Twitter¹, on the other hand, suggested that it was Costa Coffee who were going to put an 11oz flat White on the menu in the new year.

This won’t be a surprise to some people who’ve been predicting this for the last couple of months.²

If this is indeed true I look forward to the many and varied reactions to this. I hope that most independents, especially those in London, greet the decision with relief.

Recent reading³ has really reminded me that in any competitive environment, be it selling coffee or evolutionary biology, any competitive advantage gained (through mutation or innovation) is temporary. Everyone caught up, either because they copied or because the pool of competitors shrank to only those with an old advantage.

Innovating just the once is fine in the short term, but it needs to continue to be a successful long term strategy.

The flat white⁴ is not a magic bullet that can help recover declining coffee sales. The brands are increasingly aware of a new breed of independents and are looking to react. By picking on the flat white they will have made the classic mistake of confusion correlation with causation.  Lots of the best shops in the UK offer a flat white (correlation) but they are not successful because they serve flat whites (causation).  This is an apparently easy to mistake to make, going by the last broadsheet article about the flat white.  Independents know that it is a myriad of things that make them better than the chains, and should be relieved that despite the scrutiny the chains are likely to miss the key factors that give them an advantage.

That said – it should remind independents that while they still have the advantage it won’t last for long and that they have the attention and the interest of the largest coffee operators in the UK.  For the coffee-quality focused amongst us to be truly successful we have to constantly keep pushing forwards, and never give them the chance to catch up.

Hopefully there will be some official comment from either Starbucks or Costa that I can link to in the next couple of days.  Thoughts on this from all of you would be very welcome.

UPDATE: So it has been confirmed that Costa are putting them on the menu.  I haven’t found any mention of Starbucks anywhere.  (I did twitter at the UK MD but haven’t had a response yet.)

UPDATE: Starbucks have now also confirmed that they will be serving the flat white in London as of next week, and across the UK from January.

UPDATE: The broadsheet article mentioned above can now be found here.  Eric (who I am not sure really claims to be the first man serving flat whites in London) made me chuckle with his comment.  It is nice to see some explanation from Starbucks on why they are doing it.  I am more curious about the apparent customer demand for it – I would imagine the kind of people who would want a flat white wouldn’t head to Starbucks to try and get them to make something off menu.  Will Costa be grumpy they got beaten to the punch?

1. Sources here and here, as well as a couple of DMs
2. Most notably and repeatedly Ian Boughton in his Coffee House magazine
3. The Red Queen by Matt Ridley
4. essentially a small, strong latte

Fair Trade – the absolute minimum necessary to get people to stop questioning how you source, or pushing you to do better. Not enough.

The advert that had sparked it off was one I had seen on the underground, and it was the language more than anything that frustrated me:

So there you have it.  A moment of joy!  As if they had reached some pinnacle of sourcing, some great achievement instead of doing the absolute minimum to satisfy the public’s questions about the ethical nature of their sourcing.  No transparency, no open traceability, but don’t worry – we’ve got a logo so don’t worry about a thing.  This BBC article explains the move to Fair Trade that Cadburys made, though the second half could make you cynical about their motivation.

This post was sparked by a short conversation today.  I had popped down to Gwilym’s cart on Columbia Road, because the splendid Jenni Bryant (who many of you will know from Gimme!) was down there working and I wanted to work a little too.  A customer started asking about the WBC – Gwilym has a competition branded Aurelia there – and it turned out to be Nick Francis, one of the two guys behind the film “Black Gold“. We had a little chat about the film, about what I thought of it, about its relevance to the specialty coffee industry, about their goals behind the film.  Interestingly many people criticized him for not being sufficiently pro-Fair Trade in their eyes, while the specialty end no doubt felt like Fair Trade got too much good press and not enough was said about traceability, direct trades, relationship coffees and paying a sustainable premium price based on quality.

As we talked about Fair Trade he opened his newspaper to a full page advert from Starbucks, which many in the UK will have seen recently, proclaiming how proud they are that all their espresso drinks are Fair Trade. I think we shared a frustration here.  No doubt it is better for Starbucks to pay FT prices, if they are more than they were paying before.  However – a purchaser of coffee that large has an opportunity to go over and above Fair Trade.  A few of the mills I visited in my origin trips had sold to Starbucks, most under the a premium program.  ((I thought it was called the Star Program, but I can’t find any evidence of it online – can anyone enlighten me?))  Herbazu, the farm in Costa Rica whose coffee I used in the WBC finals, used to sell to Starbucks for a premium price – money that helped them build a micro mill, vertically integrate and continue to increase their quality.  The only complaints I heard were that Starbucks demanded open books, to see where every single penny of the premium went – and thus it was annoyingly bureaucratic.  Beyond that Starbucks was considered a great buyer.

I have no doubt that only a relatively small percentage of Starbucks coffee was sourced at a premium like this.  (Update:  I have been corrected on this – see end of post.) However, that is unlikely to change without pressure on them from their customers.  Switching to Fair Trade, and the lack of public understanding about what Fair Trade really means and guarantees, will no doubt alleviate the pressure on them to be ‘sufficiently’ ethical.  I just don’t see ethics as being something you can do by half.  That said – what surprises me is that after the harassment that Starbucks have taken from Costa recently, that they don’t turn the tables and start focusing on Costa’s ethical sourcing.  (Costa commits to sourcing only 30% of its espresso blend through the Rainforest Alliance certification, and says nothing about how it sources the rest.)  Nero dodge the issue on their website – though knowing what they were paying for their espresso blend a couple of years ago, I would have issue with some of their statements.  They’ve recently bought a roastery, and it will be interesting to see if taking their roasting in house results in a change to their buying practices.

I can’t help but feel that Fair Trade’s greatest deception, its most frustrating piece of consumer misinformation (purposeful or not), is that Fair Trade is the ultimate goal – not a starting point.  I’d have nothing against them pitting themselves as the absolute minimum expected of any company but I find it worrying to see it spun into being almost the exact opposite.  I don’t think there is any benefit to bashing Fair Trade, I don’t want to be one of those people, but we do need to agitate the industry – to start talking in very simple terms about how far we go and how much further we can go, as long as we take the public with us.

UPDATE: Thanks to Cindy for the figures and to Yara for telling me the name of Starbucks purchasing program is C.A.F.E. practices.  From Cindy’s comment:

” Actually, in FY2008, Starbucks purchased 77% of its coffee under C.A.F.E. Practices with the goal for reach 100% by 2015″

This is both good news and incredibly disappointing.  Good news that Starbucks buys so much of its coffee so well (in my opinion based on what I have seen at origin, and my limited conversations there).  Disappointing because I would see a move to Fair Trade as largely being a step backwards.  Why not shout about C.A.F.E. Practices?  Why not tell the world what you pay for coffee?  Why not use Fair Trade as a reference point, and then talk more about what you do?  This somehow seems like a caving in to public pressure, and not in a good way.  Again – I’d like to understand this better, thoughts and comments are very welcome.

I wish I could have wandered around Vienna for longer, in the end I only had a chance to pop into one coffee house – Hawelka – and those places are just no fun unless you have an afternoon to kill with a newspaper and an unusual desire for large quantities of whipped cream with your coffee.  They are possibly less fun if you are looking for an excellent shot of straight espresso, but I didn’t sample enough to know where local expectation lay, and how my own preferenes would fit into that.

The day after the awards was the symposium.  I don’t mind confessing that I felt a bit like the odd one out again – the speakers and fellow attendees came from Europe’s larger coffee companies and manufacturers.  However I am always interested in how that section of the industry views things, what is important, what their challenges are and what I can learn from them.

First up in the day was Jim Slater – the marketing director for Costa Coffee.  For those of you reading in the UK you’ll no doubt have noticed that Costa have pushed their marketing very hard this year.  Whether it is the “7 out of 10 Coffee Lovers prefer Costa” campaign, through to news stories about insuring their head cupper’s tongue for £1m, to more recent ads talking about their coffee being “Handmade by Baristas and Not Button Pushers”.

One thing that Jim said that really stuck was talking about the need to agitate the market.  I think that really is a perfect word for what is necessary.  Agitation is as much about movement, preventing stagnation, as it is about irritation.  You can’t really argue that those adverts agitate the industry.

Compared to the rest of the industry the Speciality Coffee sector has comparatively little budget/muscle when it comes to advertising and marketing.  However we should ask if what we are doing is agitating the industry and the public sufficiently.  I am not saying that we need to turn around and start throwing muck, start name calling and trying to pick on the rest of the industry.  Are we being too nice, too hopeful that people want to listen to our very specific message, rather than talking up traceability in a way that makes people question why the exact origin of the coffee they drink has been obscured. ².

To and from Vienna I consumed Made to Stick, which is a fun read on why some ideas stick and some don’t.  Simplicity of message is a key part of it, and it has made me think more about trying to condense down to a minimum number of words, with a maximum impact, what my business/speciality coffee does to distinguish itself.  This, combined with a goal of agitating the industry, is great for giving me direction and a goal.

That aside – I only managed to stay until just after lunch before having to hop on a flight back.  It was interesting to hear Paul Ettinger from Caffe Nero talk about their challenges and goals, and also to see their figures (they are a private company so rarely give much detail).  He, quite worryingly, mentioned an interest in facial recognition software to help baristas remember customers and their drinks.  I couldn’t quite tell if he was being serious.

Darcy Willson-Rhymer talked about Starbucks’  areas of focus.  They believe the shift in customer’s value expectations will last long after we’ve recovered from the recession.  He mentioned some new UK concepts would be unveiled soon, though I don’t think they will be anywhere near as radical as the 15th Avenue experiment.

I wish I had stayed for the Fair Trade debate – apparently it got quite juicy, and rumour has it that Fair Trade didn’t come out of it as well as they would have liked.  Anyone with more info please let me know!

1. Outstanding Contribution to the European Coffee Industry 2009
2. On a side note I’ve been thinking about how traceability could really be the best indicator of quality available, simply because the extra cost and work of keeping a lot separate is only likely to be done if that coffee is going to be able to fetch the higher price it needs to based on its cup quality – a discussion for another day perhaps

Links:

Matt Webb’s talk

Coffee at Wikipedia.org

Nonetheless it has been interesting to see what they industry press are writing about, what advice is being offered, what strategies are being deemed wise.  A word I am seeing more and more is ‘diversifying’.

Starbucks are in a mess right now, and they have been for some time.  To me the problems are linked to a gradual loss of identity over the last few years.  Right now they are putting out mixed messages – on one hand promoting better coffee, on the other hand discounting it. Worrying about breakfast sandwiches, selling CDs, whilst still trying to claim that they are all about the coffee.

Photo by tonx

For a while, in the UK anyway, McDonald’s were all about salads.  Big money on big advertising campaigns telling us what a good idea it was to buy a salad at McDonald’s.  It didn’t work, that isn’t why we go to that place and walking past a branch on my way home I didn’t see a single salad image on display and I have no idea if they even still serve them.  The saw salad’s as a way to help stop declining sales, instead of actually making the food they had served very successfully taste, and be, better.

We’ve all visited businesses that have scrambled for turnover through diversification – coffees, teas, smoothies, soft drinks, pastries, panani are only the beginning.  Every item added seems to drag the average care and attention for each item down a little.  Nowhere does a huge range of things exceptionally well.  In the end, desperate to catch all consumer demands the business looses all identity.

Imagine I showed you a menu for two different Chinese¹ restaurants.  The first has a typically huge menu of maybe 50 or 60 dishes.  The second menu has a total of 15.  Would you expect a difference in quality between the two?  Would the smaller menu imply a lack of imagination or greater care and attention to each dish?  If each restaurant does two dishes incredibly well – in which menu do you have a better chance of a great experience?

Starbucks do the desert in a cup very well.  They brand it well, they sell it well and if you have a sugar craving then it probably tastes pretty good.  The gingerbread latte has become weirdly iconic, and endlessly imitated.  Those drinks built the Starbucks expansion, and for many consumers they justified the premium price. ²

Starbucks have done a poor job of redeclaring their own identity and it continues to hurt them.  Businesses are looking at a bleak year ahead and I think having a strong identity is key.  You need customers loyal to your business, customers that have a connection with what you do, with the positive experience they associate with you.  Diversity may be a way to sneak up the average customer spend, and I am not saying it can’t be done well, but often it reeks of desperation or overreaction to a natural dip in sales (such as in January…).  Coffee is still a long way from being written out of people’s budgets – as long it is worth the price per cup.

Dropping coffee sales say more about what people think your cup is worth to them than it does about your customers think about the size of your range of products.

1. Or any cuisine with a typically very large menu
2. I justify that simply by the numbers they sold!

Clover at Square Mile HQ

The internet has been all a flutter with the news that Starbucks have acquired Coffee Equipment Company who make the Clover. It is so ubiquitous that I am not even going to link to any sort of articles about. Tempting as it is to post smugly about one of my five predictions sort of coming true something else is on my mind.

It seems that Starbucks has intentions of withdrawing the machine from the market and retaining complete control. Clover currently pledge on their website that all machines currently deployed will be supported.

I had come back from the States intent on spending some quality time with the machine and trying to get a better understanding of it before I had to give it back or buy it. I like the fact that you have control and repeatability in one cup brewing in a way that is currently unrivaled (be interesting to see how Starbucks use their ownership of the Clover patents to keep other manufacturers out of the market). However I’ve had quite a lot of coffee from it, and I wasn’t sure if I didn’t like the cups I didn’t like because of the brewer or the way it was being used. Hence wanting to get to grips with it in a bigger way.

Still – I need to think more on whether I want it. I don’t think the fact that Starbucks own it now devalues it for me. The people who have them now (approx 300 machines I think) are the only people outside of Starbucks with access to this technology. I was always against selling the brewer above the coffee, but if the brewer can do what people feel it can then it is an undoubtedly a great tool.

However the worries about support (machinery is machinery after all) are still pressing, and seeing a big company devalue a device and lower expectations and pricing of by the cup brewing is also a concern. That said – I think I would be very surprised if Clover rolled out with the 1s model as is. With that whole team/company on board I expect to see a machine based on the 1s designed much more specifically for Starbucks. (do you smell another prediction?)

I suppose that I will I could just ignore all the news/media/hype/hate and decide if it brews coffee like I’d like to present coffee. Though I suspect that the ongoing disconnection from Clover/CoEqCo will remain the largest obstacle.