Publisher’s Prologue

Welcome to CoffeeTalk’s 2015 State of the Industry. This year we changed things up a bit by asking our industry experts to identify potential threats and vulnerabilities our industry faces in the coming months and years. The answers were diverse and thought-provoking. As busy as we all are this time of year, I encourage each of you to read these provocative articles. Do you agree? Disagree?  Is your company in danger? Information is power and the one thing I do not understand is when people refuse to take the time to look up and around and do a bit of research. How are we to ever improve and grow without stopping to take a moment and realizing no problem is unique? Working together, sharing ideas, and reading industry trade journals, these are the solutions we all need to overcome the vast amount of threats identified in these pages.

I hope to entice you into these pages with my favorite quotes. However there was one article that stood out and I found myself adding several quotes… Thanks Tim Castle for your insights on page 44.

Where Are We Now? Preserving Specialty Coffee
Timothy J. Castle, Castle & Company, Castle Communications page 44
Coffee has been identified as a potential economic lifeline for millions of people around the world.

As an industry, those of us who are in the business of selling specialty coffee need to start preparing our customers for much higher prices that could present themselves as early as the end of 2015.

The risk of alternative production is one thing, but the risk of no production at all due to farmers deciding to cash out of their properties is another concern of government officials.

As an industry, we need to ensure that coffee farmers continue to be motivated and have the tools to stay the course and remain focused on producing better coffee for coffee drinkers.

Coffee drinkers, and the specialty coffee industry, will be much better off when they come to understand that there is no one “best” coffee but an increasingly better variety of exciting coffees from all over the world.

The rest are in page order…

4 Ways Mobile Can Future-Proof Your Coffee Business
Rob Bethge, Perka, a First Data Company on page 16
It’s an age-old problem: how do you tempt the AM-coffee crowd back for lunch or snacks?

Cooperative Programs, Facing Challenges Together with Research and Innovation
Luis F. Samper, Colombia Coffee Federation page 18
For mild arabica coffee to continue being an option for the 21st century consumer, the commonly increasing challenges that growers face also imply collective action. …  The lesson is clear: united we can do more. … When you have a chance, please stop and smell the beans and become aware of the challenges that hundreds of thousands of coffee growers currently face and their ability to overcome them.

Gender Equity in Coffee, Challenges and Opportunities
Susan Cote, Coffee Quality Institute Gender Initiative page 20
Because of the scale of our challenges, I believe we can’t afford not to focus on gender equity said David Roche, CQI’s Executive Director.

Consistency in a Growing Industry
Tyler Bruno, Curtis page 22
It’s a subject mulled over the way a younger you once dreamed about being an adult— with bright, lofty expectations, but no clear idea on how we’ll all actually get there. In the still burgeoning industry of Specialty Coffee, where agreement is not always an option, we can at least collectively and decisively share one dream. Growers, buyers, roasters, baristas, customers— we all want to have our coffees taste as good as they can be, without fail, all the time. But the make or break of our industry falls on the barista, and once those cafe doors are open, it’s game on. This requires repetition more than it does artistry, a concept that can be met with a fair amount of resistance. Third-wave baristas are often times referred to as artisans, and artistry by its nature does not value consistency.

August Afternoon Seeks Cool Operators
Mike Purcell, Follett Corporation on page 24
So why isn’t it easier to get a great tasting, personalized iced beverage? The market is there. The hot coffee folks have proven that given convenience and choice, people will embrace their options and do what consumers do best.

Go Grateful, For Employees and Customers
Judith W. Umlas, International Institute for Learning, Inc. page 26
But there is one tactic that is totally within each and every coffee industry member’s control and capability: They can proactively and successfully become conscious of, and express their gratitude in, every aspect of their work and their lives. The Society for Human Resource Management (SHRM) said in an employee retention study that the number one reason people leave is lack of appreciation.

Branding for the Future
Linda Smithers, Daterra Coffee page 28
There comes a time in every business when it is essential to consider re-branding.  Re-branding is a scary proposition for established businesses…will people accept a new name, logo, or buying proposition?

Resilient Together
Rick Peyser, Lutheran World Relief page 30
…the importance of motivation, the positive attitude of San Jeronimo farming families, and their willingness to work together for the common good. They are a model of resilience; a model that our industry desperately needs to replicate if we are to thrive from tree to cup in an increasingly challenging environment. If we are interested in the long- term health and resilience of our industry and a consistent supply of specialty coffee, we must follow the lead of the farmers of San Jeronimo, and work and invest in our future together, which starts on the farm.

The Price of Emission
Jim Townley, Fresh Cup Roastery Café page 32
Coffee bars all over North America are doing pour over coffee once again, and we can thank Mrs. Mellita Bentz for that simple little invention she created back in 1908. The way coffee bars talk about pour-over single cup brewing you would think that this was the newest thing to hit coffee culture this century. What this resurgence is doing well, is driving home the value of freshness as it translates to value in the cup. As coffee drinkers’ palates evolve, the days of roasting coffee in some plant in an industrial section of town, putting it into a box and shipping it to different points of distribution, hoping someone likes the look of your bag, are done.

Office Coffee Service in Transition
Dan Ragan, Pod Pack Int’l page 34
Approximately two years ago United Stationers, the largest wholesaler to the office product industry, stated: “Own the coffee, own the break room (paraphrased)…”
Approximately 20% of an office’s expense is break room, and 80% includes remaining consumables.
The method is to price the 20% break room segment at or below cost, to capture the 80% remaining consumable office product segment, and provide coffee equipment and service at no-charge.
Scheduled coffee tasting continues to be a successful OCS method to prove a quality product. The on-site tasting allows an operator to display national brands, locally roasted coffee, and private labels in the format the customer want Office Coffee Service is in transition; take advantage of the opportunities!

Keeping up with Industry Demands, A One-Way Street
Alma Likic, Plitek page 36
As coffee industry demands and consumer preferences are changing, all of the industry players are shifting along.

Tea Sales on the Rise, Infusing Your Business,
Stefanie Makagon, Garden to Cup Organics page 38
One thing is certain: the challenge is not in finding information, but in converting an overload of information into useful strategy and staying current in an industry where growth and change seem to be occurring at warp speed!…. coffee roasters, natural health industries, and food service industries are also positioned to profit from tea’s rise in popularity…

Is our current system sustainable? Addressing Vulnerabilities to Our Industry,
Marty G. Curtis, Just Quantify Coffee Academy page 40
I believe the farmer will not realize the gain until we actually have programs for the farmer on truly evaluating their coffee from seed to cup. This gives farmers tools so they can truly evaluate the coffee on their farms.

Meeting the Challenges Ahead, New Jumps From Solid Ground
Bill Murray, National Coffee Association page 42
Ever better, younger generations of coffee drinkers have embraced coffee and café culture as never before, boding well for the future. Caffeine has been under greater scrutiny in 2014, with energy drinks and powdered caffeine creating new behaviors in consumers and tripping the government’s radar.

Customization in Coffee Industry Fosters Need for Short-Run Label Printing
Amber Jechort, Primera Technology page 46
Mass customization has been a key driver in one of the largest bursts of innovation in the digital age.
Beverage consumers are notably promiscuous and willing to try new tastes and sensations.

The Graying of Coffee Farmers, Demographic and Societal Changes
Paul Kurtz, Hemisphere Coffee Roasters page 48
Hundreds of farmers, who for many years have not seen a profit, struggle to stay afloat. They literally “owe their soul to the company store.”
Buying coffee as inexpensively as possible is not compatible with the desire for quality coffee, where farmers must be rewarded for their hard work. If there is no value or incentive added for labor, why continue to add it?

Devastating Emily, Combating Coffee’s Deadliest Enemy
Donald Schoenholt, Gillies Coffee Company page 50
Bill Fishbein noted “There is no doubt that climate change is playing a role, but so is a lack of organic farming knowledge. This has led to resource-depleted soil and a gene pool lacking diversity which has exposed coffee’s jugular vein to La Roya’s sharp edges.”
According to the USAID, as reported by Reuters, “The blight is jeopardizing the livelihood and food security of about 500,000 people who make their living in the coffee industry, especially small farmers and seasonal workers.”

The Danger of Hype Over Quality
Rocky Rhodes, International Coffee Consulting Group page 52
This will be the challenge for 2015: Creating a final product scoring system, developing consumer awareness that a subjective scoring system exists, and finding a way for consumers to access the new system.

Brewing Up the Bottom Line
José Estorino, Javatino page 54
For restaurants, using coffee as a tool can enhance customers’ overall experience and provide a competitive advantage.
A simple card highlighting specialty coffee offerings complemented by a dessert menu will increase the total check amount.

The Indian Coffee Industry, Challenges and Prospects
Jawaid Akhtar, India Coffee Board page 56
The lack of active growers’ collectives / producer organizations in the Indian coffee sector places limitations on the reach and effectiveness of extension services and technological innovations.

Three Vulnerabilities
David Gross, Add A Scoop page 58
You will have to find your strength in differentiating your concept by catering to the health and wellness sector of consumer demand; to do something the majors are not doing.
Another vulnerability to be aware of, and this is a must: You must pay attention to social media. Your restaurant, whether you want it online or not, will be subject to crowd-sourced reviews on business ratings and reviews sites, the most popular of which is Yelp. If you don’t actively monitor your restaurant’s online reviews…

Tiny, Little Steps
Bill Fishbein & Jake Fishbein, The Coffee Trust page 60
There is no such thing as Sustainability. And if there ever was, it died when it was labeled as such. Labels are toxic. They imply that they are absolute, complete, and contain all the answers. And herein lies the problem. For once we believe we have all the answers, we stop asking the questions. And yet, it is within our questions that we can find the next tiny, little step.

Riding the Waves of Coffee Equality
Don Holly, Industry Veteran page 62
The 4th wave has been defined as the practiced interdependence of the supply chain, with balanced sharing of risk and value from origin through consumption. It is an optimistic vision of the evolution of our industry, and we can only hope that it is not too late to ensure a sustainable future for our beloved product.
[K-Cup] has affected and will probably permanently alter the structure of how coffee is sold and consumed here in the United States.

The Industrial Internet of Things, The Rise of The Mechs
Miles Small, CafeComm, Inc. page 64
In today’s rapidly advancing tech world, today’s billion-dollar supergiant is tomorrow’s liquidation auction.

Ignoring climate change and reforestation: an unsustainable effort
Etienne Desmarais, Ecotierra page 66
Sustainable growth is clearly a hot topic in the industry. However, we need to take things step by step. While the environmental impact of single-serve products cannot be overlooked, we must first address the issue of making coffee farming a sustainable endeavor…

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