Wednesday, July 8, 2015

Retail Coffee Prices and Value

This new post in Roast Magazine's Daily Coffee News caught my eye, and I thought the link within it to a group calling themselves Transparent Coffee Trade was of perhaps even greater interest.

The first article lists a composite average retail coffee price among so-called Blue Chip Roasters of $21.94 per pound, while the Transparent Coffee site shows that the (very) few roasters in their roster, most of whom charge retail prices well above the $21.94 per pound average, are remitting about 18-25% of their selling price to their growers.

Meanwhile, the current New York C market spot price is $1.25, Fairtrade (F.O.B.) is $1.60, top-quality green in tiny (home roaster sized) quantities from Sweet Maria's is around $5-8 per pound,  and the small roasters featured at Transparent are reporting paying green prices in the $3.20-4.40 range. (Interestingly - at least to me - the company in their listings paying by far the highest percentage to farmers, a group called Farmers to 40, is paying 40% of their selling price to growers but selling at around $14 a pound - albeit for coffee of obviously uninspiring quality).

Clearly there aren't enough data points in any of these articles to draw any conclusions, but they do make me want to raise a few issues that I don't see getting discussed very much.

One of the most obvious things is that consumers are certainly being asked to pay the price for inefficient buying on the part of small roasters. Setting aside true exotics like Geshas (which are excluded from these surveys anyway) or top-quality Kenya auction lots where there is a direct relationship between cup quality and the green price paid,  any specialty roaster buying full containers and committed to paying farmers well above their cost of production ought to be doing just fine with average F.O.B. prices in the $2-3 range for the bulk of their volume, heading well north of that for small quantities of exotics such as East Africans.

Add in ocean freight, customs, exporter/importer profit, 25% for shrink during roasting and a generous dollar per pound for state-of-the art vacuum packaging in Fresco bags (uncommon except among the larger players) and most roasters should be making double their roasted-and-packaged cost at $10 per pound, or triple that at $15 - which happens to be the average selling price from, for example, Peet's mail order, which certainly buys excellent coffee, has a shrink rate to end all shrink rates, roasts to order and packages superbly.

As a home roaster buying mostly expensive Kenyas and Yirgacheffes and a smattering of top Centrals and Indonesians from Sweet Maria's - and paying UPS freight rates - I still have a roasted cost of well under $10 per pound for coffees that are at least as good as the top Third Wave folks are selling for triple the price or more.

Going from the still-abstract level of price per pound to actual beverage coffee, my wife and I most often brew a 1 liter pot of coffee and share it over the course of a morning. That means I get seven pots (at 65 grams per liter) out of a roasted pound - meaning that if I were paying the "Blue Chip Roaster" average price of $21.94 per pound our coffee habit would cost us $3.13 per day, or $94 a month.

That's nothing compared to a couple with a daily cappuccino-and-pastry coffeehouse habit but it certainly isn't cheap - and it goes a long way towards explaining the immense popularity of good-not-great whole bean coffee (in this case from Lake Atitlán in Guatemala) for $6.65 per pound as found at Costco. Now of course the mega-growth area in Costco and other big box stores is single serve, but  Peet's K Cups are selling for 54 cents each there at the moment and Starbucks Via Instant can be had for about the same price - meaning a consumer could enjoy a full quart of brewed coffee made by these very expensive, packaging-intensive methods for less than $2.50. That doesn't even buy you a single mug of cinnamon-roasted pourover swill at your local Piercings-'n-Beans outlet.

Studies like these two are focused on what percentage of coffee's selling price ought to go to the grower rather than looking at price pie charts that include all of the stakeholders in the transaction - including the consumer. Rewarding farmers is obviously important, but so is delivering value to the consumer. Costco and its key suppliers, from JBR to Starbucks, Nestlé and Green Mountain certainly understand this but there's not much evidence of such sanity on the boutique roaster side of things - which goes a long way towards explaining why the Blue Bottles and Stumptowns get all the fawning press coverage in the world while selling such small volumes of coffee that, at the end of the day, they're just microlot noise in a container-load universe. That's also why most of the PR is about canned or bottled cold brew, insanely expensive microlots of interest only to staff and the press, the latest in ridiculous latte "art" competitions and the rest. Talking about the actual taste and value of coffee is bad business - or at least not the business many folks want to be in.

Thursday, March 26, 2015

The death of a genius and the strange fate of tea in coffee chains

I just learned of the death of the wonderful Steve Smith, the product wizard at Stash Teas, inventor of the Tazo brand and more recently the co-founder (with his lovely wife) of Steven Smith Teamaker, yet another amazing venture that pushed the quality envelope for teabag tea into uncharted territory. 

Here's the link to a lovely profile of Steve and his work in The Oregonian, and here's a photo of Steve:

I've written a couple of previous posts here detailing the sad history of tea at Starbucks and my own lengthy involvement.  Because I was the last tea buyer during the "whole leaf" era I had the pleasure of hosting Steve in the cupping room on numerous occasions. We were such kindred spirits that the old phrase "brothers from another mother" comes to mind: off-the-charts creative types with boundless product passion who idealistically believed that product-driven, product-informed marketing would (or at least should) win the day, even in the corporate world. 

If it hasn't happened already, the history of tea at Starbucks ought to make for a classic case study at Harvard Business School or the like. You have a product-driven company that offered the very best coffee, tea and spices at a time when fresh examples of any of these products were otherwise unavailable. Then trade with the People's Republic of China opens up and your city is the first to benefit, opening the door to offering such legendary teas as Hao Ya Keemun and Yin Hao Jasmine for the first time. 

Fast forward to 1987 and your company is acquire by your director of marketing, whose sentiments about tea are summed up by his advice to customers at his newly-minted ersatz Italian coffee bars: "if you want tea, you can go to China." The loyal tea customer base is sent off to Upton Tea or driven back to Peet's, since (again quoting Mr. Schultz) "if they want the connoisseurs, they can have themem." 

Still, the tea category and those pesky customers who insist on drinking both coffee and tea wouldn't go away, and rather than leveraging its long history in tea the powers-that-be at Starbucks begin to court other brands, starting with Republic of Tea and then buying Tazo, which brought Steve Smith - who was to tea what Gordon Bowker, the marketing genius co-founder of Starbucks - was to coffee - into the fold. 

There was nothing particularly high-end about Tazo but the teas were and are excellent for their price points and the blends, given that they were Steve's, were original and often spectacular. The combination of Steve's capabilities with Starbucks' limitless access to capital ought to have meant that Tazo could become whatever it needed to be to redefine the tea category, but Steve ended up leaving Starbucks, spending a year in France letting his non-compete run out in fine style and then creating yet another new world in tea with his Steven Smith Teamaker brand. 

Starbucks meanwhile seems to think that the Tazo brand has run its course, and has moved on to squandering money on the "Gloria Jean's Coffee Beans" (think Redneck alliteration accompanied by the stench of flavored coffee) of tea, the silly Teavana brand, with Howard now as star-struck by Oprah as he once was by Kenny G. 

Perhaps the "evolution" in logos says it all:

Here you have the Siren motif that inspired the the warm brown of the 1971 original logo. Brown is of course the color of coffee, but green is the color of money and disparaging "the brown look" of the Starbucks stores and packaging began with a vengeance in 1987 as the Il Giornale (the name of the Mr. Schultz's pseudo-Itallian espresso bar chain) logo was merged with an increasingly de-sexed Mermaid over time. As you can see, tea and spices were excommunicated quite early on, but it took until 2011 to remove coffee from the company's identity altogether (though any passion for said product had of course died many years earlier). 

Given the millions of dollars squandered on tea companies and brands here Peet's really does offer an amazing and laudable contrast. Tea has always received equal billing and emphasis in their stores, as a matter of conviction and passion going back to Mr. Peet himself. The whole leaf selection at Peet's is better than ever and both their regular blends and limited edition offerings are exceptional, reflecting the great talent and impeccable palate of buyer Eliot Jordan. 

Other than Peet's, the epitome of a "second wave" roaster-retailer, I'm not aware of any coffee store chains with national ambitions that are doing a serious job with tea (unless you count Intelligentsia, whose Kilogram tea line seems to exist solely to show that it's possible to charge even more usurious prices for poorly selected tea than one can for under-roasted coffee). 

I'd be sorely tempted to say that we need more Steve Smiths, but he was one of a kind and an impossible act to follow, except perhaps by this poem by one of the ancients:

Having picked some tea, he drank it,
Then he sprouted wings,
And flew to a fairy mansion,
To escape the emptiness of the world....

~Chiao Jen

Tuesday, February 3, 2015

Guest post in Royal Coffee News

From the beginning of my time working in the coffee business in 1980 Royal Coffee in Emeryville, California was one of the most important green coffee suppliers, but as usual in this trade the business relationship was just the tip of the iceberg of the value of the connections made. 

Bob Fullmer and Helen Nicholas, along with the late, great (and I do mean great!) Pete McLaughlin provided, in retrospect, not just  coffee but a great education, for a fanatically product-driven person like me, in the necessity and urgency of expanding the definition of "quality" to really include the farms and farmers who make it possible. 

Early on Royal was well-known, thanks in part to Bob's father, for its strength in Indonesian coffees, but in short order they grew to be the most complete "candy store" around, with a bevy of spot and forward offers from all parts of the world. Among the many highlights: Bob Fullmer's travel diaries (Hunter S. Thompson, eat your heart out); the phenomenal Harrars of Mohammed Ogsaday; the incomparable Fino Rojas coffee and its legendary grower; learning to love Mexico and Panama through Helen Nicholas's infectious enthusiasm for their people and culture (with coffee as almost an adornment, rather than the sole focus). 

Fast forward to the present and an email conversation with Bob and Helen's son Max (prompted in part by posts on this blog) led to an invitation to contribute to their newsletter, and a great post in the previous edition of it about sample roasting provided the perfect opportunity. The link is here

There's a nice piece by Max Nicholas-Fullmer on the Ethiopian crop situation, my missive below it, and - for me the highlight of the issue - Kevin Stark taking my suggestions on progressive roast tastings and putting them to innovative good use. Obviously these are challenging times for coffee and for our planet, but at Royal anyway it's clear the future is in good hands. 

Thursday, November 6, 2014

Seasonal Teas for Coffee Lovers

Panyang Golden Tribute

I've been really appreciating being back in the U.S. full-time after several years spent living mostly in México - not least because of the easy availability of truly great coffee and tea.

On the coffee front, Sweet Maria's continues to be a reliable source of good-to-great green coffee for me to roast at home (pretty much the only choice as far as I can tell for anyone who wants classic full-city roasts), but as has been the case for decades now I still drink tea every other morning, both because I love it and because the more subtle and varied nature of tea helps to keep my tasting chops sharp for everything else.

While "seasonality" in the Third Wave coffee world is mostly an excuse for selling what you like rather than offering consumers a reasonable range of choices, in tea it really does mean something, and this is the time of year when most of the really exciting winter-weight teas arrive in the U.S.

There's so much emphasis in the press on green and white teas for their antioxidant content and health benefits that the kinds of teas that work well with Western cuisine - and that would appeal to coffee drinkers looking for a change of pace - are hardly mentioned. In doing tastings for consumers over the years I've consistently found that coffee drinkers who are - or who aspire to be - tea drinkers as well are usually most impressed with teas that have enough heft and density to be an easy transition from coffee. Here's a brief sketch of some top value current seasonal offerings from Upton Tea, far and away the best overall source for full leaf (which is to say real, not tea bag or instant) tea in the U.S.


Teas from Sri Lanka remain under-appreciated (and thus undervalued) in the U.S. There's a tremendous diversity of styles, with most of my favorites coming from lower elevations and from districts such as Rahuna that produce teas with heavier body, though there are plenty of exceptions.

TC42 Idulgashinna BOP: From one of the best (and oldest) organic producers in Sri Lanka this value-priced tea offers classic Uva district briskness with plenty of body to stand up to milk and sugar. A classic "tea tea" to get started with.

TC70 New Vithanakande FBOPF: Always one of the country's very best producers, offering teas with a complex aromatic and flavor profile that offers flavor notes of orange, maple and sweet spice complemented with intense, almost Assam-level tannins for a stout cup. This particular lot is priced for regular consumption, but to see what they are capable of (and just how great Ceylon tea can be) do spring for a small packet at least of the sister lot TC87.

TC07 Season's Pick FBOPF: This is an outstanding, dirt cheap tea that's part of an estimable series ("Season's Pick") of very high-value teas Upton originally started sourcing for its restaurant customers. For literally pennies per cup you get a deep, round, honeyed tea that's perfect for the coming shorter days.

China Blacks

Almost invariably when I've taught "Tea 101" classes to groups of coffee drinkers the great black teas of China have been the crowd favorites. There's an autumnal, foresty complexity to the aromas of these teas not found in any others.

ZY82 Yunnan Golden Tips Imperial: my favorite of a bunch of good-to-great Yunnans on Upton's list, this not-cheap tea offers the classic complex Yunnan flavors of apricot and peach offset with peppery spice, butter caramel sweetness and a wild mushroomy earthiness. A bit of sugar brings out the flavors, and it can certainly handle milk if need be.

ZP60 Panyang Golden Tribute: this just-arrived high end tea is one of my all-time favorites, with enough depth of flavor and opulence of body to please a dyed-in-the-wool Sumatra coffee drinker. It's as good as black tea gets.

ZP22 Panyang Select is a junior sibling to the Golden Tribute, priced for everyday consumption and much simpler in flavor, but far better than many Keemuns costing twice as much or more. There's a definite smoky note, good body and plenty of sweetness. In between this lot and the top end Tribute is another stunning tea, ZP91 Panyang Congou Supreme, which offers room-filling aroma and tremendous complexity of flavor, including a lovely note of fresh apple I find partiuclarly appealing at this time of year.


Teas from the Assam district are the classic winter-weight teas, traditionally used as the backbone for Irish and Scottish Breakfast blends. Teas from the top estates really deserve to be drunk unblended, and in recent decades have begun to fetch stratospheric prices, especially from tea-crazy Germany and other sophisticated markets.

While the original Assam cultivars came from Yunnan (the motherland of tea), several sophisticated producers have long since developed gorgeous, golden-tipped varieties that offer an intensity and complexity of flavor that make their teas well worth the relatively high prices they often command.

These are the Peet's Sulawesi (or Aged Sumatra) of teas, virtually requiring the addition of milk and sugar for most drinkers, at least at first. I have fond memories of cupping several tables of new crop Assams with Jim Reynolds, the original coffee buyer for Starbucks (and then Peets for many years) in the mid 1980's. We just used the standard 2.25 grams per cup but even for us, hard-core coffee tasters used to dark roasts, the tannins in a couple of tables full of Assams had us feel like our tongues had sprouted fur coats. Still, on a February morning with snow falling outside there's nothing I'd rather drink than one of these dark beauties.

TA21 Mokalbari East GFBOP: A high-value tea from an estate that has been producing teas with a particularly ferocious malty intensity for decades. The value-for-money here is off the charts.

TA51 Mangalam FTFFOP1: One of the most famous Assam estates, and certainly one of the most consistent. If you've never tasted a classic Assam, this is the place to start. Strength and smoothness are balanced here, and the leaf is so pretty it almost seems a shame to brew it.

TA57 Harmutty TGFOP: This new arrival has plenty of malty intensity but with more balance than the Mokalbari plus an enchanting note of wild cherry, or perhaps Amarone wine. Excellent value, too.

TA97 Halmari TGFBOP1: It's well-known among professional tea tasters that BOP grade Assams often out-cup the larger leaf sizes, and this is a perfect example. Over-the-top aromatic intensity but classic Assam through and through, and living proof of the wisdom of the old Mae West adage that "too much of a good thing can be wonderful.

Mangalam Estate Assam

Sunday, October 5, 2014

The Science of Crema at Nestlé

Peter Giuliano was very kind to share this article and linked video from last year's SCAA Symposium (the video is 16 minutes long and worth every minute you spend watching it):

Brita Folmer on Crema

Dr. Folmer's talk is a rare and really wonderful glimpse into defining, measuring and achieving high quality in coffee using the full complement of scientific and technological tools available. Sadly I doubt this talk will be viewed by those who most need to see it: specialty coffee folks who think that having a "passion" for quality, or over-paying for small lots of green coffee from farms you've visited, has something to do with actual quality, when it does not.

Think about all the theories about espresso and crema you've heard: it's the sign of truly fresh coffee; you need robusta in the blend in order for it to really last; it protects the aroma of your shot while drinking it; it needs to pour towards the rim of the demitasse and stay intact to be a good one - on and on. Then look at this video, which looks at what crema actually is, what consumers and expert tasters expect and perceive it to be, and how good crema can be part of not only straight shots of espresso but the drip-strength caffe lungo that dominates the market in much of Europe (and which deserves a much wider audience here).

There's so much to learn from, and to be impressed by, in this excellent presentation, but for me the most important aspect of all is how seamlessly this company integrates the technical aspect of coffee chemistry and the perspective of expert tasters with the needs, wants and preconceptions of its customers. The consumer hardly factors in to most discussions I hear among American microroasters: instead it's talk about how much we (behind the counter) like such-and-such microlot, how much we spent on the latest Rube Goldberg brewing contraption, or how we roast the coffee to our ideal profile based on what we find at the cupping table. That's coffee-as-hobby; this talk is about the coffee business. 

A retro rejoinder in Seattle

Nicaragua (left) and Guatemala from Fundamental Coffee

Two old hands in coffee - one of whom I had the pleasure of working with during my Starbucks years - have just opened a microroastery in Seattle called Fundamental Coffee. It's very early days yet for them, but I must say I'm delighted to see fresh, deep-roasted coffee in Seattle again.

The situation in Seattle over the past decade or more has truly become a case of "coffee everywhere, but nothing fit to drink." I can think of only two exceptions: Lighthouse Roasters up on Phinney Ridge, along with the rightly legendary Joe Kittay at The Good Coffee Company down on Post Alley (no web site, of course). Other than these guys, there's a veritable ocean of cinnamon-to-city roasted, screamingly acid, scandalously over-priced AND very frequently stale coffee from a bevy of Third Wave know-nothings, offset by a Starbucks on every street corner selling stale, incinerated beans from nowhere in particular if you can even find the whole bean coffee amidst the milk, flavorings and foods.

I tasted three of the six coffees currently on offer from Fundamental: their Humbucker Blend and a Guatemala Antigua Acate Estate,  and a Nicaragua Matagalpa. The Humbucker is seriously darkly roasted - think Peet's rather than Starbucks in its prime, but there's a whole lot more going on in the cup than roasty power, with deep dark chocolate, great balance and body that's nothing short of oceanic. It reminds me a bit of Peet's Top and Garuda Blends and even more of Starbucks Gold Coast Blend when we invented in in the late 80's.  It would make magnificent espresso.

The roast on the Guatemala was also quite Peetsian, and I didn't think the coffee quite handled it, but I was drinking it through the Aeropress and as drip and I have no doubt it would've shown me a lot more in a La Marzocco. My favorite of the bunch was the Nicaragua, roasted one significant notch lighter (putting it in the Starbucks-of-old [pre Scolari roasters]) range and offering luscious body supported by crisp acidity and considerable complexity of flavors.

While the coffees here and the roasts are clearly in the Peets and Starbucks lineage, what really took me on a trip to memory lane was freshness. When I first started working at Starbucks in 1984 we roasted coffee three days a week and delivered it to the stores the next day - in increments as small as two pounds - in order to guarantee every bean was sold within a week of roasting. The aroma in my house when I opened the bags from Fundamental was exactly that of every Starbucks store (or Peet's Vine Street for that matter) during the many years before a commercial espresso machine made its way into the stores.

Close-ups of the two degrees of roast

Check out Fundamental's web site - their blog in particular - and you'll get a very clear sense of their focus and the great depth of experience, product knowledge and passion supporting their perspective and product offerings. Note also their concern about delivering value-for-money from the outset, and their eagerness to engage their customers as partners in the business. These are coffees meant for the naturally soft water, grey days and pressurized brewing methods (from French Press to espresso) that were perfected in Seattle long ago, when the Starbucks mermaid was brown and had breasts, the coffee beans were fresh, and the scale of the business was human. It's my kind of retro.

Tuesday, September 2, 2014

Mandatory Third Wave coffee bar equipment

There's a great video out that shows the classic Balance Vacuum Coffee Maker in action. It's meant to look old-timey and fun and succeeds on both counts, but the first thing that struck me in watching it is that the brewing process shown is actually less tedious than watching your local barista brew a Hario pourover and the result is ever-so-much better: an actual pot of coffee, not a mere cup, that's hot instead of tepid.

Now the last time I was in an Intelligentsia store Doug Zell facetiously apologized for not having a Fetco installed (and of course the coffee would've been much better - and the wait in line infinitely shorter - if he had), but I think, in penance for the innumerable cups of under-extracted, papery and obscenely overpriced coffee made while you wait wait wait that all of the groovy Third Wave chains ought to brew on nothing but these ever-so-retro vacuum brewers.

That way - finally - I'd be able to get a cup of coffee that doesn't suck, from a brewer that does.