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So You Say There's a Coffee Crisis by Mark Prince
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jim_schulman
Senior Member
jim_schulman
Joined: 19 Dec 2001
Posts: 3,772
Location: Chicago
Expertise: I live coffee
Posted Thu Dec 5, 2002, 1:07am
Subject: Are consumers sheep?
 

You have a good point; but perhaps backward. Most of the consumers I know don't believe anything they read on a label, not the big 4 ("it's just advertising", not government mandated information ("it's just cover your a** lawyerese"), not people we've learnt to trust ("like they're not making money, you sap").

Of course, their perfect cynicism leads to the same place as perfect gullibility; complete ignorance about what's good or bad. If sheep were as cynical, they'd walk to the slaughter just as tamely, with only the sarcastic edge to their bleats to distinguish them.

My point was that until people learn to make coffee properly, and at least trust their own judgment ("yeah, like I know anything about any of this"), nothing is going to change in a fundamental way.
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alanfrew
Senior Member
alanfrew
Joined: 19 Dec 2001
Posts: 642
Location: Melbourne
Expertise: Professional

Posted Fri Dec 6, 2002, 1:45am
Subject: Steaming
 

re the steaming: Germany is now in the top 10 coffee exporters worldwide...but the only coffee actually growing there is houseplants! Figure it out!

Alan
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lelandmiltongoldblatt
Senior Member
lelandmiltongoldblatt
Joined: 30 Nov 2002
Posts: 7
Location: Springfield, Illinois USA
Expertise: I love coffee

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Posted Fri Dec 13, 2002, 7:53pm
Subject: Where are your machines made?
 

As we give our selves all these accolades for the coffee we drink.  Not just because the top four coffees taste like worst then toilette water.  We should think about the computer we are typing on and the coffee machines that we use.  Where are they made and what blood was shed for them?

It nice doing "good works when it taste better...."

Shalom,

---Prof. Leland Milton Goldblatt, Ph.D.
new---->  ivycollege.com   <------

yale@ivycollege.com
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duncanson
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Joined: 6 Jan 2002
Posts: 1
Location: Indianapolis
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Posted Fri Dec 13, 2002, 9:52pm
Subject: That Explains A Lot
 

I recently had an opportunity to experiment with a new flavored coffee from one of the Big Four.    Apart from from hating the flavoring, I was most struck by the virtual absence of any coffee flavor in the brew.  Mark has explained this for me.  The loss of quality in supermarket coffee over the last two decades is amazingly evident.   I observe that it has bought for the Big Four a loss in long held brand loyalty. Of course the decline in quality has been driven by the search for greater profits.

I appreciate, as well, how Mark has alerted us to the global consequences.  It will be an interesting challenge to buy my shampoo from sombody other than P&G.
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MarkPrince
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Posted Sun Dec 15, 2002, 4:30pm
Subject: Computers, Machines made...
 

Hi Dr. Goldblatt.

One thing I like to do wherever possible, is be an activist with my dollars. I do actually read labels on the products I buy, and buy accordingly where I can. If I can avoid "Made in China" (proving almost impossible these days) I do it, even if it costs me a premium. Thinking about our company's major purchases this year, one of my computers (the new X30 notebook) is made in Mexico under NAFTA trade agreements that ensure workers get a living wage. My digital camera and MiniDV cameras are both made in Japan where workers do have the benefit of good government employement laws.

For coffee and espresso machines, most of the machines I test and evaluate are made in Italy or Spain, with a couple made in Mexico or similar. Two of the machines are made in the US of A. Most of the accessories I buy for espresso are made in the US, or Europe. When it comes to coffee, I really try to speak with my dollars in an activist way where I can, so I avoid "slave labour" mechandise where I can. Sometimes it is unavoidable. Where I find it especially bad is premium priced clothing labels that are made from factories in places like China where there is little in the way of fair wage laws or workers' rights (ironic for a communist country).

Most of us have the power to speak with our dollars, and it doesn't require a lot of effort to do so - read labels, do online research to find out where products are coming from and what the labour law practices in those countries are all about.
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jutebag
Senior Member


Joined: 20 Dec 2002
Posts: 1
Location: Singapore
Expertise: Professional

Posted Sat Dec 21, 2002, 5:58pm
Subject: Greed ruins coffee
 

Great article, Mark. There is a real crisis out there.  Good to see the steaming "scam" exposed. Steaming has become a massive industry undertaking over the past 10 years or so. How did this happen?

As you point out, the ICA broke down in 1989 for political reasons but also because artificially high prices encouraged coffee farmers around the world to boost coffee production with complete disregard for demand trends.  Unlike oil, where you can turn the tap off, coffee keeps growing.  End result, massive oversupply and a collapse in prices.

As the ICA collapsed, Vietnam began planting and producing coffee.  They chose robusta because the conditions in Vietnam are almost ideal for growing this variety.  The "Big Four" had no input into the rise of Vietnam as a producer.  A few carefully designed, communist government sponsored 5 year plans and seed capital from the World Bank and various Aid organisations, triggered the rapid rise of Vietnamese coffee production.  Vietnam went from an insignificant producer in 1990 to the world's second biggest coffee exporter after Brasil in 2000.

The Big Four greeted this development with open arms. They had been tinkering with the steaming concept in the early 90's, but steaming only really took off during the second half of the decade as a string of coincidences came together.

Rapid improvements in steaming technology suddenly enabled the Big Four to blend a lot more treated robusta into their products without Joe consumer noticing.  Vietnam's cheap robusta flooded the market, driving prices down and widening the premium for arabica over robusta.  It only costs 7 or 8 cents a pound to steam robusta.  With arabicas costing 30 cents a pound more than robustas you don't have to be a rocket scientist to figure out what the end result had to be. Corporate greed and shareholder activism of the 90's pushed the Big Four to destroy coffee quality as we knew it. The bottom line dictated all.

So, the damage has been done. Vietnam has been left producing massive volumes of low grade robusta to satisfy the demand for steaming.  There is a desire in Vietnam to improve quality - and let's face it, its' tough to make a good esspresso without a decent dose of powerful robusta in the blend - but no incentive.

How does the coffee world get out of this mess? Consumers need to wake up to how lousy generic supermarket stocked coffee has become and vote with their wallets.  Coffee consumers in the "rich" world need to be coffee educated.  More importantly, we need more coffee drinkers around the world.  Gordon Gillett of Nestle has a point. Coffee consumption needs to grow, even at the low quality level. Potential coffee drinkers in the rest of the world need to be introduced to coffee. Only that way will coffee farmers have a future to look forward to.
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hlbrowne
Senior Member


Joined: 2 Jan 2003
Posts: 1
Location: Pittsburgh, PA
Expertise: Intermediate

Posted Thu Jan 2, 2003, 9:35am
Subject: Media Focus
 

Thank you Mark.

A friend e-mailed a link to your article. I'm embarrassed to say this is the first I've heard of the situation in South America. Why haven't there been more articles about this in the press? It is the media's job to keep us informed. They are failing us. Where are the major news organizations? Consumer watchdog organizations?

How terrible it must be for those farmers and their neighbors!

Winston Churchill said, "The price of greatness is responsibility." We are a wealthy nation. Our money does not make us great. Our giving makes us great.

I have consciously directed quite a lot of money to good causes. I have unconsciously directed a lot of money to making these people miserable. I'm going to try to make it up to them. I can't wait to read Becky's article about fair trade coffee.

I'll be telling all my friends and changing my buying habits. Thanks again!!
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MarkPrince
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Joined: 19 Dec 2001
Posts: 5,611
Location: Vancouver, BC
Expertise: Professional

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Posted Thu Jan 9, 2003, 11:44pm
Subject: All it takes is one to start
 

Hi HL Browne - thanks for you great comments. It really does start with you, you know :)

Becky's article is online, I should have linked to it (I'll fix that) but here you go:

http://www.coffeegeek.com/columnists/cafestage/11-22-2002
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koffeekev
Senior Member
koffeekev
Joined: 21 Jul 2002
Posts: 693
Location: Connecticut
Expertise: Professional

Posted Fri Jan 10, 2003, 5:25pm
Subject: Sara Lee
 

Sara Lee took over the company I worked for (Chock Full O Nut's/LaTouraine) in a hostile takeover bid. We didn't want to sell but they wanted us so guess who won? I quit and for lack of a better word, I hate what they stand for. I will not buy Hanes, Sara Lee, Jimmy Dean, Coach Bags, Douwe Egberts, Weschler, Ireland Coffee, Latouraine Coffee, among others. The stock was doing well and much to my planners confusion I rolled it over into something else. If you think these people are creeps from a consumers stand point you should try to be forced to work for them. Sara Lee can kiss my ass.
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jrjazzman
Senior Member


Joined: 17 Aug 2003
Posts: 1
Expertise: Intermediate

Posted Sun Aug 17, 2003, 7:45pm
Subject: You're wrong
 

No one wants to see people starving, but the laws of economics rule the game.  Unless there is some kind of illegal price fixing going on, the dynamics of supply and demand set the price of coffee, not governments, cartels (ack!), or bleeding heart liberals.  The whole reason that a cartel once existed to *artificially* sustain the price of coffe is because there was too great a supply of coffee.  That means that some coffee farmers (prefereably the ones that grow crappy coffee) SHOULD get out of the coffee business.  Only then will the supply of coffee decrease to a level that can facilitate "liveable" wages for coffee farmers.  Every market has an equilibrium -- a point at which no other competitors can enter because the price is not lucrative enough.  Why did Vietnam enter?  Because the market could bear more supply, and because the new farms can make *MORE* money than they were before they produced coffee.  

It doesn't make any sense to blame the "big 4" either.  They're keeping their COGS as low as possible, just like any other company does.  And for whatever reason (good marketing?), their customers are buying it.  As much as I hate the crap they sell, how can I criticize them?  They're serving the general coffee market, which just isn't as discerning as we are.

I truly wish the starving farmers could find another business (preferably not illicit drugs) to get into -- one that isn't already over supplied, like coffee.    Bogus price fixing, a la OPEC, isn't the answer.  Markets have a way of taking care of themselves.  You can't artificially sustain suppliers.  Look at the US airline industry, for example, or American farmers.  The taxpayers pay billions upon billions to artificially sustain these industries.  And they consistenly fail, requiring ongoing monetary infusions.  Economic engineering never works.  It's a time-tested axiom.

I appreciate and share the concern for the struggling coffee farmers, and I hope that their conditions improve.  I just don't think excises, cartels or price fixing is the answer.

Hey, I love the site.  Thanks for your hard work.

Jeremy
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