Friday, February 26, 2010

An "I Told You So" Is In Order

Well, I did. Just a few days ago, I posted on how Colombia is experiencing a much lower-than-normal first 1/3 of its harvest season. Supply should go down, and therefore, prices should go up. These basic facts of market function are accessible to anyone looking for the information. I even suggested putting your money on it- that is, the fact that stock value of the super-rich coffee commodity would get super-richer (if that's a word?).  Guess what? I was right.

In this week's Bloomberg, Colombian coffee was shown to be expected to skyrocket in price. Even lower production should bring about record high prices. Of course, now that this "official" news has broken, Colombian coffee prices have, in fact, gone way up and are projected to go up another "21 percent in the next two months". In the last few days specialty coffee prices have gained by significant margins. Why did I not take my own advice and put my money where my mouth was?

There's not much else to this post than the simple declaration, "I told you so," except that it's not just you I told- I told myself as well. Here's to next time I make an air-tight prediction on the coffee market's futures. A quick picture of what is proving to be an increasingly valuable and rare item:

Lord, thank You for providing me with all I'll ever need: forgiveness through Your own sacrifice. It will never become a commodity: expensive or limited. Keep my head deflated and on straight. Here we go.

Monday, February 22, 2010

Luxury Advances as Valdez Retreats

In my last post I mentioned that Colombia, and many other Latin American coffee producing regions, is having a lower producing first part of this growing season. Using "Juan Valdez" as my emblem of big-name/big-business coffee, I proposed  that less well-known producer regions could use this time of decreased Colombian output to gain a larger share of the specialty coffee market. What I did not realize is that Juan Valdez is suffering literally as well. The "Big Colombia" coffee retail front has been losing a steady stream of business in the last year or so; the answer to what is the cause of these losses in sales is the point of this post.

Juan Valdez brand of coffee and retail shops is owned by Colombia's National Federation of Coffee Growers, known as Fedecafe, a major trading corporation focusing on quantity, not quality of the product. Juan Valdez brand has closed stores in multiple countries and, allegedly, all for the same reason: the globally depressed consumer buying power. What I want to examine now is if this "fact" is actually true. Is the big-Colombia coffee business really feeling the sting to the wallet because people cannot afford their drinks? For goodness sake, their shop in TIMES SQUARE in NYC is closing! I believe there is one central claim here worth investigation: Are ALL coffee outlets feeling the pinch or are just some KINDS of outlets contracting and WHY? Simple answer to follow.

My experience tells me that even through this rough economic time, people are still buying their beloved beverages. Not only are people still buying coffee, but they are buying more than they used to! Coffee is a luxury not a necessity (very arguably). People buy luxuries for one main purpose, and that is to create a sense of pleasure or happiness that is not found in the day-to-day expenditure for the necessary things in life like basic foods, UNPURIFIED and NON-BOTTLED water, basic clothing, and shelter. During this tough economic time, people have to cut back on their luxury expenses. A lot of the time, luxuries are ridiculously expensive- so expensive they should not ever have been incurred, even in the best of times. These expenditures are often the first ones to go. Cars that are way too pricey, unnecessary smart phone plans, designer clothing, expensive business lunches, etc. What is one luxury that is, comparatively, affordable? Specialty Coffee.

So, assuming what I've observed to be true really is true, why is Juan Valdez hurting and not other outlets like Kaldi's Coffee Roasters or Stumptown or Intelligentsia who are all relatively expensive? The answer is because consumers are being much more SELECTIVE with their luxury purchases. If I'm going to buy a latte that will cost me around $3.50, am I going to buy from a micro-roaster/ coffee shop that is nationally acclaimed or a place owned and stocked by something akin to Folgers? Juan Valdez is feeling the pain because coffee buyers are becoming snobs. I'm not talking about snooty, I'm talking about having raised standards. These are a new educated public of choosy consumers with a more limited luxury budget. They do what anyone does when in their right mind, they are more careful with what they have, ergo not buying crap coffee from crap places like the neighborhood gas station, or Juan Valdez for that matter.

There is really not much more that needs to be said. If a coffee outlet wishes to survive in a more strapped luxury expenditure economy, do what any luxury must do: Become more luxurious. Pause and take a minute to learn something from your little-brother turned pro-wrestler- the small, independent, micro-roasting, coffee shops. Improve the quality of your product and become, sincerely, specialty coffee.

Lord, thank You, once again for choice. Keep my head deflated and on straight. Here we go.

Friday, February 19, 2010

Where's My Colombian, Juan Valdez?

It turns out that coffee production is way down for the first 1/3 of the Latin American growing season.  Why does this matter? I suppose it doesn't matter much if you don't care where your coffee is coming from, but chances are if you're reading a COFFEE BLOG you're not one of those people. Prices will go up for the varietals experiencing lower production. When those prices go up, buyers will look elsewhere for more cost-effective purchases. This will be a valuable opportunity for less renowned coffee producing countries, like Honduras, to get their product out there.

Colombia's production is down, so is Peru and Costa Rica. We're not talking about menial levels of decreased output either. An article I read said, "The other six [opposed to the 3 increasing production nations] producers posted reduced output, including... Colombia (-33.6 percent), Peru (-26.9 percent), Costa Rica (-26.8 percent)...". Look for your local specialty coffee shop/roaster to begin carrying a surprising amount of the three increasing production nations.  "Only three nations in the group saw an increase in coffee production: Honduras (by 47.5 percent), Guatemala (by 18.1 percent) and Mexico (by 16.1 percent)." This bodes well for me since, according to my analysis, Guatemala has had some of the most balanced and palate soothing crops of the last 2 years.

Is it possible that the slump in production is tied to the slumping in demand? No, considering demand outstripped the supply in 2009 and is projected to do the same thing in 2010. This article even claims that coffee is the single best investment for 2009-2010; that's a big claim even if we weren't in the midst of a dramatic consumer depression. So, what's the point? Well, there are a few.

1. Get some of your favorite Latin American coffees now, while the prices are lower and availability is more ready.
2. If you're a coffee buyer (large scale), get your supply of staples like Colombian, but put more energy into researching new sources like Honduran, Mexican, or Guatemalan.
3. Invest in coffee. Maybe the actual stock of coffee commodities, maybe not. Definitely bank on specialty coffee sticking around.

I've tried the Ugandan from Coffee Ambassadors and was truly impressed. I gave some out as gifts! They did not pay me to say this either.

Lord, thank you for easy access to information. I don't appreciate basic blessings like that very often. Keep my head deflated and on straight. Here we go.

Wednesday, February 17, 2010

Fast Food Coffee? Obviously.

I'm disgusted. I'll bet I walk past at least 1,000 college students carrying their beloved mermaid laden, pearly white cup adorned with a complementary drink sleeve every day. No, I'm not ranting because I'm envious or have some kind of underlying hatred for big-business. This frustration I feel is coming from a source much more disturbing; a revelation of deception.

Like many people, I go about my everyday naive of so many things. One of those things for many out there may be that there are technically only 46 states in our union due to the fact that 4 are "commonwealths". A fact that was unbeknown to me was that Starbucks owns everything.  Their fingers are everywhere and it freaks me out.

I read today that Burger King, the #2 fast food chain in America, is going to start serving Seattle's Best coffees to help bolster their slumping breakfast sales.  At first I thought it interesting. My mind then swung to my bane, Starbucks. (Again, I must stress that I do not abhor this organization simply due to their success, but more because of their explicit exploitative abuse of specialty coffee. Believe me, I'm being very polite using these words rather than others.) I began thinking of how I loath Starbucks, but in view of Seattle's Best, they seemed to be at least a step behind in the coffee prostitution industry. I was shown to be ignorant of the facts just a few sentences later in the article: Seattle's Best is but a mere subsidiary of Starbucks Corporation. Yet again, more fuel is provided for my fiery hatred toward those who smear specialty coffee.

What a little more investigation produced was what became frightening for me. A simple Wikipedia search on Seattle's Best brought up all sorts of news. The article explains my fright pretty thoroughly:

"The Borders bookstore chain signed a contract with Seattle's Best Coffee in 2004 to convert Borders' in-store cafes to Seattle's Best cafes. As of 2006, approximately two-thirds of Borders' domestic superstores have completed the Seattle's Best conversion. Seattle's Best parent company Starbucks Corporation has contracted with Borders' competitor Barnes & Noble to sell its products in Barnes and Noble's Cafes. Starbucks also owns and operates locations within Chapters and Indigo Books and Music bookstores in Canada."

So, our two primary bookstore chain options are overwhelmed by our SINGLE most dominating coffee source. Unfortunately for those poor souls looking for what is really, truly, SPECIAL specialty coffee, you'll have to wait to get your fix until after you leave B&N or Borders. So, what does this really say? What is this post really about? I think it's about the prevalence of bad coffee pushed off onto us as good coffee. Crud coffee is rejected by some in one package, so the pushers simply repackage it and sell it to them in a different way. Always look closer.

Another sickening example even less obvious than the previous one is Starbucks' 15th Avenue Coffee and Tea experiment:
"Andrew Hetzel, the founder of coffee consulting group Cafemakers, said Starbucks may also be renaming its stores to provide a testing ground for changes and, possibly, to bring in a new brand of consumer.
“It looks to me that they are testing a specialty sub-brand to see if they can capture some other segment of the market that would otherwise be disillusioned by a large corporate chain,”
Listen, all this is probably obvious to a lot of people out there. Honestly, I knew of quite a bit of this myself beforehand, but for those of you who didn't, look up while you're walking. Check to make sure where you're getting your usual is really a place you want to patronize. I'm not trying to scare people off of Starbucks, Seattle's Best, McDonald's or even Folgers, believe it or not. They make a product, but it just happens to be something VERY much different than specialty coffee.

Lord, thank you for revelation. Your revelation is clear and available and I thank You for that. I pray I take advantage of its clarity. Keep my head deflated and on straight. Here we go.

Monday, February 15, 2010

Lo Mejor de Monserrate

I usually do not start off a post with a picture, but a simple coffee review is in order. A month ago or so, I bought "The Best of Monserrate" from Kaldi's based on some hype I had heard from a barista friend of mine. After all, it is called the "best", so how far off could it be? The stats on this particular Colombian coffee are quite impressive. It is farmed at just over 6000 feet in elevation and is of the Caturra variety. These two facts alone indicate that the coffee produced will be exemplary. Here's why: When coffee is produced at higher altitudes, the fruit "cherry" production decreases due to lower amounts of carbon dioxide in the atmosphere and typically less nutrient-rich growing conditions. The trees naturally produce less volume to increase the chances of each cherry and its seeds' ability to propagate. In other words, you get less coffee, but it's higher quality. In addition to the very high altitude, the Caturra variety is known to increase its quality as the elevation it is grown in increases. This plant and situation requires high amounts of labor and attention to successfully grow. The result, if done correctly, is a light bodied and pleasantly citric coffee.
 Kaldi's did a great job on the Colombian Monserrate. The qualities expected from this growing region, elevation, and variety were perfectly displayed in my cup. My favorite brewing method with this particular coffee was actually the AeroPress. This is atypical for me, but fitting here because it intensified the citric notes and allowed me to truly appreciate the immense quality of the beans. Another favorable method of preparation was the almighty Chemex . French Press did not perform as well as I had hoped, but did improve after employing the "skimming" method suggested by Tim Wendelboe found in James Hoffmann's Videocast. I doubt there is much left, if any, but in the event there is, PICK IT UP! Delicious and affordable is rare.

Lord, thank you for great tastes. Keep my head deflated and on straight. Here we go.

Wednesday, February 10, 2010

My McCafe Moment

Last week, I went to McDonald's for breakfast. This is not a common occurrence for several reasons. One reason is that I am not in the financial position to blow money on "food" that is honestly not worth its price. The other major reason is already stated within the first reason, the food is bad. However, I made an exception for some reason. I may have gone temporarily unconscious, I don't know, but the result of this action was my purchase of a "EXTRA-value" meal from this fine establishment. What I realized while at the counter was that I now had a problem: what to drink?

In retrospect, I'm thinking the extra fifty-some odd cents would have been worth abandoning the sinking ship of McCafe for the life raft of reconstituted from concentrate orange flavored water (juice). But, like I have said, I had some sort of mental faculty go on summer vacation a few months too early. I chose the "included" small coffee to accompany me in my delicious dining experience.

I started out by taking the lid off and documenting the wonders that are McDonald's gourmet coffee. I'm not sure if it is visible from the photo, but there is a nice watery line around the surface of the coffee where it meets the cup. Fantastic. I knew initially that this coffee was going to be weak, both in taste and in body. Honestly, I cannot believe that I'm even using proper coffee analysis lingo on this. It was in fact, weak. The taste wasn't horrendous, like that of the pre-ground anciently old office coffee, but it wasn't much better either. The finish was bland and stale. I didn't finish it.

How about that styrofoam cup covered in printed paper to replicate Starbucks' paper cups? How do you like that? McDonald's is trying to imitate bad coffee as well as cover up the fact that they use the world's worst (exaggeration, but still) substance for the environment as their cup. Great. This shouldn't be surprising- the similarity between McCafe and McStarbucks- because McDonald's has made Starbucks its prime target for expansion into the coffee scene. What IS surprising is that Howard Schultz, Starbucks CEO, said his "model for expanding Starbucks IS McDonald's." I guess the mimicking goes both ways. Bottom line: I'm not lovin' it.

Lord, thank you for the ability to go and to do and to try. I pray I don't take that for granted. Keep my head deflated and on straight. Here we go.

Wednesday, February 3, 2010

Espresso Machine Mayhem

A couple of weeks ago, my mom and dad (and sister) visited to celebrate my birthday. As a gift, my dad offered to help install my refurbished La Marzocco 4 Group AV Linea in my house, just for kicks. You see, I am a coffee freak; as if you hadn't noticed the ENTIRE BLOG devoted to my ridiculously intense coffee passion. So, he went and purchased some low-end necessary parts like a dryer plug connection cable, garden hose (for waste water), and a small water filter. We spent an hour or so hooking it up, filling the boilers, and working out the kinks in our technical knowledge. I've installed a Linea before, but it had been at least 7 or 8 months since.

The first step was hooking up the water hose to the existing laundry water outlets:
This was such a good time. The water pump, if not given enough water pressure, as to by syphoned to actually start working. Luckily for us, where I live has VERY sufficient water pressure- nearly making the pump unnecessary.  As you can see this was a low-cost job, performed as basically as possible. The next step was connecting the existing 220 V power cord to the new dryer connection cable
(costing roughly $6 compared to the usual $25 for a real machine plug). This went on easily enough since my dad is a do-it-all electrician extraordinaire.

Then came the real eventful stage of running water into the boilers. We had initially forgotten to close off the water pressure relieve valve in the waste water tray, so, water came blasting out of it at first. Quickly shutting off the water supply allowed us to close that valve and get back to it. After that shock everything filled fairly smoothly. It took about 10 minutes to get everything filled and adjusted to the correct pressures- adjusting the pump to obtain the desired 9 bars for the front 2 extraction boilers was the most difficult (there are actually 3 boilers in the 4 group machines, 1 "front" boiler for two group heads and the "rear" boiler for the steam wands).

Unfortunately, after starting the machine for 15 minutes and allowing the boilers to heat up and drain energy, the breaker in my residential breaker box tripped and that showed us that this little project had hit its limits. There are "ways" to get around this problem, but all of these ways are illegal- at the very least they are against "code."So, we called it quits for this particular adventure. I promptly drained the water out of the machine and it is now stored, propped up on paint cans, in my laundry room, again waiting for its chance to shine.

Oh, my beloved, how long do I have to wait for thee? How long before we can frolic in the meadow of espresso bliss? I know I'm ridiculous, but still. This machine was a significant investment. All I'm saying is using it would be nice. The picture doesn't show it, but I did replace the drip tray, grates, etc, so no worries about abuse and neglect.

Lord, thank you for the learning experience. I pray You bless Charlie for all his help with, and tolerance of this crazy interest of mine. Keep my head deflated and on straight. Here we go.

Tuesday, February 2, 2010

This is Cool

It is so fulfilling to see my dream begin to come true. This is such a small thing, a mere drink sleeve, but it made a huge impact on my morale regarding this endeavor. As far as significance goes, this development (and blogpost) means almost nothing, but still...

Lord, thank you for a little progress. It feels good. Keep my head deflated and on straight. Here we go.