Friday, December 7, 2007

Shade Grown

Stylized chic coffee has become charming indeed: especially from the purveyors under the watchful gaze of the "Big Mermaid." Coffee isn't just a morning kicker: not any more. Coffee has become the cachet of everyone from big SUV driving moms, to Oprah Winfrey. The charming coffee industry has made us into aristocrats, all but the coffee farmers of course.

As the unstoppable Big Mermaid juggernaut continues to steamroll her stores into every nook and cranny in America, the boys down south still struggle to find any peace. Whipsaw coffee prices, that make even seasoned and grizzled traders blush, dependant on the fickle unpredictable weather, giant muti-national corporate influence, and frenetic markets... the economies of coffee sometimes leave us feeling particularly guilty about the social and environmental costs of our little indulgence. As we seem to intuitively somehow know that Lexus Latte is costing us much more than the price of our excess, we are guilty and we know it.

The rise of a number of enigmatic conscience soothing labels on the coffee help us feel better though most consumers have little understanding of what most of them mean. But God they sound good...Fair Trade, Bird-Friendly, Shade-Grown... it's like coffee church. We can assuage our guilt if we somehow can know that we are buying conscience coffee. Enter Fair Trade. What could be more inhumane than knowingly have poor second and third world coffee farmers and their children suffer so that we can have chic.
The problem is that the crisis was created when back one sapling, stealthed from the gardens of King Louis the XIV was brought to Martinique then propagated across the Americas, resulting in MILLIONS AND MILLIONS of coffee trees which for the past three hundred years has produced far more coffee than necessary to keep the world from getting a headache. And coffee leviathan buying programs that perpetuate the problem by sourcing the cheapest coffee possible, shining it with a little Madison Avenue and reaping huge corporate profits.

Now coffee has become an affordable luxury of the west. But even four-dollar lattes aren't helping. There still is a dearth of education, health-care, even basic necessities of life for struggling farmers in most Central and South American countries. The money isn't getting down South; it is funneled into the coffers of huge multinational corporations like Nestle, Philip Morris, Proctor and Gamble, and of course Big Green.

The answer does not lye in conscience assuaging labels; it lies in the specialty coffee industries unique ability to uplift the coffee world. Most really good coffee still comes from small family farms where the trees are tended with loving care. The specialty coffee industry has created a new coffee paradigm. We can improve the impoverished people of South America and other coffee producing regions where poverty endures.

Coffee farmers typically have no idea what happens to their coffee after they deliver it to the processors. They are generally unaware of the posh, tanned and taught women who wear enormous sunglasses scream into the cell phone with one hand while holding the Lexus Latte in the other. They would likely find it comical that the frills come at four-dollars a pop! They would blush at space age coffee servers, diposable everything, and individual sweetener packs which adulterate what they consider a staple of life. All of these gratification of our coffee whims would cause them to roll their eyes as such opulence. They usually just strain the coffee through a cotton shirt and drink-up.

I think they would be infuriated to learn that the coffee they sell, even at the "fair" price of $1.26 a pound fetches $11.00 and up on the American market. Indeed it is ironic that this gift of God, that takes a year to grow, with arduous painstaking effort and often dangerous work harvesting and tending to coffee trees on the side of abysmal mountain cliffs, is so inflated by those who simply cook then display the stuff for sale. It's good they don't know, or maybe they do! But these are humble people and would likely be grateful just to be selling the coffee at all, un-flapped at the glaring gap in price from what they are paid.

The whole fair trade thing is indeed an altruistic concept, but the fact is, in the real coffee trading world, fair-trade contracts are hard to come by. There is more "fair-trade" coffee than there are buyers. The systems of economy won't support the concept very well. The fact is that most people do what benefits themselves, not someone else. It's the law of the jungle. It's at the cash register where things fall apart. Oh there are those few magnanimous angels who sacrifice themselves at the alter of humanity and regardless of the hardships they suffer, they will buy the Fair-trade label because it make them feel that they are engendering world peace. But for most of us, self-preservation and the law of the jungle prevail. There is lots of data that shows that there are two key elements that guide food product buyers: taste and price. We don't go into the marketplace and buy coffee (or anything else) at an amplified price when the very same coffee sits right next to it, but cheaper. Oh, I guess I might do it because I so love those invisible "Juan's" down in coffee land. Hmmmm....

But, there seems to be no problem to buy the Lexus Latte that costs as much a three pounds of coffee he sells, even at the so called "fair" price. So here’s the thing. That $4.00 hedonistic cappuccino doesn’t cost that much because of the coffee. The cost is everything else...the cup, the overhead, the chic...well you get it..., the coffee is only about 7 cents of the price and this is for roasted coffee, packaged and delivered to the coffee purveyors. And oh yes, there is a lot of profit too. So even wild fluctuations in the price of NYBOT "C" coffee has little if any
effect on the price at the pump (the air-pot that is).

The so called "fair-trade" movement is charming and even the big guys are lending lip service in that direction. It's good for their image, but the fact is the commitment is small, and the good will the image garners is worth the price of inflated beans. Coffee roasters in general detest the cost of fair trade beans. the call it "unfair-trade." When the roaster buys some fair-trade beans and then looks out into his warehouse, is all the rest of his coffee "unfair" trade then? Wow, thats quite a burdon for someone to bear to make a living.

The fair trade system constitutes, more or less, a socialist wish list opposed to an actual viable market scheme. The restrictions, the reporting, the "transparency", the structural problems, on and on cause distain amongst roasters of all ilk. Some say that Fair -Trade keeps high cost farmers in business at the cost of low price ones. It may be ugly but it is true. Besides, it isn't the farmers who get the extra cents a pound, generally it is the cooperatives that reap profits at once again the expense of ..well you know.

Fair-Trade is not the solution to the coffee crisis. According to Alex Singleton of the Adam Smith institute, while fair trade is based on "the best of intentions," it might in fact "make things worse." Singleton's comments echo the main criticisms of Fair Trade, that "it also leads fair trade producers to increase production." While benefiting a number of Fair Trade producers over the short run, fair trade critics worry about the impact on long run development and economic growth. The reason coffee prices are so low on the world markets is that there is too much production. By encouraging even more supply of coffee, fair trade makes the world price fall further.This makes the vast majority of coffee producers worse off. In 2003, Cato Institute's vice president for research Brink Lindsey referred to fair trade as a “well intentioned, interventionist scheme...doomed to end in failure." Fair trade, according to Lindsey, is a misguided attempt to make up for market failures in which one flawed pricing structure is replaced with another. But in a Madison Avenue world, consumers can be led to assume the worst if the label is not indicative of some kind of altruist commitment to hugging a coffee farmer. We are "sold" Fair Trade as an un educated and in general ignorant latte wielding public. It simply doesn't work to uplift the plight of the situation but it certainly gets people talking. Zero point four percent of the world coffee production is so called Fair-Trade. It isn't even a squirt gun on the price gap inferno.

So what will help? Indulge your inner, ney demand the best tasting coffee you can find.
Don't be taken by conspicuous coffee consumption and the buffed gleaming image of the Mermaid. They have never done much of anything to voluntarily help struggling coffee growers. And the coffee isn't high quality but oh my God, the will sell you that the chic cachet is well worth the price of admission. There is not one single coffee but instead many different coffee products that are differentiated from one another in terms of quality, blends, packaging, and now also "social responsibility" features. For each of these products there exists a specific and different market price that is determined by consumer taste for that kind of product . This brings a whole new meaning to the term "Drink Responsibily!"

The Big Four, Nestle, P&G, Phillip Morris and Zannetti aren’t ever going to help struggling farmers either, though they like to use their huge marketing muscle and war chest to position themselves in your mind as coffee angels. These are the real culprits of exploitation of coffee. They purchage huge volumes of cheap coffee because they could care less about quality. They buy mountains of the cheapest coffee possible then remove all of the stuff that makes it coffee in the first place, then reinject it with synthetic "flavor."

The best beans are being separated from the "C" beans, thanks in no small measure to the specialty coffee industry. I call them the farmers secret weapons. In an emerging market of really terrific coffee, these beans bring value, and not just for coffee snobs: for the farmers as well. The farmers have always known where the really great coffee is, there just wasn’t a market before, so all of the good was mixed with the bad, sold through frenetic traders on the NYBOT, roasted to death and the technologized, then of course sold to us by Juan... or Mrs. Olsen!
There has been a shift in the coffee industry and this is no mere fad, it is a trend ..good coffee matters. Thanks in no small measure to the Big Mermaid, the joys of really good coffee have gained increasing awareness in the minds of consumers. No one has done more to generate an insatiable global thirst for good coffee that Starbucks. We thank them for that from the bottom of our coffee cups! By buying really quality coffee , you help those farmers to produce good coffee, and that is the answer. Not socialistic cooperatives who would have us drink "guilty" coffee that more times than not isn't even good.

So do I have to decide to drink Bird-Friendly Coffee or Shade Grown? Do birds not like the shade?
Special Thanks to Taylor Clark.
Certain segments of this post were adapted from his book Starbucked.

"Live Well, Drink Good Coffee"

No comments: