Vice President of Coffee Operations & Sustainability, Philz Coffee
Andi Trindle Mersch is the VP of Coffee Operations and Sustainability at Philz Coffee in California. Andi has been working in coffee for over twenty-eight years with broad experience across the supply chain, so she provides a great perspective when looking at the state of the industry at different levels.
Jake: Andi, tell us a little about your coffee experience.
Andi: I spent most of my time on the import side, working between coffee roasters and exporters.
During that period, I spent a lot of time with roasters and learning about roasting before getting into the roasting side. I did work on the roasting side in the late nineties and early two thousands. I’m curious and always ask questions to learn new things and keep my job and role interesting.
Jake: We will be reviewing the industry’s state, but first, I was interested to know what got you into coffee in the first place.
Andi: I fell into it like a lot of people in my generation. We always used to say that we fell into it, but now that is changing with UC Davis and the different ways people are actually choosing coffee. I fell into it when I graduated from an acting conservatory after high school and needed a day job; go figure. My Mom got a job doing bookkeeping for a coffee company and equipment distributor owned by Robert Hensley.
Jake: Robert Hensley has been in Specialty coffee for a long time as he worked directly with Alfred Peet, Founder of Peet’s coffee, in the 1980s.
Andi: My mother asked if I, too, could work there, and they hired me. I was there for about two months when I marched into his office and said, I really love this industry. I want you to hire me full-time and mentor me. That was in 1994. And Robert taught me how to cup, roast, and so many other things.
Jake: Thank you for that. I love your initiative and the decisiveness in knowing you wanted to join the industry. So many people ask how to get into the coffee business, and this illustrates it perfectly.
Now, getting into the state of our beloved industry. The frost in Brazil used to be a once-in-a-generation occurrence, and now it has happened two years in a row. First, prices spiked, and now they are coming down again. What has been your experience with this?
Andi: In my opinion, over the last couple of years, it has been the craziest Market I have ever seen, and the fundamentals have not made much sense. So, where we think something is going to impact the Market in one way, it is doing something entirely different. The Market was sustained at very high levels for an extended period. The frost, you mentioned, was part of that level. Right now, the Market has come way-way back down again. We’ve actually been reading and hearing that the Brazil crop is looking good for next year. So, we are looking at a good Brazil crop that is pushing the Market back down; however, many other factors are contributing to the Market.
Different fundamentals are at play here. For instance, the certified stocks are really, really low.
Jake: For our audience, Certified stocks generally refer to commodity inventory that has been inspected by qualified representatives and determined to be the base grade for us in futures market trading.
Andi:These low stocks are impacting the Market. Typically, because of the state of the Certified stocks, you would think the Market would be coming back up, but it is not doing that, so it has been a very confusing time.
Jake: Do you feel that the ongoing effects of climate change in general will keep us on this roller coaster year after year?
Andi: Yes, I do think so. Of course, you have to remember two main sides go into coffee pricing. On the one side, you have the Market, and that gets very confusing because you have all these speculators that come in and are not involved in any of the physicals of coffee. Then you have the Differentials side of pricing as well, and climate change is definitely showing up on the impact of pricing at the differentials level.
Climate change is hugely impactful on pricing; however, it is even more impactful on quality and reliability. Even the origins we buy now are not the same origins we were buying five years ago.
We rely on our supplier partners, and I cannot emphasize that enough. They are the experts that we lean on to help guide us and give us feedback.
Jake: For years now, they have been growing coffee in California. Given that California has no water and they are already using 1 gallon of water per almond being grown there. Is growing coffee in California a reasonable response to climate change?
Andi: In my opinion, it is an interesting proposition, and I am supportive of people exploring it, but I do not think it is a reasonable, reliable response to climate change. No matter how much land we put toward it, we would never be able to grow close to the world’s demand for it, and it isn’t a climate that is made for it.
To that point, though, what I do see is a diversification of regions of coffee cultivation. For example, our suppliers have been telling us that in Colombia, they are starting to look at different regions where they did not previously grow coffee. Still, they are now better suited to the growing climate change.
Also, the tree varietals are planted in origins where they were not previously grown. That is where I see a lot of the response to climate change coming in. Regenerative agriculture is another response that we have seen start to come up. The producers are paying attention to all the options that are out there, and they are experimenting.
Jake: On top of all the challenges with climate change and inflation we also have Ethiopia in the midst of a war. Has this affected your supply or pricing?
Andi: I’ll admit that we have been very lucky. We have a really strong relationship with our Ethiopian coffee suppliers. We have more than one but we have one principal supplier who we have given a lot of business to over the years. When we heard about the war we reached out immediately and we were very concerned about the people we had been working with for years. We were hearing some pretty scary stories of impact on some of the people we worked with.
On the lucky side we had this really strong partner there who just kept in great communication with us and with all the farms and suppliers to give us frequent updates. We rely heavily on Ethiopian coffee and will often be contracted a year in advance to follow the harvest cycle there.
We had to ask at one point, should we move some of these contracts out and our partner said, “don’t pull out now. I will get you the coffee.” And they did deliver all the coffee. It was at a significantly higher price. Thanks to our suppliers we never missed a shipment and we were able to sustain our quality but we did pay higher prices and have worried about our supplying partners. Those are the impacts we’ve experienced.
Jake:Like we said earlier, relationships are always so important and especially in coffee. It is easy to feel helpless in times like this but through the strength of these relationships we are able to maintain some sense of normalcy and hopefully help each other.
Shifting gears into something more fun and frivolous, are TikTok and Instagram changing how humans consume coffee?
Andi: Oh, I think so, yeah. I’m social media averse. It’s more for my daughters generation but yes, absolutely. I think it is a great place for people to learn and experiment with new ways of making coffee or new equipment for brewing. I think they are really important for today. We post on these channels because they are important ways for us to introduce our products and what we’re trying to do. So I support them though I don’t participate in them.
A big part of why I joined Philz is because I think people should enjoy coffee however they want to. Whatever it is that makes them happy about coffee is what they should do.
When it comes to consumer coffee products, we have seen a tremendous rise in single serve, instant offerings even in the specialty category, over the last decade. Do you think sustainability will ever beat convenience?
Andi: I think that sustainabile products are no longer ‘nice to have’ when it comes to the younger generation. They are ‘essential to have’. So we are going to see a shift. We are going to see innovation in creating these single serve products the way people want them but in the most environmentally sound way possible. The companies that are going to lead and win with the younger generation are going to have to deliver on the social and environmental side and they are also going to have to innovate on the convenience of the products to give the customer what they want.
Interview by Jake Leonti