Why Packaging Matters

According to Mark Howley, Chairman and CEO of PBi (Pacific Bag) “Coffee is adversely affected by oxidative rancidity. It is generally believed coffee taste will degrade within 10–14 days after roasting if coffee is exposed to oxygen. Packaging has a huge impact or effect on quality if distribution time extends beyond a week or so.” In addition, Guy Wray, Marketing Manager at MOCON Inc. says “Launch a product without adequate packaging and you’ll see the permeation of water vapor and/or oxygen in or out of the package, and that can rob the product of flavor, color, and taste. In this case the product fails, not because it wasn’t a good, but because it was poorly packaged and had too short a shelf life.”

“The selection of the proper barrier packaging for the expected shelf-life is critical since the flavors can be lost by using the wrong type of packaging” Says Robert Pocius president of TekPak. So the first and probably most important factor you should determine with your supplier is the barrier level of the packaging (from oxygen and moisture).

Types of Packaging

There are various packaging styles to select from: Bags; metal cans; glass jars; and in the past couple of years we have seen the rise in demand for the single serve, and in correspondence the packaging for it. In the bag section, the main styles are: Stand out pouch, Paper tin tie, Side gusseted bag, or Quad seal bag.

When selecting the type of packaging you want to use it is important to take the following factors into consideration: Barrier level; resistance of the material so that it can endure any shipping and handling; protection from external odors; heat seal strength; and FDA approval of the packaging. According to Joy Weedon, Sales and Marketing Manager for Pack Plus Converting “If you are packaging freshly roasted coffee, you definitely need to go with a foil bag with a one-way degassing valve to extend the shelf life and allow the roasted coffee to de-gas. Unlike a tin tie paper bag, a foil bag can be heat-sealed making it air tight and tamper proof.” In addition, Jeffrey Teich, Vice President, of North Atlantic Specialty Bag says, “A multi-layer structure, as well as the use of a one way degassing valve, will give coffee the freshest flavor.”

Another important factor to consider when selecting packaging is flavored coffee. “Some ingredients in flavored coffees can affect package integrity, so it is important to select packaging that is particularly designed to handle these products” says Heather Beaubien, Sales Manager at Printpack, Inc. In order to get optimal results, it is essential to communicate to your suppliers all the aspects regarding your coffee, and the goals and expectations you have for your product.

Depending on the size and quantity of your production, you might decide to automate the packaging process. As your company grows, you may want to consider automating parts of this process if you are seeking to increase output by 2 to 3 times. According to Bob Kelly, President of General Packaging Equipment Co. “As a packaging machinery manufacturer our task is to supply equipment that will form fill seal packages reliably. That is, the machines will run with a minimum of attention, accurately meter the product into the packages and make attractive packages with seals that do not leak.”

Finally, for the testing and analysis of your packaging, “Use MOCON’s MultiCheck system to reduce your package testing costs by using just one package to cover all 4 tests” says Guy Wray, Marketing Manager at MOCON Inc.
This is a great way to avoid distribution of inadequately packaged coffee.

De-gassing Coffee

After roasting, coffee releases CO2, up to 1000 cc per pound. Fresh whole beans will release gases for several weeks after roasting. While many Roasters might allow their coffee to de-gas in storage by letting it sit for 72-hours before packaging, valves allow you to package your roasted coffee right away. The main purpose of a valve, such as the one-way degassing valve, is to allow these gases to escape, without allowing any external gases, such as oxygen, to come in. According to Nick Greco, Business Development Manager, at Avery Dennison Designed and Engineered Solutions “The Avery Dennison Flexis™ Air for Coffee valve, for example, helps eliminates the bricking effect that occurs when packaged coffee travels over high elevations, such as the Rocky Mountains.”

On the other hand, Modified Atmospheric Packaging (M.A.P.), refers to a Roaster who within a few hours of roasting, evacuates the bag of all oxygen, and flushes it with inert gas such as nitrogen (to fill the voids that used to be taken up by air), and then thermally seals the bag. This is all done by specialized food-processing equipment.

Packaging As a Marketing Tool

As a roaster you may not have a huge budget, if any, set up for marketing and promotional purposes. Therefore, packaging becomes your primary medium of communication with your customers, and can play fundamental role in how you get your message across. “Use packaging as your billboard to get the message out about your product” Says Teich. In addition, Joy Weedon says, “A great shelf appeal gets you that first purchase and hopefully the great coffee inside cements a repeat purchase.”

According to Rodrigo Sanchez, Vice President of Masipack “’There is no second chance to make a first good impression,’ so choosing the right labeling for your product is an important step to take into consideration.” When selecting the colors, message, images, material, etc. for or your packaging, ask yourself, what message do you want to communicate to your customer? What do you want people to perceive from your coffee? “The quality of the coffee can also be equated with the quality of the visuals – high quality graphics indicate to a consumer that there is a high quality product inside” says Beaubien.

There are many creative ways you can market your brand through your packaging, Beaubien from print pack suggests: “2-D scan codes, which consumers can scan with their smartphones for more information. This adds an extra dimension of experience for the consumer that can lead to repeat purchases.” In addition, Chris Burger, Coffee Market Manager at Fres-co System USA, Inc. adds, “It is easy to integrate promotions, and connect with your consumers through social media beyond the cup of coffee; and get their feedback to improve your product, package, service, and gain insight from your consumers.” Find ways to be creative with your packaging, and make sure to engage your customers as part of your branding strategy.

When labeling, Burger suggest taking into consideration “The guidelines and requirements established in the market by regulatory organizations.” In addition he also recommends the usage of “High quality printing that will allow the coffee producers or roasters to communicate their brand identity. Printing up to ten colors in rotogravure, using lacquer finishing, and adding reverse printing, gives them the opportunity to transform their packaging in a great marketing tool.” However, the CEO of PBi comments on the fact that many small roasters cannot afford the cost of custom printed packaging “A 12oz. custom printed bag typically requires a minimum run of approximately 20,000–25,000 bags and artwork/set up costs… The solution for the smaller roaster is to use a pressure sensitive label applied to one of the solid color stock bags sold in single case quantity (i.e. 500‑1000 bags)” says Howley.

Your packaging should tell consumers the story of the coffee inside. Where is it from? Is it organic, Fair Trade, or Direct Trade? Is a customer indirectly supporting a cause buy purchasing your coffee? Consumers like to know what is behind the product they are consuming. Make sure to maximize your billboard space through your packaging, since this might be the only way you are reaching a customer.

Trends

Sustainability and earth-friendly practices have been a popular topic in the past years, and this mentality is here to stay. “In today’s world that is a major factor to consider because we need to think about the future generations and not only about what benefits us now” says Sanchez. In correlation, Sherry Gorsich, Director of Marketing at LBP Manufacturing says, “Packaging has a lifecycle – manufacturers and operators should be aware of raw materials sourcing, manufacturing processes, and disposal.” Robert Pocius from TekPak Solutions recommends, “Using a Packaging that is verifiably Home Compostable and Biodegradable in Landfills, Forests, Rivers, Lakes and Oceans, this will show the customers that the Roaster is concerned about the health of the Planet.”

Various innovations and technologies are continuously being developed in the Packaging world, “The recent development of the Biotre® lamination by PBi received the Best New Product – Packaging award at SCAA 2012. Biotre allows coffee roasters the first opportunity to protect their coffee while also preserving the environment. It’s a great step forward!” Says Howley.

In a recent session at the SCAA in Portland, Packaging 201, Bill Walters from PBi discussed some of the trends he sees in packaging. He mentioned the rise in use of the Block Bottom Bag (BBB), which is a solid bottom bag that allows the package to stack well. Furthermore, Walters mentioned the increasing awareness of the importance of adequately packaging green beans, and the recognition of Vacuum seal packaging for Green Beans, specifically in the Specialty Coffee Market.

Selecting the perfect packaging will allow you to add value to your product. The right kind of packaging should extend the shelf life of your product, preserve the quality, and deliver freshly roasted coffee to your customer. A qualified supplier should be able to adequately answer your questions, and direct you to choose the packaging that will best meet your goals and needs. Moreover, make sure you are using your packaging as a marketing tool, as it might be the only way you are reaching your customer. Do not risk the integrity of your product by failing to select the right kind of packaging.

I have a little philosophy about learning and age, when we folks of a certain age can no longer remember things from ‘the ago’, we often find this worrisome; not me! Instead, I think that in my middle age, my brain is finally dumping all those black or white “absolutes” that so define the fragile pride and self-esteem of those folks starting on the path across the clearing called ‘a career.’ Whereas before I was determined to design my world and businesses around the things I was certain I knew, now I strive to explore and design my future, and the future of our businesses, using tools and ideas that I have discovered which I never knew existed.

So, I shouldn’t be too surprised when, in a conversation at the Cafe de Costa Rica SCAA booth with Mario Arroyo, I was caught completely off guard by an idea within a system I thought I pretty much knew completely – the Costa Rican Law Number 2762 enacted in 1933 that ensures fair pricing for coffee along the entire in-country supply chain. The part that surprised me was so obvious that it was truly a ‘duh’ moment. Every mill, regardless of size, has a metal box called a fanega into which the growers pour their cherries, instead of weighing their bags as in most countries. Farmers are paid by the number of fanegas they deliver the mill.

One of Mario’s presentation slides happened to show the difference in volume between fully ripe cherries, mixed ripe and unripe, and all unripe. The difference in volume was amazing. Then it hit me, the fanega system in Costa Rica was able to reward quality with a clear and quantifiable method – the more fully ripe coffee a farmer brought to the mill, the more fanegas he filled and the more money he made. Farmers who are not as careful and have a lot of unripe cherries make substantially less money for the same (approximately) weight because they fill fewer fanegas!

Brilliant! Such a simple and elegant method of incentivizing farmers to focus on quality. What a great way to reward care in picking and handling – cash.

So, my next question obviously was…why is Costa Rica the only country that requires the use of fanegas by government mandate and penalty of law?

I think that the answer touches the ugly dark grey area of sustainability. Any effort to develop a sustainable economic system in the coffee lands inevitably requires that farmers be paid more. As the President of Honduras said in Portland at the SCAA, ensuring that farmers are paid more for their coffee distributes much needed cash across a wide spectrum of rural communities and the small businesses that serve them. More cash for farmers means greater prosperity in underserved rural communities around the world. Coffee is unique as a consumed product because of the extraordinarily wide universe of beneficiaries who financially depend on the price of coffee for survival.

True sustainability cannot be achieved without the unambiguous determination on the part of consuming countries to pay more for coffee at the farm level. As long as the only skin in the game is money, then the buyers will never allow a system such as exists in Costa Rica to become universal. When trader companies believe that there is more to business than the economic bottom line alone, then and only then, will a truly sustainable business system be possible.

It all seems so obvious.

Cheers,
Kerri & Miles

We’re lucky we have roasters to listen to – they’ve told us what’s important to them – gentle conveying + low breakage rates = happy customers – they’re referring to their customers of course! But we recognize a bit of pride in the processes they’ve nailed down in-house.
Karl Seidel, Marketing Manager

Cablevey Conveyors

This article will explore the problems that need to be solved in moving product in a coffee plant. When you think it through there are a dozen places or more that you have to move the product. The next logical step then is exploring solutions to the problem by different conveyance systems.

No matter what the scale of your shop, you have to move product for the same reasons. This chart shows the basic flow of coffee from green to shipping in a coffee plant. As a plant operator you will make conveyance decisions based on the following criteria:

Initial Investment
It would be awesome to start an operation completely scaled for your business over the next 10 years and have unlimited funds to put in the ‘perfect plant.’ But in the real world we start up, chase the business, grow, and make plant decisions based on where we are and where we think we might grow. This can lead to an interesting selection of different systems.

Operating Cost
Running the convey systems requires manpower and energy consumption. The best system is one that requires the least amount of manpower and the least amount of energy to run. If you still have to manually feed a convey system then you only save the manpower of the actual transport. It is better to also automate the feeding of the convey system. As far as energy goes, it comes down to how many motors and how much horsepower is required to run them. With today’s energy prices, that can be a huge operational consideration.

Reliability
When your plant relies on convey systems to do the work of strong backs, it is important that the machine operates without down time. Most plants have to come to a screeching halt if a convey system anywhere in the plant fails because everything backs up. You will also probably no longer have the manpower in place to do the work that the convey system does. So having the systems vigorously maintained is crucial for long-term success.

Effect on coffee quality
In specialty coffee, we are concerned about coffee’s physical appearance as well as cup quality. Certain convey systems like bucket elevators, and load systems that drop from tall heights can cause a lot of broken beans and affect the appearance of the coffee. While this might not affect cup quality Jeremy Raths of The Roastery in MN says, “Broken beans shows a lack of caring for quality.” Darryl Blunk of Apffels Coffee points out that some pneumatic conveyors can release a lot of the volatiles of coffee, especially ground coffee so another method is preferable.

Choosing a system based on your size, and scalability for forecasted growth is important. I had a small roasting plant. I used the ‘Rocky-vey’ system and it worked for me. I lost weight and did not need big expensive equipment. I would probably use a different system next time because it cost me in time. That was time I could have used to grow my business.

A different approach was taken by Apffels coffee when building a new roasting facility for their nearly 100 year old roasting company. “We wanted to control dust, reduce labor, have flexibility, speed and a system that would not harm the quality of the coffee,” said Darryl Blunk, CEO. They installed a versatile Cablevey system to transport coffee from the multiple production stations. “From the time we open the bags of green coffee until it leaves the shipping dock, the coffee is never touched by human hands.” Says Blunk.

Jeff Dudas, CEO of Spiroflow Systems Inc. has to deal with all sorts of products that need conveying besides coffee. All plants however express similar needs. “One of the big requests we get is to reduce dust in production.” Spiroflow Systems continues to work on their cable pull system to machine the puck size to minimize dust. These systems also have dust collection areas to help in that regard.

Spiroflow Systems also created a ‘super sack’ loader that continuously limits the fall height of product to eliminate both dust and breakage of beans and thereby maintaining the quality appearance of the coffee.

So, consider your options carefully when building upon your plant’s equipment and layout. There are lots of ways to get from Point A to Point B, but hopefully you have a basis to at least start to make an informed decision.

Coffee is one of Hawaii’s signature products. The legendary Kona origin has been part of the mystique of Hawaii for nearly 200 years. High-quality Hawaiian coffee is a unique export crop in that it is almost exclusively grown on small family farms that help to support resilient rural communities. However, the very success of Hawaii’s coffee has led to problems of counterfeiting that the coffee industry must address in order to protect the integrity of Hawaiian coffee in a global marketplace.

HB280 seeks to repeal mandatory coffee certification for quality standards while giving Hawaii’s valuable coffee origins more protection.

Deep budget cuts in 2009 set Hawaii’s Department of Agriculture on its heels, shrinking the department’s budget by 19%. Numerous positions were eliminated, including coffee inspectors. With the loss of all but one inspector position in Kona, the viability of the inspection service was crippled. This year’s growing season has been marked by increasing delays for inspection and certification. Coupled with impacts from Coffee Berry Borer, severe drought, and rising shipping costs, the coffee industry has reached a tipping point. Delays of up to four weeks hurt the industry, crimping cash flows to farmers and producers alike, strangling commerce.

The certification process has become a restrictive bottleneck, damaging the industry it was intended to protect. Inspector positions have not been restored notwithstanding industry efforts. The pain will continue if a remedy is not found. Our primary competition is not within our borders, but overseas where our wage and benefit burdens don’t exist. Long delays combined with relatively high production and shipping costs combine to make one of Hawaii’s signature crops less competitive in the global marketplace. Clearly a change is needed.

There are two aspects of coffee certification that inspections address: minimum quality standards and origin. Currently, in order to sell coffee as of Hawaiian origin, minimum quality standards must be met. Sophisticated buyers who pay the prices that Hawaiian coffees command typically request samples in advance. These samples are evaluated to a much higher standard than HDOA’s standards by panels of highly skilled, accredited cuppers with discerning palates. The ultimate arbiter of quality is the buyer. If coffee buyers are not demanding minimum quality certification by HDOA, HB280 will make quality certification voluntary. If they are, it would continue to be available on a fee-for-service basis.

Secondly is certification for origin. This inspection helps ensure that the coffee is accurately represented by the seller with respect to where it is grown. Maximum penalties are currently up to a $1,000 fine and up to one year in prison, or both, and enforcement lies with HDOA. These penalties are not having the necessary deterrent effect. A fine of $1,000 is less than the value of a single bag of quality Hawaiian green coffee and HDOA has never put anyone in jail.

Passage of HB280 would make false labeling (counterfeiting) of Hawaii-grown coffee a felony punishable by a $10,000 fine and up to five years in prison. The bill provides for enhanced record keeping and reporting and gives law enforcement statutory authority to enforce the laws. HB280 gives Hawaii’s valuable coffee origins more protection than they have ever had before; certainly more than what exists today. The ability for producers to opt out of minimum quality certification will reduce HDOA’s workload, eliminate delays, and help rural locations that have been historically underserved by inspectors.

It’s important to note that Hawaii’s current certification rules do not regulate roasted coffee nor any coffee not moved out of the growing region. If the market can voluntarily regulate quality in these trading environments, the same is true at other levels.

While much of Hawaii’s coffee is produced on small family farms, large scale production is also found on plantations located on Maui, Kauai, Molokai and Oahu. Given this diverse spectrum of producers, it’s uncommon when such a broad array of stakeholders agrees upon any issue. This is one of those landmark occasions when growers and producers, large and small, government, and law enforcement agree on a solution.

HB 280 is less costly, improves Hawaii’s competiveness, helps rural underserved locations and protects Hawaii’s valuable origins better than ever before.

That sounds like a change for the better.

Chris Manfredi, Ka’u Farm Bureau

This opinion is endorsed by the collective membership of the Hawaii Coffee Association, Kona Coffee Council, Hawaii Coffee Growers Association, and the Maui Coffee Association

At World Tea Expo, we always strive to stay one step ahead of emerging trends, so we can deliver a relevant event to participants that fuels business growth. Accordingly, we’re pinpointing quality tea, growth in tea retail, cold brew green tea, green tea popularity, Matcha lattes and tea-enhancing wares as six of the key tea trends for 2012.

World Tea Expo, the largest and most prominent B2B event for the industry, is taking place June 1 – 3 at the Las Vegas Convention Center, and all of these trends will be covered – as well as numerous other hot topics. At the event, attendees can: taste cold-brewed green tea and the latest Japanese Matcha lattes; gain current knowledge regarding tea retail growth, supply chain transparency and FDA regulations; learn how to capitalize on tasting trends; and taste for themselves whether or not the newest tea ware on the market does in fact enhance the flavor of tea.

Trend No. 1. – Quality Tea on the Rise

The tea industry is educating tea consumers about quality, thus improving their palate and desire for better tea. We’re still a bit behind here, but many retailers and manufacturers are making progress, and consumers are increasingly looking to buy better teas; they want to know what makes certain teas high quality rather than relying on the manufacturer’s word or enticing packaging. At the same time, industry members continue to discuss and ask one another, “How do we internally define quality,” and that is great. We are scrutinizing our own product; we are asking what Fair Trade really means; and we are asking if products calling themselves ready-to-drink [RTD] tea should contain a minimum of tea total dissolved solids, or if tea-flavored sugar water should be allowed to call itself tea. We are also seeing big tea buyers take notice of the high-quality winning teas from the North American Tea Championship, a professionally judged tea competition. A win here means that a third party professional has assessed quality, and that is making a significant difference for manufacturers when closing major deals.

Trend No. 2. – Tea Retail Continues its Upward Trend

The tea retail trend hit a nice stride in 2011, and it will continue to move up quickly in 2012. Last year, for example, tea retailer Teavana launched its IPO and Canadian-based DavidsTea opened two retail stores in N.Y.C., adding to its line-up of 69 locations. Most recently, Teavana acquired Canadian –based, Teaopia which has 46 stores. And Starbucks Coffee Company hired tea-retail expert Charles Cain as its new vice president for Tazo tea merchants and operations, which leads to much speculation regarding Starbucks’ plans to launch tea retail outlets. At World Tea Expo, the industry is set to discuss the future growth of tea retail – and what will happen in 2012 – in a session called “Will Tea Ever Be as Big as Coffee?” Right now, in the United States, there are currently more than 25,000 coffeehouses and around 3,500 tea retail locations.

Trend No. 3. – Green Tea Grows in Popularity

Green tea is moving ahead of flavored and blended herbal teas, in terms of popularity. No doubt due to its association with health and the preferences of ageing Baby Boomers and conscious Millennials, green tea is experiencing a growing consumer base, and that will continue this year. According to Packaged Facts’ Tea and Ready-to-Drink Tea in the U.S., 4th Edition, green tea is currently the No. 2 top flavor for U.S. tea product introductions (the No. 1 spot is blended teas). Among households purchasing loose leaf tea, green tea edges out herbal and fruit/spice teas with black tea as No. 1. The study notes that green tea is the No. 1 selected specialty tea product selected by customers at restaurants and retail establishments.

Trend No. 4. – Tea-enhancing Tea Wares

Glassware maker Reidel creates some of the finest wine glasses and decanters, and it’s said that these special glasses make a significant difference in the taste of vino, bringing out the depth, flavor and balance. And now, as the general populous continues to build a sophisticated palate, innovators are emerging and looking at ways they can enhance the tea drinking experience on a more sophisticated level. In fact, one stellar example of tea-enhancing tea ware is the 2012 World Tea Expo Best New Product Award winner 1660 London, for its 1660 Tasting Cups. The company won the top prize in the category of Tea Ware. These cups are each shaped to enhance the drinking experience of green, black, and fragrant teas.

Trend No. 5. – Cold Brew Green Tea

Cold brew green tea is expected to be big in 2012. Last year, Japanese manufacturer Yamashiro Bussan Company launched the first cold brew green tea at World Tea Expo. This year, branded cold-brew green tea takes the stage, including Swirl Tea, by Breezy Springs LLC. Breezy Spring products are already sold in Whole Foods Markets and Publix Supermarkets, to name a few. Swirl is a trendy new concept that combines premium green tea with convenience. Its unique, slender tea bag goes into a water bottle for brewing anywhere. It also uses all natural ingredients, is naturally decaffeinated, zero calories, and contains no sugar or gluten. We predict that with Swirl Tea’s cold-brewed green tea on grocery store shelves, there will be a larger consumer base and awareness for this product category in 2012. Imagine the delight consumers will have when they realize they can enjoy green tea without worrying about over-steeping it or water temperatures causing the tea to taste like burnt grass. Swirl Green Tea – Cold-Brewed On The Go!, by Breezy Spring LLC, won a 2012 World Tea Expo Best New Product Award in the category of Tea as an Ingredient.

Trend No. 6. – Matcha Lattes (Real Ones)

Unlike the poor quality Matcha lattes that have “crashed and burned” in the past, there are now superb product offerings in the market. All of these use real and high-quality Japanese Matcha, blended with minimal sugar but packed with flavor, such as AIYA America’s Matcha Zen Café Blend. Matcha lattes are already wildly selling in Canadian foodservice establishments, and we suspect the time has come for American restaurants to catch on in 2012. They are easy to make, require no additional equipment, taste delicious and are packed with the nutritional benefits of Matcha. They’re certainly a wonderful alternative to over-roasted coffee after a lovely dinner.

Tea Growth in 2012 & Beyond

On the whole, tea continues to grow in the marketplace, and many companies – like 2012 World Tea Expo exhibitor finum by Riensch & Held – are nurturing an urban tea culture, where consumers are discovering full-leaf specialty teas. finum offers a range of products, including stylish drink ware in combination with unique filtering components for tea. The company agrees that more young people are drinking tea because they like it, because it suits their image, because it fits into their life style. “They are of course health conscious,” says Christian Justus, CEO of finum, “and tea must blend into their social and ecologic environment – in the office, at a party on the street.” The company is trying to make it easier to prepare good, high quality tea to the standard that the Chinese and Japanese are accustomed to.

Yes, tea is on the rise. And according to projections from Packaged Facts, in their study Tea and Ready-to-Drink Tea in the U.S., 4th Edition, tea retail market growth will edge up from approximately 6.6 percent in 2012 to 8.7 percent in 2014, reaching $8.3 billion in that year. World Tea Expo presenter David Sprinkle, research director for Packaged Facts, notes, “The horizon for tea indeed looks bright. Factors spurring continued overall growth of the tea market include: the success of refrigerated and RTD tea; the acquisitions of Honest Tea and Sweet Leaf Tea that will continue to expand the distribution channels for these and other organic and specialty brands; the rapid expansion of specialty tea retailers such as Teavana; increased emphasis by Starbucks and other coffeehouses on their tea offerings; the sustained promotion of tea by the big restaurant chains, led by McDonald’s; the proliferation of tea rooms and other tea offerings at foodservice; the continued recognition by consumers of tea’s healthy properties and their switch to tea from carbonated soft drinks.” Sprinkle will present, “Understanding the Retail Shopper of Tea Products” Saturday, at World Tea Expo.

Kim Jage is the sales and marketing director, World Tea Media, a division of F+W Media. To learn more about these trends and other hot tea topics, register for World Tea Expo at www.WorldTeaExpo.com.

V. Hi Ryan! Traditional question brother, how did you dip your feet in coffee?

K. Hi Max! About 5 years ago, I was finishing up college and had no idea what to do with my Theology degree. About that time, I made a trip to East Africa, mostly Uganda and a little bit of Rwanda. I guess I was kind of inspired by how much of an effect coffee could have on countries’ economies and Rwanda specifically, which experienced so much of this during the last couple of decades. Coffee has been its number one export commodity, so on that side of things I was really intrigued by it. And then I started working as a barista in this cafe in a small town in Illinois, and had no idea how much coffee would draw me in. I fell in love with making espresso, and brewing coffee.
Trevor Corlett and I decided to open up MadCap Company together in Grand Rapids, a place where we could deliver the highest level of quality and focus on delicious coffee without cutting corners on any step of the chain.

V. Ah, I see… It could be interesting for some to know why it’s hard to deliver quality coffee in a small town?

K. We were in a super small town, of about 15,000 people maybe, and it is difficult to do coffee with the quality that we wanted to do in such a low traffic area, so we were looking for a bigger city than that. We found Grand Rapids to be an attractive city with a very accepting food culture. The specialty coffee movement was pretty new in Michigan as a whole in the entire state, so we thought we had a lot to offer, and it has been a great community for us so far.
I just think that with buying expensive coffee, you also have to sell a lot of expensive coffee, and we have just been in a town where you don’t have a lot of fancy breweries and restaurants. Sometimes that standard of quality is hard to deliver because it is hard to find somebody who wants it. Specialty coffee isn’t for everyone and not everybody gets excited about it, but that is ok, the more people are excited about it the better (laughs).

V. I have heard that MadCap buys coffee from this sweet farm Finca de Dios, Guatemala. Please tell me about your relationship with it.

K. Quality and relationships are the two things that we are really focused on as a business. We have been buying from Finca de Dios since the first year that we have opened, and we visit it every year. Currently, every coffee that we purchase from them is part of a relationship: we are commited to them – farmers know that we are gonna pay money for their coffee no matter what.

V. What is one of the most effective methods that you have found as far as promoting the public’s interest in specialty coffee?

K. I believe the most succesful method for us has been our Sunday service, where we pair different foods and coffees in a sit down manner. It is not a common cupping experience, it is more closely related to a fine dining experience. Sometimes when you do a cupping format it can be a little intimidating and less sensible for consumers and we want to offer something that is a little more comfortable and unique.

V. Que bueno! What kind of foods do you pair and what has been the general reception from the public?

K. We usually work with local companies to deliver the food to us. The choice varies depending on the service. On our first service we had blueberries, cheese and bisquits. In another one we did chocolate pairings. The main goal is to complement and to highlight the coffees we use.
As far as the reception it has been really, really good so far. The most exciting part about it is having people coming back during the week after the Sunday service and asking more and more questions about the stuff they learned during it.

V. We are nearing the end of our interview, is there something that you would like to share with our caffeinated audience?

K. Yeah, for sure! I think we have grown so much as an industry that you see more and more roasters that are excited to see great coffees. However, more than often I find myself talking with other roasters, and they will say I wish I could do something this way, but I am not able to do this because my customers will get mad, or I don’t have any money. For example, they are afraid to buy expensive coffee because they don’t think their customer base will pay 50 cents more for a better coffee, but I think there is a lot that we can do. Get out of the box and don’t be afraid to operate differently!

MadCap Coffee Company

98 Monroe Center NW
Grand Rapids, MI 49503.
www.madcapcoffee.com
info@madcapcoffee.com

V. Hi Augusto! I know it is a delicate question, but why did you start bringing Americans to work on your coffee farm? Is it one of the ways to promote your brand?

C. Laughs… It is combined, but primarily it’s for fun. Doing tours is one of the possibilities for me to go to Brazil more often. I guess I have always wanted to show off what my family does, and this is one way of making it come true. This is the 4th time that I am taking a group from the States to Brazil, and it has been a great success.
Last year for example, we were harvesting coffee amongst the people at the farm. They wanted to know what these gringos did back home. We had a doctor with us, and the farmers were so shocked and impressed that an American doctor came to harvest coffee along their side. It really makes farmers proud of the work that they do.

V. We all start something, somewhere, sometime. How did you start your successful business here in the U.S.?

C. I came to study in the U.S. back in 1996 and graduated with a mechanical engineering degree. It took me three years before I realized that it wasn’t my cup of tea, and started looking for other possibilities. My family has this beautiful coffee farm with this rich tradition of around 120 years, and I grew up around it.
I thought it would be really fun to showcase what we do in Brazil. With the help of my cousin Gabriel, I brought back 75 pounds of roasted coffee, and got really good feedback here in Portland, so I thought “Wow! Maybe we have something here.”
Later, I was able to make a handshake agreement with my grandpa at the farm, and he allowed me to bring in a whole container under the condition that I would pay my family back in about a year. I think I was able to pay it off in about 14 months, which is just a bit longer, but everybody was happy that it worked. From there on, we grew to what we are today.

V. Did you have somebody roast the beans for you when you started out in America?

C. Sure! A big part of my success was due to having a local partnership with a roaster here in Portland because we didn’t have to acquire all the equipment and roaster “know-how” for many years. We grew the company with our partner roaster for many years, but since last year, however, we roast our own coffee. We have a state-of-the-art Loring roasting machine, so now we are pretty much completely a seeds-to-cup coffee company!

V. Oh, ya! I heard about this nice rig that everyone is talking about – Loring. Gimme the details.

C. Yeah, we really really love our Loring. You know Loring was a new piece of equipment at a time, and it wasn’t yet that well known when I started researching what equipment I would put in. However, once I read about how it worked and the engineering behind it – I think maybe because of my engineering background– I fell in love with it instantly. At first glance it appears to cost more than other conventional roasters, but the reality is that it comes with an afterburner, scale, loading cart and elevator, all of which are worth tens of thousands of dollars if you buy them separately: also not to mention the fuel efficiency of the Loring.
So then I needed to know if it roasted coffee well. So I actually flew down to the plant to see how it was made and where it was made. Then I had some of my green beans roasted in a Loring at a place that had one, and they turned out great. In the end we are extremely happy with our Loring.

Nossa Familia Coffee

Portland, Oregon 97209
www.familyroast.com

1) We would not actively poach others accounts. There is plenty of business to be had, we didn’t need to hurt each other

2) If a customer of another roaster reached out to a new roaster, it was fair game. (Usually a courtesy call was made to inform the other roaster that the activity was ‘customer generated’. It was also helpful to find out if the customer was someone to steer away from due to pending bankruptcy or other reasons!)

3) If there was a NEW account we would all compete fiercely and then congratulate the winner. (Often side bets of dinner were placed on who would get the business.)

This code of conduct made us service our accounts tirelessly. It demanded an attention to ever increasing quality. It made us better coffee companies and all of our businesses grew as a result.

When talking with a respected customer, restaurant chain owner, and friend this concept was explained. He was told how the coffee industry supported each other in an effort to make coffee better and in return the ‘rising tide lifted all ships’. That this effort in turn taught customers like him to seek better quality coffee and that the whole producing world ended up being better for it. When quality of service, and product improved, we all, including the customer, were better for it.

Because of the explanation, there was an expectation for a dreamy-eyed response of praise as to the brilliance of the holistic concept of the entire process. The clouds should part, angels would sing because we in the coffee industry strive to make the world better! The customer, however, had a different take on the economic model. He called it: Elegant Stupidity!

This was obviously not the expected feedback. A conversation then ensued regarding the flaws in the plan. He said, “Look, the market takes care of itself. Do a great job and be rewarded. Do a sucky job and lose business. It is the customer who should decide who competes for the business, not the vendors.”

The clouds closed back up again and the angels were silent. Could it be that coffee is just another commodity product that follows the rules of every other product and service in the world? Is the romantic nature of the industry just important to us insiders and no one else could care less? Do people say they want high quality coffee and farmer’s lives to be better but really don’t want to be the ones that pay for it? Could the world be that cynical?

The answer is yes, there are parts of the consumer base that don’t care about what we do and the blood, sweat and tears we put in to making the products we sell. They don’t care that we try to make the world a better place. Yes there are cynical people and yes we in the industry can have a tendency to take ourselves too seriously at certain times.

Obviously the customer was misguided and needed to be convinced. “Do you like the quality of the coffee?”

“Sure! I love it!”

“Do you pay a fair price for it?”

“I will pay more for quality and yes this is a fair price.”

“Do you feel you could get better coffee at a better price from a different vendor?”

“Honestly it has never crossed my mind to change because I like what I have.”

“Then we are saying the same thing in regards to market forces at play. You get a great product at a great price and, if you wanted to, could go and try out other vendors but you don’t because you don’t have a reason to do so. You are a satisfied customer and our system of Elegant Stupidity has worked for you.”

“I guess so, but why have you made it so complicated and collaborative. It kind of seems like you are gaming the market and controlling prices?”

And you know what… in a sense that is EXACTLY what our industry does. And EVERYONE in the quality supply chain wins as a result INCLUDING this customer. This point was reinforced over and over again at the SCAA conference in Portland. We are an entire industry devoted to the concept that QUALITY in coffee is a game changer for the world. It seems that we are more concerned with making coffee better than by competing for business in the conventional sense.

On the show floor we saw equipment manufacturers talking about how to maximize flavor, not profits. We saw producer groups describing the care they put into growing and how that changes flavor. We saw social groups showing us that there are needs in these growing areas that we as an industry can uniquely address.

Off the floor in meeting rooms were dozens of classes and lectures designed to educate and stimulate discussions on how to do the right thing for our products, business, industry and the world. The greatest minds of the world pondered the future and suggested what we can do now to have what we want ongoing.

I certainly didn’t feel the hours, dollars and effort spent at the show by the nearly 10,000 people was representative of something called ‘Elegant Stupidity’.

Let’s dig a little deeper and see if it makes sense. The total coffee market is huge. We deal with a small but growing segment we affectionately call ‘specialty’. In that segment there are market forces that concern its long term viability. Supply and demand are driving forces that we see as something we can affect with programs and activities.

On supply, we try to promote ‘green’ projects because we see the effect of weather on production. We also see poverty and urban migration as factors that diminish farm production so we devote aid money and put programs in place to deliver higher wages for the work. We devote countless volunteer hours and dollars to education on agricultural practices to strengthen trees, increase yields and increase the number of planted hectares. We support social and health programs that increase the quality of life for farming communities in hopes they will continue to farm.

We do this as an industry for a number of reasons. Alone we can only do so much but collectively we are funded, nimble and willing to help. We may spend company money to do it, but we do it for the industry as a whole because we are all in it together.

On the demand side we do all that we can to promote quality. This includes teaching each other the skills we have learned so they can be better. We create guilds to organize and concentrate the learning by industry segment. We have associations to help promote quality coffee to the marketplace. All of this is done so the consumer will demand quality coffee over commercial coffee. What other industry teaches its competitors ‘industry secrets’ so they can compete more fully?

Given this culture is it surprising that we employ the selling practices that the above customer referred to as Elegant Stupidity? We tend to not want to eat each other’s children but make sure that there are always new customers rising up to our standards of quality. We do this as we do everything else in the industry: By building as a group so we all thrive and survive. The result is a customer that gets high quality at a fair price, and a world that can sustain increasing demand by decreasing pressures on supply.

Turns out the customer was right. It IS Elegant Stupidity. In fact it is VERY elegant. And it makes our industry work! This also proves what we knew in the service sector: The customer is always right.

Rocky can be reached at rocky@INTLcoffeeConsulting.com

Top Ten Reasons why coffee is GOOD for you:

1. Lowers risk for skin and breast cancer. According to Robert J. Davis, PhD, author of Coffee is Good for You, flavanoids in caffeine have been found to inhibit the formation of UVB-induced tumors. Furthermore, the American Association for Cancer Research referenced studies which examined the risks of basal cell carcinoma, squamous cell carcinoma and melanoma in connection with coffee consumption and discovered coffee consumption decreased the risk for basal cell carcinoma. Even better, using coffee topically is being touted as a new method to “fix” the UV damage already done to your skin. Dr. Leslie Baumann sites recent studies where the topical application of coffee offers promising results at fixing damage done by the sun.
2. Lowers risk of depression. Health Watch aired findings where certain chemicals in coffee lower the risk of depression. Studies indicate the more coffee you drink, the less likely you are to be depressed. According to research results by Alberto Ascherio, MD, DrPH and team at the Harvard School of Public Health, women who regularly drink four or more cups of coffee a day have a 20 percent lower risk for developing depression than those who rarely or never drink coffee.
3. Reduces diabetes by 50%. Several studies indicate that certain elements of coffee block the chemical process which leads to type II diabetes. Researchers at UCLA have discovered a relationship between coffee consumption and a protein called SHBG, thought to play a role in the development of type II diabetes. Once again, research indicates the more coffee you drink, the better protected you are against type II diabetes.
4. Reduces inflammation. The American Journal of Clinical Nutrition concluded consumption of coffee had beneficial effects on subclinical inflammation and HDL cholesterol. Other sources support these findings by indicating that the anti-oxidants in coffee will neutralize certain free radicals in the body which cause inflammation.
5. Increased fiber intake. The Journal of Agricultural and Food Chemistry expressed results exhibiting significantly higher amounts of soluble dietary fiber in coffee than other common beverages. The Mayo Clinic recognizes the importance of fiber in dietary nutrition for maintaining bowel integrity and health, reducing blood cholesterol levels and controlling blood sugar levels.
6. Lowers risk of Alzheimer’s. Results linking caffeine to lowered risk of Alzheimer’s and enhanced brain function can be found in the European Journal of Neurology. Additionally, the Journal of Alzheimer’s Disease states that the lowest risk (65% decreased) was found in people who drank 3–5 cups of coffee per day. They further suggest that consuming coffee at midlife is associated with decreased risk of dementia and AD later in life.
7. Human hair growth. The International Journal of Dermatology found that caffeine alone led to a significant stimulation of hair follicle growth in in-vitro studies. Clinical research in Berlin implies a topical application of caffeine-infused shampoo or ointment will penetrate the hair follicle faster, lending credence to the possibility of an effective treatment for androgenetic alopecia (baldness) or other reasons of premature hair loss.
8. Acne prevention and skin health. Barista Bath and Body performed extensive research related to the effects of topical coffee creams and scrubs. The slightly acidic pH of coffee constricts pores, creating a protective layer and providing the appearance of younger looking skin and aiding in the prevention of acne. The exfoliating and anti-oxidant properties of a coffee facial polish are comparable to (if not better than) other beauty and skin products currently on the market. Founder of the University of Miami Cosmetic Medicine and Research Institute also recognizes the ability of caffeine to quickly and effectively constrict blood vessels, making it a particularly valued asset and potential treatment for suffers of rosacea.
9. Lowers risk of Parkinson’s. PloS Genetics reports research results consistent across studies corroborating the robustness of interaction between consumption of coffee/caffeine and the gene GRIN2A. Caffeine has already been proven to be neuroprotective, but researchers indicate other ingredients in caffeinated coffee may also affect the development of Parkinson’s disease.
10. Protection against cirrhosis of the liver. As noted by the Journal of the American Medical Association, research concluded that there is an ingredient in coffee which protects against cirrhosis, especially alcoholic cirrhosis. Joe Vinson, PhD regards the study, “In a cross-sectional study, coffee consumption was also significantly related to a lower prevalence of transaminase enzymes [markers of liver damage], with a stronger association for those who drank large quantities of alcohol.” While some speculate that the active principle may be caffeine, Vinson strongly supports the hypothesis that it is the polyphenol antioxidant compounds in coffee that are the causative agents and that they act in concert with caffeine, which is also hepatoprotective.

A myriad of research continues to support the healthy nature of coffee, giving optimism to those who partake in the beloved beverage and pause to those who do not. Considered an authority on coffee, Forrest Graves summarized quite nicely, “The positive medical research and findings around coffee have obviously been mounting since the 15th century, making it the largest consumed beverage in the world next to water. Who knows? A cup a day could keep the doctor away.”

Andrea Illy of illy Caffè highlighted some of the sustainability issues impacting the coffee industry at the recent National Coffee Association Convention in Charleston, SC. Mr. Illy started the attendees with the UN’s Bruntland Commission’s 1987 definition of sustainability, “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

The concept of sustainability is part of the broader concept of corporate social responsibility. While there are many definitions of CSR, they all in some way involve organizations take responsibility for their impact on society and on the environment. They usually embody going beyond legal requirements to improve the quality of life for the company’s stakeholders, which include not only company employees but the broader community, locally and globally. At one point, CSR was thought of as philanthropy, charitable contributions to organizations that management thought were worthy recipients in the community. However, today, the concept transcends specific causes and communities (although charitable giving of time, treasure, and talent is still an element of CSR) and contemplates how companies fundamentally operate and carry out their core functions, not only for the improvement of society but also for the improvement of the company itself.

The mantra of the sustainability effort has been the triple bottom line. This three-legged stool has been described in several different ways. There are the 3”Ps” of sustainability: People, Planet, and Profit. And there are the 3”Es” as well: Environmental, Economic, (Social) Equity. Mr. Illy talked about 3”Cs”, an interdependent cosmos: Economic Cosmos, Social Cosmos, and Environmental Cosmos. In addressing these different cosmos, he spoke about shared value, growth, and respect.

Shared value speaks to the need to find common ground that balances, and possibly constrains, the drive for profit with the fundamental respect for the dignity of the individual and the dignity of the environment for the benefit of the long term. Shared value and sustainability do not ignore the need for profit; they just try to place in perspective vis-à-vis the people that work to produce this profit and the environment from which these profits come.

The term respect is fundamental to sustainability and CSR, and to ethical behavior in its essence. Whether it is through a secular, natural law philosophy or from a religious belief in the inherent value of the human person, respect for the dignity of the individual is the fundamental underpinning of a healthy society. And it is precisely when this dignity is violated that the seeds of social and environmental turmoil are sown. The philosopher, Immanuel Kant, privileged us with the thought that we should all, “Act in such a way that you treat humanity, whether in your own person or in the person of any other, never merely as a means to an end, but always at the same time as an end.” People need to be treated with respect because they deserve it.

It is that fundamental need to respect the dignity of individuals that forms the foundation of the many initiatives and proposals aimed at improving global ethical behavior, especially in developing countries. The U.N.’s Declarations of Human Rights speaks to respecting and honoring the dignity of all. In the coffee industry, the discussions over fair pricing and distribution of the wealth generated by this $100+ billion dollar industry beckon the question of how we respect and honor the dignity of the individual, especially those that are most vulnerable. Fair trade coffee and the education of consumers in coffee’s Third Wave are all part of this dialogue. The success that the industry can generate in these areas will determine how effectively it can help promote the social growth that Mr. Illy described as part of social sustainability.

Another element of social growth is personal development. How well do our social systems allow people to reach their full potential as human beings? An interesting way to examine this can be found in Abraham Maslow’s hierarchy of needs, which Mr. Illy gave us as food for thought. According to Maslow, individuals need to successfully fill a hierarchy of needs on their way to achieving what he called “self-actualization.” Others have variously defined this as personal fulfillment, self-awareness, openness to truth, and true contentment. But, to be able to fully achieve self-actualization, one must progress through a series of lower needs starting with physiological needs (food, water, sex, sleep, etc.). Once physiological needs are met, security and safety needs (shelter, protection from danger, job security) must be addressed. The next need is for love and belonging (affection, friendship, community). The last need that must be satisfied before pursuing fulfillment is esteem (both self-worth and the esteem of others).

When individuals are not able to fully satisfy a lower level need, it becomes difficult, if not impossible to progress toward self-actualization, personal fulfillment, and true contentment. Because of personal hurts we have experienced in our lives, we all have some type of “holes in our souls” that lead us, and our companies, (since companies are essentially collections of individuals brought together under an organizational structure) into temptations that compromise our abilities to act in socially responsible and sustainable fashions.

“Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

Not surprisingly, much of this poor ethical behavior can be traced back to unhealthy attempts to satisfy unmet needs that usually manifests itself in actions that disrespect the dignity of others. One can easily identify four great temptations that lead to most unethical behavior in business: sex, money, power, and honor. Interestingly, each of these temptations can be connected to one of Maslow’s lower four needs. Inappropriate desires for physical pleasure, be it sex, gluttony, or any physically addictive behavior, that disrespect others or disrespect ourselves, are physiological issues. Excessive desire for money or material goods at the expense of the dignity of others relate to security. Unethical use of power can be associated with belonging. Esteem issues can result in people going to extreme lengths to be honored at the expense of others. Exploring these connections more deeply can provide insights into the roots of disrespect and unethical behavior. And then committing to those values, both individual and corporate, that truly respect the dignity of individuals and rethinking organizational structures and management practices to replace exploitation with empowerment will be the underpinnings of a responsible, sustainable enterprise.

Respect for the environment comes right after the respect for the individual. As Mr. Illy demonstrated to convention attendees, “good agronomical practices will maximize profits to the growers and benefits to consumers without harm to the environment.” The keys to this transformation are a long-term perspective and education (both of consumers to recognize and be willing to pay a premium for higher quality and of producers to develop and internalize a longer term perspective).

Thus, a long-term integrated commitment is essential to successful implementation and achievement of these principles of sustainability and CSR. Such a commitment means that companies integrate these tenets into their core values and their strategic planning. It means that they align their objectives and their core competencies to produce both the motivation and the resources to accomplish these goals. And, most importantly, it means that both employees and company management, and especially management, are committed in both word and action. There is nothing that will derail a sustainability initiative or a CSR effort faster than management giving only “lip service” to it.

Such efforts require time, patience, and new perspectives, particularly a longer-term perspective. Unfortunately, individuals and companies are frequently tempted by quick short-term gains and shirk their responsibility to their fellow employees, their company, or society at large in the pursuit of immediate gratification. Oftentimes, people forget that the purpose of a business is to generate long-term wealth.

However, when companies do live and act in a socially responsible manner, they often find that their actions not only benefit society but also benefit themselves in a number of areas. These companies are better able to recruit and retain talented employees. People want to work for companies they can trust, companies that respect them, and companies they believe are socially responsible. It is no surprise that companies in the “Top 100 Best Companies to Work For” often perform better than the average corporation.

Companies also find that being socially responsible also resonates with more and more consumers, giving companies another win-win opportunity, contributing to society while enhancing brand loyalty and customer satisfaction. Combine this with motivated employees and you have a recipe for financial success. This is part of the “shared value” that Mr. Illy addressed.

Other benefits include an improved risk profile that comes both from proactive measures of a responsible culture that can avert scandals of abuse and from a reservoir of good will than can help get a company through an unexpected crisis. Financial markets like responsible companies because their risk profile is lower and studies have shown that those companies that rate high in ethical behavior and social responsibility in the eyes of society usually perform better financially as well. Therefore, whether it is the 3Ps, the 3Es or the 3Cs, embracing the tenets of social responsibility and respect for the individual and for the environment can create economic success, which can, in term, create new resources to even further propagate a sustainable society.

As we move through coffee’s Third Wave and into the Fourth, all participants will find opportunities to advance social and environmental sustainability in ways that can meet the needs of long-term economic sustainability. The question is, “How quickly and how passionately can the industry rise to the challenge?”

Michael Rice is Adjunct Faculty at DeSales University in Center Valley, PA where he teaches courses on Ethical Issues in the Workplace, including topics of Corporate Social Responsibility and Sustainability. Mike is also Senior Product Marketing Manager for Follett Corporation, a leading manufacturer of ice machines, ice and water dispensers, and ice storage and transport equipment focused on promoting health, safety, and well-being in foodservice, healthcare, and office environments. Contact Mike at mrice@follettice.com.