Opinion: Coffee’s Biggest Crossroads May Be In These Two Headlines

Can progressive coffee companies stay afloat in a market where the perception of value comes in plastic pods? Creative Commons photo by Randy

There are several reasons I tend to shy away from writing about mainstream coffee reportage — not least among them, it seems kind of rude. Also, mainstream sources are generally writing for a different audience than ours, with broader topics and a consumer focus, and there is little in the way of meaningful crossover.

But I cannot ignore two mainstream stories that have come out in recent days that each touch on the perception of coffee value among consumers — specifically, I’m struck by how one got it so right and how another got it so wrong. Let’s start with the right:

Yesterday, The Guardian published an opinion piece from Chérmelle Edwards titled, “The hipster coffee revolution is going to save your morning and the planet. Are you ready to pay a little more to help?” Pitched as a “manifesto for the end of Starbucksification,” the piece describes the “intimacy from source to shop” that has become so prevalent in many of today’s coffee retailers operating at the highest levels. Writes Edwards:

Sorry, but I’m a fanatic of coffee culture: I’ve bought into paying more to know where my coffee comes from, tracing the coffee I buy to a website that tells me about its trip – from my coffee’s home country and farm to my cup, in one of the two coffee shops I visit each day. I was riding the “third wave” of coffee way before I knew the term even existed.

(related: NGO Consortium Calls Out Roasting Industry for Poor Efforts Toward Supply Sustainability)

Edwards then questions what will happen when “the big four” of coffee’s latest wave — Blue Bottle, Stumptown, Intelligentsia and Counter Culture — further expand their retail reach to consumers, in the process expanding their collective footprint as buyers of coffee as a commodity. This, she argues, could be a good thing, so long as those companies are responding to the consumer interests that popularized them in the first place: commitments to supply sustainability and consumer engagement in origin; processing methods; alternative brew methods; and other factors that can elevate the coffee drinking experience.

Edwards concludes, appropriately, with questions:

There’s always another wave coming, and the small artisanal coffee indies will be riding it, too – not just the big four, who are trying to take their current business model to the masses. The real question is: are there enough coffee-curious among us to support the evolution? Will you pay enough to support specialty coffee while it stays sustainable?

Rephrased, Edwards’ final question is also an important one for the industry: How can coffee command more value in the marketplace?

Now, onto the wrong:

Slate on Monday published a piece that begins with the headline, “How to Make Money Off Rising Coffee Prices.”

(related: Win For Folgers Results in Unprovoked Attacks on ‘Coffee Snobbery’)

For many in the coffee world, the headline alone has appalling global implications. As we know, rising coffee prices generally reflect increased demand in consuming countries, combined with diminished supply in producing countries, where issues like food security, poverty, and lack of basic healthcare and sanitation affect huge numbers of people working at origin. The basic question, “How can one capitalize on this?” is shallow, at best.

Slate staff writer Alison Griswold begins with the following:

The cost of packaged coffee sold in stores from Starbucks and Dunkin’ Donuts and Maxwell and you-name-it is rising between 8 and 10 percent to compensate for the increased prices of blighted and drought-stricken coffee beans. Many of those price hikes have already taken effect. But some — like the up-to-9-percent raise for Keurig Green Mountain Coffee’s K-Cups— don’t hit until the fall. And herein lies a great business opportunity.

The story then goes on to consider whether one might be able to turn a decent profit by, for example, stocking away K-cups purchased at the current retail price and reselling slightly below retail value once prices rise. Griswold then reaches out to law professors to see if this kind of deal may be a) profitable, and b) legal, concluding with the following:

Law professors say that attempting to make a buck off rising coffee prices is a legitimate business venture. “I’m happy to report that this raises no legal issues — you are free to buy and sell coffee in massive quantities,” Ryan Bubb, a professor at New York University School of Law, emailed. It might not be the next gold rush, but the window for coffee arbitrage is open and now is the time to act.

There is no shame in making a dollar off coffee, just as there no inherent shame in being the first to act on something (see “coffee wine”). But in my mind, the juxtaposition of these two stories begs one of the most important questions facing the specialty coffee industry: Can growing coffee companies stay true to their social and environmental values in a world where the perception of retail value among consumers is being driven by the Starbucksian and plastic pod segments?

As each of these specialty segments grows, as has been the trend, this question should only become more pressing.