About:


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.

A good definition of a chain

February 28th, 2013

Just as a follow up to this previous blog post, I received an email from Oliver Strand that linked me to one clear definition of a chain.  It comes from San Francisco’s Planning Department.

Formula retail uses are commonly referred to as “chain stores.” Under Section 703.3 of the San Francisco Planning Code they are defined as “a type of retail sales activity or retail sales establishment which, along with eleven or more other retail sales establishments located in the United States, maintains two or more of the following features: astandardized array of merchandise, a standardized facade, a standardized decor and color scheme, a uniform apparel, standardized signage, a trademark or a servicemark.” In other words, retail stores with multiple locations and a recognizable “look” or appearance.

There’s something pleasingly damning about the phrase “Formula retail use” for a chain.  It is also pleasing to see this so clearly detailed out, in a relatively objective way. That aside – it is interesting to see how far you could go under these definitions without technically being called a chain, though you’d probably end up with a dangerously interesting business at the end of it all!  (Or a completely incoherent one….)

Of course – defining a chain is a pretty poor way of defining an independent.  Coffee shops don’t exist in two categories – no matter how convenient or easy for us it would be if they did.

What to do about water?

February 27th, 2013

We all agree that when brewing coffee, that the ingredient you choose is very important.  The consumer understands there is a choice, even if that choice has nothing to do with how the coffee tastes.  The most successful here have been the ones that have told the simplest story: this one is traded fairly, or this one won an award for its taste, or this one is from a single farm.

I think coffee has done a reasonable job of communicating the importance of grinding coffee freshly.  While grinders at home aren’t as common as we’d all like, the fact that “Fresh Ground” is still used as a heavy handed piece of advertising suggests that overall people understand that freshly ground = good.

We’ve all had fun with communicating brew methods and techniques, there have been some great videos – both entertaining and informative, and they’ve been seen by a reasonable number of people.  While I am not going to claim that people at home all have exceptional technique, I think those interested in brewing better can be pointed somewhere simple like Brew Methods.  It isn’t a difficult message to communicate, and most of the time they reinforce the first two issues.

Then we have water.  Water is complicated. Water makes me depressed.

Perhaps because I live in London, where the water is so bad for coffee, I am disproportionately frustrated.  The taste impact of London water on coffee brewing is utterly shocking to those experiencing it for the first time.  Coffee brewed with great water can be alive, sparkly, sweet and distinctive.  Coffee brewed with London water all just tastes…. brown.  Juicy lots from Nyeri, floral coffees from Yirgacheffe, jammy coffees from Huila – all of these and more end up tasting pretty much the same with London water.

I am interested in people having a great experience with coffee. I am interested in people understanding that spending more money on better coffee can produce incredible and pleasingly variable experiences.  Water is a huge hurdle and a problem.

So a simple message must be communicated:  You should use relatively soft water, free from negative tastes and odours.  It should have a little hardness, but not too much.  This is already a pretty complicated message (and I’ve already massively oversimplified it).  Even if it is understood we get a difficult question in return:  so how do I achieve this at home?

This is where everything goes wrong, and I am still stumped for a good answer.  The choices are the following:

- Use bottled water.  You can look at the mineral content on the side of the bottle – presented as “Dry residue at 180°C”.  You can pick up water from places like Tesco relatively cheaply.  However, you don’t really feel good about telling people to be buying bottled water (hardly the most sustainable idea in the world) just to brew their coffee with.  Those that do see a massive improvement and realise the value, but it doesn’t feel like a practical or scalable solution.

- Treat the water at home.  Most people working on improving their water will use something like a Brita filter.  These do remove unpleasant tastes and odours, but they do’t really soften the water very much, and you’ll still have a relatively high TDS.  Not recommended for optimal results. The other option for home treatment is to install a reverse osmosis (RO) unit.  In a commercial environment I now consider these to be absolutely essential, and you’re opening or operating a coffee bar in London without one then I strongly suggest getting one installed as soon as possible.  You can produce great water with it ,and stellar results.

At home you need to do some semi-serious plumbing to install one.  For many people renting this isn’t a viable option, and even if the unit is relatively cheap it is still  similar money to starter electric burr grinder – though this won’t have great production capacity.

RO is without doubt the best commercial solution, and I will put one in my next kitchen – but I don’t know if people want to get this involved with their plumbing just for a cup of coffee.

What’s left?  Not a lot really.  Cafes with RO units could sell or give away the water to people (with reusable containers) if they have sold whole bean coffee to them too.  I’d love to see cafes give some away, if only so people could taste what they could be brewing at home.

I pose this as a question about water to anyone and everyone reading, because I don’t have a good answer.  This should be a question troubling more people.  If you roast coffee in an environment where the water is hard, or has a high TDS, then it is likely that your customers are having very, very different experiences in their homes compared to what you’re enjoying on your cupping table.  We need a solution for this that is practical, sustainable and affordable.  I desperately hope we find one soon.  All ideas are welcome…

What is independence?

February 24th, 2013

The recent coverage of Harris and Hoole has made for interesting reading. Coverage ranged from the laudable to the laughable.

The one sentiment that popped up repeatedly was the idea that Harris and Hoole were being disingenuous by pretending to be an independent.  This raises, in my eyes, a rather interesting question:  What exactly is independence?  What is it that Harris and Hoole were considered to be doing that they shouldn’t have been?

Looking at the comments it appears they have been committing the cardinal sins of:

- Fitting out their shops nicely, and not in an identikit kind of way.

- Brewing the coffee properly on quality equipment.

- Sourcing good coffee to brew and serve.

- Not plastering the place from top to bottom in Tesco’s branding

Essentially pretending to be an independent is simply not acting like other multi-unit operators in the sector like Starbucks, Costa and Caffe Nero.  Unfortunately this point of view can easily expose one’s own hypocrisy.  I’ve railed against the homogenous high street throughout the UK, the fact that everywhere I went the experience was pretty much identical, and pretty low in quality to boot.  There are always going to be nationwide operators in any segment, and I certainly can’t complain if they start acting a little more sympathetically to their surroundings, or not cutting corners on fit-out or ingredient and preparation.  (There are always going to be multiple unit operators because scaling is one of the very few ways to make selling cups of coffee adequately profitable – but this is a subject for another day!)

In the past I’ve defined independence through access to capital for expansion.  “Independent” is an incredibly annoying term to use and define, but I think access to cash is at the root of just about everyone’s definition.

People seemed angry about Harris and Hoole because they felt like they were lining the profits of Tesco, which has more than enough money already.  People were indicating that their decision-making about which coffee shop to frequent was massively influenced by who they considered the ultimate beneficiary was.  This is extremely interesting in and of itself.  However, it quickly leads us into murky waters again. Every business requires startup capital – should part of a businesses identity be where this money came from.  We like the plucky underdog in this country, and we do love to cut down the tall poppy.  This would imply that people should avoid taking on serious investors (as they’ll expect a return, which of course will result in the destruction of quality because any form of profitability obviously requires “selling out.”) [1. I am hopeful that people's sarcasm detectors are turned on here....]

Yet, if we truly want independent entrepreneurs to have a greater chance of success, or even limited profitability, then surely we should encourage them to take on sufficient funding that they can open a business capable of that.  (This is yet another topic for another day.)

This other Guardian piece on Harris & Hoole in the Guardian was somewhat annoying, or mildly amusing – depending how satirical you take the tone to be.  One particular sentence tickled me – talking about how you can spot a corporate business pretending to be an independent one:

Low prices is another, since one of the main advantages of corporate ownership is improved negotiating power with suppliers.

Seems like this might work with anything but coffee.  Our industry’s tendency towards a kind of false competitive pricing – where an independent with limited buying power prices the product comparably to a multiple outlet, or even multinational, competitor.  In the short term this seems sensible, but of course the long term effect is that the consumer doesn’t see pricing being a suitable differentiator of quality, and the business doesn’t make enough profit to be sustainable.

(One day I promise I’ll stop ranting about this stuff – perhaps when our industry doesn’t have one of the highest failure rates of new businesses.)

In Summary

This post isn’t really about Harris and Hoole.  It is about how consumers perceive our business.  We talk a lot about the things we think matter in the decision making process when someone chooses a coffee shop:  location, quality, convenience, price and brand are all discussed.  We don’t really talk about how the financial transactions involved actually make people feel.  We don’t talk about what people expect of the financial transparency of a coffee shop.

Has the independent coffee shop culture sold an image of the independent coffee shop as a begging bowl, a place to spend away our guilt over how we much most of us spend with corporate giants like Amazon, Tesco, Walmart or Coca Cola?

Will this image turn from a boon to a shackle as we try to professionalise our industry, in the hopes of making it financially sustainable?

Leaf Rust: End of Days?

February 11th, 2013

There have been an increasing number of news reports about the impact of leaf rust on coffee producing countries, specifically those in Central America. I’ve been a bit overwhelmed by the information, and felt like I lacked some context.  I am writing this to try and organise and contextualize some of the available information. (For myself as much as anyone else! Also – this is a long article, the Read Later button may be useful!)

A number of countries have declared agricultural states of national emergency as a result, including Honduras, Guatemala and Costa Rica. El Salvador and Nicaragua are also badly affected, and Colombia has been struggling with the impact of leaf rust on its production for a number of years.

Over the last few years I hope people have noticed that there has been an increase in focus on topics like the effects of climate change on coffee production, as well as the issue of the lack of genetic diversity within coffee.

Leaf rust is a great example of why we should be deeply concerned. Most coffee plants are susceptible to leaf rust, because we’ve been commercializing a fairly narrow strain of arabica for our consumption.

One question I’ve seen popping up is how this will affect the price of coffee. We’re seeing dramatic drops in production in countries we might consider major producers. Yet the C-market price considers to trend downwards.

To understand this in the short term it might be worth looking at the numbers more closely:

Projected losses to leaf rust in Central America total 184 million kg. This is approximately 3 million bags of coffee (bags being the preferred unit for production/export statistics).

Last year the total production globally was around 134 million bags, about 5 million bags below consumption (the gap was filled by existing stocks – not everyone is concerned about past crop flavour!). This year the projected production is 144 million bags, producing a surplus of coffee, even with global consumption set to rise by around 1% (based on an increase of 4.7% between 2008 and 2011 inclusive). Stocks in producing countries currently total around 15 million bags – the lowest since records began. Stocks in consuming countries are more difficult to track. 1

Much of this increase is due to Brazil, whose production alternates between relatively high and low – and this year is the higher production year. Last year Brazil produced 43 million bags. This year it is set to produce just under 51 million.

Other countries are seeing increases this year – Indonesia is up with a 2.3 million bag increase, and Africa’s total production is expected to be up by about 2.1 million bags.

Effectively the losses to leaf rust are simply reducing the size of surplus this year, but we’re still going to have a surplus. So in the short term, the supply vs demand relationship that we expect to see impact the C-market has no reason to do anything other than suppress the price for coffee. In the short term…

To quote from the summary of the ICO report from December:

In conclusion, it should be noted that coffee prices continued to fall during December, reinforcing the downward trend since October. As a result, calendar year 2012 ended with the ICO composite indicator price 25.7% lower than the previous year, although the average price for 2012 is still higher than most of the previous decade at 156.34 US cents/lb. However, costs of production continue to increase, reducing good agricultural practices in a number of exporting countries. Vietnam is unlikely to repeat its record crop of 2011/12 this year and Colombia is also yet to recover to its previous production levels. Consumption remains reasonably resilient to macroeconomic concerns, and there is strong potential for growth in exporting countries and emerging markets. With certified stocks and inventories at relatively low historical levels, there seems to be limited potential for further downwards price corrections. (emphasis added)

The future is a different story. I don’t know exactly what will happen, but there are a few things worth considering:

Leaf rust isn’t a short term problem. It impacts trees and their ability to produce over several years. If not controlled and aggressively managed it will pretty much destroy a coffee farm. You don’t bounce back from rust damage quickly.

Secondly – we (as in specialty coffee people) don’t think of coffee as being a commodity. Most of us aren’t really excited by more commodity grade Brazils and coffees from Indonesia filling the gaps coming from rust losses. Moreover, it is likely that Brazil and others could ramp up production if needed, should rust continue to reduce crops from Central America. Adding to a bleak trend: Robusta production is also up significantly – over 2 million bags (around 4%). Prices for robusta remain healthy, indicating a matched demand for this new production from roasters who are still struggling with what they consider too high of a price for arabica. They’re blending in more robusta to stay competitive, at the expense of cup quality.

Screen Shot 2013-02-10 at 13.03.31

 

(Source for graph)

While we’ve seen this trend before where quality dips because of price, in the US especially, with an eventual recovery – I don’t think the conditions are exactly the same and we’d be foolish to expect the entire coffee market to correct back towards quality the way it did in the past.

Let’s turn our attention back to quality coffee.

As leaf rust is more likely to attack higher yielding trees, grown at lower altitudes, you might think that the speciality end of the market is likely to be less affected.

It is still going to affect pricing longer term – for a farm nervous about rust and trying to prevent it there are a number of costs, which are significant. I’d recommend reading Tom Owen’s recent excellent post from Guatemala for some idea of the work necessary to prevent rust, let alone treat it. To quote from it:

As with most disasters, it will be the poor and unprepared who suffer the most. The little farms I saw that were most affected aren’t the sole income of the farmers, so it’s not that they are being pushed off an economic cliff. But it is going to hurt badly.

I’d also hazard a guess that differentials within those countries would be affected. Demand for coffees from Honduras specifically are unlikely to dramatically shift, but if production there has been reduced by 25% then scarcity of those particular coffees may drive up price! Again – differentials are based on the C-market, and would in theory be unconnected to speciality buying/the cost of producing specialty, but farmers are generally very much aware of what is happening with the C and its differentials within any coffee growing country.

Farm producing high quality coffee are being affected. We’ve seen this discussion going on in Colombia for a little while: would we rather a producer grows a rust resistant variety, and still has a crop, or grows something like Caturra which has a better cup quality but is a massive gamble where one possible outcome is no coffee to sell? Read this for some farmer responses to Castillo. (In fact, I hope you’re already reading this blog as this post is part of a great series on rust in Colombia.)  Those of us who work within genuine speciality rely on a higher cup quality as the basis of what we do, making many cautious to embrace varieties like Castillo in Colombia or Batian in Kenya.

It would be prudent to presume that climate change isn’t going to go away. (also worth remembering that climate change adds to the Broca problem too.) While there is still some debate as to whether it is rain generally, or specific types of rainfall that cause the problem – I think we should expect rainfall patters to continue to promote the spread of rust. Some would argue that increased use of fungicides aren’t going to solve the problem either because fungicides also kill a fungus called White Halo fungus that actually prevents leaf rust. This leaves those of us on this side of the coffee industry at something of a loss as to what to do.

Hopefully the value of World Coffee Research is increasingly clear and supporting it seems worthwhile. I don’t believe that the spread of information on treatment and prevention is suddenly the responsibility of green coffee buyers. Producing countries have infrastructure for outreach and development, and way more experience in it. I believe our responsibilities lie on our side of the supply chain. We need to make sure we can bear the increased costs, and be willing to pay the increased costs of production necessary to allow producers to invest in prevention. We need to champion diversity, and not take the easy way out of buying cheaper, lower quality and less interesting coffees.

Equally I don’t expect anyone to suddenly have a solution to climate change, but we do have a duty to clearly and simply explain the issue to our customers and those around, and to spread awareness of it as a problem. A critical mass of desire is necessary for change of policy and genuine efforts to work on the problem, so I guess every little helps.

I’d also look to bodies like the SCAA for leadership on this issue. 2 On a related note: There is going to be some interesting information presented at the Symposium this year which relates both directly and indirectly to this topic.

Ultimately – I don’t know what to do. I’d love some input from others, be it through blog post responses or on Twitter. I am not trying to scaremonger, simply understand this issue.

  1. All data comes from the ICO Summary Report for December 2012  ↩︎
  2. As a side note one might expect leadership from the SCAE here, but I don’t think we’re going to see it.  ↩︎

Beautiful Cafes Poll Results

February 6th, 2013

I’ve had the poll running for a while now, and several hundred of you took the time to respond.  My thanks!

However, some people clearly thought this was a competition to be won, and clearly tried to game the poll.  For this reason it is pretty much impossible to do any sort of ranking. 1  Plus that would be silly, by its very nature. I’m not really sure how I feel about the results I had.  Interestingly, though not surprisingly, they were very much skewed in favour of cafes that happen to serve good coffee. I had hoped more people would look past the terrible coffee served to identify interesting design, or important design, and nominate that.  However, the readership of this blog unsurprisingly frequent cafes that work hard on their coffee program – hence the results looking the way they do.

So instead I offer up a list of several cafes that had repeated mentions.  The list is alphabetical, and ultimately meaningless.

49th Parallel, Vancouver, CANADA
Barista Parlor, Nashville, USA
Caffe Streets, Chicago, USA
Coava, Portland, USA
Coffee Collective Roastery, Copenhagen, DENMARK
Four Barrel, San Francisco, USA
Handsome Coffee, Los Angeles, USA
Heart Roasters, Portland, USA
Intelligentsia Venice, Los Angeles, USA
Market Lane, Melbourne, AUSTRALIA
Ozone Coffee, London, UK
Patricia, Melbourne, AUSTRALIA
Prufrock Coffee, London, UK
Revolver, Vancouver, CANADA
Seven Seeds, Melbourne, AUSTRALIA
Sightglass, San Francisco, USA
Tail0r Made, Athens, GREECE
Workshop Coffee, London, UK

I am surprised less by the cafes that are on the list, more by the ones missing. Also, looking at the distribution across the different countries – this very much reflects the distribution of readership of this site around the world. I’m not going to post up my own picks, but I should confess that none of them made this list. 2

  1. Seriously, I am disappoint…  ↩︎
  2. I did consider adding a google images search link to each cafe, but I figure if you’re interested then you’ll probably work it out yourself.  ↩︎

You can’t take it away from me

January 14th, 2013

One of the biggest challenges we have is that as we progress in coffee we learn. Hopefully this means we change out minds, change our opinion of what we think is good, and what we wish to present to customers.

The reason this gets tricky is the menu. Many businesses reach a point where they want to take something off the menu. It might be a particular drink, or maybe soy milk or perhaps a certain size – 20oz for example.

Taking something away is something customers are resistant to. It isn’t that they don’t like change; they don’t like being called stupid or wrong.

This is one of the most common breakdowns in customer relations that I see in coffee, and it is usually done with the best intentions. We only see our justifications for the decision without really considering the subtext behind it.

“We don’t do 20oz lattes any more because….”

There’s almost nothing you can say here (apart from claiming that 20oz cups no longer exist) that doesn’t imply that the customer’s preference for that drink is wrong in your eyes. No one likes to go somewhere to spend money to find out that the business has decided overnight that what was yesterday ok to make and sell is now substandard.

“… we don’t feel the quality was good enough” translation:  you have no taste, and like low quality things. You pleb.

“… It wasn’t something we were proud to serve” translation:  we were ashamed of it. You should be ashamed for wanting this. Have you no decency?!

“… we only want to offer smaller sizes, because coffee shouldn’t be consumed in 20oz portions.” translation:  we are appalled by your gluttony, and frankly find your desire for huge portions of coffee disgusting.

Of course, this isn’t what we’re actually saying – but this is often what is heard by customers.  Pretty much the only way to eliminate large sizes is to simply not have the cups, and have a good reason why not.  So – what are the solutions to this:

The obvious thing to do is to go positive, rather than focus on the negative.  Focus on what you can offer, what you think they’ll like, and just the good stuff.  Try to avoid saying “No, you can’t have that.”  This is difficult, but frankly there is no easy way to take something away.

This is very important for those writings menus, for those starting businesses.  Starting with an extremely limited menu is fine, and you can always add something later if there is a demand and you believe you can meet that demand with a great product.

If you start off with a clear policy and philosophy about what you offer or don’t then things get much easier.  Offering 8oz drinks in a 20oz market is fine, if you’re clear from the outset why you want to do this.  Once you start offering the 20oz it is there to stay unless you’re willing to endure some pain and potentially lose a few regular customers.  These same customers may have been fine drinking 8oz drinks, from the start and onwards, but taking it away from them once you’ve set a precedent is going to be very tough.

People don’t like change. Don’t mistake this for people not liking variation, which would be a mistake.  Consistency of ideas behind a menu is more important than consistency of a menu itself.

The most beautiful cafes poll

January 5th, 2013

I’ve been thinking about this a little bit recently.  I think that many cafes are prized for their coffee quality but I think the execution of design is worth focusing on too.  I know polls and things are pretty silly – and I am not declaring this particularly scientific.  Just fun!

So – just type in your top three.  Ideally places you’ve been to – not just photos you’ve seen online.  I think that the experience of being in a shop is pretty essential to judging its beauty.  When I hit enough submissions (hopefully 1,000) I will post a top 10.  If there are no clear winners then that’s ok too.  This is just a bit of fun – I’m just really curious about what people think on this topic…

Predictions for 2012 – Analysis

December 23rd, 2012

As I said in the post at the start of the year, this is the fifth time I’ve made five predictions and it is the last one.  I had a little think about what I would predict if I was going to go again but I came up empty handed (or empty headed….)

So – let’s have a look at how badly I’ve done this year….

The WBC Prediction:

Alejandro’s win in Bogota felt like the culmination of a certain approach to a competition performance, combined with great execution. There’d be increasing focus on better connecting the producer and the barista and I think Alejandro took that as far as it can go. Alejandro wasn’t the only one taking this route – Pete Licata’s routine was also a great expression of that idea. That means that this year there will need to be a new angle, a new focus. I think the field of competitors will struggle with this – though I think there is a great opportunity for someone to do well by having a very clear vision and idea. (I hope I get to commentate again, as I really enjoyed that in Bogota.)

Wrong.  This year the baristas from origin countries were strong again and Raul’s winning routine was very much focused on the journey of the coffee.

The C-Market Prediction:

A lot of the factors that caused the wild fluctuations in price seem to have moved away from the coffee market, but a lot of the base causes for the rise are still there. I predict a slow and steady creep up in price over the next 12 months.

Absolutely wrong.  There has been nothing but a steady drop in the C in the last 12 months.  This year was one where I became increasingly interested in what drives the C-market.  Supply and demand don’t have the kind of impact I thought they would, especially as more and more outside factors contribute to the fluctuations we see.

The Brewed Coffee Prediction:

Like it or not, I think we’re going to see an increase in the quality of coffee coming out of batch brewers. This doesn’t imply an upcoming innovation in the technology, more a shift in the places using them. They make really nice coffee when used well, and this year I think it is very important that we focus on just getting coffee right regularly rather than trying to blow people’s minds with clever by the cup techniques.

In London – Correct.  Outside of London – I don’t really know.  Be interested to see if people have any thoughts on this one in the UK or further afield.

The UK Coffee Market Prediction:

London has seem some explosive growth in the last few years, but this hasn’t spread at the same rate outside of the capital. London businesses have enjoyed some protection from the UK’s economy because London is pretty much a separate economy unto itself. The recession certainly hit, and many feel like there must surely be an end to the storm. I don’t think that end will be in sight in the next year, I think 2012 is going to be extremely tough in London for coffee retail. I hope I am wrong on this one.

True.  We saw some businesses struggle throughout the year, a few close, and it has been a tough environment for independent and chain operators.  Whenever I talk to cafe owners the two main points of concern remain staffing and profitability.

The Equipment Prediction:

Always a tough one. I think we’ll see some technical innovation in espresso and coffee brewing from outside of established manufacturers. We’re not yet at a point where we’ll see the reinvention of the espresso machine (which I do think will happen in the next 3 years), but we’ll definitely see some great ideas coming from unusual places. Whether these ideas end up being industrialised or licensed to the larger manufacturers – I don’t know.

Wrong.  I had hopes to see some cool stuff hit the market, and I don’t think I can claim we’ve seen much.  Tell me if I am wrong.

 

So – another pretty poor year of predictions.  I should probably have given up earlier but they were fun to do each time.  Perhaps I try something different next year…

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