Increase the value of coffee instead of rushing towards the lowest price?

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thejarren

#1: Post by thejarren »

While listening to the Cat and Cloud podcast interview with James Hoffmann (https://www.stitcher.com/podcast/pullst ... e/57411982) they lightly touch on the inability for baristas and cafes to make good living wages for most of the employees involved. I'm interested to know other people's thoughts on this.

In essence, their conversation talks about how easily we are able to get extremely high quality coffee for a very low price. For the consumer this seems like the best deal, but for the farmers, those involved in the supply chain, and the end baristas, etc., it seems to be something preventing growth and adding to living wages for more people.

I'm wondering if we'd be able to do something to change the consumer's mindset towards quality coffee? Can we point the industry towards a type of quality coffee with a cost and respect similar to that of wine?

Arguments for:
- Provide better living wages for all people involved in the supply chain.
- Greater respect and prestige for coffee.
- Expands the coffee/cafe field, makes room for a new type of cafe aimed towards a premium experience (similar to that of a wine tasting).

Arguments against:
- Hypothetically increases the barrier of entry for people to get into higher quality coffee.
- Coffee, especially espresso, is meant to be created and consumed quickly, as opposed to the "aging" process involved in something like wine.

I'd love to know any additional thoughts from the community here at Home Barista. What did I miss? Are there people already doing something like this?

I'm fairly new to coffee and espresso, and this is also my first post on the site, so I apologize if I'm not posting in the correct location, etc. I'm used to using Reddit, so this is ever so slightly out of my comfort zone. :D

nuketopia

#2: Post by nuketopia »

Social Justice or real world economics?

You can look at Hawaii for living wages vs. coffee. Go there, go visit a quality grower like Hula Daddy. They pay US wages to US workers. They focus on quality. They grow, they harvest, they process, they roast and they ship, all on site.

I never miss a chance to visit and to carry something home with me.

But, their coffee is expensive. And no one working there, not even the owners, are getting rich.

Something like 99% of coffee sold in the world is commodity market. It's not high quality, it's just commercial quality, interchangeable, meant to be roasted to indistinction. These are more and more picked by machine, processed industrially. The supply chain needs fewer people and mechanization is cheaper in most cases than labor.

In impoverished nations, the people who do the work are often happy to get any employment. I don't know that we can fix that problem in just coffee. It is a much, much bigger thing.

Conversely, a very small minority of beans produced and sold world wide are "speciality" beans. These tend to command much higher prices. They are usually small growers and small processors, lots of hand labor. The price of these beans reflects the scarce quantity, hand processing and demand from a small segment of consumers. Anything from about $10 a pound or

That about covers the beans.

In the US and Western nations - wages are pretty much a free market with certain limitations. Food service is not typically a high-paying industry, with a few exceptions. Tipped service staff in the USA tend to earn better wages. Sometimes, very good wages. Most food service establishments with tipped servers do pool tips. So, where tipping is a custom, do tip generously.

In Europe and other nations, tipping is not a custom and service charges are typically on the bill.

How much do you want to pay for a coffee? Is an espresso worth a euro? Or more? Would you pay $15 for a shot? Or $4.50?

Presumably, in a free market, the wage is what a willing employer and a willing employee agree to.

But all this applies really to everything, not just coffee. It applies to pizza, bakery goods, car repairs, painting, lawn mowing, legal services, dentistry, logging, pest control.

I don't know why coffee shops like to tout how socially aware they are. I don't know why every bag of coffee needs to have a social justice tome printed on it.

Thing is, consumers will pay $x for the product. The vendor has to produce it $x-margin and pay their materials, labor, rent, taxes and insurance and themselves out of the margin.

themusgrat

#3: Post by themusgrat »

It's not that the free market won't pay people a living wage, it's just that consumers dictate the wage.

I do pay "top dollar" for green coffee, but that still works out to less than $10/lb. I'm totally fine with it, because the source claims to be doing direct trade with the farmers, or co-ops, what have you. To me, the easiest way to give the producers more money is to cut out as many middlemen as possible. If I'm buying from a US source that does direct trade, that's just 1 middleman taking a cut, but let's be real, they are also finding quality coffee, and shipping it from A to B. I can't do that for myself.

So rather than talk about paying more money to the middleman, we'd be better served by taking a look at the logistics chain from the coffee farm to our kitchen. The more direct the route, probably the more everyone is being paid. To say nothing of the value of the dollar to these farmers.

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thejarren

#4: Post by thejarren »

I appreciate both of your responses.

I guess ultimately I know it's a larger issue than simply the coffee industry, I just wish it weren't.

I think when I open a Cafe, I'll look for different revenue streams as well to supplement the main coffee income. As well as additional routes of improving efficiency and accuracy.

Thanks again, there's a lot of food for thought in both responses.

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luca
Team HB

#5: Post by luca »

thejarren wrote:I'd love to know any additional thoughts from the community here at Home Barista. What did I miss? Are there people already doing something like this
Well this is hardly a new idea, but it's an important one, so it's worth exploring a few ideas.

First up is that what you're writing starts off as though there is some notion of what is "quality". This, in itself is controversial. There are a few well-established coffee scoring systems, most of which are really geared towards identifying coffee that is first and foremost fantastic for filter, maybe a bit less so for espresso. These systems usually fairly mercilessly punish characteristics that they call defects; faults and taints, and historically high acidity and very clean coffees have tended to score highly. So what you'll see now is that there is some backlash to these. The backlash could be for a number of reasons. The more noble is that people say that they prefer the taste of coffee that might traditionally score poorly. A good example is people who like low acid, big bodied espresso, where coffees that might deliver that might not score all that well because they lack acidity, flavour, or persistence of flavour. The example that you see more often is natural processed coffees and anaerobic processed coffees. Natural process coffees often score poorly because they often combine an absolute riot of fruit flavours with defects like earthy and mouldy taints and ferment. The fruit flavours are obvious and easy for people with little experience to appreciate, so they have legions of fans, and people who are new to good coffee usually have a frame of reference of coffee that has a lot of roast bitterness or staleness, so the green coffee defects kind of hide in the general raft of off flavours that people expect anyway. 15 years ago, you might taste something like a low grade natural processed Ethiopian Harrar, which would likely have a lot of defects; it had its fans and the green coffee was fairly cheap. Today, you could still buy that coffee as cheap, sub-specialty grade green. Or you could get an almost identical flavour from an anaerobic natural processed extended fermentation lot, which green coffee suppliers will sell as a premium product at quite literally 8-10 times the price. The more nefarious reason would, of course, be that it's not really in coffee roasters' interests to be held to external quality standards.

Next is the way in which single origin coffees are marketed. Basically, there's a formula of words that almost everyone uses, regardless of if they're selling very cheap or very expensive green. "This is finca such and such from this country. It tastes like this thing, that thing and this other thing. This guy and that guy inherited the farm from their father and have been farming for this long. They are quality focussed and recently bought this piece of equipment or apply this processing step. The environment is very important to them and they have this environmentally friendly initiative. They do this socially responsible thing." The story reads the same, regardless of if the roaster has had a 20 year relationship with the farmer where they've both stuck together through thick and thin, or if it has been copied and pasted from an importer's offer sheet and they have never met the farmer. Whenever these sorts of descriptions are not attributed, I like to copy and paste them into google to see if I can find the original description that the coffee roaster copied and pasted them from. But the point is, these descriptions are a nuclear arms' race of feel good statements, and basically all roasters have ended up at the same point. You're just as likely to read this sort of description for a coffee that's barely specialty grade as you are from a coffee that's the best of the best.

Next point is roast level. Roasters are useless at communicating what their roast level is. Utterly useless. Basically, with most coffees and roasts, you have to choose what you are going to maximise, and you usually can't have it all. If you want to reduce acidity, you will probably reduce aroma, and vice-versa. No roaster will ever describe anything negative. My experience is that the majority of commercial roasts have some fairly obvious roast or green coffee quality problem. But from a quality perspective, I think that it's fair to say that the darker or the longer coffees are roasted, the less distinctive they taste. And this is the way that most espresso is roasted. What really irritates me is buying coffee on the basis of a description that is probably absolutely correct for a light "cupping" roast level, only to discover that the roaster has simply kept the taste descriptions for a roast that has actually developed out those characteristics to reduce acidity.

Finally, there's the question of what consumers seem to actually respond to and be willing to pay for. Around me, it feels like roasters have basically come to the view that in order to charge a premium price, the word that does it is "geisha" (or "gesha"), the coffee variety. I think they can also command a bit of a premium if they ham up some gimmicky processing description. I've got to say that I don't think I've ever heard a consumer in a cafe ever tell a barista that they thought the geisha that they have been served is not good, but I reckon that probably less than 1/3 of what I've tasted has been good. Geisha can be a little tricky to roast, and it's a bit heartbreaking that they often have roast defects.

Personally, I'd love there to be more discussion of, and enthusiasm for, great coffee. There's a whole class of extremely meticulously processed and very expensive central american coffees that basically seem not to have any real market near me, but they are coffees that I really enjoy and would like to see around more. But I don't think that consumers are really interested in paying geisha prices for a washed pacas, even if it has more body and more aroma.

That's sort of just looking at the quality and the marketing aspect of it, but it sort of does boil down to roasters having an argument of "why would I do more than the minimum if I'm not going to be able to command a premium for it"?
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false1001

#6: Post by false1001 »

Are wine and coffee really that much different?

At your local grocery store a middlebrow bag of beans will cost about $8-12. A middlebrow bottle of wine will cost anywhere from $9-16. Some people will be satisfied with Folgers at $6 for a tub, and some people will be satisfied with a bottle of Barefoot at $5 a bottle. Further, in both markets there are business savvy hucksters happy to fleece those with more money than sense for 2-3x the middlebrow price for swill, and both markets have extreme price elasticity with large portions being lemon markets as well.

I think the two main differences are 1) Coffee is generally produced by the global south with all of the connotations that come with that, while wine has generally been produced by the economic and landed elite with all of the connotations that come with that. You don't even have to be an -ist, or delve deep into the -isms to understand that one of those things will command a generally higher price in the market.

and 2) The art of making truly tasty, high quality, objectively good coffee is extremely nascent and still relatively involved. Maybe 30-40 years old? Whereas wine has been "good" for hundreds of years, if not thousands. We're fighting against millennia of engrained preconceptions. That's not going to be an easy task, and a big reason why the upper end of coffee isn't as well developed or appreciated as the upper end of wine.

I think beyond the differences in markets, coffee preparation and consumption needs to be "democratized" in a way. It's extremely expensive to make high quality (or even just consistently tasty) coffee, especially espresso. At bare minimum, we're talking $100 for a grinder, $10 for a scale, and $30 for a pourover setup. Plus beans! If you want to enjoy a delicious, award winning wine you can spend half that on a bottle and some solo cups. Espresso is even worse, bare minimum $1k+ to get anything close to a repeatable setup that produces tasty coffee. Yes, the coffee setup pays for itself over time but the rational consumer is more of a myth than fact, and in today's economic environment large upfront costs are harder and harder for the average person to justify.

false1001

#7: Post by false1001 »

thejarren wrote:I appreciate both of your responses.

I guess ultimately I know it's a larger issue than simply the coffee industry, I just wish it weren't.

I think when I open a Cafe, I'll look for different revenue streams as well to supplement the main coffee income. As well as additional routes of improving efficiency and accuracy.

Thanks again, there's a lot of food for thought in both responses.
If you're serious about opening a cafe, I hope you're aware that unless you are truly lucky with the perfect combination of startup capital, consumer market, location, and staff it will be hard to make a living just off of coffee. Often the best you can hope for when serving what this forum considers "good" coffee in a commercial environment is using it as a loss leader for your outrageously priced food items. This might be overly pessimistic, but I would advise you not to fight this fight as the owner of a new cafe... chances are overwhelming that you will be crushed by the neighborhood Starbucks. Serve the best coffee you can, as ethically as possible, but make a profit. Once you become an established part of your community you can start to change the hearts and minds of your consumers.

Or fuck it, reach for the stars and start a coffee revolution. Who am I to say otherwise???

nuketopia

#8: Post by nuketopia »

thejarren wrote:I appreciate both of your responses.

I guess ultimately I know it's a larger issue than simply the coffee industry, I just wish it weren't.

I think when I open a Cafe, I'll look for different revenue streams as well to supplement the main coffee income. As well as additional routes of improving efficiency and accuracy.

Thanks again, there's a lot of food for thought in both responses.

I may sound cynical, but the reason you see this "social justice" push is that it is mostly marketing. There is a certain amount of consumer guilt over "luxury" purchases like speciality coffee. The purpose of hanging all kinds of "green" slogans and pictures of smiling people sorting red coffee cherries is to overcome sales resistance to that guilt. I mean, who doesn't want to feel better about indulgently buying a $5 coffee drink and seeing something that makes it seem like those poor people over there are getting a better life because of me treating myself.

On the cafe thing, realize it is a business and artisanal quality can be an ingredient of what sets you apart, but it may not be enough to sustain a business model. I've seen some cafes evolve from quality-first, exceptional product, to more mainstream product that is good but perhaps not wildly exceptional.

Depending on your audience, you might want to plaster the place with social justice messages, or not. People who like scary black rifles drink coffee too. So do conservative christians and devout muslims. You have to know your audience and how to make them feel welcome and comfortable, whether it is soccer moms in Lexus and Cayennes or contractors in dually pickup trucks.

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Almico
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#9: Post by Almico »

Thanks for the link to that podcast; I hadn't heard it. I didn't think I had 90 minutes to listen to a podcast, but it just sucked me in. I'm in the process of opening coffee bar #2 in PA and it was great hearing all Jim's thoughts on the coffee biz.

Mbb

#10: Post by Mbb »

Free market at work
Is always correct