Panel no 2. – Coffee in a Changing Economy

Before we start on the the economics panel, I just want to put it out there that I think economics is fascinating, especially macroeconomic issues such as global trade & globalization, unintended consequences, how market factors influence daily lives, etc. If anybody wants to read up on the current economic issues in America in general, I highly recommend NPR’s Planet Money blog, which in turn will send you to tons of other economics blogs.

NYC Coffee Summit 2009

Alan Kaiser from the National Coffee Association was the first to speak in the second panel. Alan went over the data from the most recent NCA study (conducted from May-December 2008, finished in January) discussing consumer coffee habits. Overall, coffee consumption has returned to its 2002 levels, which is still substantially higher than, say, 1997 when coffee first bypassed soda for frequency of consumption (now they’re about even, soda caught back up). An average coffee drinker drinks 3.3 cups of coffee per day, neither up or down from previous years. The majority of coffee drinkers (89%) have not changed their coffee drinking habits in the past six months.

Overall Alan stated that ‘flat is the new up’ in this economy, and that we should be overall happy that the coffee business hasn’t tanked during the recession. This is a sentiment for which I am extremely grateful. The continued demand for coffee is what keeps my company alive, so of course I am glad that coffee is still in demand. Do I hope to see more growth? Of course.

Also, there were some troubling questions in the survey, especially the one that asked where consumers drank coffee. It didn’t include the coffee house, or cafe. It had office, gas station, and home. This of course irked the specialty-coffee centrics in the audience, and I think shows that the findings aren’t necessarily relevant to specialty. I know that the SCAA has conducted similar surveys in the past, but I’m not sure if there is one out for 2008. If there is, I would love to see it.

Another key point Alan brought up was that coffee bean sales – for home use – has gone up in the past year. I think this is something that anecdotally we’ve all been doing instinctively – the intelly website is all about home brewing right now – but this confirmed our theories.

NYC Coffee Summit 2009

Aleco Chigounis from stumptown coffee was up next. Aleco’s speech was pretty brief. He simply said that specialty coffee, and businesses like his, have the ability to really control what the consumer can receive and expect in terms of truly exceptional coffees. With that, though, must come a higher price tag for coffee. That price must be explained by connecting the consumer to the real work and effort that goes into producing great coffees. And with that, he showed this excellent video, which I recommend watching, with the hopes you’ll come back to read about coffee in Malawi.

NYC Coffee Summit 2009

Jan Willem van den Broek from the United Nations was the final speaker on the panel. He told us about his experience developing a coffee program in Malawi. I think this was one of the most interesting discussions, describing just how far we as a coffee community still have to go on the agricultural side, in terms of picking ripe cherries and proper processing. Similarly Malawian coffee producers have a difficult time exporting their coffees, much like the more famed Ethiopian troubles. One way that his program helped improve coffee quality at origin was to send samples to roasters and then not only ask if they want to purchase it, but also provide feedback on the cup quality and what steps farmers should take to improve so that roasters might buy it in the future. I thought this was an interesting idea, and wonder if more coffee farmers or organizations do this already in any methodical way. I’m sure there are but I hadn’t heard about it being a systematic, customer feedback approach. So that talk was very interesting.

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~ by Anne on May 6, 2009.

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