What You Should Know about Coffee

EAR

New member
Oct 22, 2014
5
0
What You Should Know about Coffee

One day last month, I accompanied my roommate to buy a cup of latte in a Starbucks store, which was really the first time I entered a café in America. But it was this first-time experience that aroused my interest in learning more about coffee in the U.S. That Starbucks store was small, only with several seats which were occupied at that time. Besides this, many people in that café were queuing, waiting to buy or pick up a cup of coffee. When I was waiting for my roommate, I even didn’t know where to stand, because there were always many customers who kept coming in and out of the café.

However, in China, Starbucks stores, by no means, look like a fast food restaurant and are usually large and quite, maybe five times as big as the store above, but with only several people drinking and chatting. Customers of Starbucks usually have higher social status in a city, because the coffee is really expensive. This sharp contrast drove me to know more about American coffee culture, since it seems that coffee is just like a necessity for Americans. And based on looking up Wikipedia, United States Department of Agriculture (USDA), U.S. Food and Drug Administration (FDA), National Coffee Association (NCA), International Coffee Organization (ICO), Fair Trade USA and other organization related to coffee, I wrote this paper and also found some unexpected data and facts.

1. A Brief History of Coffee
Based on research and the credible evidence ever found, coffee originated from Arabia. It was first cultivated in southern Arabia and in the middle of 15[SUP]th[/SUP] century, the Sufi Muslim monasteries around Mocha in Yemen were the first place where people drank coffee and they also roasted and brewed coffee beans as we do today. In some parts of East Africa and Yemen, people used coffee in some native religious ceremonies. But because of the conflicts between these ceremonies and the beliefs of the Christian Church, secular people were not allowed to buy or drink coffee until Emperor MenelikⅡcame to power.

Before the 17[SUP]th[/SUP] century, all the coffee exported from Arabia was boiled, so that they could not be planted in other places. This continued until 1670, when a person called Sufi Baba Budan first smuggled some coffee from Yemen to India. The only seven beans he smuggled became the start of the world-wide spread of coffee. After then, coffee spread to Italy, then to the entirety of Europe, to Indonesia and to Americas.

From the history, we can know that though coffee spread to Americas later than other regions in the world, although the Americas have now become the worldwide biggest producing and consumption region of coffee in the world.

2. Global Coffee Trade
During the data collection, the first thing that shocked me was that according to International Coffee Organization (ICO, n.d.), the value of the global exports of coffee in 2010 was estimated to US$15.4 billion. That was really a big figure which makes coffee the second most widely traded commodity in the world, following the thing you put into your gas tank. But if we narrow down the scope to agricultural commodities, coffee ranks as the first most widely traded.

If we say coffee, I guess that most of people would think of Brazil. Yes, Brazil is the biggest producer of green coffee (unroasted coffee beans) in the world. The global output of coffee this year is forecast to be 148.7 million bags (one bag here is about 60kg net weight). (USDA, 2014) Besides Brazil, Colombia and Central America, Vietnam, Ethiopia, Mexico, Indonesia and India are also the largest producers of coffee, whereas these countries do not have a huge consumption of coffee. So they become big exporters of coffee as well.

Then who consumes those large amount of coffee? The answers are European Union (EU), the United States and Japan. But if we say the biggest coffee consumption country, it should be the U.S. And it is interesting that none of these three regions plant and produce coffee (here we refer to the mainland of US, since Hawaii and Puerto Rico produce coffee). As the 2[SUP]nd[/SUP] importer of coffee, U.S. is expected to import a record of 25 million bags with its rising consumption. And among the top suppliers, Brazil ranks first, accounting for 25% of American imports. Vietnam comes in second, with 18%. And the third is Colombia, with about 13%. (USDA, 2014)

Though the U.S. is the biggest coffee consumption country, it only ranks 12[SUP]th[/SUP] in coffee consumption per capita, with 4.2kg per year per capita (ChartsBin statistics collector team, 2010). The data also showed that the annual world average of coffee consumption was 1.3 kg per person per year. And the top eight countries on this list are European and first six countries are Finland (12kg), Norway (9.9kg) and Iceland (9kg), Denmark, Netherlands and Sweden. (ChartsBin statistics collector team, 2010) It is interesting to find that almost all of these countries are Scandinavian and I think maybe it is because of the cold weather there that they drink more hot coffee to keep warm.

2.1 Coffee in Hawaii and Puerto Rico
I mentioned that no coffee was produced on the mainland of the U.S. And Hawaii and Puerto coffee are the only American-grown coffee, because of the geological advantages of these places.

Coffee was first introduced to Hawaii in about 1800s. Though Hawaii does not locate on the traditional coffee belt – the Tropics of Cancer and Capricorn, the advantageous geographic location enables Hawaii, especially the Kona area, to become suitable for coffee production. “The weather of sunny mornings, cloud or rain in the afternoon, little wind, and mild nights combined with porous, mineral-rich volcanic soil create favorable coffee growing conditions. Nowadays, Kona coffee that planted in Kona District is one of the most expensive coffees in the world.” (Kona Coffee Wikipedia, n.d.)

Based on a report of NASS (2009), “Hawaii produced about 8.6 million pounds (parchment equivalent basis) during the 2008/09 season. And the total farm revenue of coffee was estimated at $29.2 million for the 2008/09 season, 8 percent lower than the 2007/08 season, which was the result of a 20 percent drop in the average farm price compared to a 15 percent increase in production.”

Being located in the traditional coffee belt makes the coffee produced in Puerto Rico enjoy the worldwide high reputation. Abby Goodnough (2005) argued that, “the cafes of Vienna, Paris and Madrid served Puerto Rican coffee in the 19th century, as did European monarchs and even the Vatican”. Rivera M. (n.d.) argues that now coffee is still the most valuable crop for Puerto Rico. “Production in previous years has fluctuated between 105,000 pounds (47,600 kilograms) and 150,000 pounds (68,000 kilograms), according to department statistics.” (Coto Danica, 2013) So the amount of coffee exports to the U.S. also declined, which pushed the U.S. to seek other coffee-providers.

From the above data, I think that these two places are very interesting, because they only export, but not import coffee. So local people in these two parts can only drink local coffee. Why? Is it because that the local people only like drinking local coffee? The answer is no. It is only because of a regulation made over 100 years ago. According to the website of Hawaii’s Agriculture Department (n.d.), in 1888, a man called King David Kalakaua prohibited the import of coffee into Hawaii to protect the local coffee factories. Though the regulation was changed in 1970s that the fumigated unprocessed coffee beans could be imported, green coffee beans were still prohibited, in case the destructive pests to coffee outside the state were brought into Hawaii and affected the local production. Then in 2005, Animal and Plant Health Inspection Service (APHIS) made a proposed rule for movement of unroasted coffee into Hawaii and Puerto Rico. According to this proposal, Hawaii and Puerto Rico once requested for the import of coffee which were all denied for the potential risks of introducing other kinds of coffee into these places. But now, the production of coffee in these two places could not meet the demand and they thought that with proper quarantine and the help from APHIS, the import of coffee would not hurt the local coffee industry. (USDA, 2005) Although nine years have passed since the proposal was submitted, no revision in regulation has passed.

3. From the Coffee Tree to Your Cup
Now, if you are holding a cup of coffee, I invite you to imagine the journey that the coffee in your hand has taken. If you have no idea of how long it has travelled, then read the following part.

You can never imagine that the coffee you drink now was planted several years ago, since usually it takes 3 to 4 years to harvest the cherries of the coffee.

After being harvested, the coffee beans would undergo a series of processes, in order to be prepared for shipment. They will be first dehydrated as soon as they are picked, unless they would be spoiled. And then farmers would remove the dried husk of coffee beans, polish them and separate them based on size, color and etc. After these processing, they can be called green coffee which are ready for shipment.

During the shipment and unloading, it is very common that the bags are broken and the coffee beans are spilled out. So what the shippers would do to these spilled beans? In the past, FDA regulated that the beans that were recollected should be considered qualified for import and export. But one thing happened in 1978 in Philadelphia changed the rules. The spilled beans were found contaminated when they reached the destination and the buyer sued and resorted to the courts to settle the problem. After that, FDA specified another 4 criteria about coffee and cocoa bean sweeps in its Compliance Policy Guides Sec. 560.350. (FDA, 1989) If the spilled beans meet the all of these criteria, they should be considered qualified for import and export.

1. All such sweeps shall be placed in bags suitable for food storage and clearly marked with the identity of the importing vessel and with tags indicating that they are for export only.
2. The sweeps shall be stored in a sanitary food storage warehouse.
3. The sweeps shall only contain extraneous matter commonly associated with sweeps; i.e., wood, string, stones, sticks, straw, etc.
4. The appropriate FDA office shall be notified prior to exportation.
Sweeps that contain contaminants such as chemicals, mold, or animal and insect filth or otherwise do not conform to the above criteria will be considered for seizure action.

After the green beans have arrived at the destination, they would be roasted so that the aroma would come out, followed by grinding it according to the different needs of drinkers. Some may be finer, while some may be coarser. It usually takes less time to prepare a coffee with finer ones. So if you want a cup of Espresso, you need the finer ones, while if you have more time and plan to brew coffee by a drip-style coffee machine, you may try the coarser ones.

Finally, what you should do is to brew the coffee, think of the long journey of the coffee and enjoy it!

4. From Coffee Industry to Fair Trade Act & Fair Trade USA
Nowadays, when people want a cup of coffee, they would first think of Starbucks which now has over 20,000 retail stores in 65 countries (Starbucks Coffee Company, 2014) and has made a large amount of profits. According to Starbucks’ annual report (2013), it earned $14.9 billion and what they do is just to brew the coffee. The huge consumption and demand of coffee in America contributes to its success.

What contrasts to these huge profits is the small income of the farmers. A Peruvian coffee-farmer called Guzman has a 60-acre farm which can only bring about US$6,500 per year for his family which is the only income for them. There is really a big gap between Starbucks and Guzman. According to Fairtrade Foundation (2012),

the global consumption of coffee almost doubled over the last 40 years from 4.2m tonnes in 1970 to 8.1m tonnes in 2010. The last decade has seen steady growth of around 2.5 per cent a year, from 6.3m tonnes in 2000 to 8.1m tonnes in 2010. Consumption grew by 12 per cent in traditional markets such as Western Europe, Japan and the US, by 57 per cent in exporting countries and by 46 per cent in emerging markets such as Eastern Europe and Asia.

Then what about the price of coffee? Basically, coffee market is unstable and the price of coffee fluctuates from year to year, according to the weather condition which may result in harvest as well as failure. According to ICO (2014), during the last decade, the composite price for raw coffee beans fluctuated a lot. It first rose from 62.15 cents/pound in 2004 to 124.25 cents/pound in 2008, followed by a slight decline in 2009, reaching 115.67 cents/pound. Then the price spiked again in 2010 and 2011, peaking at 210.39 cents/pound. From 2012 to 2013, the price plunged to less than 110 cents/pound. But

recent spikes in coffee prices in both current terms and real terms – adjusted for inflation – are contrary to the long-term downward trend in real prices which farmers have been exposed to for more than fifty years. Current high coffee prices are matched by corresponding increases in farm input costs which, coupled with devaluation of the US dollar, means there is limited real income growth for coffee growers. (Fairtrade Foundation, 2012)

Based on this phenomenon, Fair Trade USA was established in 1998, aiming at helping those farmers. Once the farmers join the organization, their products would be guaranteed to be sold at a much higher price and they can also establish a long-relationship with the buyers. These things really work. They helped farmers in 70 countries additionally earn more than $220 million in about 30 years. (Hill Corey, 2012) It sounds good, but when you analyze case by case, it seems different.

According to Tina Beuchelt and Manfred Zeller (2011), in Nicaragua, there were 68.6% of fair-trade farmers who were below the official poverty line, compared with 60.8% of non-fair-trade farmers. That is, if you are a farmer in Nicaragua, you would do better to not join the organization, so that you might make more money. But, if you look at the results in Colombia, it is totally different, which has a really better outcome. In other words, Colombian coffee farmers really benefited from the program. Therefore, we could know that only with the help of organization, the income of farmers could not really be raised, which also needs the cooperation of the local government to improve the local infrastructure and provide a better access to the high-quality of roads and technologies, so that the cost of transportation of processing could be reduced.


Reference:
Beuchelt, Tina D., & Zeller Manfred. (2011). Profits and poverty: Certification's troubled link for Nicaragua's organic and fairtrade coffee producers. Ecological Economics, 70(7), 1316–1324.

ChartsBin statistics collector team. (2011). Current Worldwide Annual Coffee Consumption per capita, ChartsBin.com, Retrieved from
http://chartsbin.com/view/581

Coto Danica. (2013, May 17). Puerto Rico Coffee Production Hits All Time Low. Latinovoices. Retrieved from http://www.huffingtonpost.com/
2013/05/17/puerto-rico-coffee-production_n_3292392.html

Department of Agriculture of State of Hawaii. (n.d.) Plant Quarantine Branch. Retrieved November 3, 2014 from Plant Industry Division | Plant
Quarantine Branch


Fairtrade Foundation. (2012). Fairtrade and Coffee. Retrieved from https://www.google.com/urlsa=t&rct=j&q=&esrc=s&source=web&cd=19&cad=
rja&uact=8&ved=0CFoQFjAIOAo
&url=http%3A%2F%2Fwww.fairtrade.net%2Ffileadmin%2Fuser_upload%2Fcontent%2F2009%2Fresources%
2F2012_Fairtrade_and_coffee_Briefing.pdf&ei=rChZVKe0B8uZyASOx4KQBQ&usg=AFQCNHhuegL3BloW0lnuEk_4R2tUyJ_vA&sig2=68mwMIAeGz
dknAu_xdMtg

Goodnough A. (2005, July 31). Puerto Rico’s little secret: coffee / Some of the world’s best beans never get off the island. New York Times. Retrieved
from http://www.sfgate.com/news/article/Puerto-Rico-s-little-secret-coffee-Some-of-the-2619182.php

Hill Corey. (2012, April 25). Fair Trade USA’s Coffee Policy Comes Under Fire. East Bay Express. Retrieved from http://www.eastbayexpress.com/
oakland/fair-trade-usas-coffee-
policy-comes-under-fire/Content?oid=3184779.

International Coffee Organization. (2014). Annual and Monthly Averages: 2001 to 2014. Retrieved from http://www.ico.org/prices/p2.htm

International Coffee Organization. (n.d.). World Coffee Trade. Retrieved from http://www.ico.org/trade_e.asp?section=About_Coffee

Kona Coffee. (n.d.). Retrieved November 3, 2014 from Kona Coffee Wikipedia: http://en.wikipedia.org/wiki/Kona_coffee

National Agricultural Statistics Service. (2009). Hawaii Coffee. Retrieved from http://www.nass.usda.gov/Statistics_by_State/Hawaii/Publications/
Sugarcane_and_Specialty_Crops/
coffee.pdf

Rivera Magaly. (n.d.). Economy. Retrieved from http://welcome.topuertorico.org/economy.shtml

Starbucks Corporation. (2013). Starbucks Corporation Fiscal 2013 Annual Reports. Retrieved from http://phx.corporateir.net/External.Fileitem=UGFy
ZW50SUQ9MjE4MDQyfENoaWxk
SUQ9LTF8VHlwZT0z&t=1

Starbucks Coffee Company. (2014). Starbucks Company Profiles. Retrieved from http://globalassets.starbucks.com/assets/233b9b746b384f8ca
57882614f6cebdb.pdf


U.S. Department of Agriculture. (1989). CPG Sec. 560.350 Coffee and Cocoa Bean Sweeps.Retrieved from http://www.fda.gov/iceci/compliancemanuals/compliancepolicyguidancemanual/ucm074570.htm

U.S. Department of Agriculture. (2005). Proposed Rule for Movement of Unroasted Coffee into Hawaii and Puerto Rico. Retrieved from http://www.aphis.usda.gov/plant_health/ea/downloads/unroasted-coffee.pdf

U.S. Department of Agriculture. (2014). Coffee: World Markets and Trade. Retrieved from http://apps.fas.usda.gov/psdonline/circulars/coffee.pdf
 
Last edited:
OP
E

EAR

New member
Oct 22, 2014
5
0
  • Thread Starter
  • Thread starter
  • #5
Yes, coffee has a much longer history than I wrote in my paper. But there was a word limit on my paper and I just could not talk too much about it.
 
OP
E

EAR

New member
Oct 22, 2014
5
0
  • Thread Starter
  • Thread starter
  • #6
Yes, it is. But do you have any opinions on the change of this regulation?
 
OP
E

EAR

New member
Oct 22, 2014
5
0
  • Thread Starter
  • Thread starter
  • #7
I do like to talk more about the history of coffee, but I couldn't because of the word limit. However, we can discuss more about it, if you'd like.
 
OP
E

EAR

New member
Oct 22, 2014
5
0
  • Thread Starter
  • Thread starter
  • #8
Here now comes a revised version of this paper, with the list of references and more details.
 

PinkRose

Super Moderator
Staff member
Feb 28, 2008
5,221
3
Near Philadelphia, PA
Hello EAR,

If you want to discuss any specific points, please post them separately in their own threads.

I have a feeling most of the members of this Forum don't have the time or the interest to read a huge post and then reply to it.

Rose
 

chast

New member
Jul 30, 2006
659
0
MA
not true Rose as I enjoyed reading the efforts he put in his paper. Time can always be found to read. That's would mean nobody reads Roast or other trade mags. He deserves a compliment on his effort. Look how many people ask a simple question here and some senior members post a short in depth novel where a simple sentence in laymans terms would have been more appreciated.
I hope he gets the mark he deserves. Looking forward to reading chapter 2
 

PinkRose

Super Moderator
Staff member
Feb 28, 2008
5,221
3
Near Philadelphia, PA
I also read the whole paper, and I found it quite interesting.

I was thinking that any discussion regarding particular topics would be better served in their own threads. It's okay with me if it all stays here.

Rose
 

PinkRose

Super Moderator
Staff member
Feb 28, 2008
5,221
3
Near Philadelphia, PA
Hello "yurong"

Since you are in China, have you had any experience meeting Alex from Ensoluna coffee? He traveled to China a few times this year and he was in the process of setting up some business there.

He's been a very active member of this Forum, and he's shared a lot of his photos and experiences. We've appreciated how he shares his adventures with us. Ensoluna also has a coffee training camp in Guatamela that appears to be very interesting.

Alex seems to be a very busy man, and he hasn't visited the Forum much lately.

I'm not sure if he's still in China. He was there a few weeks ago. I think Ensoluna is establishing a presence and doing some importing to China from Guatemala.

Rose
 
Last edited:

Nucer

New member
Aug 6, 2014
29
0
Benbrook, Texas
I have visited several different coffee farms (aka finca, and plantation). It is amazing how each country differs. The ones in Belize and central america are totally different from the ones in Kona and Puerto Rico. I hear that the ones in Africa are even more amazingly different. A visit to the finca or farms is a must for anyone who enjoys coffee. To see the hard work and dedication of the owners is amazing. I even thought one owner was a farm worker so.... Got me in hot water and now I buy from him. So establishing a relationship with the growers is as important as with the importers. It makes for some interesting friends and stories.

(so many good people to meet and so little time)
 

PinkRose

Super Moderator
Staff member
Feb 28, 2008
5,221
3
Near Philadelphia, PA
yes, I know him only by emails and skype.
he is coming to see me early Feb next year.

I'm guessing that Alex (Ensoluna) is the person who told you about the Coffee Forum.

He has had many interesting adventures in China and all over the globe. I'm glad that you will be meeting him soon. Maybe he will convince you to take a trip to Guatamela to visit the coffee farms there.

Rose
 

PinkRose

Super Moderator
Staff member
Feb 28, 2008
5,221
3
Near Philadelphia, PA
I remember Alex posting about his travels on the mountain and how they got stuck there. It was a few months ago, in the beginning of August.

I think he learned a valuable lesson on that trip.
 

Latest posts

Top