenous peoples. The geology of the region, rich with basalt rock and volcanic soil, was formed some 160 million years ago and is home to ideal conditions for coffee cultivation.

At an average height of 451 metres above sea level, Buon Ma Thuot’s climate is savannah-tropical with two distinct seasons: rainy season from May to October and dry season from November to April.

The long-lasting rainy season and plentiful natural water sources have created the ideal conditions for the region’s coffee trees to flourish.

In recognition of the importance of this water to their livelihoods, the local people have maintained their traditional animist custom of worshipping water sources.

During the French colonial era, the fate of Buon Ma Thuot’s people became inextricably entwined with the coffee crop, even though they were not allowed to grow coffee themselves and seldom had a chance to even taste the drink. In 2013, roughly 85 per cent of the local population earns their livelihood from the coffee industry, which has created some 500,000 jobs in the region.

Buon Ma Thuot has been favoured by excellent conditions for coffee cultivation. However, for many decades now we have

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ALONG WITH THE INTEGRAL ROLE OF COFFEE IN THE LOCAL GONG CULTURE AND FOLK SAGAS, THE ENJOYMENT OF COFFEE HAS AN IMPORTANT ROLE IN DAILY LIFE.

witnessed the paradox of coffee – the sustained disadvantage of the coffee producers despite the continued growth of the global industry.

As an exporter, the Vietnamese industry only receives 10 per cent of the final value that its coffee generates from bean to cup. I believe our producers deserve more than that. In order to do this, I intend to help make Buon Ma Thuot’s coffee a recognised and prestigious brand.

The importance of the coffee tree to the lives of the people in the Central Highlands is reflected in the traditional festivals of the region.

Along with the integral role of coffee in the local Gong culture and folk sagas, the enjoyment of coffee has an important role in daily life, even being celebrated with a specific festival.

Nowadays, coffee is more and more important to the region as most households grow coffee for export. Coffee is their major income.

Because of the pivotal role of the coffee crop in the lives of local people, enjoying coffee has become a practice rich with custom and tradition. Like in Brazil and Turkey, the local Ede ethnic people drink very strong coffee. However, they will only drink it pure, without any additional ingredients. Locally prepared coffee is filtered through a cotton bag, which is handmade by women for that specific purpose.

THE EDE PEOPLES’ M’JOR COFFEE CEREMONY, WHICH TRANSLATES TO RESPECTFULLY OFFERING COFFEE, RECOGNISES COFFEE AS A GIFT OF LIFE AND NATURE AND A SACRED PRODUCT OF BUON MA THUOT.

While the people of Buon Ma Thuot have been sharing their coffee with the world for many years, they now wish to share the traditions surrounding their product as well.

The Ede peoples’ M’Jor Coffee ceremony, which translates to Respectfully Offering Coffee, recognises coffee as a gift of life and nature and a sacred product of Buon Ma Thuot. The Ede people want to share this ceremony with the international coffee community, showing how Vietnam’s coffee beans are imbued with the soul of the people and land that produced them.

In 2005, Trung Nguyen created the Celebration of Coffee Festival, a national festival with global stature, which has been enjoyed biannually by crowds of domestic and international tourists ever since. As a part of Trung Nguyen’s plan for a National Coffee Cluster in Vietnam, we intend to establish Buon Ma Thuot as a global coffee capital that will become a tourist destination for the millions of coffee enthusiasts.

We are planning the development of an international level multi-disciplinary university, a global coffee museum, a coffee research institute, a research

institute for ethnology and indigenous culture, and a coffee exchange in Buon Ma Thuot.

In order to realise this dream, we require the participation of government, ministries, the industries of Vietnam as well as the international coffee community. In the meantime, Trung Nguyen is gradually developing the key elements of the project, including plans for an urban coffee zone, global coffee museum, and global coffee sanctuary. Trung Nguyen has already collected more than 12,000 coffee items for the global coffee museum and a small replica of the facility is on display in Buon Ma Thuot.

Our global coffee capital is a model of sustainable development, recognising the spirit of our people and providing en example for developing countries. At the same time this program is spreading the awareness of Vietnam’s coffee culture and also increasing the value of Vietnamese coffee on the world market. G C R

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DIARY Dashboard COFFEE AROUND THE GLOBE

WORLD COFFEE EVENTS

ESPAÇO CAFÉ BRASIL

EXPOMINAS, BELO HORIZONTE, BRAZIL

9 - 12 SEPTEMBER The eighth edition of Space Café Brazil will take place during the International Week of Coffee.

Besides the traditional fair, the International Coffee Week comprises the 50-year anniversary of the International Coffee Organization, thus enabling visitors from different countries to come into contact with the Brazilian market and generate great opportunities for conducting business. www.espacocafebrasil.com.br

INTERNATIONAL COFFEE & TEA FESTIVAL THE MEYDAN GRANDSTAND & CONVENTION CENTRE,

DUBAI, UNITED ARAB EMIRATES

8 - 11 OCTOBER The International Coffee & Tea Festival is a one-stop event showcasing all facets of coffee, tea, bar and café products, equipment and services. The Middle East’s flourishing coffee and tea market offers a conducive environment for cafés and restaurants and continues to grow exponentially. Over the past four years since its inception, the International Coffee & Tea Festival has proved instrumental to the development of the industry, providing professionals and coffee/tea businesses the exposure to promote their products, launch new concepts and seek out new business channels. www.coffeeteafest.com

UNITED COFFEE & TEA INDUSTRY SHOW RUSSIA

EXPOCENTRE, MOSCOW, RUSSIA

12 – 14 SEPTEMBER The United Coffee & Tea Industry Show (UCTIS) Russia is an international combined coffee and tea conference and industrial exhibition. Its three-day schedule includes the established Moscow International Coffee Forum (MICF) and Moscow International Tea Symposium (MITS). Major exhibitors taking part in the show include coffee and tea raw materials suppliers, coffee and tea producers, exporters, importers, distributors, manufacturers of all types of equipment, packaging, various ingredients, and accessories for industries. The Organising Committee of the Russian United Coffee & Tea Industry Show expects more than 2500 visitors to attend from Russia, the Commonwealth of Independent States (CIS) and other countries. www.unitedcoffeetea.ru

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HOST FIERA MILANO

MILAN, ITALY 18 – 22 OCTOBER

Host is the international exhibition of the hospitality industry. It is a leading marketplace for the sector, and a trend setter for the HoReCa industry. Around 1600 exhibitors take part in the event, coming from 40 countries and all four corners of the globe. The 2013 event will see a 10 per cent increase in exhibitors over the last 2011 event. Around 125,000 professional operators will visit Host, including 33,000 international guests from 153 countries.

Host offers specialised areas, including a dedicated coffee and tea segment. www.host.fieramilano.it/en

LET’S TALK COFFEE ROYAL DECAMERON RESORT AND CONVENTION CENTER,

SALINITAS, EL SALVADOR

30 OCTOBER - 3 NOVEMBER Let’s Talk Coffee 2013 is a specialty coffee conference and training event hosted by Sustainable Harvest Coffee Importers.

The event is a chance for the industry to calibrate and innovate its understanding of taste and quality. Visitors will have the opportunity to meet producers from Rwanda and El Salvador and listen to keynote speaker Oliver Strand, a regular contributor to United States news and lifestyle media outlets. Discussions will explore the impact of Roya and breakout sessions will focus on strategies for mitigating the short and long-term effects of the disease. Let’s Talk Coffee 2013 will also host its inaugural HarVee Awards, celebrating the best coffees of the year from El Salvador. www.letstalkcoffee.org

KEEP A LOOK OUT Nordic Barista Cup 5 – 7 September 2013 Oslo, Norway www.nordicbaristacup.com Coffeena International Coffee Fair 19 – 21 September 2013 Cologne, Germany www.euvend-coffeena.com COTECA 24 – 26 September 2013 Hamburg, Germany www.coteca-hamburg.com/en Let’s Talk Roya 3 – 6 November 2013 El Salvator, Central America www.letstalkroya.org

WORLD TEA & COFFEE EXPO

BOMBAY EXHIBITION CENTRE,

MUMBAI, INDIA 6 - 8 FEBRUARY

Seoul International Café Show 21 – 24 November 2013 Seoul, South Korea www.cafeshow.co.kr Melbourne International Coffee Expo 15 – 18 May 2014 Melbourne, Australia www.internationalcoffeeexpo.com

In view of the enthusiastic response from exhibitors and visitors – both Indian as well as international – the second edition of this expo is being held at a bigger venue to accommodate larger number of exhibitors and visitors. This event will also include a conference, workshops and seminars, which will be addressed by industry leaders from India and abroad. More than 100 exhibitors from eight countries are likely to display their products and technologies related to the hot beverage sector to an audience of 6000 decision makers from about 15 countries. www.worldteacoffeeexpo.com

SEPTEMBER/OCTOBER 2013 | GCR

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PRODUCTS Marketplace

FUTURMAT F3 WITH GROUPTRONIC TEMPERATURE CONTROL The Grouptronic technology developed by Barcelona-based Quality Espresso allows the temperature of each group to be independently programmed with a precision of +/- 0.2°C. Probes continuously monitor the temperature of each group, controlling the flow of water in the thermo-siphon circuits and allowing the espresso brew water to be fine tuned to each blend. Just one single boiler on a Grouptronic machine produces the same result as four boilers on a three group multi-boiler machine.

With fewer boilers to heat, electricity costs are lower, and with less to go wrong, service issues are fewer.

The two group F3 Grouptronic seen here is the machine of choice for the busy coffee serving professional seeking to bring out the subtleties of different blends or single origins. www.qualityespresso.net/en

FREQUENCY CONVERTER TOOL FOR NEUHAUS NEOTEC’S RFBS ROASTER The frequency converter is a new tool that is mainly used for research purposes. It allows different roasting times for small sample-sized roast. With this new frequency converter the RFBS roaster offers a unique possibility to vary roasting times and the air quantities supplied during the roasting process. The great variability of the fan performance also allows the slow roasting of small coffee quantities. On request, the frequency converter can directly be installed into new RFBS types.

Existing RFBS roasters also have the option of being equipped with the frequency converter.

The RFBS roaster has been designed for the quality control of a large global food company. Its separate roasting and cooling part, controlled air quantity and intelligent roasting control make the RFBS a unique roasting tool for smaller and larger samples. www.neuhaus-neotec.de/kaffee/en

WMF 8000 S The WMF 8000 S – WMF‘s new premium model – combines quality, perfection and innovation with unbelievably good coffee. Its design has already won the coveted iF Design Award. With its revolutionary ‘Man Machine Interface’, it guarantees that all functions are simple to understand and to use in an instant. When it comes to performance, the WMF 8000 S is yet again a trendsetter. From pressing your selection on the display to the perfect coffee – the timing of numerous processes has been hugely improved. When it comes to equipment for milk and steamed drinks, the WMF 8000 S stands head and shoulders above the competition in terms of the range on offer. The Active Milk version even allows the fully automated preparation of hot and cold milk and foamed milk drinks. www.wmf.com

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CAFETTO’S CERTIFIED ORGANIC RANGE As part of its involvement in MICE2013, Cafetto launched its world first organic range of coffee equipment cleaning products. This is the first coffee equipment cleaner range to be certified by an organic certification body. Cafetto’s products are safe and include a high performance cleaner for professional espresso machines using organic coffee.

A support of the coffee industry through many events and sponsorships, Cafetto is committed to developing products that assist their client’s commitment to coffee quality. For the World Barista Championships in Melbourne, Cafetto sponsored AASCA’s Barista Buddy program – helping the world’s leading baristas enjoy their experience in Melbourne. Cafetto continues their commitment to developing products that will always be the barista’s buddy in providing high quality coffee experiences all over the world.

Cafetto products include the Cafetto Evo and Cafetto Tevo Tablets (espresso machine cleaner), Cafetto Restore (descaler, decalcifier), Grinder Clean, Liquid Organic Descaler and Organic Milk Frother. To get your Cafetto Organic products today visit www.cafetto.com

DETPAK ECO RANGE If you’re looking for food packaging options that are more environmentally friendly then look no further. Detpak has a wide range to choose from, including its popular Detpak Eco range that includes compostable Ripple-Wrap cups, single wall cups, bags and sandwich wedges. In fact Detpak stocks more than 200 products that are compostable and yet still retain that great quality that Detpak is known for in the industry. www.detpak.com

FLEXICON BULK BAG DISCHARGER The Bulk-Out Bulk Bag Discharger from Flexicon eliminates dust during untying, discharging, retying, collapsing and removing of bulk bags while increasing safety and promoting complete discharge of coffee and tea from the bag. A patented Spout-Lock clamp ring atop a pneumatically-actuated Tele-Tube (telescoping tube) allows quick, dust-tight connections, and maintains downward tension on the bag as it empties and elongates, promoting complete discharge. Flow-Flexer bag activators raise and lower opposite bottom edges of the bag at timed intervals, loosening compacted materials and promoting material flow into the bag discharge spout. For retying of partially-empty bags, a patented Power-Cincher pneumatically-actuated flow control valve cinches the bag spout concentrically. An integral Bag-Vac dust collector creates negative pressure within the sealed system to collapse empty bags prior to retying and disconnection, eliminating dust emitted during manual flattening of empty bags.

Patented Z-Clip bag strap holders allow rapid, secure insertion and removal of bag straps. Broad model range allows loading of bags with electric hoist and trolley (shown) or forklift. Numerous options include integrated scale systems for loss-of-weight batching directly from bulk bags. Carbon steel construction with durable industrial finish, or stainless steel in industrial, sanitary, and USDA-accepted finishes. www.flexicon.com

S E P TE M B E R /O C TO B E R 2013 | GCR

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LASTWORD Obituary

VINCENZO SANDALJ: AN ICON OF ITALIAN COFFEE A TRIBUTE TO THE MAN WHO DEDICATED HIS LIFE TO NURTURING THE COFFEE INDUSTRY

scale producers and reach crops in supplier countries for small batches THE INTERNATIONAL COFFEE COMMUNITY is mourning the of excellent coffee. sudden passing of the President of Sandalj Trading Company, Vincenzo “He ran fast, and at times it was difficult to keep up,” says Venuti.

Sandalj, who died on 2 July.

“He helped and managed to lead the company to excellence.”

Sandalj generously and actively contributed to the promotion of the Italian espresso coffee culture at a worldwide level. He was 63 years old.

Thanks to his extensive experience and knowledge of the sector, Born in Trieste, Italy, Sandalj graduated from university in economics Sandalj contributed to the spread of coffee culture and Italian espresso across the globe with authority and great competence. and commerce in 1974 before joining his father Antonio’s firm.

The Sandalj family has been trading coffee Vincenzo frequently travelled with his friend and photographer Fulvio Eccardi, for three generations, since the times of the with whom he published two coffee books, Austro-Hungarian Empire.

Sandalj took control of the family business Coffee – A Celebration of Diversity in 2000, from his late father in 1979. He was not yet which has been translated into eight lanugages 30 years of age. and sold a total of 20,000 copies; and more From that moment on, thanks to Sandalj’s recently a photo book by Fulvio titled Coffee, The Wonder of Chiapas, Mexico. great business skills and strong vision, the Driven by his aim of spreading awareness company grew exponentially to become the Sandalj Trading Company, importers and of the cultural and social value of coffee and its production chain, Sandalj held exporters of green beans. many institutional positions at a local and The company remains one of the most prominent Italian importers of green coffee and international level. a point of reference for more than a thousand He was a founding member of the Specialty coffee roasters in 50 countries worldwide.

Coffee Association of Europe (SCAE), as well Nicknamed Vinko by friends and colleagues, as Director and President of the SCAE in the Sandalj team of professionals saw Vinko as 2003 and 2004. Sandalj was President of the a “concrete visionary” and guide, who through Trieste Coffee Association and Trieste Coffee generosity and humanity, added knowledge, Cluster. He participated in the United Nations and World Trade Organisation project for the experience, curiosity, ideas, ambitious objectives Development of Gourmet Coffee potential in and trust to the company, day after day. He was determined to make an impact on the industry Geneva, and was a member of the Board of he so passionately admired.

Directors of the Association for the Cup of “His spirit and vision of life made him Excellence in the United States, and Honorary Vincenzo ‘Vinko’ Sandalj was committed to the spread of coffee culture around the world.

Consul of the Republic of Indonesia. He was an innovator and forerunner in the world of also Trade Advisor at the International Coffee coffee,” says co-worker and friend of 23 years, Edy Bieker.

Organisation and European representative of the International Relations Committee for the Specialty Coffee “Vinko followed his own ideas, aiming at culture and quality, bringing new life and dynamism to this world.”

Association of America.

Friend and right-hand man of 25 years, Enrico Venuti, says Vincenzo As evidenced by his many roles and contributions, Sandalj lead a never stopped educating himself. He continued to travel the world in distinguished career. The industry is now facing the loss of a landmark order to stay informed of the world’s latest coffee developments and to figure. However, the Sandalj Company has vowed to carry on the ideas discover new coffee varieties. and projects established by Sandalj in honour of his vision. He leaves behind a legacy of great innovation and dynamism to a sector that is Before anyone else in the Italian green coffee market, it was Vincenzo undoubtedly better off for his profound contribution. G C R who realised that the “right way” to work was to turn directly to small-

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W E

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