Complete confidence with Franke Coffee Systems

Franke’s Coffee Competence Program provides training to its staff, distribution partners, and customers while IoT technology allows central management of coffee machines.

To Franke Coffee Systems, offering consistently excellent coffee quality requires not only the right coffee machine, but also a great deal of knowledge and expertise. Read more

Coffee without the bean

Atomo Coffee has reverse-engineered the coffee bean and aims to launch bean-free molecular coffee in 2020.

With climate change a significant threat to the future of coffee production, Seattle-based startup Atomo Coffee has looked into new ways to produce the beverage. The result is “molecular coffee”, taking coffee’s chemical components and reproducing them in a lab setting. Read more

Eversys CCO Kamal Bengougam on the freedom of imagination

Eversys’ Chief Commercial Officer Kamal Bengougam on how to determine what is fair and at what cost.

Today, we live in a world in which people seek a greater sense of freedom, identity, and meaning. When we observe the way things seem to operate, it appears that, behind the scenes, there lies an intriguing reality, a clearly defined and organised system of gears which enable society to happen with apparent order. There is a clear food chain.

People and companies are controlled by governments through laws and taxes, we need passports and visas to travel beyond our own borders, bigger nations control smaller ones with weapons, money, and food and financial institutions manipulate us through debt and interest rates.

In order to keep the voices of dissent to a minimum, those in power dish out ‘treats’, compromises designed to appease the masses and maintain the status quo. So it is in our coffee world. We have things like ‘fair trade, rainforest alliance, and sustainable practices’ to protect the environment and those people and places who produce the base products that generate profits in the West. However, these ‘treats’ do not seem to be working anymore. The price of coffee is at an all-time low, way below the US$1 per pound mark, significantly less than what it costs to produce, taking into account low labour costs, a time when global coffee sales are at an all-time high, and consumption is growing at an exceptional pace. We seem more interested on the sustainable agenda, in compostable coffee cups, and packaging than we are in those who provide the content of the cup.

How could that be, when the basic law of economics dictates that increase in demand should warrant higher prices at times when supply is constrained? The core issue lies in the fact that pricing is not dictated by the seller in this case, but by the buyer. In the world of global commodities, pricing is more often dictated by buyers rather than producers. There are a few exceptions of course like oil, where the price is dictated by the producers/sellers who formed an alliance called the Organization of the Petroleum Exporting Countries.

In bygone times, people could buy a wife for between five to 10 cocoa beans in Mexico, depending on her beauty. African kings used to exchange people for weapons. I do not know what the going value of human life was at the time, but American Indians sold their land for weapons and alcohol, and are now confined on isolated ‘reservations’ with gambling licences. A fair trade?

So why don’t governments protect their farmers better and ensure that inherent profit benefits all as opposed to the privileged few? We have global institutions that police unfairness and promote the wellbeing of all, like the United Nations, and in our coffee world, Rainforest Alliance and other ‘ethical’ coffee organisations do this with varying degrees of success.

But how does one determine what fair is? Green coffee buyers at large companies receive conflicting messages: buy fair but optimise profit at the same time, which sounds like an oxymoron. And corporate social responsibility is also a misnomer in that responsibility can only be linked to individuals or our conscience risks being dumped onto an unsuspecting neighbour.

This leads to people deserting their farms in search of better lives. Far from being an exodus driven by greed, this is a quest for survival as selling products for less than they cost to make results in abject poverty and despair.

The truth is that we live in a broken society, a world governed by greed. This desire for more leads to only one destination – the oblivion of those who cannot fend for themselves.

Today, those people are leaving what they know for the unknown of distant shores, having given up on their way of life, in search of survival. The reason why this is happening is that the West has spent centuries pillaging the wealth of developing nations, keeping them down while their economies flourish. This has created a chasm between the haves and have nots, with the blessing of local leaders who were more intent on filling their own pockets than defending those they had a mandate to protect.

In my opinion, fairness is the wrong objective. How can one determine what fair is in any situation? How can fairness be defined as a word when everyone involved has an obvious conflict of interest, which is to optimise personal outcome? We should be talking about justice, social justice, that no man/woman can be exploited by others under the realm of economic or political capitalism. Justice dictates that sellers/growers should control their own destiny and determine their worth, value of their work. If bankers can accumulate exorbitant amounts of wealth for taking risks with other people’s money, farmers should at least be able to make a small profit, benefit from the sweat of their brows.

Well-meaning global organisations should not only protect but also empower those who suffer, giving them a chance to rise above and find their place in the sun too. Why not create local, regional alliances, teach them the power of brand, elevate the value of their goods, and become a player rather than a victim, sit at the top table and negotiate their worth with those who call themselves fair? In the French wine world, why are certain wines worth more than others? Is Chateau Petrus really worth five to 10 times more than its neighbours? Reality often reflects what we believe and what we believe is influenced by what we are told. Petrus is worth this much because we have been led to believe that it is that much better by those who control the levers of value.

At ‘origin’, of course, we must rewrite the story we find ourselves in. Make people believe in their own worth, create a new identity, an empowered one. Help farmers believe for more, be prepared to defend their cause, play ‘hard ball’.

Imagine a world where transactions are conducted through block chains, driven by accountability and transparency and away from the grasp of those who seek control.

Imagine a world in which people can believe in their self-worth and no longer aspire to become the lead in a film that does not matter or even exist.

Imagine a world where people realise the true purpose of creation, the communion between the before, the now, and the hereafter.

Imagine a time when leaders realise that they are meant to serve those they represent and act accordingly. A time when we really believe that things can and must change.

How do we trigger this paradigm shift in thinking? Greed is a powerful force and power a great aphrodisiac so those in control will not relinquish the current state of things with a whimper. Philosophers and artists today, the former conscience of our society, no longer occupy seats of influence as they focus more on form than substance. In my opinion, change begins with a picture, a vision. This, of course, requires power, the mere and peaceful power of imagination.

“Everything is determined, the beginning as well as the end, by forces over which we have no control. It is determined for the insect, as well as for the star. Human beings, vegetables, or cosmic dust, we all dance to a mysterious tune, intoned in the distance by an invisible piper.” ― Albert Einstein

Building a billion-dollar coffee hub

Through MyCoffeeWorld, coffee pioneer Pascal Schlittler and a group of investors provide entrepreneurial equity, hands-on support, and business expertise to innovative coffee start-ups.

Even before falling for the coffee industry, Pascal Schlittler had a mind for building businesses. He started his first company at 22 years of age while still in university, and from there, built a successful career, leading him to the position of CEO of Lenovo Switzerland. When the opportunity came up to work with Eric Favre, creator of the Nespresso capsule system, on coffee capsule start-up Mocoffee, Schlittler jumped at the chance to apply all he had learnt about business and build this new company from the ground up. Read more

MICE2020: All eyes Down Under

The ninth instalment of the Melbourne International Coffee Expo is set to have stronger international representation than ever before.

When people think of Australia, they imagine sweeping landscapes, picturesque beaches, quality coffee, and dangerous wildlife. While the latter is highly overdramatised, the rest of the stereotypes are true, particularly its thriving coffee culture. Read more

El Salvador: A federation for the future

Tiny El Salvador was once the fourth-largest coffee producer, but then the perfect storm swept through. Local actors talk renovation, unification, and the Federation.

Looking at the International Coffee Organisation’s (ICO) historical production figures for El Salvador, one might wonder what happened to the small country whose coffee industry once produced millions of bags of coffee a year, making the 21,000-square-kilometre country the fourth-largest producer globally throughout the 1970s. By the 1990s, El Salvador still averaged about 2.4 million bags per year, but this current harvest is expected below 900,000 60-kilogram bags. Read more

Nespresso commits to reducing carbon footprint

Nestlé has announced its ambition to achieve zero net greenhouse gas emissions by 2050 and capsule arm Nespresso is just as committed to reducing its carbon footprint. Global Coffee Report explores how.

When consumers assess the impact of a coffee capsule, they look at the packaging material, then question the way it’s recycled. But Christophe Boussemart, Nespresso’s Sustainable Development Project Manager, says there’s more to the product’s carbon footprint than meets the eye. Read more

Nordic by nature

The cold weather isn’t the only reason the Nordics drink so much coffee. Global Coffee Report explores the serious coffee culture behind the top consuming countries.

When Sonja Björk Grant thinks back to her introduction to coffee, she remembers her grandmother teaching her how to brew coffee as a youth. “Because Iceland has always had a huge culture around coffee, it’s one of the first things you learn to do,” explains Grant, who turned that early coffee lesson into a dynamic career and is somewhat of an icon in the global industry today.

That coffee culture she speaks of is actually quite prominent throughout the entire Nordic region, with all five of its countries having long histories with coffee and consumer cultures that evolved along the way.

For the past 10 years, Finland, Sweden, Iceland, Norway, and Denmark have ranked among the top 10 coffee consuming countries per capita, according to the International Coffee Organization (ICO). Finland consistently holds the No. 1 spot, and in 2010 and 2014, the countries snagged all five top spots.

According to the ICO, the Finns drank about 12 kilograms of coffee per capita in 2018, a volume that has remained stable on average for the past decade. Consuming the least among the Nordics, but still ranking ninth globally, the Danes drank 7.7 kilograms per capita in 2018.

While there are many factors supporting the region’s high coffee consumption – factors that are both consistent with global trends and unique to each country – it is worth noting the relatively small populations. Sweden hosts barely 10 million people, while Iceland has only 338,000; the others average about 5.5 million.

As such, the Nordic countries aren’t the top consumers of coffee when it comes to volumes consumed across total global production. But broken down by volumes consumed per individual, the Finns drink more coffee each day on average than anyone in the world.

The socialite
Coffee was introduced to the Nordics in the late 17th century, and became a mainstream staple over the following century. Then in the early 1900s, prohibition followed by high taxes on alcohol boosted coffee as the social beverage of choice.

Social settings and activities have since remained at the centre of coffee drinking there. With zero-tolerance drink-driving laws, partygoers often opt for coffee if they have to drive. Coffee shops are the go-to meeting place for clubs, communities, and social gatherings. And it’s practically obligatory to brew a fresh pot of coffee for any visitors.

“It was a mark of a good host and of status if you offered coffee,” says Tiina Jokelainen, President of Specialty Coffee Association Finland. She says that expectation has loosened over time in the bigger cities, but that it’s still strong in suburban and rural communities.

Grant confirms this obligation in Iceland, too, as well as the lexicon dedicated to it. “Kaffetår” means a “small cup of coffee”, while “tiú dropar” literally translates to “10 drops” and refers to an even smaller cup of coffee that is generally offered to someone stopping by only briefly.

Kaffitár is one of the largest coffee shop chains in Iceland and is where Grant got her start (as did many other award-winning baristas). Launched in 1990 by Adalheidur Hédinsdóttir, Kaffitár was one of the first specialty roasters and cafés in Iceland; it now has seven locations and a thriving B2B business.

In addition to coffee’s prominence in social settings, the workplace is where a lot of coffee is consumed. “People want better coffee at offices,” Hédinsdóttir tells Global Coffee Report, “and in general, salaries are already high, so instead of raises, employers might improve workplaces with premium coffee.”

Over the years, both women have actually led trainings at offices, banks in particular. “There’s quite a culture behind it there,” says Grant. “After being focused on money all day, they enjoy meeting in front of the espresso machine and talking about coffee – some with strong opinions.”

What’s more, three of the five countries have longstanding labour laws requiring paid coffee breaks. “Even schools have a coffee break,” Grant points out. “Obviously the children aren’t drinking coffee, but the break itself is called a ‘coffee’ break.”

Those aforementioned high salaries are also responsible for coffee’s rise to fame across the region over the centuries. When coffee first came to the Nordics, first to Sweden, only nobility could afford it. But during the 19th century, the working class became more affluent and gained access to coffee, explains Asser Christensen, a coffee blogger, instructor, and licensed Q Grader from Denmark.

Today, the five countries are among the top 25 wealthiest countries, according to the International Monetary Fund. So as premium coffee, high-end equipment, and craft coffee beverages permeate coffee-drinking countries around the world, the affluent Nordics have kept up.

On the menu
Despite coffee’s third wave moving through the five countries, all local experts point to “batch brew filter coffee”, i.e. standard drip, as the most popular. Again, Jokelainen says the bigger cities have seen the greatest shift away from traditional, with espresso-based drinks and other coffee beverages and brewing methods becoming increasingly popular. After filter coffee, Hédinsdóttir says lattes are the next favourite beverage at her cafés. Christensen estimates that about half of Danes prefer filter coffee; the French press is a distant second.

They also agree that preferences differ across generations. The older demographics are the heaviest drinkers of filter coffee, while the younger generations have been exploring third wave coffee and brewing methods. The latter have also been more interested in takeaway coffee, a concept that conflicts with the Nordic way of socialising over coffee but also supports consumption of filter coffee for its quick service.

Not unlike other bourgeoning coffee consuming nations around the world, “Starbucks has played a big role in our coffee industry,” Jokelainen tells GCR. “It has helped people learn about espresso-based drinks and specialty coffees. Starbucks has also helped change the way people think about takeaway coffee.”

But in Iceland, where the population and economy are too small for multinational chains, there is no Starbucks. In fact, Dunkin Donuts, Krispy Kreme, and McDonalds were all unsuccessful in the Icelandic market.

So when it came to introducing the country’s coffee drinkers to specialty coffee and espresso-based drinks, the learning curve was a bit steeper. Explains Grant, “Customers would come in and order a cup of coffee, but then I’d have to ask them if they wanted filter brew or espresso, and whether they wanted it for here or takeaway. They were like ‘Can I just have my cup of coffee? Why are you asking me so many questions?’

“We were introducing these foreign concepts, essentially trying to represent the environments at various coffee shops abroad, and people weren’t open to it [at first].”

In the other Nordic countries, various multinational chains and roasters have moderate representation, but the local behemoths dominate. According to Euromonitor, the three largest Norwegian players in retail coffee sales, Joh. Johannson Kaffe, Friele (owned by JDE), and Nestlé Norge, account for a significant combined share of sales.

In Finland, Gustav Paulig and Meira are the leading coffee manufacturers, though Starbucks and Nespresso also serve the market. Paulig is also the second-largest supplier of coffee to the Russian market, according to the Centre for the Promotion of Imports (CBI).

JDE and Nestlé subsidiaries also dominate Sweden, and German conglomerate JAB Holdings has an expanding presence throughout the Nordic region through local coffee shop chains Espresso House and Baresso Coffee.

Despite an increasing number of smaller players entering the market over the past decade, the Nordic coffee industry is concentrated overall. As such, significant changes in the competitive landscape are unlikely in the coming years, Euromonitor estimates. The global market research firm points to new product launches, strong investment in marketing activities, and private label products as key areas of strategic focus for major players to protect their competitive positions.

Consistent with the industry at large, major players are expected to continue expanding their portfolios through acquisitions, specifically to tap into the Nordics’ budding specialty market.

Specialty moves in
The Nordic specialty scene had a slower start compared to other parts of Europe, but it is slowly gaining speed in each of the five countries. This is evident in the growing number of specialty roasters and coffee shops, which is then fuelling consumption of higher-quality coffees. In Finland in particular, import values grew at a strong average annual rate of 7.1 per cent from 2013 to 2017, according to CBI, while volumes have been increasing much slower on average. CBI links this comparatively strong growth in value to expansion of the specialty market.

Although the region has always trended toward higher-grade arabica coffee, Christensen says the specialty coffee market exists in its “own little bubble outside the general coffee culture”, popular among trendy young people. He says the majority of coffee consumers buy standard grounds at supermarkets to make filter coffee at home.

Jokelainen credits SCA Finland for helping the specialty market garner more attention. Among other efforts, the organisation helps produce an annual Coffee Festival in Helsinki that it touts as the “biggest coffee festival in the Nordics”.

Meanwhile, Norway is responsible for the global competition scene buzzing today and World Coffee Events (WCE), which operates under greater SCA. In 1998, Alf Kramer, who was also a founding member and the first president of SCA Europe (before it merged with the United States), curated a global group of passionate coffee individuals to launch a competition that would help “bring awareness to our craft”. Grant and Hédinsdóttir were among those.

The first World Barista Championships (WBC) was held in 2000, hosting 17 competitors in Monte Carlo. “The original idea was to [resemble] the Olympics, with different categories and with rules from gymnastics and horse-riding competitions,” Grant tells GCR. As the competition expanded beyond WBC – seven events currently – WCE was formalised in 2011.

With WBC’s roots in Norway and strong Nordic representation across the founding team, naturally the majority of competitors, and thus winners, were from the region’s five countries. In the first six years in particular, they consistently placed in the top six, with Norway, Iceland, and Denmark leading the pack.

But as both the event and the specialty coffee scene gained greater notoriety on a global scale, WBC and its pool of competitors expanded in size and reach. Simultaneously, Grant and Jokelainen say there was an attitude change among the Nordics when competing required greater effort. “In the past it was easier to win because it was so simple,” says Grant, pointing to the many years of practice and training it now requires. “And because it’s all volunteer, I think [Nordic people] don’t see the value of putting the time and effort into it anymore.”

Grant hates to see her home country and the greater region lose its recognition on the global stage, but she sees potential among her Nordic cohorts if they want to reclaim their titles. “With a little bit of help and money and a three-year plan, there are competitors here who I think could do it.”

Nico Roozen: A founding father

Solidaridad’s Nico Roozen on lessons learnt from more than 30 years at the helm of certification systems, the disruptive power of new technologies, and why they’re needed to make an impact on the supply chain.

Nico Roozen is determined to break the stereotype of retirement. In June this year, the Co-founder of fair trade certification system and corporate social responsibility initiatives including Max Havelaar and Utz Certified, officially stepped down from his role as Executive Director of development agency Solidaridad. He handed the baton of responsibilities over to Jeroen Douglas to lead the next evolution of the foundation, but far from taking a back seat in the slow lane, Roozen is excited about the changes he can help implement as Solidaridad’s first Honorary President. Read more

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