2012

Elegant Stupidity

BIn the market where my company was wholesaling coffee there was an unwritten set of rules with the roasters in the area:

1) We would not actively poach others accounts. There is plenty of business to be had, we didn’t need to hurt each other

2) If a customer of another roaster reached out to a new roaster, it was fair game. (Usually a courtesy call was made to inform the other roaster that the activity was ‘customer generated’. It was also helpful to find out if the customer was someone to steer away from due to pending bankruptcy or other reasons!)

3) If there was a NEW account we would all compete fiercely and then congratulate the winner. (Often side bets of dinner were placed on who would get the business.)

This code of conduct made us service our accounts tirelessly. It demanded an attention to ever increasing quality. It made us better coffee companies and all of our businesses grew as a result.

When talking with a respected customer, restaurant chain owner, and friend this concept was explained. He was told how the coffee industry supported each other in an effort to make coffee better and in return the ‘rising tide lifted all ships’. That this effort in turn taught customers like him to seek better quality coffee and that the whole producing world ended up being better for it. When quality of service, and product improved, we all, including the customer, were better for it.

Because of the explanation, there was an expectation for a dreamy-eyed response of praise as to the brilliance of the holistic concept of the entire process. The clouds should part, angels would sing because we in the coffee industry strive to make the world better! The customer, however, had a different take on the economic model. He called it: Elegant Stupidity!

This was obviously not the expected feedback. A conversation then ensued regarding the flaws in the plan. He said, “Look, the market takes care of itself. Do a great job and be rewarded. Do a sucky job and lose business. It is the customer who should decide who competes for the business, not the vendors.”

The clouds closed back up again and the angels were silent. Could it be that coffee is just another commodity product that follows the rules of every other product and service in the world? Is the romantic nature of the industry just important to us insiders and no one else could care less? Do people say they want high quality coffee and farmer’s lives to be better but really don’t want to be the ones that pay for it? Could the world be that cynical?

The answer is yes, there are parts of the consumer base that don’t care about what we do and the blood, sweat and tears we put in to making the products we sell. They don’t care that we try to make the world a better place. Yes there are cynical people and yes we in the industry can have a tendency to take ourselves too seriously at certain times.

Obviously the customer was misguided and needed to be convinced. “Do you like the quality of the coffee?”

“Sure! I love it!”

“Do you pay a fair price for it?”

“I will pay more for quality and yes this is a fair price.”

“Do you feel you could get better coffee at a better price from a different vendor?”

“Honestly it has never crossed my mind to change because I like what I have.”

“Then we are saying the same thing in regards to market forces at play. You get a great product at a great price and, if you wanted to, could go and try out other vendors but you don’t because you don’t have a reason to do so. You are a satisfied customer and our system of Elegant Stupidity has worked for you.”

“I guess so, but why have you made it so complicated and collaborative. It kind of seems like you are gaming the market and controlling prices?”

And you know what… in a sense that is EXACTLY what our industry does. And EVERYONE in the quality supply chain wins as a result INCLUDING this customer. This point was reinforced over and over again at the SCAA conference in Portland. We are an entire industry devoted to the concept that QUALITY in coffee is a game changer for the world. It seems that we are more concerned with making coffee better than by competing for business in the conventional sense.

On the show floor we saw equipment manufacturers talking about how to maximize flavor, not profits. We saw producer groups describing the care they put into growing and how that changes flavor. We saw social groups showing us that there are needs in these growing areas that we as an industry can uniquely address.

Off the floor in meeting rooms were dozens of classes and lectures designed to educate and stimulate discussions on how to do the right thing for our products, business, industry and the world. The greatest minds of the world pondered the future and suggested what we can do now to have what we want ongoing.

I certainly didn’t feel the hours, dollars and effort spent at the show by the nearly 10,000 people was representative of something called ‘Elegant Stupidity’.

Let’s dig a little deeper and see if it makes sense. The total coffee market is huge. We deal with a small but growing segment we affectionately call ‘specialty’. In that segment there are market forces that concern its long term viability. Supply and demand are driving forces that we see as something we can affect with programs and activities.

On supply, we try to promote ‘green’ projects because we see the effect of weather on production. We also see poverty and urban migration as factors that diminish farm production so we devote aid money and put programs in place to deliver higher wages for the work. We devote countless volunteer hours and dollars to education on agricultural practices to strengthen trees, increase yields and increase the number of planted hectares. We support social and health programs that increase the quality of life for farming communities in hopes they will continue to farm.

We do this as an industry for a number of reasons. Alone we can only do so much but collectively we are funded, nimble and willing to help. We may spend company money to do it, but we do it for the industry as a whole because we are all in it together.

On the demand side we do all that we can to promote quality. This includes teaching each other the skills we have learned so they can be better. We create guilds to organize and concentrate the learning by industry segment. We have associations to help promote quality coffee to the marketplace. All of this is done so the consumer will demand quality coffee over commercial coffee. What other industry teaches its competitors ‘industry secrets’ so they can compete more fully?

Given this culture is it surprising that we employ the selling practices that the above customer referred to as Elegant Stupidity? We tend to not want to eat each other’s children but make sure that there are always new customers rising up to our standards of quality. We do this as we do everything else in the industry: By building as a group so we all thrive and survive. The result is a customer that gets high quality at a fair price, and a world that can sustain increasing demand by decreasing pressures on supply.

Turns out the customer was right. It IS Elegant Stupidity. In fact it is VERY elegant. And it makes our industry work! This also proves what we knew in the service sector: The customer is always right.

Rocky can be reached at rocky@INTLcoffeeConsulting.com

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