Expansion and Perfection in 2016
Whenever someone presents a ‘state of the industry’ observation, it is important to understand the viewpoint/perspective/prism from which the observation is being made. There is probably no one single person that has a whole industry outlook, so each person has some limitation to their ability to look into the future of coffee.
In my case, I am focused on supply chain quality improvements and mostly focused on sensory evaluation as a way to increase communication. I work in producing countries and consuming countries. I work with growers and roasters. The majority of my work is done in Asian countries and the US with a spattering of work in other countries.
Through that prism I have a tremendous feeling of excitement for the industry in 2016. As the specialty segment of the market continues to grow in Asia, everyone is seeing the benefit. The demand for the ‘uber-specialty’ 90+ coffees out there is going through the roof and yet this large growth is still a pinprick of the overall market. As the supply of this coffee starts running low, the farmers and mills are getting more aggressive in creating those lots. This is fueling expansion.
I see expansion in all areas of the industry. Roaster manufacturers are selling more machines. That is always a strong sign for the industry. In fact it is one of the most important signs, as everything flows through the roaster at some point. In Asia there are scores of really small machines going into micro roaster shops. Most of these are new shops that are going to find some unique way to differentiate themselves. They are seeking the ‘best coffees’ out in the industry and driving demand for the top end of the green market. Importers to places like Korea are bringing in record amounts of COE coffees and other 90+ single origins. Prices are being driven up and the extra expense is being paid by the consumer over the counter.
A big unsung hero of this movement is the importer. This is the part of the industry absorbing the biggest amount of risk by acquiring micro-lots, consolidating containers and making them available on the spot market in small quantities. This allows the small roaster to participate in the 3rd wave without having to invest hundreds of thousands of dollars to build and maintain relationships with growers around the world.
I have been asked by Asian clients if I think it is nearing a saturation point with the number of coffee shops now open in places like Seoul, South Korea. I just look at them and say, “I was born and raised in Seattle where we kept thinking that year after year after year. It turns out that every time you open a shop some number of commercial coffee drinkers move to specialty, increasing the size of the market. I am not sure I can really ever conceive of saturation.” If you are creative you will always be relevant in the market.
And this brings us to the concept of perfecting the art and craft of coffee. I am so excited for the future every time I teach a roasting class, Q-Grader Class or anything else. It used to be that students were the ‘old guard’ of the industry and used training to stay relevant. Now I see young folks (new to the industry) eating up the information in class and applying it to their own ideas of perfection. I have seen significant innovations in cold brew, single-serve and menu parings. I am watching roasters perfect profiles for single origin coffees that make them true beauty in a cup. I see baristas make foam dance while delivering all of the subtle nuance of the coffee.
But the thing that gives me the most hope for expansion and perfection, is communication. Every level of the supply chain is investing in the Q-Grader certification course focusing on how to communicate about quality levels of coffee and how to improve them. Roasters ask their suppliers for certain specific attributes they want. Importers make the same requests from their exporters, cooperatives and estate farmers. Since everyone is getting calibrated on quality, there is much more efficiency as well as equitable compensation.
When the coffee supply chain is doing business based on quality and not just availability of coffee, I have great expectations for the future. Coffee starts to trade on merits, and is less and less tied to the C-market. Higher, more realistic prices for high quality coffee cause each member in the chain to contemplate how they can perfect their part of the craft. This only increases demand and forces an expansion in the market.
2016 is certainly poised for expansion and perfection.