My name is James Hoffmann. I write about coffee, and about the coffee business. Most of my time is spent focusing on Square Mile Coffee Roasters in London.

I also travel and talk a lot on many of the subjects I write about here. For more information or to get in touch click here.

The price of espresso in London 2014

April 2nd, 2014

A little less than a year ago I wrote a short piece about the price of coffee in London. For that post I’d used the London Coffee Guide produced by a company called Allegra, (who do a lot of research) which launches at the London Coffee Festival which starts tomorrow.

Very kindly, and out of the blue, they forwarded me the data from this year’s book, and in a spreadsheet no less! (Meaning I didn’t have to put the prices in manually this time.) I thought I’d write about where things are now, what has changed and what hasn’t.

Espresso pricing

2013 Vs 2014
Year 2013 2014
Lowest Price £1.30 £1.50
Highest Price £2.60 £2.60
Average Price £1.89 £1.99
Mode Price £2.00 £2.00

A few small changes: those charging the lowest price for espresso have either increased pricing, or those businesses at the bottom end of pricing are no longer in business. At the top end there has been little to no change. However, the change in pricing distribution has moved the average and the mode to be essentially the same. Overall the price of espresso in London has increased, by around 5.3% which is above the rate of inflation (2.4-3.0%).

Pricing distribution looks very similar to last year except that the number of cafes charging £2.00 (the mode) has increased from 35% to 42% of the cafes listed in the guide. I should note at this point that prices for a double espresso were used when two prices were listed.

Price distribution by neighbourhood


One rather lovely addition to the data shared is that each cafe had been tagged with its neighbourhood in London. This allowed me to look at the distribution of price across London. Here it is with the average price for an espresso and a flat white, and where they rank from most expensive (1) to cheapest (11):

2013 Vs 2014
Region Espresso (£) Rank (11) Flat White (£) Rank (11)
East London £1.89 10 £2.51 9
Farringdon/Clerkenwell £2.07 4 £2.56 6
Holborn/Bloomsbury £2.09 3 £2.66 3
Inner East/Shoreditch £1.96 7 £2.63 4
North London £1.94 9 £2.50 10
Soho £2.11 2 £2.63 5
South East £1.79 11 £2.33 11
South West £2.02 6 £2.56 7
The City £1.96 8 £2.76 1
West End £2.17 1 £2.73 2
West London £2.03 5 £2.55 8

While this is interesting, it is hardly revelatory – but there are a few notables. The most expensive retail rent in London (the West End) comes with the most expensive coffee – I don’t think anyone is particularly surprised by this.  The South East is also considered a relatively cheap (in comparison to the rest of London) place to do business, but it is interesting to see how much cheaper coffee is down there.

I was surprised to see espresso in the City was cheaper than the average (even if it is just a little under). Amusingly milk drinks are the most expensive in London, so either bankers are buying bigger cups of coffee (I used the highest price for a flat white listed for each cafe) or the cafes are recouping their expensive rent costs with their most popular drinks. On principle they should probably be more expensive…

I’m not exactly sure why, but I was quite surprised to find the standard deviation across the prices to be so similar – 11p for espresso and 12p for flat whites. To me I would say that this indicates that cafes pay attention to each other’s pricing a lot (probably more than customers) – but I’m aware that I’m stating the obvious again…

I didn’t do the data analysis on milk drinks in 2013, so hopefully I can keep it up from this year onwards. This post is just a presentation of data, and has nothing to do with what I think cafes should be charging for espresso drinks – simply what they are charging right now.

Hipsters, coffee and authenticity

March 24th, 2014

I don’t really like the word hipster, nor do I condone its usage (despite occasional indulgence), but I did spend some time recently trying to work out what it meant and what we mean when we use it.

It isn’t really a cultural label the way “goth” or “mod” were and are. I think the word has ended up being many things to many people, but I think when you use it there is, at its root, one key idea: you are saying “I don’t believe you.”

It is the label given to those who posture, whose cultural, sartorial or intellectual pretence is painful to see. This is why no one self identifies this way – we are believe we’re telling the truth, or at least getting away with looking like we do.

Hipster gets thrown at coffee a great deal too. Half the time to describe the people behind the counter, half the time to describe those patiently queuing to buy it. The aloof barista, with a carefully cultivated sense of ennui and the vaguely disguised disgust at the coarseness and ignorance of customers, is perhaps the arch trope of coffee today.

When we see such theatricality, perhaps we assume that every aspect is a performance. Caring about coffee, being interested in it and deeply involved in it, all of this must be part of the act. How can we, as a customer, tell which part is genuine and which some sort of pretence.

I read a piece on coffee consumption that brought me back to this Frank Bruni piece from a few years ago in the New York Times. This particular sentence was highlighted (emphasis mine):

“In these food-mad times, have the economically privileged among us gone too far in turning simple acts of nourishment into complicated rituals of self-congratulation?

Have we offered up coffee as a way to define who we are as customers? Is this something modern or is this simply the next step after coffee’s position as the epitome of the Fair Trade movement, the next step in the evolution of our relationship with a product thats complexity is slowly starting to seep into the public sphere.

While I don’t really see coffee in London, or the UK, being regularly used by consumer’s to really define themselves (outside of those for whom coffee is a passion) – I do see a great deal of inauthenticity within the industry.

Part of this, I think, is a byproduct of the homogeneity that can develop in a market or a result of tapping into the hive mind of the coffee industry online. London is home to what others have described as the “chain with no name”, independent cafes that look and feel very similar to each, offer very similar products at similar prices, with similar service experiences, but have no shared ownership. In a situation like this, it seems pretty obvious to anyone that each of these business is unlikely to be the honest expression of an individual, and can end up looking like bandwagon-jumping or an attempt to profiteer from a trend someone doesn’t truly understand. I understand that conformity offers safety, and I see that the industry doesn’t often encourage the kind of risk taking we want to see. This part, however, may in part be because we’ve struggled to work out how the risk/reward model could really offer something compelling.

Authenticity comes from honesty, from transparency. Cafes are great canvases, for the expression of ideas about service, about taste, about design, about community, and about coffee itself. All too rarely are they any, let alone all, of these things. When they are clearly the result of someone’s considered, and personal, vision I think they’re compelling, and I believe consumers can tell and respond strongly to it. My limited experience within my own market supports this.

The cafes around London, past and present, that I have formed the strongest bonds with all have a genuine identity, from their owners and founders, that I find strongly appealing. I deeply hope to see more of this in the future, because I believe it will make talking to people about why coffee is worth their attention, their money and their time so much easier.

Learning Project: An update and the next topic

February 12th, 2014

Today I closed submissions to the January topic and I’ve updated the blog post to show a full list of further reading links you lovely people submitted. Some people’s submitted links didn’t work, and I haven’t had the time to work out what they meant to submit.

The voters have also chosen the next topic. In the next couple of weeks I will write and post:

An introduction to coffee roasting

This is going to be tricky, and I know that when I call for links to further reading that there isn’t a lot of stuff online. However, there is more than you think…

I just want to make clear that what I will write will be designed as an introduction. It won’t be too superficial (I hope) but I will be leaving out some of the fuzzy stuff that is full of half baked opinions, pseudo science and conjecture. It’s actually quite an intimidating topic to write an introduction for…

There’s some great reading to be had back in the acidity post – so I hope people enjoy getting stuck in!

An admission of failure

February 5th, 2014

Maybe I set the bar too high in my own mind, maybe I wasn’t sufficiently clear and maybe (the most likely explanation) it just wasn’t that good of an idea to start with.

UPDATE: Twitter has informed me that the problem is my expectations, and that I should stop being churlish for what many would consider a good result. I have since reviewed my expectations for this – there’ll definitely be a part two… My expectations are likely skewed by the last two times I requested reader participation which each generated 500+ responses.

The idea behind the collaborative learning project was that if you gave a little you got something more in return. The first post on acidity has had 10k+ views, excluding the several thousand who subscribe to the RSS feed. I had hoped that even 1 in 100 page views might yield a submitted link, but for all the views and the thousand of people who read the post I’ve received (to date) 29 viable links on the subject of acidity. (Less than 1 per 400 views)

Let me be clear: I’m not really blaming anyone else but me for this, and I’m not really moaning about it either. This isn’t an “oh poor me!” blog post, I promise you. My predictions of how this would go were based more on my own hopes, rather than evidence or historical precedents.

I’m not yet sure if I am going to continue with the project, or certainly continue it in its current form. I will definitely update the existing blog post with the links submitted on acidity so far, but as for starting a new topic – I don’t think so. Failure is fine, it should be accepted, and sometimes it is ok to let things go and to move on to other projects. There are a few other ideas in the pipeline, so hopefully they’ll come to fruition soon!

An Introduction to Acidity

January 20th, 2014

This is the first topic in the learning project series of posts. Please click through at the end to share a link for further reading on the topic.

Acidity is an important part of coffee, and weaves its way through the entire supply chain of the industry from variety to picking, from process to roasting and from brewing to tasting. I want to start with the basics, cover some of the tasting aspect and then look at acids specific to coffee.

We tend to define acids as having a pH lower than 7, or as having a sour taste, but these aren’t particularly scientific. In fact there are three different scientific definitions of an acid: The Arrhenius definition, the Brønsted-Lowry definition and the Lewis definition. I think the Arrhenius definition is going to serve us best here which is:

An Arrhenius acid is a substance that dissociates in water to form hydrogen ions (H+) that is, an acid increases the concentration of H+ ions in an aqueous solution.

The important part to note here is the presence of H+ ions, as we’ll discuss this later. It should be noted that his definition specifies an aqueous solution, so you could argue that pure hydrochloric acid, or pure sulphuric acid wouldn’t count as acid but this would be nitpicking.

The measurement of the level of acidity is done through measuring the number of these H+ ions,  and is usually communicated through the pH scale. While there is some disagreement on exactly what pH stands for but the Carlsberg Foundation (tied to the Carlsberg Labratory where Søren Peder Lauritz Sørensen did the work to first introduce the scale) claims it stands for “power of hydrogen”.

It is important to remember that the pH scale is logarithmic. This means that each whole value below 7 is ten times  more acidic. Thus a pH of 4 is 10 times more acidic than a pH of 5, and 100 times more acidic than a pH of 6.

Tasting Acidity

Acidity is often described as being one of the 5 tastes, which is deeply unfair to other tastes such as pungency, astringency, piquancy or metallic tastes. (Much like saying we only have five senses ignores senses like balance or the sensation radiant heat). It is a critical part of the foods we taste, though it doesn’t have the same functionality as sweetness (the suggestion that something is good to eat) or bitterness (the warning that a food may be poisonous).

We have a very good idea of how taste receptors, in our mouths, detect sourness. That doesn’t mean it is particularly simple though. What happens is that a hydrogen ion (H+) enters the cell and essentially triggers an electrical response that fires the nerve that sends the signal to the brain that we are tasting something acidic.

Types of Acid in Food

There are a variety of different acids in food that influence our perception and enjoyment of it. Adding acids to foods (either more traditionally by using an acidic liquid like a juice, or in the more modern way of using them in powdered forms as food additives) is likely as old as cooking and the ideas of recipes. They also play a crucial role in preservation as well as providing some anti-oxidative properties.

Here are some of the key acids in food:

Acetic acid – We are most familiar with this acid as vinegar (though only acetic acid produced through fermentation can be called vinegar). This is an acid that can be extremely unpleasant (it is awful when present in coffee through defective processing), but we do like to add it to fried potatoes a lot.

Citric acid – This is the acid found in citrus fruit, and if you give most people plain water with citric acid added to it they will describe as tasting of lemons. This is an incredibly popular food additive – it is the acid used in sour sweets/candy – and it is no longer efficient to extract it from citrus fruit. Instead it is now often produced by fermenting a carbohydrate (like molasses) using a mould called Aspergillus niger.

Fumaric acid – This one doesn’t really occur in common foodstuffs (unless you enjoy eating lichen and Iceland moss), but it is used extensively as a food additive and acidity regulator. It is often used in soft drinks and can also be added as a coagulent in things like stovetop pudding mixes.

Lactic acid – Most of us are as familiar with the pain of lactic acid build up in muscles, as we are with the taste of it in sour milk products like yoghurt or cottage cheese, or with the sourness it brings to sourdough bread. Outside of food it also is used in things  like detergents and as an active ingredient in mosquito lures.

Malic acid – This is the acid found in fruit like apples and pears, though for a more explicit experience of malic acid then the delicious tartness of rhubard is an excellent example. It was first isolated from apples, and as such takes its name from the latin malum. Despite being a little more expensive than citric acid, it is used in many similar products such as sodas (particularly diet ones) and also in the sourest of sour candies.

Phosphoric acid – This isn’t really a naturally occurring acid, but we consume huge amounts of the stuff, mostly in one particular form: cola. This particular type of acidity is often described as being relatively harsh compared to other acids, but it seems to provide excellent balance in cola drinks specifically.

Tartaric acid – This occurs naturally in many fruits like bananas, grapes and tamarinds. I confess I am probably most familiar with it as the primary acidity found in wine (along with citric, malic, ascorbic and many others).

Most of these acids can be bought easily in powdered form, and simple (low concentration!) solutions can be made for tasting. The tasting, and blind identification, of acids has become a staple part of coffee tasting tests for a variety of certifications.

Acids in Coffee

There are a great deal of different acids in green coffee, byproducts of a cycle of chemical reactions called the Calvin Cycle. Some of these survive the roasting process intact, but many don’t. The longer and darker that a coffee is roasted the lower the perceived acidity tends to be when that coffee is brewed and tasted. This seems pretty simple – but when you dive into the chemistry a little bit you will see that it isn’t quite as simple as that.

A variety of the acids we’ve already mentioned (citric, acetic, lactic, malic and phosphoric) have been identified in brewed coffee, but two others have as well (at higher concentrations than those already mentioned). They are:

Quinic Acid – While it usually is in crystalline form, quinic acids melts at around 160C and coffee that is being roasted will comfortably exceed these temperatures.  It is considered to add a positive acidity to the cup, and give coffees a “clean finish”.

Chlorogenic Acids (CGAs) - Chlorogenic acids (a group of acids, rather than just one) contain no chlorine. The name comes from the Greek χλωρός (light green) and -γένος (a suffix meaning “giving rise to”), because of the green colour produced when chlorogenic acids are oxidised.  These acids play an important role in the generation of flavours during the roasting process.

CGAs degrade quite dramatically during the roasting process, with around 50% of them gone by the time a medium roast is reached. As CGAs break down the byproducts are both caffeic acid and quinic acid.

This is designed as only a brief introduction, but we all want to go deeper…

Now it is your turn! Submit a link to further reading on acidity, and vote for whichever topic you would to see focused on next. The link can be about acidity in coffee specifically, or about acidity in general. It can be examples of tastings to try, or more about how we taste and how acidity interacts with other tastes and flavours. Anything and everything!

Further Reading

Here are the links submitted by readers, for those interested in learning more about acidity:

General Acidity

Taste: The sour and bitter story
Acidity (jpg)
Brewing Sour Beers at Home
What is the difference between tannins and acidity?

Acidity and Coffee

What is acidity in regards to the taste of coffee?
Coffee Chemistry Acids
Low Acidity Coffee Reviews
“Coffee Gone Sour”
A pinch of salt in your coffee, sir?
Brew temperature – 180 vs 200
Sourness and Acidity
Coffee and acidity: the science and experience
Coffee Chemistry – Acidity
Teaching to Taste
What’s geology got to do with it?
Prufrock – Coffee Science
I found my “roots” to coffee in Africa
Coffee Acidity

PDFs/Journal Papers

Effect of sugar on acid perception in wine (abstract)
A Structural Basis for the Biosynthesis of the Major Chlorogenic Acids Found in Coffee (full)
Alchemy in the roasting lab (pdf)
Improving the flavour of fruit products with acidulants (pdf)
Taste Receptors in the Gastrointestinal Tract III. Salty and sour taste: sensing of sodium and protons by the tongue (full)
Biosynthesis of Chlorogenic Acids in Growing and Ripening Fruits of Coffea arabica and Coffea canephora Plants (pdf full)


A worrying situation in Nyeri

January 14th, 2014

Nyeri is a county in Kenya that produces some of the stunning coffees we’ve come to love. Coffee in the region is generally produced by small holders, rather than larger estates, which means we are used to seeing traceability down to the local factories (the term used in Kenya for a wet mill) that farmer’s societies choose to work with.

Recent changes to Kenya’s political structure has given more power to local counties, and in Nyeri there has been a proposed change that is  worrying. The governor of the county, Nderitu Gachagua, has announced that all of the coffee in the region shall be milled at a single mill (called Sagana) and the coffee should be pooled and sold through a newly formed company. The logic behind this is that the politicians believe that they can achieve higher prices for the coffee and pass those higher prices on to the producers. From a political perspective it should be noted that farmers are often the target of political manoeuvring in areas where they make up a large portion of the voter base, and this is very much the case in Nyeri.

While great Kenyan coffees produced by the mills throughout Nyeri can already be quite expensive, compared to many other sources of green coffee, there have long been challenges in making sure that the premiums achieved make their way to the producers. This is not a universal problem, by any means, but something that many producers are aware of. However I don’t think that reduced traceability like this, or pushing all of the coffee through one mill, will preserve the interests of growers who produce the highest quality coffee in the region. As a roaster, the idea of offering a coffee traceable simply down to Nyeri isn’t strongly appealing – and there several other regions in Central Kenya (and increasingly west of the Rift Valley) growing great coffees, with sufficient traceability. As traceability is a core tenet of my business this must factor into decision making and purchasing.

In an effort to further the political cause the Central Kenyan Coffee Mill (familiar to a great many speciality buyers) has essentially been shut down, and I’m sure I’m not alone in being extremely skeptical as to why and how this has been done.

While I am sure this centralising move does have some support in the farmer base, I do not think it is in the best interests of every farmer. 13 farmers’ societies have taken this to court to get an injunction, though their case won’t be heard until February 10th. That isn’t the best news considering the harvest has started.

As I’m based in Europe I suppose I should be looking to my trade association (SCAE) for advocacy and support in a situation like this, but I don’t think this will happen. Realistically I am hoping that the SCAA may have some opportunity to support the idea of retaining better levels of traceability. I’m sure we’ll see more information on this shared soon, but I thought spreading the word was a good idea.

In summary, I’m concerned that we’re going to lose some traceability (and potentially quality through separation) from some of the best coffees in the world. I’m concerned that legal wrangling, even best case scenario, could several delay the export of those coffees (not something anyone wants), and that this decision is being made my people who don’t really understand our sector of the market.


Mette- Marie Hansen also sent me this link. The whole thing is worth reading, but it is hard to ignore this bit.

The county government envisages a situation where once the coffee is milled, they can approach buyers and negotiate to supply either milled or roasted coffee at a premium price.

County Secretary for Agriculture Shadrack Mubea said earlier in the week that the governor was keen to explore potential markets, especially in non-traditional markets such as America and China.

Wilson Karime, the chairman of the Gititu Coffee Factory, which is under the four factory Aguthi Coffee Farmers Society, urged Nyeri farmers to give the governor a chance to prove his worth.

“The past model has favoured middlemen and buyers,” said Karime. “I see no harm in trying a new set if it finally benefits farmers.”

Emphasis added is mine. This is undeniably an approach that doesn’t understand the needs of speciality buyers, and doesn’t truly value quality.

Active and Passive Learning and a Project

January 10th, 2014

I meet and chat to quite a lot of baristas and coffee people from all over the world. Often one of the topics that comes up is having a career in coffee and the idea of progressing. One of the most common avenues of conversation is learning, and I confess that from time to time the following sentence has been like a red rag to a bull:

“I think I am going to look for a job somewhere else, I don’t really feel like I am learning anything any more.”

To most people this may seem like a fair comment, but I want to explore the idea of learning at work and its purpose and value.

When you start your first serious coffee job (it might not be your first coffee job, but your first speciality coffee one) you go through a very intense learning experience. Learning like this feels great. Coffee seems big and exciting, and the learning is not only rapid but generally fun. Learning like this is very addictive and we all want to learn like this all the time, but that isn’t really viable – there’s work to do! We need to split the value of learning into two separate ideas here:

1. Learning is rewarding, and a motivating factor in performing and remaining in a job. The idea of mastery was best communicated to me by Daniel Pink in Drive, which is a great read about how to retain staff and motivate them to do good work.

2. Learning is a way to increase the value of a staff member. If time/money/resource has been spent on a staff member then, from a purely business perspective, this person should be able to generate more revenue and value as a result. In the simplest terms, if I teach you to brew espresso you go from being completely useless to a successful cafe, to someone who can produce products for sale. The more I train you then the more product you should be able to produce (you get faster and more efficient) or the more revenue you can generate (you can make more expensive drinks or upsell, or do good customer retention work).

The second type of learning is the responsibility of the business, to assess whether you are ready to learn more (you have achieved some level of mastery of your existing skillset) and then to deliver more training. After this there is a period of time when you should be mastering the new skills. Then there needs to be a period of time where you return on the investment of the employer. If you take your new skills and jump into a different job then the employer has no return on their investment. This will increasingly discourage them from further investment in staff, and over time lead to a stagnant work environment. Alternatively there may be requests for learning from staff, but no way for the business to recoup its investment as the learning may not have a practical application to that business.

The problem many people have is that in the period where you leverage your new skills for your employer, you generally stop learning. So you feel uninspired, restless and you start to look for other employment. I will accept that (and I include myself in this too) employers often do a bad job of setting out goals to met and expected time periods between the periods of advancement. (And in fairness to them, this is no easy thing to do).

This isn’t the only part of this that I find frustrating. Learning does not need to be passive. If you want to learn then there is a world of information out there, and a little effort will yield big reward. Staff who are active learners stand out very clearly in any business, not simply because of their demonstrated motivation. For quite some time I suffered mild imposter syndrome, because I felt that people thought I knew lots and all I had done is read things that had been published for free on the internet – something freely available to all. I should add that while I am pro active learning, I’m not a big believer in work cultures that expect you to stay late and be in early for no extra financial reward, in order to move up in an organisation.

My point here is not to try to generate sympathy for employers, but instead to try to encourage more active learning. This leads me to one of the things I’d like to do on the blog this year.

The Learning Project

Here is what I am proposing: a monthly topic of learning that allows people to get involved with it. The plan will be:

Month 1 (this month): Write a short introductory blog post on a certain topic (approx 1000 words). This will also have a link allowing you to submit an interesting link on this topic. When you’ve submitted a link you will then get to vote on which topic we cover the following month.

Month 2: Republish the initial blog post including all of the submitted links on the topic. Publish a short introductory topic on the group voted subject. Again, submit a link on it to vote on what we do next.

My goal would be to continue this same cycle month to month throughout 2014 (thus covering 12 topics).

I have no idea if it will work, but if it does it will be fun to take a journey around different topics and to not know where we’re going until we get there. It will certainly push me, and I hope others will benefit too.

If you think this sounds fun then do please get involved. When the first topic goes live please share it (the more incoming and suggested reading the better!), and any feedback is welcome on twitter.

The C Market in 2014 – Some Speculation

January 3rd, 2014

I’ve tried to stop making predictions, but in some ways I can’t really help it. I’ve been watching the commodity price for coffee moving around quite a lot in the last few years, and things are currently in a pretty difficult place. I thought it was worth having a look at why things might be the way they are. Here’s a very, very short summary:

In May 2011 the C-price for coffee briefly exceeded $3.00/lb. This was a great time to grow coffee and sell coffee, and doing so could be considered profitable. This price spike wasn’t simply because of supply and demand. While consumption of coffee had risen to the point where it had briefly exceeded production, and companies were digging into existing stockpiles, the rapid rises and extreme volatility in the market were intensified by general financial speculation in this particular commodity.

There were discussions at SCAA’s symposium in 2011 about the need for more coffee, and I remember hearing Carlos Brando speak about Brazil’s capacity to increase yields and produce more. 1

Over the next two years the price of coffee dropped steadily, reaching the precarious, and psychologically significant, low of $100.95 on November 4th 20132. The reason for the drop was pretty simple, there was more coffee being produced than was required. Supply had exceeded demand, and the market pushed sellers into lowering their prices.

Prices fell so low that, in many countries, it was below the cost of production. We saw strikes in Colombia3 as growers demanded more support from the government. Brazil’s government talked about trying help its producers through finance, to enable them to withhold coffee from the market until the price had recovered, which it didn’t really do4.

To further compound the woes of our industry, the impact of coffee leaf rust was dramatic on many Central American producers with massively reduced yields from many farms. This scarcity did nothing to impact the commodity price of coffee, because the reduction in coffee exported from Central America was more than made up for by Brazil, Ethiopia and Indonesia. By definition, the commodity market doesn’t really care where the coffee is from as long as it is coffee. The International Coffee Organization (ICO) estimates that from October 2013 to September 2014,  supply will exceed demand by 4 million bags.

So, here begins the speculation5:

- We’re going to see less coffee from Central American producers ongoing. This reduction will come not just from leaf rust, but also from producers moving away from coffee. It is important to remember that no one is obliged to grow coffee, and I don’t think it is right to push people into doing so if it is not in their best interests. On a somewhat related note, despite massive efforts to the contrary the number of producers of coffee in Bolivia is shrinking. It simply makes more sense to grow coca – the price is more stable, it harvests more often and there is little threat of criminal repercussions. This is a decision that is absolutely contrary to the developed world’s best interests, but can we convincingly argue that it isn’t a better decision for those producers than growing coffee.

- Hopefully the demand from speciality will drive the prices for high quality coffees up, ideally to the point where growing good coffee is sensible and sustainable.

- We’re going to see more coffee from Colombia. It seems like the rust resistant varieties are starting to kick in, and Colombia’s production is up. What is interesting is that the differential for Colombian coffee, the varying premium that certain countries get above the C, has decreased recently. I am not saying they are directly linked, though differentials are as much about reputation as they are about quality, and some would argue countries like Costa Rica got undeservingly high differentials once quality from other Central American producers caught up.

- Brazil’s production is going to be sufficiently large that it will continue to squash the commodity price. The 2013 crop is considered to be an “off” year in Brazil’s biennial production cycle, leading to speculation that the 2014 crop will be very large. There is, inevitably, a sort of public denial of this because confirming it will only keep prices low. Most banks and financial agencies seem to be talking about it being a big crop, and the presumption seems to be that the market will stay low.  I would say that it is unlikely that the price will sink below $1.00/lb, but I’m sufficiently aware that no one has ever really been successful in predicting the movements of financial markets to not be too sure of myself there. 6

What does this mean for speciality (again, more speculation)?

- Supermarket/grocery store coffee is going to remain pretty cheap. I would expect it to increase with inflation/cost of living but to look increasingly cheap compared to speciality. Cheap drip coffee, cheap espresso, will still be around.

- Wholesalers of lower quality coffee will once again be able to leverage free-on-loan equipment more aggressively, as it will be easier to hide the margin necessary in the price of the coffee. Good news for businesses who don’t really care about their coffee program (by which I mostly mean restaurants – for which I don’ t really blame them), and I suppose good news for espresso machine manufacturers…

- Roasters, and coffeeshops, will have some decisions to make. With the gap between speciality and commodity likely to widen then the choices may be to go premium, to go mass market or to try and bridge both. The latter is the approach tried by many in the past and it seems to be difficult to genuinely achieve – with many ultimately doing the bulk of their business on a lower quality tier.

- Those involved in making decisions about green coffee buying need to decide on their short and long term strategy when it comes to buying. It is possible to buy cheaper right now, and make more money on roasted product. It is also possible to invest in the future too, and those companies with long standing relationships with producers look, to me anyway, to be in a stronger position than others.

- I don’t think we’ll see the wider industry embrace certifications again. It is pretty hard to feel positive about certifications like Fair Trade at the moment, when it becomes appears that the best they achieve is an alleviation of a symptom rather than any sort of solution to the root problem. There is still brutal fluctuation of price, and when the prices were high it was not unusual to see Fair Trade producers default on contracts because they could get more money for the coffee elsewhere. The idea that there was some of loyalty owed is somewhat laughable in the context of coffee’s trade history, but this is a topic for another post entirely.

It’s not all doom and gloom, though I’m aware that what is written above seems very negative. I still believe it is a great time to be in the business of high quality coffee. I think that with sufficient planning and anticipation, most problems can be avoided or turned into advantageous solutions. It will require that we perhaps do a better job on converting raw product quality into better customer experience, to charge what we need to charge to keep doing this for years – but I’ve also been saying this for years so make of that what you will.

I will be interested to look at the ICO’s production data at the end of the year to see if any of the above is accurate. I guess I really did a bad job on stopping with the predictions…

  1. We did also see various articles about new places, such as Yunnan in China, planting coffee. I’m not sure if significantly more coffee was planted though. If anyone knows of data collection of land under coffee then do please let me know!  ↩︎
  2. Source  ↩︎
  3. More info here and a summary by Michael Sheridan here  ↩︎
  4. Summary here  ↩︎
  5. This is obviously another term for “guessing”  ↩︎
  6. For good reading on the science of predictions then I strongly recommend Nate Silver’s book The Signal and the Noise: The Art and Science of Prediction  ↩︎

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