GCR Nov 2014

November/December 2014

BIG BEAR

Russia has a new coffee chain giant

FOLLOWING THE BRIC ROAD

Tracking consumption in developing powerhouses

GENDER & DEVELOPMENT

Boosting economies via equality

DRINKING UP SUPPLIES

Indonesia’s latest trend

PARTNERSHIP

POWER BROKERS TECHNOSERVE’S NEW CEO ON WHY CORPORATE INVESTMENT IN POOR COUNTRIES IS THE BEST PATH TO PROSPERITY

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CONTENTS November/December 2014

COVER STORY

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PARTNERSHIP POWER PLAY TechnoServe CEO Will Warshauer tells GCR Magazine why welldesigned private investment in poor countries is the key to achieving development goals.

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“A PROJECT IS NOT GOING TO SUCCEED IN THE LONG RUN IF YOU’RE NOT MEETING THE NEEDS OF ALL PARTIES… YOU NEED TO BUILD A MODEL SO THAT ALL PARTIES ARE WINNING.” Will Warshauer

Chief Executive Officer TechnoServe

IN THIS ISSUE FEATURES 12 POWER PLAY

TechnoServe on how to make corporate investment in the poor world work.

18 THE BIGGER THE BEAR

Founder of Shokoladnitsa talks about plans to dominate the market.

22 THE COFFEE BRIC ROAD

Economic slowdown has spared the coffee industry in Brazil, Russia, India and China.

RESEARCH 26 COPING MECHANISMS AND COFFEE SCIENCE

The industry’s top minds could be our best chance against climate change.

30 ENGENDERING DEVELOPMENT Exploring the link between gender issues, productivity and development.

TECHNOLOGY 34 ORIGINS OF INNOVATION

Probat reviews the history of one of the industry’s most flexible coffee roasting machines.

39 PREMIUMISED

Intelligent Blends on why single-serve in the US has stepped up a notch.

PROFILE 43 CHARTING GROWTH

Garanti marks 64 years of watching an industry advance.

ORIGIN 46 A QUALITY UNDERTAKING

Honduran farmers access the specialty market.

50 EXPLAINING INDONESIA’S DROP

Production is only partly to blame for a drop in exports.

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REGULARS 04 EDITOR’S NOTE 06 NEWS DRIP BY DRIP 54 DIARY DASHBOARD 56 MARKETPLACE 58 LAST WORD

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EDITOR’S NOTE Global Coffee Report

PUBLISHER John Murphy john.murphy@primecreative.com.au EDITOR Christine Grimard christine.grimard@primecreative.com.au JOURNALISTS Sarah Baker sarah.baker@primecreative.com.au

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Alexandra Crowe alexandra.crowe@primecreative.com.au

HINDSIGHT IS A TERRIBLE THING

HOPEFULLY it’s a true rarity in this modern day and age that a company is consciously acting in the disinterest of any party it works with.

Will Warshauer, the new CEO of TechnoServe, says it very succinctly in this edition’s look at corporate and public private partnerships (see page 12), noting that modern supplier relationships are not a “zero sum game”. On the contrary, the most beneficial relationships are ones where every party wins.

While the win-win idea is fantastic in theory, and hopefully the reality of many of the relationships we’re seeing today, the Fairtrade Foundation released a sobering report (see page 14) revealing a sometimes different reality.

Where the management of projects to help smallholder farmers sits in corporate hands, preconceived, rich-world notions about their interests can be detrimental to their success.

Often these projects are destined to fail from the beginning. Power does more than just decide where resources are going to go. Those in power direct the very nature of what issues are going to be addressed, what questions are going to be asked, and what is going to happen as a result.

Some of the worst market catastrophes follow from the very best of intentions. Think of Vietnam’s jump in coffee production, linked to the coffee price crisis at the turn of the millennium. Or the promotion of renewable fuel made from corn leading to a spike in food prices.

Hindsight can show us where we went wrong, but is only a small step in correcting our paths in the future. Much of it comes down to stepping outside of our own paradigms, and better understanding – and importantly learning

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from – every level of the supply chain. For those in the coffee industry, that means projects can’t just take smallholder farmers into account. We need to actively give them the strongest voice possible from the very start of every initiative.

Coffee Quality Institute’s workshops on gender, taking place over the next few years, are a welcome step in that direction (see page 30). In looking to provide advice on gender, the project is starting at the ground level, to gain valuable insight on incorporating gender issues in the coffee industry for years to come.

Projects like the Catracha quality initiative are an even stronger move in that direction. Initiated by Honduran Mayra Ollena-Powell, the project’s impressive capacity to boost the Nicaraguan coffee industry was theorised at ground-level.

There is nothing to be gained by taking a top-down approach to fixing the problems of the poorer nations. The mistakes of the past have taught us that the principle of self-determination is a value that should absolutely be carried over from the political into the business world.

ART DIRECTOR/PRODUCTION MANAGER Michelle Weston michelle.weston@primecreative.com.au DESIGN Blake Storey, Sarah Doyle BUSINESS DEVELOPMENT MANAGER Steve Roberts steve.roberts@primecreative.com.au GENERAL MANAGER COFFEE MEDIA & EVENTS Brad Buchanan brad.buchanan@primecreative.com.au ADMINISTRATION ASSISTANT Justine Nardone justine.nardone@primecreative.com.au PHOTOGRAPHY Cover photography Daniel Bedell, Patrick Varney CONTRIBUTORS Eugene Gerden, Leighton Cosseboom Maja Wallengren 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.gcrmag.com SUBSCRIPTIONS +61 3 9690 8766 subscriptions@primecreative.com.au

Global Coffee Report 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 Report is owned and published by Prime Creative Media. All material in Global Coffee Report 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 Report are not necessarily the opinions of, or endorsed by the publisher unless otherwise stated.

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NEWS In Brief

NEWS DRIPBYDRIP 

AFRICA

Nespresso announced in August that it will invest US$554 million in sustainability programs over the next six years, including almost $16 million to develop coffee growing programs in Africa.

Nespresso has been purchasing coffee from East Africa since 1998.

Guillaume Le Cunff, Nespresso’s International Marketing, Strategy, and Sustainability Director, tells GCR Magazine that Kenya and Ethiopia already produce high-quality coffee with notes that have an important role in the company’s Grand Cru range. It will focus its efforts on these countries, by supporting 300 wet mills that purchase coffee from around 200,000 smallholder farmers.

The company will also look to stump older trees to renew growth. It will partner with TechnoServe and local governments in the country, with the hopes to double what it sources from Kenya and Ethiopia by 2020.

See page 12.

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AMERICAS

Will Warshauer was appointed as the new CEO of US-based charity TechnoServe this past June.

Warshauer previously worked as Chief Operating Officer of Pact, a US$180 million development organisation operating in more than 25 countries. He launched his career as a Peace Corps volunteers in Sierra Leone, and has worked in 40 developing countries.

Warshauer tells GCR Magazine that he was looking forward to working with TechnoServe, which focuses

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on “Business Solutions to Poverty” according to its tagline. From his experience in working with smallholder farmers, he says TechnoServe’s work in financing and improving skills at origin fits well with his views on how to alleviate poverty in poor countries.

See page 12.

The industry’s top minds gathered at the 25th International Conference on Coffee Science (ASIC), hosted by the Colombian Coffee Growers Federation (FNC) from 8 – 13 September in Armenia, Colombia.

Climate change was a central talking point of the event. Cenicafé, the FNC’s research arm, used the event to announce the world’s first early climate warning system for coffee growers in Colombia. Similar to an Early Tsunami warning system, it sends a special message to all the FNC’s producer members in a particular region or province if a potential weather hazard is detected.

The FNC’s members include around 500,000 coffee growers in the country. The warning system will help producers curb the worst effects of either a devastating drought or an excessive dryness.

Scientists from around the world shared other studies and projects under way to combat the effects of climate change on growers, including the use of ‘Terroir’ growing principles in Ethiopia and a coffee reforestation project in Mexico.

See page 26.

The Coffee Quality Institute (CQI) announced this past September that it would be spearheading a collaborative research initiative to better understand the effects of gender inequality on coffee production.

It held the first of a series of four workshops in Colombia in early October. The organisation is planning to use information gathered at the workshops in conjunction with an extensive literature review to create an academically based, industry-relevant report to offer recommendations for investments, partnerships and pilot projects.

Kimberly Easson, Gender Program Advisor for CQI, tells GCR Magazine that understanding gender issues is a pivotal part of improving situations for smallholder farmers.

Furthermore, she says most funding applications need a well-considered approach to gender.

See page 30.

United States-based single-serve packaging specialist Intelligent Blends will be offering Nespressocompatible packaging capabilities in early 2015.

Company CEO Michael Ishayik says that Nespresso is slowly gaining ground in the United States.

Nespresso made a strong move to enter the American market this past February with the introduction of VertuoLine, which can produce both espresso and American-style filter coffee.

Ishayik says that the Keurig system, however, continues to dominate the market, but that with increased demand for single-serve, there is ample opportunity for different systems. He says currently around 18 per cent of households have a single-serve machine, with room for future growth, and that single-serve now makes up around 40 per cent of all ground coffee sales in the US, up from 30 per cent last year.

See page 39.

WEATHER WARNING The Colombian Coffee Growers Federation is introducing a climate change warning system for coffee farmers.

See page 26

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NEWS In Brief

Sustainable Harvest held the 12th edition of its Let’s Talk Coffee from 9 – 12 October outside Panama City.

The latest edition of the relationship-building, transparentbusiness-generating conference drew more than 550 stakeholders, including coffee producers, roasters, NGOs, media members and financiers.

Under the theme “Building a World-Class Supply Chain”, Let’s Talk Coffee featured presentations from representatives of top companies

TIME TO TALK

Let’s Talk Coffee Panama attracted more than 550 stakeholders (right). Sustainable Harvest will hold its first event outside of origin in Australia next March. letstalkcoffee.org

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including Blue Bottle Coffee, the Wall Street Journal, Ben & Jerry’s, Allegro Coffee, Royal Botanic Gardens at Kew, Keurig Green Mountain, and the Specialty Coffee Association of America.

Let’s Talk Coffee 2014 also featured the debut of a side conference called Let’s Talk Cocoa, sponsored by Catholic Relief Services and Oikocredit.

The general event saw the launch of beta testing for Sustainable Harvest’s new Tastify technology. Tastify maps out a visual representation of a coffee’s flavour, drawing upon Sustainable Harvest’s 15 years of cupping scores to describe coffees throughout the company’s sourcing history.

A search function allows users to seek out specific flavours in a coffee and discover them in sometimes unexpected places.

Sustainable Harvest announced earlier this year that it would hold its next event, Let’s Talk Coffee Australia, in Melbourne from 13 – 15 March 2015. This is the first time that the event will be held outside of a producing country.

For details visit www.letstalkcoffee.org

ASIA

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United States-based Honduran Mayra Orellana-Powell has launched the Catracha Quality Project, an initiative focused on supporting the production of specialty coffee among farmers in Honduras.

By introducing data collection practices to farmers, Orellana-Powell and her team are hoping to gain a deeper insight into opportunities to maximise quality during coffee processing. Trialling the project during the upcoming harvest in Santa Elena, the team has high hopes to eventually increase the quality of coffee right across the country, improving the lives of coffee farmers as a result.

See page 46.

Brazil and its fellow BRIC nations (Russia, India and China) continue to see strong growth in the coffee industry, despite some economic slowdown.

Consumption in Brazil is growing at between 3 – 3.5 per cent annually, with the country likely to see an extra 700,000 of consumption for the year.

In Russia, most growth is coming in the roast and ground segment, which is now between 35 – 37 per cent of the overall market, compared to a market share of 90 per cent 20 years ago. Soluble demand is staying relatively stable.

Demand in India has grown from just under 1 million bags in 2000, to 1.6 – 1.7 million bags today, marking 60 – 70 per cent growth.

In China, one local source estimated that coffee consumption in China is rising at 30 – 40 per cent annually.

The Chinese government has projected this coffee consumption to grow at an average 15 per cent a year until 2020 to hit 5.5 million bags, putting it among the top 10 consuming countries in the world alongside France and Japan.

See page 22.

Coffee exports are down 10 per cent in Indonesia, according to figures released mid-year by the United States Department of Agriculture (USDA).

Production, however is only down 6.3 per cent. The difference has been linked to increased local consumption. Demand is expected to jump by 33 per cent within the next two years, according to the Association of Indonesian Coffee Exporters and Industries. It predicts local consumption will surge to 1.54 kilograms per person in 2015.

See page 50.

NEWS In Brief

More than 4100 trade visitors attended the second edition of the World Tea & Coffee Expo, that took place from 11 – 13 September in Mumbai, India.

At the event, Liu Youfa, the Consul General of China, announced that the two countries were looking to increase bilateral trade in the coffee and tea sectors.

“Both the Asian giants are witnessing significant lifestyle changes,” said Youfa in a statement.

The three-day expo showcased products, machinery and new technology from the coffee and tea sectors of India and a range of other countries.

Around 40 Indian and foreign exhibitors participated in the expo.

See worldteacoffeeexpo.com

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EUROPE

In September 2014, the United Kingdom-based Fairtrade Foundation released a report analysing the effectiveness of public-private partnerships in the smallholder agricultural sector.

Coupled with case studies from different crops including coffee, the Fairtrade Foundation generally found that smallholders weren’t being adequately consulted on PPPs, resulting in their interests not being well represented.

“Within specific projects, smallholders are often perceived as ‘beneficiaries’ of the PPP, but are largely peripheral in the management of these initiatives,” Fairtrade Foundation writes. “In addition, partnerships seem to be driven by preconceived ideas amongst government and donor partners about the requirements of smallholders.”

The report said there was a general disconnect between agricultural PPPs and smallholders’ own priorities for investment.

See page 14.

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The Russian branded coffee shop market is on the verge of consolidation, as Shokoladnitsa, Russia’s largest coffee chain, plans to acquire its major local rival Coffee House.

The deal, reportedly worth around US$400 million, would make Shokoladnitsa Founder Alexander Kolobov an absolute leader of the market with more than 650 shops under his umbrella. This far outnumbers competitors Starbucks and McCafé.

In an exclusive interview with GCR Magazine, Kolobov says that Russia is well placed to see an increase in the branded coffee shop market, with the younger generation enjoying the Western-style of self-service. Kolobov admits to being inspired by the Starbucks model in setting up the first Shokoladnitsa shop in 2000.

He says he now has plans not only to expand into major cities, but also into less affluent regional centres.

See page 18.

German-based Probat continues to make improvements on its Tangential Roaster Series Jupiter, the original flexible coffee roaster that is able to provide both air-roasted and drumroasted qualities.

The first tangential roaster was patented in 1969 by Gothot as the Rapido Nova. Seven years later, Gothot was brought under the Probat group of families. This led to several improvements, including the latest release of the machine in 2011 which allowed both short and long-time roasts with the implementation of a new stirring mechanism.

See page 34.

Garanti is set to celebrate its 64-year anniversary, as one of Turkey’s oldest producers of coffee roasting and producing equipment.

Sinem Umsu is the third generation to run the company, following in her grandfather Mustafa Umsu’s footsteps.

Mustafa set up the first Garanti workshop in Turkey in 1951 in a tiny seven-square metre facility. Today, the company operates a 2000-square metre facility, and exports its equipment around the world.

See page 43.

An Italian production team is set to film the second series of a coffee reality television show, Barista & Farmer, in Honduras in 2015.

The series was set up by three-time Italian Barista Champion Francesco Sanapo and Producer Rebecca Atienza.

In the series, 10 baristas spend 10 days on a coffee farm, picking cherries and learning about agriculture.

The baristas have to undergo daily competitions, with one barista ultimately winning the challenge.

The show will be displayed at the upcoming Sigep show, taking place from 17 – 21 January 2015 in Rimini, Italy. Now in its 36th edition, Sigep is a world-leading international exhibition for the artisan production of gelato, pastry, confectionery and bakery.

See page 58.

POWER HOUSE

The owner of Russian branded coffee chain Shokoladnitsa is set to purchase its major rival Coffee House to become an absolute leader in the industry.

See page 18.

The Specialty Coffee Association of Europe announced that the next World of Coffee event will take place from 16 – 18 June in Gothenburg, Sweden.

The flagship event brings together thousands of coffee professionals from more than 100 countries across the globe. The year 2015 will mark the event’s 15th anniversary, with a range of exciting content. One such event will be the launch of Re:Co, the inaugural European coffee summit that will bring together the industry’s leading stakeholders and strategists.

World of Coffee will also host the World Cup Tasting Championships, World Coffee Roasting Championship, World Latte Art Championship, World Coffee in Good Spirits Championship, and the World Brewers Cup. For details visit www.worldofcoffee-nordic.com

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COVER STORY TechnoServe

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P A R T N E R S H I P

WER PLAY TECHNOSERVE CEO WILL WARSHAUER TELLS GCR MAGAZINE ABOUT WHY WELL-DESIGNED PRIVATE INVESTMENT IN POOR COUNTRIES IS THE KEY TO ACHIEVING DEVELOPMENT GOALS.

I

t seemed apt timing that Nespresso’s pledge to invest US$554 million over the next six years in sustainability, came around the same that the Fairtrade Foundation released a study (see sidebar page 14) criticising the power imbalances in public private partnerships (PPPs).

A company with pockets deep enough to pledge that level of investment begs some questions about how much weight private companies carry in the supply chain. At the simplest level, the old adage that “with money comes power” causes reason for caution. How much power can a smallholder coffee farmer have in a relationship with a company as affluent as Nespresso?

To put it into perspective, the half a billion dollar investment makes up around half of what 15 million Ethiopians are hoping to earn from coffee in 2015. With so many lives in the hands of private companies like Nespresso, how can the public be assured that farmers’ interests are being properly balanced?

These are issues that Will Warshauer, who took the reins as CEO of US-based TechnoServe

this past August, is ready to field. TechnoServe’s tagline “Business solutions to poverty” is telling of an approach where corporate investment like Nespresso’s is not only seen as healthy, but as fundamental in bridging the rich-poor world divide. Warshauer argues that the position where businesses can only profit at the cost of others – especially in coffee – is no longer relevant in an industry where supply concerns are running high.

“It’s not a zero sum game,” he says. “If we can help farmers increase their yields, then there is a net addition to the GDP, and a net addition to coffee companies.”

Taking the argument one step further, Warshauer says that relationships where one party suffers for the profits of the other should be viewed as an unsustainable business model.

“A project is not going to succeed in the long run if you’re not meeting the needs of all parties,” he says. “You need to build a model so that all parties are winning.”

Warshauer says the rich world’s understanding of this model has changed remarkably over the years, with corporate investment in developing countries now largely the norm. He says that for every dollar of aid, around $6 is spent in foreign direct investment. He says smaller agencies that have specialised in handouts are having to rethink the nature of their work.

“Historically, the problem with aid is that it has distorted the market,” he says. “Things worked well when aid was flowing, however once the money stopped, it stopped working. We need to create sustainable business environments.”

Warshauer feels similarly about too much government intervention. He points to one Western African nation (which he prefers not to name) as one example. At one point, the government was subsidising 60 per cent of fertiliser costs. The subsidy was removed, putting the price of fertiliser out of a price range that farmers could afford. Finally the government stepped in and said it would provide fertiliser free of charge, however it was too late to fertilise the current crop.

“This is an example of market distortion,” says Warshauer. “In these situations, you need financial institutions to provide credit. It’s smarter aid.”

Warshauer still sees a place for governments to help.“Government involvement can be essential

N OV E M B E R /D EC E M B E R 2 014 | GCR

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COVER STORY TechnoServe

TechnoServe has previously worked with Nespresso to support coffee production in South Sudan.

A SEAT AT THE TABLE FOR SMALLHOLDERS? In September 2014, the UK-based Fairtrade Foundation released a report analysing the effectiveness of PPPs in the smallholder agricultural sector.

The report included two case studies of coffee projects Kenya. One project involved enhancing coffee smallholders’ capacity to adapt to climate change, and was generally viewed as positive. A second project resulted in all coffee growers in one region being ordered to sell their coffee to a central mill to sell to a private US buyer. With some smallholders having previous contracts in place, this caused reason for concerns.

Coupled with case studies from other crops, the Fairtrade Foundation generally found that smallholders weren’t being adequately consulted on PPPs, resulting in their interests not being well represented. “Within specific projects, smallholders are often perceived as ‘beneficiaries’ of the PPP, but are largely peripheral in the management of these initiatives,” Fairtrade Foundation writes.

“In addition, partnerships seem to be driven by preconceived ideas amongst government and donor partners about the requirements of smallholders.”

The report said there was a general disconnect between agricultural PPPs and smallholders’ own priorities for investment. “A failure to adequately consider such factors, and tailor PPPs accordingly, can lead to partnerships that miss or ignore smallholder farmers’ priorities,” it said. “Or in the worst case scenario, actually aggravate local social and economic disparities and inequalities and exacerbate poverty.”

The report says that power imbalances in the value chain are preventing farmers from actively taking part in these relationships.

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for encouraging private investment, by minimising risk and helping jumpstart activities. But the best PPPs then evolve to the point where public support is no longer needed, and sound market dynamics carry things forward,” he says.

The nature of these corporate partnerships, Warshauer says, has changed significantly over time. He says initially, any corporate investment was categorised under a company’s philanthropy work, with the belief among management that the work was mostly about helping the company look good. Now, he says companies approach these projects as necessary for the sustainability of their business. “We’ve seen a very healthy evolution towards shared value where the interests of society and business align, and both can benefit in a sustainable way,” he says.

Although a registered non-profit-organisation, TechnoServe is an example of corporate success in its own right, seeing an 86 per cent increase in its revenue over the past five years to US$82.5 million in 2013.

So what makes TechnoServe’s work so highly sought-after? Fairtrade’s concerns about smallholder farmers not having a say is exactly where TechnoServe sees its value. Its highly qualified staff, many of whom previously worked in the private sector, work largely on-the-ground to “translate” the needs of the developing world into a corporate and public arena.

In the coffee space, TechnoServe has been supporting projects at origin level for the past 50 years. David Browning is Senior Vice President of Strategic Initiatives and the head of TechnoServe’s global coffee practice.

He describes the group’s earlier work, efforts to save smallholder coffee farmers following local conflict. He cites examples such as the Rwandan genocides of the mid 1990s that killed anywhere from 500,000 to 1 million people, and two Sudanese civil wars that claimed more than 2.5 million lives in just under two decades. These kinds of tragedies naturally result

IMAGE: TechnoServe

in the devastation of agricultural industries. TechnoServe worked to help rebuild these industries, to ensure survivors had an ongoing source of income.

“Our focus is to help create sustainable livelihoods, and work with farmers to develop their skills and knowledge,” explains Browning.

TechnoServe’s funding comes from a variety of sources, including philanthropy groups like the Bill and Melinda Gates Foundation, governments including the Swiss and US, large coffee roasters (like Nespresso) and individual donors.

The work has been largely about financing projects that improve quality at the farm level, for instance, moving from hand-pulpers to mechanical eco-pulpers.

“We don’t provide things for free. We’re not handing out seeds or fertiliser,” says Browning. “Historically, we know there have been challenges in that approach. It creates a cycle of disincentives. When you receive something for free, you’re just going to keep looking for something for free. It’s about providing a hand up – not a handout.” Browning has been on the ground enough to know that too many handouts can also lead to good will ending up on the black market.

So how does a company like TechnoServe decide where to spend its dollars? Although the funding may come from the rich part of the world, Browning says the best ideas come from the farmers themselves.

“We always start by listening to farmers,” says Browning. “We need to understand their needs and aspirations. What we can bring to that conversation is which global best practices exist to protect water resources, improve yields, and so on.”

Working with farmers, TechnoServe helps identify where farmers can obtain, or already have, a global competitive advantage. The next step is then finding funding to get the project off the ground.

“Then the realities of the world kick in. Whatever we’re excited about needs to be matched with resources and we need to match that with the excitement of the farmers,” he says.

Improving yields and quality at the farmer level has been one of TechnoServe’s most admirable achievements; one that Browning says is truly a win-win among all parties involved (see ‘Cinderella’ sidebar on right). From 2007 to 2008, using funds from the Bill and Melinda Gates Foundation, they worked with 200,000 farmers, providing training and also wet milling equipment. Of the farmers TechnoServe has followed up with since, the group has found yields have increased 40 per cent, while quality has improved 20 – 30 per cent.

“Overall, over US$100 million of incremental profits went to farmers in the past five years, and that money will just keep flowing year after year,” he says.

For coffee companies, although the “feel good” factor of helping farmers secure more income is naturally there, securing their own supplies of quality coffee is an obvious factor in the win-win equation.

Nespresso has been a well-recognised player in this regard. A leader in the single-serve realm, Nespresso can be equally applauded for bringing premium coffee into households. As it continues to succeed, a key challenge has been ensuring it can source enough coffee to meet high demand.

“Sustainability has always been an important part of what we do,” Nespresso’s Le Cunff tells GCR Magazine. “It is our way of securing our brand promise of quality and taste, so it is about building a sustainable future for our business. It is also about securing the future of the farmers we work with and ensuring they run sustainable businesses, so we can

TECHNOSERVE AND THE DUROMINA COFFEE ‘CINDERELLA’ STORY Although Ethiopia has a rich history of coffee production, TechnoServe’s David Browning says that around five years ago, the coffee grown here was at the time considered to be among the worst in the world. He explains that farmers used out-dated agronomic practices, knew little about quality control, and didn’t have the means for sophisticated processing. At the time, the name of the region’s major city, Jimma, was associated with the trade term for bad coffee.

In 2010, more than 100 local coffee farmers formed a cooperative to enhance their coffee incomes. They called themselves Duromina, which means: ‘to improve their lives’ in the Afan Oromo language.

TechnoServe provided the Duromina cooperative with agronomic and business training, and helped arrange a loan for a wet mill.

Two years later, Duromina’s improved coffee was named the best in Africa by an international panel of professional judges in a prestigious regional competition.

Buyers from US-based specialty roasters Stumptown Coffee described Duromina’s coffee as an “extremely complex yet clean cup that flaunts notes of lemon, cinnamon, sweet hops, ginger and nectarine accented by jasmine”.

In 2012, four major international roasters purchased 71 metric tons of green coffee through direct trade relationships with Duromina, paying an average of US$3.68 per pound, a 65 per cent premium over the international commodity price. Duromina was able to repay its entire investment loan in just one year, instead of the planned four years.

With their new income, one of the first things Duromina’s members did was invest collectively in building a bridge for their remote community. Previously, the nearby river would swell during rainy season and cut off access to markets and the clinic in a neighbouring village.

“So many people were injured falling into the river when attempting to cross during heavy rain,” says Nizamu Abamecha, Duromina’s Chairman. “We could not benefit from many government services because of the river, and some pregnant women even died because they could not reach the clinic.”

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COVER STORY TechnoServe

NESPRESSO AAA PROGRAM GCR Magazine featured Guillaume Le Cunff discussing the Nespresso AAA Sustainable Quality Program its July/August 2013 edition.

Nespresso developed the AAA Program in partnership with Rainforest Alliance as a company-driven certification scheme that helps farmers meet AAA sustainability and quality requirements.

In that edition, Le Cunff told GCR Magazine that it would aim to source 80 per cent of its coffee by the end of 2013. By the end of the year, the company surpassed that level, sourcing 84 per cent of its coffee under the AAA scheme.

In its announcement this past August, it pledged to source 100 per cent of its AAA coffee by 2020.

“Nespresso is a growing company and consumer demand for our highest quality Grand Cru coffees is increasing worldwide,” Le Cunff tells GCR Magazine.

“Continuing to increase the levels of AAA coffee we source, while increasing global purchasing volumes, presents a challenge in itself. In Africa, coffee farms are very smaller, with 0.5 hectares on average. As you can imagine, this means we need to integrate many more farmers into the AAA Program in the coming years.”

The program is well known in Colombia, where Nespresso helped establish the first retirement fund for the country’s coffee farmers. In one study of more than 1000 farms, Colombian research institute CRECE found that AAA farmers in Colombia had on average 22.6 per cent better social conditions, 52 per cent better environmental conditions, and 41 per cent better economic conditions than non-AAA farms..

Guillaume Le Cunff is Nespresso’s Marketing and Strategy Director.

deliver on our brand promise to our customers.”

Nespresso announced in August that it would be making the over half a billion dollar investment towards sustainability in the next six years. In addition to committing to purchase 100 per cent of its coffee under its AAA Program (see sidebar on left) the money will also go towards sustainably managed aluminium and carbon “insetting” (Nespresso defines carbon insetting as different from offsetting because the activities will take place in the heart of the company’s activities and networks rather than off-site).

On the coffee sourcing goal, Nespresso will be using that money to pay premiums to farmers, provide technical assistance via agronomists, fund public-private partnerships and plant new trees in coffee producing ecosystems, to increase farms’ climate resilience.

Nespresso will be working with TechnoServe and local governments in Ethiopia and Kenya, in PPPs which aim mainly to increase quality and yield. Nespresso has been buying coffee from East Africa, mainly the two countries mentioned, since 1998. With this experience, Nespresso is all too familiar with the challenges that exist in the region.

“Expanding our AAA Sustainable Quality Program in Africa presents multiple challenges, including farmer poverty, a lack of investment in coffee quality, environmental degradation, and a lack of an established infrastructure to drive shared value through the supply chain,” says Le Cunff. “Although marketing channels exists, they constitute a challenge for our usual AAA model.”

Le Cunff points to Ethiopia and Kenya’s commodity exchange or auction systems as one of these challenges. The systems were established to help ensure farmers receive a fair market price, by providing a single purchase point where they could sell their coffee and not rely on green bean traders. The auction systems have been criticised by many in the

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“IT IS ALSO ABOUT SECURING THE FUTURE OF THE FARMERS WE WORK WITH AND ENSURING THEY RUN SUSTAINABLE BUSINESSES, SO WE CAN DELIVER ON OUR BRAND PROMISE TO OUR CUSTOMERS.” Guillaume Le Cunff

Nespresso’s International Marketing and Strategy Director

specialty coffee realm as limiting traceability. For Nespresso, it limits the company’s ability to purchase directly from farmers who take part in its AAA model.

Because of this, Nespresso will focus on supporting 300 wet mills that purchase coffee from 200,000 smallholder farmers.

Despite East Africa’s challenges, Le Cunff says investing in the region was necessary to secure the supply of quality coffee Nespresso needs.

“We estimate that only 1 – 2 per cent of the coffee produced worldwide meets our strict quality and taste profile requirements,” he says. “It is a challenge to ensure a continuous supply of these highest quality coffees due to increased demands, as well as the risks and challenges in producing countries.”

Through this approach and in working with TechnoServe, Le Cunff says not only do farmers have a say in the work, but that smallholder contribution is indeed as the most valuable in the PPP equation.

“The most important partner is of course the coffee grower,” he says. “The effective management and deployment of these partnerships is a critical success factor for our sustainability efforts. Public-private partnerships allow us to leverage expertise, scale, and funding and reinforce the impact that programs are having on the ground in coffee growing communities.”

TechnoServe’s Warshauer says we’ll only keep seeing more companies like Nespresso make this level of investment. As supply concerns keep mounting, he says we might even see some unexpected partnerships emerge: “We’re seeing very interesting pre-competitive businesses. Companies that are competing with each other, but have shared interests in better planning, are coming together to support sustainable sourcing.”

Browning agrees, saying that the coffee world is already showing great interest in the supply chain.

“We’re really noticing increasing engagement among coffee companies in the world who are interested in protecting the supply chain of the future,” he says. “It’s a wonderful win-win. These companies have an investment interest in the future of the supply chain. They are interested in having suppliers who are prosperous, and who can secure the supply of coffee for generations to come.” GCR

FEATURE Shokoladnitsa

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BIGGER THE BEAR 18

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FOUNDER OF RUSSIAN COFFEE CHAIN SHOKOLADNITSA ALEXANDER KOLOBOV TELLS GCR MAGAZINE ABOUT HIS PLANS TO DOMINATE THE MARKET BY PURCHASING HIS MAIN COMPETITOR AND ABOUT THE FUTURE OF BRANDED SHOPS IN THE COUNTRY.

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ussia may not be getting the greatest international headlines of late. At its peak, Australian Prime Minister Tony Abbott threatened to “shirtfront” Russian President Vladamir Putin on his visit to his far neighbour – a football move that involves a purposeful collision.

Despite Abbott’s colourful threat, Putin was still expected to travel to Australia for the G20 meeting. Although Russia faces shady diplomatic relations and sanctions , it’s mostly business as usual for the former Soviet giant.

It’s certainly business as usual for the coffee industry. As this magazine went to print, the Russian Federal Anti-Monopoly Service (FAS) was set to approve one of the country’s biggest coffee chains, Shokoladnitsa’s, plans to purchase its major competitor Coffee House.

The two coffee chains have been competing

The design for Shokoladnitsa is inspired by an old Soviet coffee shop.

neck-in-neck for most number of shops. Coffee House was winning until 2011, however Shokoladnitsa was able to overtake its main competitor in the middle of 2012. Shokoladnitsa is currently the market leader, operating 420 coffee shops in Russia, of which more than 230 are in Moscow, around 100 in the regions, and another 90 are operated by the company under a franchising model.

The brains behind Shokoladnitsa is Alexander Kolobov, its Founder and Owner. Kolobov is one of Russia’s most successful businessmen, thanks to a fast-food empire. In addition to Shokoladnitsa, he developed Wabi-Sabi, a sushi-café chain. He also introduced the country to Israeli Max Brenner chocolate bars and Burger King outlets, in cooperation with Russian investment fund VTB Capital.

He opened the first Shokoladnitsa in 2000, when Russia was recovering from the 1998 crisis and crash of the Ruble, its national currency. Rising energy prices in the early years of the millennium fuelled incredible economic growth in Russia, with disposable incomes doubling over eight years.

The result was a growing middle class with dollars to spend on coffee and low-cost food.

“At the beginning of 2000s the Russian market of coffee chains was in its infancy, being only comprised of several Coffee Bean outlets [Russia’s first coffee chain] and Coffee House,” he tells GCR Magazine. “Coffee is a very interesting format, designed for communication. People come, sit and talk, having also an opportunity to eat and drink coffee for little money. At the beginning of the 2000s Moscow, St. Petersburg and other large cities had a shortage of inexpensive, good places to eat.”

The brand came from the iconic Soviet Shokoladnitsa coffee shop, located near the October metro station in the centre of Moscow and operating since 1964. The current Shokoladnitsa experience however, Kolobov admits, was taken from a US coffee giant.

“At the initial stage we used the experience of Starbucks during the development of our chain,” he says. “We believe that it is really impossible to design new revolutionary offers and meals that will radically differ from the offers of main competitors. However, we are planning on finding our niche in terms of the format of our business.”

The Shokoladnitsa chain follows Starbucks’ self-service format. It was a risk taking on this format, following comments from the Russian Association of Coffee and Tea Producers that selfservice would never work in Russia. The association has generally been negative about the potential for branded coffee shops to take off in the country, saying local consumers prefer table service.

In contrast, Kolobov says this format may provide an impetus for the further development of the Russian coffee market.

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FEATURE Shokoladnitsa

Shokoladnitsa operates 420 coffee shops in Russia, mainly in larger cities.

Although the younger generation is primarily driving the growth of coffee shop chains, Kolobov says he sees see a range of customers in his shops.

“There is a slight domination of female audience in our coffee shops,” he says. “As for age, we can see both children and students, as well as mature people. However the majority account for young people within the age range of 20 – 35 years.”

Following on from success in the past decade and a half, and with a new brand set to come under the company umbrella, Kolobov now has his eyes set on expansion – even in less affluent parts of the country, outside of major cities. “We have plans to expand in the regions, despite the fact that this may be associated with certain difficulties,” he says. “In the case of the regions, purchasing power of local customers is significantly lower than in Moscow, which is not very suitable for us, as we prefer to operate in the premium segment. However, in any case we have big plans for regional markets.”

Although regional centres may present their challenges in terms of spending power, the rising costs of rent in cities remains a major issue threatening to stifle urban expansion plans. It currently costs around US$200,000 – $300,000 to start a shop, however those costs are doubled to open up in a shopping centre.

“Ever growing rental rates, especially in Moscow, probably remains the biggest problem for the business,” says Kolobov. “At the same time, a shortage of personnel remains another pressing problem for the company. In recent years the number of coffee chains has significantly increased, which resulted in the increase of demand for personnel in this sphere.”

Despite these challenges, Kolobov is now ready to put everything the company has into purchasing Coffee House and expanding his reach. He tells GCR Magazine that the majority of funds will come from their own cash reserves, with the difference taken in bank loans. He says that at present, all of the coffee chain’s revenue, and even part of its working capital, is being invested in further development of the chain.

Like much of Russia’s business community, Kolobov offered no comment on whether sanctions

by Western countries, for Russia’s current involvement in Ukraine, would affect the business.

One official spokesperson from the Russian Ministry of Industry and Trade tells GCR Magazine that the Russian government currently has no plans to continue attacks on foreign coffee businesses,

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in particular coffee chains, affiliated with the EU and the US. This follows the recent closure of several McDonald’s outlets in different parts of the country (and in particular Moscow, Voronezh and other large cities) due to supposed non-compliance of their production processes to Russian sanitary standards and requirements.

Western media, including the Wall Street Journal, reported on the “sudden inspections and closures”, suggesting they were in retaliation for sanctions.

Officials adamantly denied the retaliation, and few will know the true cause. Getting onthe-record information out of Russia officials is challenging. The official who spoke to GCR Magazine asked not to be named for fear of repercussions. This follows the dismissal of Andrew Belyakov, Russia’s former Deputy Minister of Economic Development, who was recently fired for publicly criticising the Russian government’s latest decisions.

Sources close to McDonald’s and McCafé say that it will probably revise its expansion plans in Russia, and even possibly suspend them. Reasons cited, however, were not fear of retaliation but due to deterioration of the country’s investment climate, and the devaluation of the Ruble by 15 per cent. Other Western coffee chains might soon follow.

As long as Russians keep drinking coffee, this could be good news for Shokoladnitsa and Kolobov, as he sets himself up as the new Coffee King of Russia. G C R

COFFEENOMICS BRIC

FOLLOWING THE COFFEE BRIC ROAD

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ALTHOUGH BRIC NATIONS MAY HAVE LOST SOME ECONOMIC LIMELIGHT, COFFEE CONSUMPTION REMAINS CENTRE STAGE IN AN INDUSTRY LOOKING FOR GROWTH.

t’s hard to find topics that investors like better than a product or market that over performs. The coffee industry’s resilience to economic strife is a popular topic that falls in this space. From the global financial crisis, to a slowdown in China’s economic growth, coffee lovers continue drinking up, keeping the industry afloat when many think it should be sinking.

So, when in early 2014 analysts like Rabobank warned that the global beverage market would suffer from a slowdown in BRIC countries (Brazil, Russia, India and China), the warning may have fallen on deaf ears. As the year ends, coffee consumption is growing just fine, and even BRIC markets seem to be in great shape. Analysts were right that overall economic growth in the BRIC group has slowed down. However, coffee consumption is growing, with the four markets together consuming close to 30 million 60-kilogram bags.

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“Brazil continues to see coffee consumption growing at between 3 – 3.5 per cent a year. Despite the slowdown reported in the beginning of the year, we are still looking at adding at least 700,000 bags in new consumption a year in Brazil for the time being,” says Carlos Brando, an international consultant who has advised the International Coffee Organization (ICO) and the World Bank on consumption trends for the past decade.

A barista at Sao Paulo’s trendy Octavo coffee shop shows off his company’s coffee. Roast and ground dominates the Brazilian market.

In BRIC countries, as well as in major producer nations, coffee is especially popular among the younger generation. It remains a status symbol for the rapidly expanding middle class, says Brando. Coffee’s popularity, coupled with higher household income in the new middle class across emerging coffee markets, means that more people than ever are now buying coffee.

The BRIC term was created in 2001 by American investment and financial service company Goldman Sachs. The firm now projects that by 2020 the BRICS (which now include South Africa) will be home to about half of the world’s economic growth. Their combined GDP currently accounts for about 18 per cent of the global GDP. The four original BRIC countries are home to around 40 per cent of the world’s population.

Brando says that the Russian, Indian and Chinese markets are still dominated by soluble, while in Brazil roast and ground makes up most of consumption. He notes that: “All

Robusta (pictured) is filling Russian supplies where demand for soluble remains steady.

these countries have two key facts in common: better income and bigger populations.”

As in most things coffee, Brazil tends to dominate the conversation, as the world’s biggest coffee producer, exporter, and grower of specialty-grade coffee. Brazil is expected to take over the US as the world’s largest consumer in the next few years. Although the Brazil Coffee Industry Association (ABIC) reported that local demand last year suffered a small decline, overall consumption is expected to get back up and close in on 22 million bags in 2014.

Russia, the second largest emerging market for coffee, recorded in the 2011-12 coffee cycle a small decline as a result of the economic recession, with total demand that year estimated at 3.7 million bags. This came after a high of 4.2 million bags the previous cycle after 10 years of consecutive growth, the US Department of Agriculture (USDA) said in its 2014 market forecast. But demand was back to 4.2 million bags in Russia in the

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COFFEENOMICS BRIC

Although still largely tea-drinking, coffee is taking off in India.

2013-14 cycle, and is expected to expand further to a record 4.4 million bags in the new 201415 year, the USDA said.

These figures should keep rising even in the face of economic decline and tightening international sanctions that are sure to affect the nation’s economy. Coffee has become an affordable luxury that is the last to be cut in tough times. “Coffee continues to be an ultra cool product in Russia and the average age of a coffee consumer today is substantially lower than ever before,” says Ramaz Chanturiya, Head of the Russian Tea and Coffee Association, or Rusteacoffee. The association was founded in 1991 at the end of the Cold War to tackle the industry challenges brought about by the economy’s transformation into a free market.

“Throughout the years of the Soviet Union, coffee was an exclusive luxury product and only very important people could go to special clubs or VIP lounges and have coffee there. So today, a lot of people are willing to pay, and pay extra for coffee, because they can,” Chanturiya tells GCR Magazine.

Russia has historically been a tea-drinking nation, with tea popularised during the rule of the Tzars. Coffee has now become highly competitive in the hot beverage market according to Chanturiya. “For the 10 years from 1991 until just after 2000, we had a fantastic growth rate of between 20 – 25 per cent a year in coffee consumption. Since 2000 the market became a bit more balanced and stable,” he says. After five years with “a bit of stagnation in the market” growth started to pick up in 2013 at 2.5 per cent and the market is expected to grow at about the same rate this year, he said.

Russia has seen a steady growth in the roast and ground segment of the market, which has been taking market share from soluble in recent years.

Per capita consumption in Russia currently sits at 0.8 kilograms per year. Roast and ground coffee makes up between 35 – 37 per cent of the overall market, compared to a market share of at least 90 per cent 20 years ago. Growth in the better quality Arabica blends has primarily been seen in the past 5 – 10 years, according to Rusteacoffee.

“Today overall growth in the market comes from the roast and ground segment, which

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“TODAY OVERALL GROWTH IN THE MARKET COMES FROM THE ROAST AND GROUND SEGMENT, WHICH CONTINUES TO RISE EVERY YEAR. SOLUBLE DEMAND IN THE BEST YEARS STAYS STABLE OR EVEN GOES DOWN IN VOLUME.” Ramaz Chanturiya

Head of Rusteacoffee

continues to rise every year. Soluble demand in the best years stays stable or even goes down in volume,” Chanturiya says.

Since the 1960s, India has been a major supplier of this coffee to Russia. From virtually no local consumption, Indians have been steadily drinking more coffee for the past 10 years. From consumption of just under

1 million bags in 2000, local demand rose by 40 per cent to 1.4 million bags in 2010 and is today estimated at between 1.6 – 1.7 million bags, according to the ICO. Coffee officials in India say the real figure may be much higher, as the soluble industry continues to register growth rates of between 10 – 20 per cent a year, but independent figures were not immediately available.

Attilio Capuano, Asia & Pacific Director for Italy’s Lavazza Group, says that India’s coffee drinkers share characteristics with their BRIC counterparts.

“An increasingly urbanised, young and trendy population is embracing Western tastes and flocking to cafés, ” says Capuano.

In a report published by Dow Jones Newswires earlier this year, Capuano said that domestic consumption of coffee in India should grow at an average of between 5 – 6 per cent per year.

The report dismissed concerns that the entry of new players like Starbucks Coffee may limit Lavazza’s growth in India.

The key focus in coffee is in China’s population. There is a popular saying that if every person in China drank one cup of coffee a day, the world would run out of coffee. Although it’s hard to judge the accuracy of this statement, growth in coffee consumption in the world’s most populous country would undoubtedly affect supplies.

Citing local market research, the Chinese Jing Daily reported that coffee consumption in China is rising at an estimated 30 – 40 per cent annually, compared to a global average of 2 – 3 per cent.

With no official industry body, figures for Chinese coffee consumption are difficult to find. The ICO rarely mentions China in its monthly market reports. The USDA only includes import figures, and bases its consumption estimate for China solely on those imports. Albeit an incomplete figure, the USDA numbers provide a good indicator of the growing importance of China to coffee. Green coffee imports were estimated to rise 29 per cent to 2 million bags in the 2013-14 marketing year from 1.5 million bags in the 2012-13 cycle. This is compared to imports of just 610,000 bags in the 2009-10 coffee year.

Unlike most consuming countries, however, imports don’t represent a clear picture of how much coffee is on the ground.

China is also a producer, and homegrown coffee, especially from the southern Yunnan province, has also started to pick up.

Industry estimates peg current production at between 800,000 and 1.2 million bags, although local government officials in Yunnan province say production is approaching 1.4 million bags. An official from the Beijing Coffee Association tells GCR Magazine that China’s locally grown coffee will approach 2 million bags in 2015. If all this coffee is staying in China’s borders, then local consumption for 2014 could be around 3.4 million bags.

The government has projected that coffee consumption will grow at an average 15 per cent a year until 2020 to hit 5.5 million bags, putting it among the top 10 consuming countries in the world alongside France and Japan.

With coffee production just barely balancing out with consumption, these are figures worth taking a close look at as the industry cheers consumption along. G C R

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RESEARCH ASIC 2014

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ISM

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E C HAN M G

AND COFFEE SCIENCE THE INDUSTRY’S TOP MINDS GATHERED AT THE 25TH INTERNATIONAL CONFERENCE ON COFFEE SCIENCE (ASIC) IN COLOMBIA TO LOOK AT HOW SCIENTIFIC EFFORTS ARE HELPING TO SECURE THE FUTURE OF COFFEE PRODUCTION.

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t would seem that Mother Nature has recently made a game of ticking off a list of coffee producing countries to attack.

First, the world’s largest producer Brazil saw its worst drought in more than 70 years, bringing production down around 30 per cent. Then the world’s second largest producer Vietnam saw an extra heavy onset of deadly flooding. Indonesia and India followed, and together the Southeast Asian coffee giants are reporting losses of between 20 – 30 per cent. In Central America, climate change is being blamed for the most severe outbreak of rust in recent history, which coupled with a severe drought has sent around 2.8 million people on food aid.

These occurrences, however, are no games of a coffee-hating higher power, but a sharp reminder that climate change is already having a significant effect on the coffee industry, as it is on food production the world over. The most recent report from the United Nations Intergovernmental Panel on Climate Change confirmed that the impact of climate-related extremes, including droughts and floods, are creating a noticeable disruption in food production. It warned that countries need plans of attack to deal with modern environments, noting that: “For countries at all levels of development, these impacts are consistent with a significant lack of preparedness for current climate variability in some sectors.”

Fortunately, the coffee industry’s scientific community has started taking the offensive. The 25th International Conference on Coffee Science (ASIC) welcomed plans on how the scientific

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community is helping producers prepare for, and mitigate, the effects of climate change. From a weather warning system in Colombia, to the use of Terroir growing principles in Ethiopia and a Coffee Reforestation Project in Mexico, coffee producers of the future will have more power in the face of Mother Nature.

One of the most exciting announcements – drawing massive audience applause – was from Colombian Coffee Growers Federation’s (FNC) R&D Center, Cenicafé, who served as one of the official hosts of the ASIC conference.

“In the next 25 – 50 years the climate will be warming with between 2 – 4 degrees Celsius.

Our principal target is to figure out how we can lower the risk caused by these climatic changes for the growers,” Cenicafé Director Fernando

Rust disease and drought in Central America sent 2.8 million people on food aid.

Cenicafe announced a coffee agronomist project that will use an early warning system to warn coffee farmers to help them prepare for unusual climate.

Gast tells GCR Magazine on the sidelines of ASIC in Armenia, the capital of Quindio in the heart of Colombia’s Eje Cafetero coffee region. “The error that so easily is committed today is that growers are only preparing for the event of an unexpected La Nina. The same variability in the weather from the climatic cycles today may suddenly bring on an El Nino instead.”

Gast knows this problem better than most. When it comes to climate and coffee, few countries have been hit as hard as Colombia. From 2008 to 2012, production dropped a stunning 40 per cent, largely due to changes in the climate cycles. Because Colombian growers harvest two crops a year, it’s been especially challenging to curb the onset of crop pests and related growing problems.

“At the heart of the crisis, Cenicafé was given a mandate by the FNC to deepen our research and look into specific models which could help ease the negative effects for growers,” he says.

The result was the excited announcement of a new coffee “climate-agronomist” project that Cenicafé will manage. “This year we started the implementation of the world’s first early warning system for coffee growers here in Colombia. Through it, producers can learn of not just the possibility of an unseasonal El Nino or La Nina, but get concrete advice on what to do to prevent the worst damage, even with limited resources,” Gast says.

Similar to an Early Tsunami warning system, the system will send a special message out to all the FNC’s producer members in a particular region or province if a potential weather hazard is detected. To begin with, the information will be delivered via the FNC’s 15,000 Extension Workers, and progressively the growers will receive information relevant to their farms direction. The FNC’s members include around 500,000 coffee growers in the country. The warning system will help producers try to curb the worst effects of an either devastating drought or excessive dryness from an El Nino. This early warning system will help growers prepare for what’s to come.

For instance, Gast explains how an understanding of the weather can help direct farmers on when to fertilize: “Here in Quindio we have three completely different coffee growing regions with different risks from either an El Nino or La Nina. In the event of an unseasonal El Nino for the winter

“THIS YEAR WE STARTED THE IMPLEMENTATION OF THE WORLD’S FIRST EARLY WARNING SYSTEM FOR COFFEE GROWERS HERE IN COLOMBIA. THROUGH IT, PRODUCERS CAN LEARN OF NOT JUST THE POSSIBILITY OF AN UNSEASONAL EL NINO OR LA NINA, BUT GET CONCRETE ADVICE ON WHAT TO DO.” Fernando Gast

Cenicafe Director

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A Coffee Reforestation project in Mexico is looking to encourage sustainable farm management.

season, which primarily is in December and January, we recommend that growers start fertilizing now or within the next month when there is still humidity left in the soils,” Gast tells GCR Magazine in mid-September.

Producers in a regular crop season with regular weather patterns would usually wait to fertilise until after the flowering for the Mitaca, or mid-crop, which starts in November. In the event of a drought, however, such an investment would be lost as soils without humidity will have no way to absorb the fertiliser and other inputs.

“This way an early fertilisation would leave the trees in a much better shape to face an unseasonal El Nino, and hence be better prepared to cope with the effects and leave at least a part of the farm in better shape for producing a harvest, even with less rainfall,” explains Gast. With the basics of coffee production and tree and farm management guided by the same agronomic principles across the world, Cenicafé’s work should benefit coffee farmers everywhere.

This isn’t to say that Cenicafé’s approach should necessarily be universal. In the birthplace of coffee, Ethiopia, scientists are taking a different approach. As the onslaught of weather has brutally hit growers with little relief in sight, producers here are receiving technical advice on how to apply Terroir principles to mitigate some of the issues caused by climate.

The concept of Terroir had traditionally been used in the French wine appellation system, but is today increasingly being adapted to specialty coffee to explain the interaction between a set of unique characteristics such as geography and climate with plant genetics. According to Getu Bekele, of the Ethiopian Institute for Agricultural Research, an understanding of Terroir could now be a key to securing the coffee supply of the future.

“What we tried to address in this study was how to strengthen Arabica coffee breeding through the optimum use of coffee Terroir. This program has demonstrated remarkable results via the use of local genetic diversity,” said Bekele in a presentation at the ASIC conference.

“We need to adapt the varieties to the environment. By maintaining the typical quality of each locality in the research project, we avoided most adaptation problems and were able to maintain the local varieties preferred by the farmers,” he tells GCR Magazine, adding: “The concept of Terroir

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might be our last resort.”

In Mexico, meanwhile, Indigenous smallholder coffee producers in the central Puebla state are coming to the end of the pilot phase of a Coffee Reforestation Project. The project uses coffee farms to create natural buffer zones between urban areas and pristine forest reserves. Mexico is one of the five most biologically diverse countries in the world. Its forests are home to 10 per cent of the earth’s plant and animal species, but the ecosystems have suffered from years of rapid industrialisation including the conversion of forests to farmland, according to the Rainforest Alliance.

This and other projects are part of a series of efforts engaging public and private partnerships into addressing the negative effects of climate change. The Mexico Alliance for Reducing Carbon Emissions from Deforestation and Degradation (MREDD) is a USAID-funded coalition of NGOs that includes groups such as the Rainforest Alliance and The Nature Conservancy. Project stakeholders are setting up a national system in Mexico that can monitor, report and verify carbon sequestration (the capturing of carbon dioxide), and the emissions that are avoided as the result of sustainable land management.

“The country’s forests and ecosystems are jeopardised by rapid development and the conversion of forests to farmland – two of the main drivers of climate change,” said the Rainforest Alliance in comments sent to GCR Magazine. By reducing carbon emissions from deforestation and degradation, in combination with forest activation, the project seeks to fix some of the damage that is contributing to negative climate change.

Of all the differing strategies and opinions in fighting climate change, among this scientific community, there was one universally shared opinion: changes in the earth’s temperature are real, and the effects are only going to get worse.

“Climate change is happening and we are seeing quite worrying trends,” Dr. Peter Baker, a commodities development specialist at CABI, a not-for-profit science-based development organisation, told the ASIC the crowd. “Some scientists believe that climate change could push coffee growing to the brink of extinction.

Regardless of what we believe, we really need to study the capacity of these plants to adapt to climate change. That will be very critical.” GCR

FEATURE CQI

ENGENDERING DEVELOPMENT EMPOWERING WOMEN IS ABOUT MORE THAN JUST EQUALITY, BUT IMPROVING PRODUCTIVITY FOR THE COFFEE INDUSTRY AS A WHOLE.

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n Popayan, the capital city of Colombia’s Cauca department, an American woman sits down with a group of female coffee farmers.

They share the same kind of conversation women have the world over – talking about their work, families, money, and the trials and tribulations of their day-to-day lives.

But this conversation is a lot more than idle chitchat. The American woman leading the talk is Kimberly Easson, Gender Program Advisor for the Coffee Quality Institute (CQI). What these women are telling Easson is poised to form the basis for future development of the coffee sector.

The session is part of a series of four gender equity workshops that CQI will be having over the next year in support of its mission to improve the quality of coffee and the lives of those who produce it.

CQI will hold similar conversations with men and women, both single and coupled, in other parts of the coffee producing world. Combined with an extensive literature review, CQI is looking to draft a comprehensive, data-based report that can be used to inform gender-focused policy and research

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in the coffee industry for years to come.

The business case for everyone – from private companies through to governments and NGOs – to take an interest in this work is powerful. In its 2010-11 State of Food and Agriculture report, the United Nations’ Food and Agriculture Organisation (FAO) states that closing the gender gap could generate significant gains for the agricultural industry. The report says that if women had the same access to resources as men, they could increase yields on their farms by 20 – 30 per cent. This could raise

total agricultural input in developing countries by 2.5 – 4 per cent, and decrease the number of hungry people in the world by 12 – 17 per cent.

Easson is well placed to lead the CQI study, with a strong background in gender issues in coffee. Easson is a co-founder of the International Women’s Coffee Alliance, and served as Director of Producer Services and Relations at Fairtrade International. CQI’s interest in gender issues dates back to 2005, when the organisation launched the Women in Coffee Leadership Program. Following the coffee price crisis at the turn of the millennium, USAID funded the program to partly address the problem in Central America. It was during this project, Easson tells GCR Magazine, that CQI cemented its belief that it must use a bottom-up approach in any gender work it conducts.

“Soon after the launch of this program, we realised we were learning from each other.

It’s not a case of the South learning from the North,” she says.

Since that time, the development sector has evolved to a much stronger focus on gender, including new requirements for a gender outlook in funding policies. Easson saw there were limited formal resources available on gender in coffee, and that there was a desire in the industry to better understand the issue and invest.

“If you don’t have an approach to gender, you will miss out on funding. You need to outline in your application what impact your project will have on gender issues,” she says.

Indeed, many funding organisations are explicitly spelling out their requirements for a gender outlook. For instance, the Bill and Melinda Gates foundation has a 13-page document that outlines what they look for in a gender strategy when considering applications.

“Agricultural development must address gender in order to achieve significant impact in the reduction of hunger and poverty,” states the foundation’s Gender Impact Strategy for Agricultural Development. The strategy outlines nine gender-issues tenets that need to be addressed in funding applications. This includes the consideration of female participation, effects on women and children, and also monitoring mechanisms that track the progress of women’s participation.

More than just helping in funding applications, Easson says the ultimate goal of CQI’s work is about answering a key question: What is the business case in coffee for investing in gender?

CQI is using a bottom-up approach in putting together a comprehensive report on gender-issues in coffee.

“AGRICULTURAL DEVELOPMENT MUST ADDRESS GENDER IN ORDER TO ACHIEVE SIGNIFICANT IMPACT IN THE REDUCTION OF HUNGER AND POVERTY.” Gender Impact Strategy for Agricultural Development

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FEATURE CQI

CQI will hold four participatory workshops in origin countries to discuss gender issues in coffee.

“That’s the crux of it,” she says. “If we’re going to request more funding, then we need to show what are we trying to drive. Also, we want to ensure that what we recommend is in line with what producers are looking for.”

Although it’s too early to judge the outcomes of the workshops, Easson says initial feedback from the first set of workshops has been in line with more general work on gender in agriculture, where the control of land and resources sits largely in the hands of men. “In Colombia, we saw a pretty strong difference between men’s and women’s roles,” she says. “Men are owners of the product and the land. They are responsible for taking the coffee to be sold, and they’re the first ones to access the money. They don’t tend to share decisions on how that money is spent.”

Among all of the high value activities going into the production of coffee, Easson says men tend to control the monetary outcomes. Although women contribute by raising the children, preparing the food, and generally taking care of the household, these contributions don’t attract a monetary value.

“We’re able to look at that, and explain how it works in our world,” she says. “Things like property ownership, it’s not the same everywhere. I own my home with my husband, I have a say in when we sell the car.”

Historically, land policy and administration have had significant impacts on gender issues. In the Western world, suffrage movements were often linked to land ownership, as a prerequisite to vote.

In the developing world, where three out of every four poor people depend directly or indirectly on agriculture for their livelihoods, issues of land come back into play. According to Agriculture and Rural Development: Gender in Agriculture Sourcebook published by FAO, World Bank and the International Fund for Agriculture Development, in the past few decades, the organisations have expanded their programs in land policy and administration, to support gender and social inequality.

“Gender inequity can be diminished when women’s rights are explicitly taken into account and when women participate in designing and implementing land policy and programs,” the guidebook states. “Land rights – whether customary or formal – act as a form of economic access to key markets, as well as a form of social access to non-market institutions, such as household relations and

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community-level governance structures.” Even in cases where women do control households, current literature shows that women have less access to assets, inputs and services. FAO reports that compared to their male counterparts, women tended to operate smaller farms, use less credit and financial services, and use less inputs such as fertilisers, improved seeds and mechanical equipment.

As the gender picture becomes clearer, so does the business case for helping lift women out of this position. Making that case for businesses however, Easson says, is not so straightforward.

“It’s not so easy to say that if you invest in gender, productivity will go up,” she says.

“It’s softer than that... It’s not easy for people to loosen their grip on how things have always been. There are cultural paradigms here that will need to shift.”

CQI is set to spend the next year learning more about these paradigms, with the next set of workshops taking place in Nicaragua in January 2015, Uganda in February and Indonesia later in the year. CQI is currently seeking industry involvement, including funding partners. GCR For details visit www.coffeeinstitute.org

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magazine SEPTEMBER/OCTOBER 2009 ISSUE 34

TASTING THE LIFESTYLE OF THE CAFÉ SECTOR

TECHNOLOGY Tangential

THE ORIGINS OF

INNOVATION PROBAT’S THOMAS KOZIOROWSKI TELLS GCR MAGAZINE ABOUT THE HISTORY OF ONE OF THE INDUSTRY’S MOST FLEXIBLE COFFEE ROASTING MACHINES.

T

he year was 1969, and in the age of coffee roasting the drum was still king, recounts Thomas Koziorowski, Director of Product Technology and R&D at Germany-based Probat.

This meant roasting times of anywhere from 10 to 15 minutes. Although a manageable time frame for the artisan crowd, at the industrial level, demands for a more efficient production line meant that operators were looking to decrease their roasting times to generate a speedier operation.

“Coming from 15 minutes, they weren’t thinking of what we can do today in 1 – 2 minutes. They were hoping for maybe 6 minutes,” explains Koziorowski. “Also, they had made some trials on roasting profiles and observed some advantages to shorter roasting times in terms of extraction yields and flavour profiles.”

The challenge, explains Koziorowski, in reducing roasting times was changing the way the heat was transferred to the beans. With drum roasting equipment, the beans are packed in volume, and get their heat either directly from a heating source, or via bean-to-bean heat transfer.

“They knew that if they wanted a shorter roasting time, then they needed to find a more efficient way to transfer the heat. They would need to maximise each individual bean’s contact with the air,” says Koziorowski.

The solution was the Rapido Nova, a new system that equipment manufacturer Gothot patented in 1969. The system integrated airflow in a closed chamber that could transfer the heat directly to the beans. A paddle mixer would ensure the constant movement of the beans so that

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PADDLE PIONEER Gothot introduced the first closed machine that used a paddle mixer to maximise bean movement, and minimise roast times.

their travel wasn’t dependant on the airflow.

“That was the idea behind it all, it was a completely different kind of equipment,” says Koziorowski.

Probat purchased Gothot seven years after the first patent was filed, taking into their family this revolutionary equipment design. The air is pushed tangentially into the roasting chamber to maximise movement, which led to Probat changing the name to what the roaster is known as today – the Tangential roaster series. In 2007, Probat named its different series of roasters after the planets, and the Tangential Series became known as the Jupiter Series.

“The basic principle of mixing the beans with a paddle and the air movement has stayed the same,” explains Koziorowski. “But as the industry has developed, there’s been an increased need for shorter roasting times. That single bean is always in the air stream, so the question becomes: ‘How do we get the most out of that?’ The next step is to get the most efficient heat transfer to that bean.”

Hence the original Rapido Nova (Italian for ‘new speed’) underwent several development phases over the years. The first major innovation was in 1980, with the release of the Rapido Nova UIII, following by the RT series. In 2000 the Rapido Nova 5000 was released as the world’s largest serial roasting equipment.

Perhaps one of the most significant advancements was in 2001, when the machine was integrated with a reflection roast control system. Up until that point, the operator managed roast control externally, manually adjusting temperature and flow control as needed.

Probat’s Reflection Roast Control system would change that, and impact on the role of the operator for years to come. Via Reflection Roast Control, a smart computer

Thomas Koziorowski is Director of Product Technology and R&D at Germany-based Probat.

system measures the temperature of the beans and automatically adjusts all of the inputs accordingly. At this level of measurement and adjustment, the result is a highly accurate roast, set to a specific recipe, regardless of external conditions.

“Imagine if you keep your silo outside,” explains Koziorowski. “In summer your beans are coming into the machine at 30 degrees Celsius. But in winter, they’re coming in at zero degrees. With the reflection control, the system will automatically adjust to change for these variations.”

The operator uses the fully automatic, PCbased operating station Pilot Roaster control system to manage and monitor the roasting machine. The system displays the actual and target temperatures, as well as a range of other relevant parameters, on its display screen. This Pilot Roaster program communicates with the

Reflection Control module to adjust the machine parameters of air supply and temperature to bring the product back on curve.

In 2002, the Tangential series was fitted with a green coffee pre-heating system developed by Probat. The system pre-heats the beans in an external chamber as they wait to enter the roasting chamber. The pre-heater uses precious recycled heat from the roasting process, and cuts down on roasting times, maximising efficiency while minimising energy inputs.

Until this point in the early 2000s, the development of Probat’s Tangential roasting system was all about these themes, maximising consistency and efficiency in operation. A major revolution in the nature of the roasting process, however, was introduced in 2011, in the patented Hybrid concept for the then-named Jupiter series.

Over the years, the Jupiter series had continued to develop along the lines of shorter and shorter roasting times. One customer, however, had given some feedback to Probat that for some of his roasts, he preferred the aroma components of a longer roast time. As a result, he had to have two roasting machines in his facility.

This, coupled with other customer feedback, inspired the Hybrid. The Hybrid Jupiter series used a new stirring mechanism that improved the mixing of the coffee inside the chamber. The new stirring mechanism put less demand on the air supply to move the coffee beans, making it far more flexible than before. The machine can generate roasting air inlet heat levels of 260 degrees Celsius to 550 degrees Celsius. With these characteristics, an operator can create the same roasting profiles as a drum roaster through to an air roaster.

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TECHNOLOGY Tangential

The Jupiter Hybrid series’ modular design means the machine can accommodate a range of industrial requirements.

“Our Tangential roasting solution is really a one-of-a-kind worldwide,” says Koziorowski.

“It’s possible to create special flavour notes by using the roaster’s flexible supply air solutions. ” The modular design of the latest series means that roasters can customise their orders based on what characteristics they need.

“Some customers don’t need to roast their coffee in one and a half minutes, or they don’t need such a high level of flexibility,” says Koziorowski. “It’s like in the car industry.

Sometimes you need a station wagon, sometimes a family car, or sometimes a sports car. It’s like that with the Jupiter series. The base model is always the same, and you can integrate what you need into the design.”

As a result of this history of innovation, the Jupiter today is a market leader in industrial coffee roasting equipment. The machine ensures even moisture distribution within a batch, even colour distribution, and less water consumption (via less condensation inside the roaster). Thanks to its design, it can offer flexible batch sizes, fast cooling systems, and full automation.

The machine also offers some of the industry’s most advanced safety features.

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“THEY KNEW THAT IF THEY WANTED A SHORTER ROASTING TIME, THEN THEY NEEDED TO FIND A MORE EFFICIENT WAY TO TRANSFER THE HEAT. THEY WOULD NEED TO MAXIMISE EACH INDIVIDUAL BEAN’S CONTACT WITH THE AIR.”

Koziorowski explains that the fully automatic process means that the operator can control the roasting process at a safe distance.

“The roaster has the flexibility to play around with the roast, all while working in a safe environment,” says Koziorowski.

The system has safety elements in the Programmable Logic Controller, and features carbon monoxide monitoring, overheating alarms, and software that undergoes regular safety checks of the equipment.

As for the future, Koziorowski hints to GCR Magazine at what’s to come. He says that in addition to measuring temperature and colour elements of the beans, equipment of the future might be able to chemically measure aroma components throughout the roasting profile.

Seeing the impressive evolution that Probat has led in Tangential roasting technology over the past four and a half decades, it will be an interesting time to watch this space for future advancements. GCR

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PROFILE Intelligent Blends

PREMIUMISED INTELLIGENT BLEND’S MICHAEL ISHAYIK TELLS GCR MAGAZINE WHY 2015 IS THE YEAR THAT ROASTERS ACROSS THE QUALITY SPECTRUM WILL JUMP ON BOARD THE SINGLE-SERVE WAGON.

M

ichael Ishayik is used to hearing that the product he’s making might just be a passing trend.

Ishayik started up Intelligent Blends two and a half years ago, specialising in single-serve coffee capsule manufacturing.

In that time, he’s fielded roaster concerns about the prevalence of single-serve, which system will prevail, and the dangers of backing the wrong system.

Although he’s only been in the coffee business a short while, these are questions Ishayik has heard for nearly two decades. In his primary business of DVD and CD manufacturing, Ishayik has been front and centre in the transition from tape to discs.

He helped the entertainment industry finally embrace discs, and now he’s watching those discs steadily lose ground in the face of hardware-free digital technology.

“As you can image, CDs and DVD manufacturing is not the most robust business nowadays,” he tells GCR Magazine.

The irony of switching from one once-criticised medium to another hasn’t escaped Ishayik. “It’s pretty funny. We used to hear the comparison [of DVDs to coffee capsules] all the time.

We helped a lot of companies manage the transition from VHS to DVDs. They went from ordering just a few discs, to half their stock, to everything on DVD. We saw the delivery mediums flip over. With single-serve, I can now make the same arguments.”

That consumers are embracing single-serve coffee as quickly as they did disc players is becoming an easier argument for Ishayik to make every year. Pulling from various official and estimated sources, Ishayik says that around 18 per cent of households in the United States currently have single-serve systems. He estimates that single serve now makes up around 40 per cent of all ground

Intelligent Blends’ Michael Ishayik estimates that coffee capsules make up around 40 per cent of all roast and ground coffee sales in the US.

coffee sales, up from 30 per cent last year alone.

“Single serve is just another format that all coffee and tea purveyors should offer their clientele,” he says. “If they don’t they are just missing out on sales.”

Although single serve has traditionally been well accepted among more mainstream coffee brands, Ishayik says it’s been a more challenging sell for top-end, specialty roasters.

“I’ve spoken with high-end roasters who don’t want to enter single serve,” says Ishayik. “They’re worried about the perception of their brand.”

His pitch to these roasters is that the technology has come a long way since Keurig Green Mountain introduced the first capsule in the US. “The product has grown up a lot, “ he says. “Coffee has followed a similar path.

Whole bean coffee is not the same as it was a few years ago, with the advent of microroasters and the like. In the US, people are now really into coffee – it’s hip, it’s chic.

People are out there talking about cafés that they visit, that just wasn’t happening five years ago.”

Ishayik says single serve has similarly become more sophisticated. “When Keurig Green Mountain first launched their capsules, they were figuring out how to deliver a consistent cup, and keep the machines running. Now that focus has shifted to quality.”

Ishayik points to the latest National Coffee Association report to show that

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PROFILE Intelligent Blends

Michael Ishayik is Founder of single-serve specialist Intelligent Blends.

customers have made a similar shift. In a survey, a number of customers were asked what were their top reasons for using single serve. The first reason was taste, the second was convenience, and the third was value.

With quality now the top reason that customers use single-serve, this falls in line with the goals of the high-end coffee industry. Ishayik says now is the time that roasters of every part of the spectrum should be embracing single serve. Intelligent Blends’ newly introduced, patented 15-gram basket should help attract a new clientele. With this technology, Ishayik says Intelligent blends can offer a “gold cup” standard.

“We’ve done blind tests, and you can’t tell the difference between a hand-brewed coffee and our single serve,” he says. “We can get a target particle size to hit the ideal TDS [total dissolved solids] in the cup. Working with different filter paper and grams, we can really control that customer experience to exactly what the roaster wants.”

With filter coffee by far the preferred consumption method in the US, Ishayik says there is certainly room for players like Nespresso to profit from a growing espresso culture, even if it takes a while.

“Most Americans like their cups of coffee, they’re not really into espresso. Although that’s changing a little, it will take some time,” he says. “Europe has been drinking a much more sophisticated cup of coffee over a longer period of time. Europeans are used to drinking espresso, it’s a big cultural difference than here [in the US]. We’re learning to drink better coffee, our palates are becoming more sophisticated, but it takes time.

Ishayik estimates Nespresso has around a 2 – 3 per cent market share. The Swiss company made a move to increase its presence in North America in February this year, with its VertuoLine machine that brews both large cup coffee and espressos. “Nespresso is doing a great job [of attracting customers].

It’s getting the benefit in the US of Keurig’s success. People go to shops like Bloomingdales and try Nespresso. They’s already into single-serve systems, so buying a Nespresso is just an upgrade.”

Ishayik is placing his bets that Nespresso will succeed and gain more ground. Intelligent Blends is looking to launch Nespresso compatible capsule manufacturing in January 2015.

As with every market, Nespresso has a closed distribution system, where it only sells its capsules

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direct to consumers either via its boutiques or web sites. This means no Nespresso capsules are available on retail shelves. As of early 2015, Ishayik will be looking to change that with the offering of Nespresso compatible capsules manufacturing.

As for Keurig systems, with the US market becoming increasingly saturated and possibly losing ground to Nespresso, Ishayik says roasters should be looking in Central and South America for growth. With these markets so new, he says roasters can look at bringing in their own branded systems to encourage loyalty and build up a clientele.

Whether the Keurig will one day go the way of the DVD no one can tell. But Ishayik is ready to ride the single serve train as he sees another one of his products slowly become redundant.

With a staff of 50, that between them average 11 years at the company, single-serve has meant Ishayik has been able to keep his staff employed and thriving.

Although it may seem like a big jump, he says the sophisticated nature of modern coffee capsule manufacturing lends itself to complementing high technology.

“There are a lot of similarities. Customer graphics, labelling, cartons. And the quality control is all about process, process, process,” he says.

As a single-serve specialist, Ishayik says he’s made a huge capital investment to position the company as a leader. Intelligent Blends can pack a regular K-Cup that can hold up to 11 grams, however they have also developed a new K-Cup that can hold 17 grams of coffee.

Although he may be a relative newcomer to the coffee industry, Ishayik says he has already discovered the importance of quality grinding equipment.

“We found out the hard way when we first started the requirements and tolerances (of single serve) are pretty tight,” he says. The company invested in a MPE IMD699, a three-stage grinder with water chilling technology so that the coffee isn’t reheated while grinding.

“This grinder allows us to get just the right particle size to hit each pan in the rotap, so that we can ensure the perfect grind every time, which ultimately makes a great cup of coffee,” he says.

Other than producing a great cup of coffee, Ishayik’s story shows that single-serve is serving another fantastic service to a struggling American economy – keeping at least part of the country’s manufacturing industry alive. GCR

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PROFILE Garanti

CHARTING

GRO TH

ONE OF TURKEY’S MOST ESTABLISHED COFFEE PROCESSING MACHINE MANUFACTURERS, GARANTI, TELLS GCR MAGAZINE ABOUT 60 YEARS OF WATCHING AN INDUSTRY ADVANCE.

T

here are many measures that can be used to chart a company’s growth.

Annual revenue can paint a picture of financial success, although figures don’t tell much of a rich story.

Numbers of customers and employees are always a welcome insight into the path an entrepreneur has taken, but most companies will keep this information close to their chests.

For Garanti, a leading manufacturer of coffee processing equipment, its growth is perhaps best measured in square footage.

In 1951, less than three decades since Turkey was born as an official Republic, Mustafa Umsu started up a tiny atelier of seven square meters. Here, he manufactured what would today be considered very rudimental coffee and spice grinders and roasters. The machines were sold domestically, at a time when Turks knew little of a coffee culture beyond the traditional Ibrik.

Over the course of a decade, Umsu’s fine craftsmanship become well recognised and sought after among coffee and spice manufacturers. As he gained popularity, he needed more space. The company moved to a 300-square-metre facility in 1961, and started exporting equipment to Macedonia, Greece, Bulgaria, Cyprus, Armenia, Albania, Algeria, Libya, and even Germany – what is today

a powerhouse in the construction of coffee machine manufacturing equipment.

With each new market, Garanti experienced a new level of growth. It soon outgrew what once seemed a spacious manufacturing floor.

In 2000, the company moved to an aptly sized 2000-square-metre factory, a space Garanti still works in today.

The size and reach of modern-day Garanti is something the company founder would never have imagined. In addition to coffee processing, roasting and grinding equipment, Garanti also produces cacao processing equipment; malt, wheat and black rice roasting machines; nut roasting machines; spice, sugar, mineral and chemical grinding machines; and loading and

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PROFILE Garanti mixing equipment.

It’s a beautiful journey that has been followed by the generations of the family. Umsu’s son Suleyman now runs the family business along with his daughter Sinem, as the second and third generation.

Speaking with GCR Magazine, Sinem says a set of core values has helped the company achieve the success it enjoys today. In addition to its long history, Garanti is known for the latest technological advancements.

“We understand our customers. We update the production process and our products with consideration of our customer requirements,” she says. “We’re looking to make improvements to make higher quality products.”

Sinem is proud to say that Garanti’s equipment, inspired by her grandfather’s craftsmanship, can now be found all over the world. In addition to making direct sales from their Turkish office, Garanti has agencies in South Korea, Australia, the United Kingdom and Ethiopia. In the coffee space, Sinem says Garanti has made a name for itself among a satisfied clientele. “We’re known for timely delivery, customer satisfaction, and after-sales support,” she says.

In the coffee space, Garanti offers a full range of equipment to suit any level of operation. This includes roasting machines and afterburners, grinders, destoners, loaders, silos (both café and industrial sizes) and mixers.

With this range of equipment, Garanti is set up well to partner with a roasting operation to design and install a full plant. Sinem offers this advice to roasters who are starting up shop: “First of all, they must decide what they want to do,” she says. “Then, they must decide the capacity, both daily and monthly. After making these decisions, and sharing the plan of the location, we can prepare a coffee processing line. Our customers can customise according to their requirements.”

In the journey of setting up a new plant, Garanti offers full support, from installing the equipment through to training staff, step-bystep, on the coffee processing line. It is services like this that Sinem says roasters should be looking for.

“They must consider [a supplier’s] years of experience in working with coffee and equipment when they choose an equipment supplier. They must also consider after-sales service,” she says.

Although the company supplies to roasting companies all over the world, Garanti is well placed to have watched coffee trends in Turkey

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Garanti manufactures its machines in Turkey, and exports around the world, with agencies in South Korea, Australia, the United Kingdom and Ethiopia.

change significantly over the past six decades. Allegra Strategies recently identified Turkey as one of the strongest growth markets of the 23 European countries the UK-based research firm analysed.

With an impressive 19.5 per cent growth rate in 2013, the country now has an estimated 1331 branded coffee shops units. This represents a significant change from the traditional Turkish coffee drinking of the past.

“Before the 2000s, Turkey mainly just knew about Turkish Coffee. In the past 14 years, coffee trends are growing up, with the introduction of espresso and filter coffee,” says Sinem. “Most young Turkish people are tasting and drinking Turkish coffee, but also espresso and filter coffee instead of tea. The coffee trends continue to develop day by day.”

Allegra’s latest report confirms that the most potential for increased coffee consumption in Turkey will be from these converted tea drinkers. The report credits the nation’s tea culture to a low coffee consumption per capita of just 0.5 kilograms per year.

“Turkey has a strong tea culture, but with the rise of specialist coffee shops, coffee is becoming part of the daily routine,” reports Allegra. “While traditional cafés continue to cater to an older crowd, the specialist coffee shop culture is being embraced by a younger urban population.”

Outside of Turkey, Sinem says similar demographics are driving and directing consumption all over the world. “Coffee market trends change according to people’s cultures and also what they can afford,” she says. “However, people’s tastes are also affecting the market.”

As the company continues to increase its sales around the world, it may be ready for an even bigger factory in the near future. In any case, Sinem sees ample opportunity for growth, saying more countries will be opting to roast coffee within their borders. “[In the future] we think that all streets will have a local coffee roaster,” she says. “So that all people can drink and buy fresh-roasted coffee.” GCR

IMAGES BY SARAH GERBER

ORIGIN Honduras

A QUALITY

UNDERTAKING MAYRA ORELLANA-POWELL, THE DRIVING FORCE BEHIND THE CATRACHA COFFEE COMPANY, TELLS GCR MAGAZINE HOW SHE’S USING HER SUCCESS TO HELP HONDURAN FARMERS ACCESS THE SPECIALTY COFFEE MARKET.

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Santa Elena coffee farmers are taking part in an initiative to improve the quality of their coffee.

“WE OFFER A UNIQUE EXPERIENCE TO THE FARMERS BECAUSE WE ENCOURAGE THEIR INPUT, THERE’S NO HIERARCHY. TRADITIONALLY THEY’VE PRODUCED FOR LARGE COMPANIES WHICH HAS MEANT THEY’VE HAD TO COMPETE AND FIGHT OVER POWER.”

I

n the hills of Western Honduras, Central America exists a small community of around 400 coffee farmers. As is the case with the majority of the 110,000 coffee growers registered in Honduras, the farmers of Santa Elena are smallholder farmers. They sell just enough coffee to keep their families going year to year, with an average crop area of less than 5.9 acres Since the 2008-09 global financial crisis, Honduras has been experiencing moderate recovery.

According to the World Bank, growth has been driven by public investments, exports and higher remittances. World Bank figures state a GDP growth of 3.7 per cent in 2010, 3.7 per cent in 2011 and 3.3 per cent in 2012. When this figure dropped to 2.5 per cent in 2013, coffee-farming families were some of the hardest hit.

With a largely unequal distribution of wealth, the country struggles with high levels of crime and violence. In fact, Honduras has earned itself the unenviable title of the country with the highest rate of homicide in the world. It is estimated that endemic violence costs Honduras nearly US$900 million per year, or about 10 per cent of the country’s GDP. But with crime mostly centralised around the major cities, country coffee farmers are largely isolated enough to be exempt from that figure.

Although, in the years that coffee production has been low, more and more Hondurans have moved to the city in search of work. As was the case in 2013, when coffee rust had devastating effects on a large percentage of the coffee farms in Honduras. The 2012-13 harvest produced 8 million quintals of coffee, but approximately 1.8 million quintals were lost from coffee rust. According to the United Nations World Food Bank, up to 100,000 jobs were lost as a result of the disease, causing them to respond with an emergency US$1.3 million in food aid.

Severe drought is having a similar consequence this year. In October the situation was so bad that the Red Cross issued an urgent appeal for donations. In a statement it said that 3500 families were experiencing food insecurity, due to their loss of livelihoods and restricted access to food and water sources. It added that children and poor families were particularly vulnerable, a concerning fact given that chronic malnutrition in Honduras affects 22.6 per cent of people and an estimated 42.5 per cent are living in extreme poverty.

“If they were hungry last year, it’s going to be even worse this year,” Mayra Orellana-Powell the Founder of Catracha Coffee Company, tells GCR Magazine.

Catracha Coffee is a coffee-buying social enterprise that accesses the specialty coffee market for smallholder farmers in Santa Elena, Honduras. Established by Orellana-Powell in 2010, Catracha gives back to farming families by returning the profits made from the sale of green beans.

“Last year’s crops were badly damaged from leaf rust which meant many young people packed up and

Mayra Orellana-Powell

Founder Catracha Coffee

left their family farms,” says Orellana-Powell.

“At home in Santa Elena they are protected from the violence of the cities, but out there they get into trouble.”

Although she now lives with her husband in the United States, Orellana-Powell was born to coffee farmers in Santa Elena. Her grandmother raised her in what was then a small village of about 50 houses. Along with her cousins, who still call Honduras home, Orellana-Powell would walk to the nearest town to attend high school.

“My grandmother had high expectations of us, she was a teacher and she encouraged me to work hard and make my own way,” says Orellana-Powell. “From a young age, I thought that I too might end up teaching.”

Following in her grandmother’s footsteps was put aside when Orellana-Powell received a scholarship to study Business Management in the United States. The opportunity opened up a different path to honour the woman she says had the biggest impact in her life.

It was on a trip back to Honduras that she met Lowell Powell, an American who was designing water systems in Honduras with the US Peace Corps.

The pair fell in love and moved back to the US to complete their educations. Marrying and settling down together in the US, the couple

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ORIGIN Honduras

A Santa Elena coffee farmer tends to the beans.

would make frequent visits to the country where they had first met. They would return to the farm in Santa Elena to help harvest for two weeks of every year.

When Orellana-Powell’s grandmother passed away, she inherited her coffee farm of around 300 trees. In the years after, Orellana-Powell and her husband continued to fly to the farm during harvest to help out, returning home with a suitcase full of coffee to try to tempt buyers.

“It doesn’t matter how good the coffee is, if you don’t have the connections you don’t get very far,” says Orellana-Powell. “It was very expensive trying to do it all myself and we would end up drinking a lot of the coffee ourselves.”

Determined to return to Honduras with a better outcome for herself and for the Santa Elena farmers, Orellana-Powell says she persisted with specialty distributor Royal Coffee until they agreed to sell her coffee.

“Royal Coffee opened up the doors for me, helping me to establish the Catracha Coffee Company,” says Orellana-Powell. “It was the first time they’d had someone from Honduras come in and they’ve been supporting us ever since.”

Catracha, which is a nickname for a Honduran woman, began profitably exporting the coffee from Orellana-Powell’s farm. Wanting to share her good fortune with her neighbours, she began purchasing coffee from the farmers around her, using the connections she’d made through Royal Coffee.

In 2011, Orellana-Powell’s parents began running monthly training sessions with farmers to collectively improve the quality of the coffee.

Once a month Santa Elena farmers come together and learn how to pick when the cherries are most ripe, how to fertilise against leaf rust, as well as the importance of sustainable practices like planting vegetable crops for an alternative source of income.

“Catracha Coffee Company will only buy coffee off farmers who attend the classes, which

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allows us to be transparent with them. As well as teaching good practice, the classes create morale and a more positive energy in the community,” says Orellana-Powell.

According to Orellana-Powell, the Catracha Coffee Company operates differently to the corporations the farmers have previously sold to.

“We offer a unique experience to the farmers because we encourage their input, there’s no hierarchy,” says Orellana-Powell. “Traditionally they’ve produced for large companies which has meant they’ve had to compete and fight over power.

“There’s also been no feedback, so less incentive to improve quality. We keep them in the loop, sending back pictures so they can see the coffee’s journey.”

In July 2013, Orellana-Powell realised her goal of giving back to the Santa Elena coffee farmers, with Catracha Coffee Company returning more than US$30,000 to farmers through its profit sharing program.

On a trip to Honduras with Orellana-Powell and her husband in 2013, a close friend Arvin Juan was inspired to contribute in his own way. From that trip, the idea of the Catracha Quality Project was born. The project supports the production of specialty coffee among coffee farmers in Honduras. By introducing data collection practices to farmers, Orellana-Powell and her team are hoping to gain a deeper insight into opportunities to maximise quality during coffee processing.

Trialling the project during the upcoming harvest in Santa Elena, the team has high hopes of eventually increasing the quality of coffee right across the country, improving the lives of coffee farmers along the way.

The project will introduce data collection practices to farmers. The farmers will map the postharvest process and record their practices at each step, from receiving, pulping, fermenting and drying, through to storage.

“Many farmers have their particular way of doing things, and our goal is to capture the uniqueness from farm to farm so we can learn from each other and get even better,” says Orellana-Powell.

In addition to collecting the data, the farmers must agree to join the training sessions that are being run by Orellana-Powell’s parents. In phase two they will receive suggestions for better practices and by next year the Quality Project team hope to be able to share their findings with other farmers.

“If we can increase the production of specialty coffee in Honduras we will increase the demand for it, which ultimately will better the lives of the coffee farmers,” says Orellana-Powell. “Although currently we are busy working in the US, our plan one day is having a home in Santa Elena. It is our dream to live in a prosperous place, where not just us, but also our neighbours live happy lives.” GCR

www.world-of-coffeeandtea.com

BREW THE BEST

IN ASIA

20 - 24 May

2015 International Trade Exhibition for the Coffee and Tea Industry in Asia Koelnmesse Pte Ltd Jennifer Chiah (Ms) Tel: +65 6500 6738 Fax: +65 6294 8403 j.chiah@koelnmesse.com.sg

Powered by

Jointly organized by

THAIFEX–World of Food Asia

The Thai Chamber of Commerce

Challenger Hall 3 IMPACT Exhibition & Convention Ce n t e r, B a n g k o k , T h a i l a n d

ORIGIN Indonesia

EXPLAINING A

EXPORTS ARE DOWN IN INDONESIA, BUT CLIMATE CHANGE IS ONLY PARTLY TO BLAME.

nomali café in Jakarta’s Sudirman Central Business District is the kind of place that never sleeps. The wood-adorned, three-storey café serves as a permanent meeting spot and remote office for youthful startups and suit-wearing professionals alike.

It’s also well known for single origin Arabica variants from Sumatra. Veronica Herlina, Executive Director of the Specialty Coffee Association of Indonesia (SCAI), is clearly comfortable here as she sits down with GCR Magazine to discuss the state of the country’s coffee production.

“A couple years ago it happened just like this. We cannot

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predict the climate change,” explains Herlina, a soft-spoken, yet authoritative voice in Jakarta’s coffee industry. “The rain has impacted the quality of our coffee this year. Sumatra has been impacted the most in the international market.”

For the second consecutive year, the weather has been credited for lowering Indonesia’s green bean coffee yields, negatively affecting the nation’s exports and the livelihoods of local farmers.

According to the latest estimates from the United States Department of Agriculture (USDA), Indonesia’s production is forecast to drop 600,000 60-kilogram bags to 8.9 million in the 2014-15 coffee year.

Green bean traders Volcafe claim coffee shipments from Sumatra, the world’s third-largest grower of Robusta, dropped

DR O P

INDONESIA’S

Workers harvest coffee at the Ciwidey coffee plantation in West Java, Indonesia.

41 per cent in June, raising concerns about the sizes of local crops. May 2014 exports from the Panjang port in Lampung, South Sumatra ended at 12,000 tonnes. That is a 45 per cent decrease from the same time last year.

Herlina links the drop in production to climate change and poor farm management. She says that even a week’s worth of rain during the critical stage of development can delay the process, significantly impacting the final product in a year’s time. The USDA reports that Indonesia’s rainy weather resulted in sub-optimal pollination for its latest crops. In the 2012-13 season, excessive dryness negatively impacted production. On the farm managment side, Herlina says many farms lack shade for their trees, aren’t managing berry borer, or planting at improper altitudes. All of these factors are affecting both quantity or quality.

“The impacts can be felt the most by buyers and niche roasters. They are looking for quality,” Herlina says. “It impacts the income of everyone. The farmers already have limited income.

Maybe one or two of them feel like it’s dangerous if they have to do this continuously. But even if one person goes out of business there is always someone who will take their place in Indonesia.”

Armia Zuhri can account for how production drops affect farmers. He is the Director of the Sumatra Permata Gayo Cooperative. His organisation is well known in Indonesia for promoting specialty coffee in direct trade relationships between regional farmer unions and wholesale buyers. He has been active in the Sumatra coffee ecosystem for nearly 20 years, and assisted the Dutch government’s initiative to improve the quality of Gayo coffee in Aceh.

Work like Zuhri’s is important to a region highly dependent on coffee production, with around 90 per cent of the population working as smallholder farmers. Although production here has been down, he says that high prices have been supporting coffee farmers.

For people like Zuhri, who see the effects of climate change on livelihoods firsthand, there is little climate skepticism present. He says the unpredictable climate in Indonesia year after year is a direct effect of global warming. Although Indonesia has struggled with coffee cherry borers, they have traditionally only attacked his plants below 1000 metres in altitude. But because of

gradual climate change, they are now infesting cherries at unprecedented altitudes.

“Most of these challenges are not controllable by the coffee farmers,” he says. “The farmers need support from the local government, but it’s lacking.” Zuhri says that his cooperative has partnered with NGOs like Mercy Corps and Lutheran World Relief to find a solution for coffee crops affected by adverse weather. He thinks one thing Indonesian farmers can do to combat production drops is to replant their crops with a new variety of coffee, one that is more resistant to climate change.

The main challenge here in dealing with the ups and downs of climate change is in Indonesia’s prevalence of smallholder farms.

According to the SCAI’s Herlina, Indonesian coffee farmers are not the same as Brazil’s, who have big plantations and facilities that can sustain themselves even in times of damaging weather. In Indonesia, most coffee growers are private operators with their own specialised variants. She says Indonesian farmers must cooperate in order to survive: “That’s the big opportunity in Indonesia. Be specialised and be unique, but work together.”

DRINKING UP SUPPLIES But climate change isn’t the only culprit in the drop of Indonesian beans around the globe.

The USDA reports that, although Indonesia’s overall production will drop by 6.3 per cent this year, exports are dropping by 10 per cent.

The difference can be attributed to an increase domestic consumption. The Association of Indonesian Coffee Exporters and Industries (AEKI) says local demand will jump by 33 per cent within the next two years. It predicts that coffee consumption per capita in Indonesia will surge to 1.54 kilograms come 2016.

For exporters, a new strategy may be in order. Leman Pahlevi Sulaiman is the Managing Director of Medan-based coffee export operation PT Menacom, one of the leading Arabica coffee suppliers in Indonesia., and also Chairman of the SCAI. “As everybody mentioned, exports are down,” Sulaiman explains. “But also we have to realise that local consumption has increased by 7 per cent in the past five years alone. At the present moment it is 1.3 kilograms per capita.” Sulaiman believes that at a time like this, Indonesian suppliers should try to more

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ORIGIN Indonesia

Coffee farmers in North Sumatra’s Lake Toba wash coffee beans after a 12-hour pulping and fermentation process.

“MOST OF THESE CHALLENGES ARE NOT CONTROLLABLE BY THE COFFEE FARMERS. THE FARMERS NEED SUPPORT FROM THE LOCAL GOVERNMENT, BUT IT’S LACKING.” Armia Zuhri

Director of the Sumatra Permata Gayo Cooperative

A coffee picker in Gayo, Aceh looks for quality cherries.

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aggressively cultivate the local market.

Indonesia has a population of more than 250 million people, and has seen an average annual economic growth rate of 6 per cent in recent years. According to a report from global market insights firm McKinsey and Company, some 90 million Indonesians will join the consumer class by 2030 – more than in any other emerging market, except China and India. For consumptiondriven enterprises like upscale cafés and mid-priced coffee labels, this will mean an additional US$1 trillion in annual spending by the nation’s increasingly affluent consumers.

These are striking figures for AEKI Chairman Irfan Anwar. In May, Anwar told reporters that local demand is likely to rise to 400,000 metric tonnes in 2016 from an estimated 300,000 tonnes this year and 260,000 tonnes in 2013. This upward trend in local demand is most likely a result of a younger generation embracing coffee culture.

The result will mean fewer foreign dollars coming into the country. After a press conference in Jakarta at the third annual Indonesian Coffee Festival in August, the nation’s Deputy Minister of Trade Bayu Krisnamurthi commented on coffee exports, saying: “Our target is more or less the same as last year’s. We hope to catch up in the second semester.” This will be a difficult task.

Krisnamurthi is targeting US$1.4 billion in coffee sales by the end of this year. The Embassy of Indonesia claims exports were recorded at only $333 million in the first semester.

In mid-October, at the 29th Trade Expo Indonesia, Trade Ministry Director General for Export Development, Nus Nuzulia Ishak, said that despite a lower production year, she was optimistic that the value of Indonesia’s coffee exports would increase by around 10 per cent to US$1.3 billion from US$1.17 billion last year. She credits Brazil’s drought as the cause. Ishak told reporters: “We will benefit from the crop failure experienced by Brazilian coffee growers as their markets are switching to our coffee.”

To reach Krisnamurthi’s goal, local demand will still have to pick up the slack. Pranoto Soenarto is the Executive Director of PT Excelso Multi Rasa, the umbrella company of Excelso, one of the biggest local café chains. Soenarto told The Jakarta Post that in recent years, sales at his outlets have risen annually by more than 10 per cent on average. Higher consumption will also bring benefits to companies like PT Mayora Indah, the producer of instant coffees such as Torabika and Kopiko 3-in-1. Sribugo Suratmo, Mayora’s Head of Corporate Communication and External Affairs, said the domestic sales that make up 65 per cent of his company’s output continue to show an upward trend, climbing by around 15 per cent each year.

AEKI reports that Indonesia’s coffee plantations can only generate 760 kilograms per hectare each year, which is well below other major producing countries. Local growers are struggling to boost the annual harvest to 1.5 tonnes per hectare.

Hopefully the shortfall in this year’s export revenue will be covered by increased domestic spending by Indonesia’s increasingly affluent youth. The archipelago has what’s called a demographic dividend, which means more than 50 per cent of the population is under the age of 30. For venues like Jakarta’s Anomali café – a hot spot for the new generation of Indonesian coffee drinkers – it means business should continue to boom. GCR

DIARY Dashboard COFFEE AROUND THE GLOBE

WORLD COFFEE EVENTS

EUROPEAN COFFEE SYMPOSIUM

ISTANBUL, TURKEY

24 – 26 NOVEMBER The European Coffee Symposium is fuelled by contributions from industry thought-leaders from across Europe, and leading-edge market analysis from sister company Allegra Strategies. The event provides key decision makers with ready-to-implement market insight, innovative ideas and enhanced networking opportunities.

The conference, titled ‘Beyond Borders – From Home Markets to Globalisation’ will explore several key themes with a strong focus on the Turkish, European and global markets. www.europeancoffeesymposium.com

COFFEE CONFERENCE (AICC) HO CHI MINH CITY, VIETNAM

3 – 5 DECEMBER The 20th Asia International Coffee Conference (AICC) is set to be one of the largest coffee industry gatherings in the region. With a refreshed and updated agenda, the event will feature presentations from a number of industry professionals. Focusing on important coffee policies, production projections, and price outlook from industry renowned experts, the event will provide an opportunity to learn and network. www.asiainternationalcoffee.com

MELBOURNE INTERNATIONAL COFFEE EXPO

HOTELEX SHANGHAI 2015

13 – 15 MARCH 2015

30 MARCH – 2 APRIL 2015

MELBOURNE, AUSTRALIA The Melbourne International Coffee Expo is Australia’s largest coffee-dedicated event. With more than 100 exhibitors and 10,000 visitors annually, it is a destination for the Asia Pacific industry at large, as a beacon of industry development. The expo, now, in its fourth year, will be hosting Let’s Talk Coffee Australia, the Australian International Coffee Roasting Awards, the Australian Specialty Coffee Association (ASCA) Coffee Championships, and is a flagship event of the Melbourne Food and Wine Festival. www.internationalcoffeeexpo.com

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SHANGHAI, CHINA

Hotelex is one of the largest, most effective and highest level exhibitions in the hospitality industry. Hotelex has led hospitality industry trends for 23 years, providing a one-stop purchasing and information platform for hospitality professionals. Hotelex Shanghai 2014 welcomed 81,595 visitors from 132 countries. The coffee sector is one of the most important themed exhibitions under HOTELEX Shanghai, and three world-leading coffee competitions will be held during exhibition: the 13th China Barista Championship, 3rd China Latte Art Championship, 2nd China Cup Tasting Championship. www.hotelex.cn

KEEP A LOOK OUT Coffee Fest Atlanta 6 – 8 February 2015 Atlanta, United States www.coffeefest.com

LET’S TALK COFFEE AUSTRALIA

MELBOURNE, AUSTRALIA

13 – 15 MARCH 2015

The Let’s Talk Coffee conference, presented by importer Sustainable Harvest, is a one-of-a-kind origin experience that, for the past 13 years, has brought together the entire supply chain in a coffeeproducing country. In March 2015, Let’s Talk Coffee will move to a consuming country for the first time for Let’s Talk Coffee Australia.

Roasters and other stakeholders will have the opportunity to forge relationships with coffee growers from 20 producing countries, as well as learn about exciting coffee processing and producing innovations, and discuss topics such as climate change, volatility, and supply chain transparency. www.letstalkcoffee.org

Buon Ma Thuot Coffee Festival March 2015 Buon Ma Thuot, Dak Lak, Vietnam International Congress of Coffee and Cocoa 14 – 17 April 2015 Havana, Cuba Latte Art Tokyo 2015 15 – 17 April 2015 Tokyo, Japan www.coffeefest.com Food&Hotel Vietnam 21 – 23 April 2015 Ho Chi Minh City, Vietnam www.foodnhotelvietnam.com SCAE World of Coffee 16 – 18 June 2015 Gothenburg, Sweden www.worldofcoffee-nordic.com

THE SCAA EVENT SEATTLE, WASHINGTON

9 – 12 APRIL 2015 The Specialty Coffee Association of America (SCAA) will host its 27th expo this year, in the iconic American coffee city of Seattle.

This year, the SCAA Event will host the World Barista Championship (WBC), the preeminent international coffee competition produced annually by World Coffee Events (WCE). The competition focuses on promoting excellence in coffee, advancing the barista profession, and engaging a worldwide audience with an annual championship event that serves as the culmination of local and regional events around the globe. www.scaaevent.org

NOVEMBER/DECEMBER 2014 | GCR

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PRODUCTS Marketplace

DETMOLD I AM ECO Australian-owned Detmold group has taken its environmental packaging range to a new level with the launch of a new brand ‘I am eco’. The new range uses a unique bagasse sugarcase board material. The material is a new sustainable product, the result of Detmold’s product development to investigate and trial alternative renewable materials. It’s made from 100 per cent recycled content, and is converted into solid board sheets for effective printing. The sheeting can be transported more efficiently than pre-assembled product, resulting in energy and carbon emissions savings. www.detmoldgroup.com

NUOVA SIMONELLI TELANTO Talento is a super-automatic machine offering ease of use and great flexibility. The new Special version represents a major advancement in technology. With the introduction of Milk Silk Technology, Talento Special guarantees a greater density of crema, which means beverages can be prepared at different temperatures, including cold milk foam, ideal for warm weather. Easy Cream Technology allows the user to heat and froth milk for cappuccinos at the professional level.

In addition, Talento is even quieter, ideal for a calm environment.

With two professional grinders, different coffee blends can be used to satisfy different customer tastes and to enhance the flavours in the cup. New software allows different grinding times for each blend. www.nuovasimonelli.it

MPE G7.MG MICROFINE GRANULIZER Modern Process Equipment (MPE) announced its latest technology in ultrafine grinding with the MPE G7.MG Microfine Granulizer. The G7.MG is a redesigned version of MPE’s existing G7, which merges both roller and disc-style grinding technologies in a single unit to deliver uniform and cool ultrafine coffee at a rate of up to 100 kilograms per hour. The G7 technology uses a water-cooled environment in which the whole bean coffee is ground to a 30 – 40 microns particle size via MPE’s proprietary NASA grinding rolls and materials.

This process results in microfine ground coffee with great taste, preserved colour and high aroma that is ideal for natural coffee additions for instant coffee and other ingredients. www.mpecoffee.com

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RIEDEL NESPRESSO GLASSES Nespresso and master glassmakers Riedel have designed two special tasting glasses made especially for coffee. Following the wine industry, the glasses, called Intense and Mild, are designed to best convey the tastes and aromas of Nespresso’s finest coffees.

Although Nespresso has traditionally crafted coffee cups to enhance aromas of its coffees, the Riedel-designed Reveal Collection takes this enhancement one step further. The Intense glass increases the overall intensity of aroma and taste while the Mild glass brings out the freshness, acidity and lightness of the coffee as well as the delicacy of the aromas. The glass also increases perception of smoothness and sweetness. The Reveal Collection will be commercially available from the end of October. www.nespresso.com

CURTIS GOLD BREWER The Curtis Gold Cup Brewer replicates the hand-craft of single cup brewing through the automation of a machine. The brewer features Generation 4 digital controls with an instinctive touch screen providing simple training, unmatched accuracy and seamless operation. The machine has twin brewing heads so that the machine can brew both sides simultaneously. Its brew cone’s patented design allows water to rise to the perfect level without exiting for ideal pre-infusion and it stops immediately at end of brew. Its Pre-Wet/Wash Filter streams hot water over paper filters to eliminate any undesirable paper taste prior to brewing. Its USB Port allows firmware updates and custom recipes that are easily imported and shared.

The Curtis Gold Brewer also reduces waste thanks to single cup brewing, while the Hot Water Tap is perfect for pre-heating cups or drawing hot water for tea and other beverages. www.wilburcurtis.com

MAHLKOENIG VARIO HOME Following market feedback, Mahlkoenig has introduced modified portafilter holders in its Vario home grinder. The formerly plastic insert, with a slim metal fork rest and hook, will be replaced by sturdy zink-die-cast which resists heavy-duty operation.

The new design will allow the grinder to be adjusted for different models of portafilters, and will improve the accuracy and stability of the fit. This new version of the Vario home with metal portafilter holder was just released in October 2014. www.mahlkoenig.de

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LAST WORD Reality Television

COFFEE HITS THE REALITY TELEVISION STREAM

IN 1991, a group of seven strangers met for the first time in a student house in Amsterdam. Surrounded by cameras, the students were set to change the nature of television narratives for years to come.

The house, Number 28, was the original Big Brother, largely considered the world’s first modern reality television show. More than two decades later, reality television is a staple of network programming, and has spared few professions in the quest for ratings. From supermodels to celebrity chefs, ballroom dancing to high diving, it turns out pretty much any skill can be edited into prime time entertainment.

Coffee has now joined the list, with the second season of Barista & Farmer set to be filmed in Honduras in February 2015. In the series, a group of 10 baristas head to a coffee farm for a week of living like, and learning from, a coffee farmer. The baristas are tested daily on both coffee production and preparation skills, with one winner emerging as the ultimate champion.

Francesco Sanapo, three-time Italian barista champion and third place winner of the World Barista Championships, helped come up with the idea alongside Barista & Farmer President Rebecca Atienza.

Unlike many reality shows, the inspiration came from outside the conference rooms of network television, in the open air of a Puerto Rican coffee farm.

“In 2010, I visited my first coffee farm in Puerto Rico,” recounts Sanapo. “It was my first time on a farm. I thought I knew a lot about coffee, but then I got there and realised I didn’t really know anything…

I never imagined how difficult it was to produce a cup of coffee.”

It was on this trip that Sanapo met Rebecca, and promised to return a year later with 10 baristas from Italy. At this point, the trip was just about sharing his experience with other baristas so that they could learn more about coffee. He also brought along some cameras so that they could record the experience.

Sanapo says his original goal of educating baristas on life on the farm has easily been achieved. Of the first group he brought to the

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farm, one barista went on to win the Italian Barista Championship, and another won the Italian Latte Art Championships and placed second in the world.

“Of the 10 baristas who came, four ended up as finalists in the Italian Coffee Championships,” he says. “I think that by going to Puerto Rico they started to understand the coffee better, and they learned to better spread their love and their passion to their customers.”

Sanapo says he’s impressed with the general public’s interest in the show.

In this space, he says Barista & Farmer serves a great educational purpose in teaching coffee drinkers more about this precious product.

“There are people in Italy who don’t even know coffee is a fruit. I just never imagined that,” he says. “Not only are we giving more knowledge to the barista, we’re also helping normal people understand more about coffee.”

Two years later, the show is starting to look more like a network reality television series. Ten baristas share a house, rising early to spend the morning doing manual labour on the farm. In the afternoon they attend agricultural classes, and finish off the day with two challenges. Sanapo says there is one “serious” competition on tasks like pulping, cupping, and more. These are complemented by “funny”competitions including a coffee sack race, a football game of farmers versus baristas, and a cook-off of coffee-inspired Honduran dishes. There is even a daily weigh in, with the baristas having to present their bags of cherries to two judges. One checks the weight, while the other checks the ripeness of the cherries With this format, Sanapo and Atienza have attracted the attention of mainstream media channels, with talks that the show might find its way onto international television. Sanapo is a bit hesitant, as the format will have to be changed to cater for the network heads. Currently, the competitions are graded throughout the week, with the points tallied at the end for a final winner. In television format, Sanapo has been told the baristas will have to be eliminated daily to cater for more thrilling entertainment.

The content can currently be viewed via the web, meaning the pair can keep their friendlier format. The show is also going to be previewed at the upcoming Sigep show, taking place from 17 – 21 January 2015 in Rimini, Italy. Now in its 36th edition, Sigep is a world-leading international exhibition for the artisan production of gelato, pastry, confectionery and bakery. A feature of the show will be a central stage where they will announce the 10 competitors who will be taking part in the 2015 show. The stand will feature the beauty of Honduras, and will stream videos from the web site, including show clips, interviews, and other promotional videos about the Santa Isabel and Cooperative Les Capucas where the 2015 show will be filmed. GCR For details visit www.baristafarmer.com

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CHILE UK AUSTRALIA SINGAPORE SOUTH AFRICA

+56 +44 +61 +65 +27

2 2415 1286 (0)1227 374710 (0)7 3879 4180 6778 9225 (0)41 453 1871

See the full range of fast-payback equipment at flexicon.com: Flexible Screw Conveyors, Tubular Cable Conveyors, Pneumatic Conveying Systems, Bulk Bag Unloaders, Bulk Bag Conditioners, Bulk Bag Fillers, Bag Dump Stations, Drum/Box/Container Dumpers, Weigh Batching and Blending Systems, and Automated Plant-Wide Bulk Handling Systems ©2014 Flexicon Corporation. Flexicon Corporation has registrations and pending applications for the trademark FLEXICON throughout the world.

CC-1060

Ideally suited to gently convey green, roasted and ground coffees, and all forms of tea and tea blends, FLEXI-DISC Tubular Cable Conveyors are fully enclosed, preventing dust and product contamination.