Any roasters on par with Howell and Wendelboe? - Page 4

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Milligan
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#31: Post by Milligan »

luca wrote:Yes, you're quite right to point out that things are quite opaque to consumers and that we can't assume that higher retail prices mean higher prices to producers. But like I do think that if you are price sensitive, you are probably pretty likely to experience a quality drop. I just cupped about 35 coffees from three different importers. I found one 88.75, which was delicious and I'll try to snap up, but I didn't actually find a single coffee between 86.5 and 87.5. Not one. This part of the market where you had good quality coffees that were kind of priced in line with everything else has really dropped off. If you look at the SCTG, 88+ prices went up, 86s stayed flat, and 84s and below followed commodity down. But I feel like the supply of 86.5 - 87.5 has diminished, thus if you aren't paying more, you've got to expect that a lot of the single origins you are paying for have probably gone down a notch or two in quality.

FWIW, I don't really know about Onyx's retail prices, but if you look at Onyx and TW's FOB prices, they seem like they're double or more what the Australian roasters that I've seen that report such prices pay ... and that's just the Australian roasters that are confident enough that they are paying amounts high enough to be worth showing off!

Of course, it's all difficult because every roaster's marketing material is more or less the same.
Curious what your thoughts are on the reason for the decline of the "middle class" of specialty coffee? At first look, it would seem producers are getting better at sorting. Leaving us with more of the top tier quality lots (still not keeping up with demand for them) but gutting the middle where the exceptional beans used to linger with the rest of the lot. Perhaps it is something completely different?

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luca
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#32: Post by luca »

Sorry, I missed this.
Milligan wrote:Curious what your thoughts are on the reason for the decline of the "middle class" of specialty coffee? At first look, it would seem producers are getting better at sorting. Leaving us with more of the top tier quality lots (still not keeping up with demand for them) but gutting the middle where the exceptional beans used to linger with the rest of the lot. Perhaps it is something completely different?
Well, for a start ...
luca wrote:The broader issue is that good coffee has probably always been underpriced, it hasn't been priced sustainably, and we are losing it because of it. There are lots of reasons for this, but a few issues are:
1. Coffee relies on a ballistically ridiculous amount of unskilled labour that costs very little. The supply of people willing to do this is drying up.
2. Coffee prices have been historically low, sometimes below the cost of production, and coffee producers have hardly made a lot of money. Coffee producers are old, and their kids don't want to take over. Because being a coffee producer is not a good career or money decision.
3. The cost of property all around the world is skyrocketing. Coffee growing land is usually beautiful, and makes a great holiday house or hotel location.
4. Climate change.
5. Petrol costs have made fertiliser costs skyrocket.
6. War and civil unrest.
You seem to be speculating that coffee producers are making some conscious decision to sort out 88+ coffee from a lot and gutting the quality of the remaining coffee so that it falls to like 84 and then they end up better off overall. I don't think that's really happening.

Coffee doesn't get sorted by magic; it gets sorted by money, which any producer will seek to minimise to maximise their profit (or, sadly for coffee, to minimise their loss). The money either goes to unskilled labour, or it goes to machines, or it doesn't get spent. Which is the case depends on the producers, which vary wildly in who they are and how they are set up. They might be a mega agricultural company with a high capital cost, mechanised production, or they might be a smallholder that collects from a handful of trees in a forest near them and aggregates them with many other producers to make a viable lot.

A lot of it is just an eyewatering number of people selecting things; either by picking only ripe cherry by colour and feel, or by sorting it once it reaches the wet milling/processing area. We're talking about stuff like 20 women packed shoulder to shoulder in a room on either side of a conveyor belt with coffee on it that they evaluate. It's an eyewatering amount of labour, nothing that anyone in a first world country would want to do, and it has only been possible because people in producing countries had few options and were willing to work for little money. But time passes and progresses, all of these people have smartphones and educations now, and this isn't a very attractive job. So there is a shortage of labour willing to work at any price, and the price to do all of this stuff has increased dramatically.

So, like, to give you an example, in Panama, a typical coffee farm might have six "passes" per year, where they get the pickers in and hand pick hopefully only ripe cherry. The most might be 20 passes per year, which is ridiculous. Each pass costs more or less the same. Now I remember hearing that a farm in Colombia, which I won't name, had difficulty attracting workers to do the smaller mid-season harvest at any price, and they finally managed to get pickers at a very high price. We're talking their costs per pass doubling or tripling from a few years ago, here. The cost blowouts people have had have varied greatly, but they're huge. Like when fertilizer costs spiked 350%. So for the mid season harvest, they just did one pass, ripes and underripes mixed in together, did a bit of floating and mechanical sorting. For them, we simply weren't going to pay enough to cover the labour cost of additional sorting, so economically the most sensible thing for the producer was to minimise their costs and lump a slightly lower cost for worse quality coffee. Now that producer is a fairly well respected producer, and their lots also go to some very highly respected roasters, who pay them like 2-3x what their competitors pay. Those highly respected roasters are paying a lot more and getting selectively picked lots from the main harvest, when there's a greater supply of labour ... and those roasters are paying for it.

I doubt that there's really much coffee where a big lot is harvested and the best is removed from it, dropping the quality of the rest. I think usually what is sorted out just gets thrown out. Well, actually, the defective/rejected coffee never gets thrown out; usually it gets sold, roasted and consumed in the local producing country and doesn't get exported to consuming countries. The very high quality lots usually result from more selective picking.

Of course, ripeness is only one small thing that goes to quality, and it's much, much more complicated than this, and it varies a lot from producer to producer and depending on processing methods. But, generally speaking, it's probably pretty true to say that higher quality costs more, and that if the producer isn't financially rewarded for it, it's not going to happen. And certainly not if they have to subsidise quality by getting a higher price, but that price resulting in less profit to them because getting that higher price costs so much more.

FWIW, I've been cupping away a lot of samples in pre-ship season. I think I'm probably at 50 or 60 samples now from a bunch of different importers. I found one very nice 88+ish coffee that we've asked for and I think I've probably only hit about 5 coffees in the 86-87ish band. Most of those were delightful Rwandan bourbons, which I think Aussie roasters will probably buy and roast darkish so that you can't actually tell any of the detail from them anyway, unfortunately. Hopefully we'll be able to snag a bag of one of these coffees, since they'll be great value for me and the small band of home roasters that are buying from the guy I'm doing evaluation with and aren't confined to an A$15/kg price point. I'd actually kind of prefer it if we could pay the ladies that produced these coffees more, but we're small fry buying a bag at a time spot from the importer, so we can really only accept the price offered to us by the importer.
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