Another article on the Single Cup Machines

The real price of Single Cup coffee?

This article is an interesting read on the real price of the single cup coffee. Are there articles out there about the environmental cost of these pods?

The Price of Convenience

SOMETIMES it’s hard to tell how much coffee costs, even if you know what you spent. At least that’s the case with many of the single-serve brewing machines that are soaring in popularity.

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The Cost of Coffee From Single-Serve Systems

For example, the Nespresso Arpeggio costs $5.70 for 10 espresso capsules, while the Folgers Black Silk blend for a K-Cup brewed-coffee machine is $10.69 for 12 pods. But that Nespresso capsule contains 5 grams of coffee, so it costs about $51 a pound. And the Folgers, with 8 grams per capsule, works out to more than $50 a pound.

That’s even more expensive than all but the priciest coffees sold by artisanal roasters, the stuff of coffee snobs.

An exclusive single-origin espresso like the Ethiopia, Gedeo Single Origin Espresso from Sightglass Coffee costs $19 for a 12-ounce bag, or about $25 a pound. La Cima beans for brewed coffee from Stumptown Coffee Roasters, a Grand Cru selection grown at Finca el Injerto, a renowned farm in Guatemala, is $28.50 for a 12-ounce bag, or $38 a pound.

In fact, most high-end coffees cost less than $20 a pound, and the coffees you find on supermarket shelves are substantially cheaper. A bag of Dark Espresso Roast beans at Starbucks is $12.95 a pound, and a bag of Eight O’Clock beans for brewed coffee at the Food Emporium is $10.72 a pound.

How much of that coffee goes into a cup varies according to who (or what) controls the machine. For instance, a Lavazza Gran Crema espresso capsule has 7 grams of coffee, the standard for most chain coffee stores. But independent coffee shops regularly pack 14 to 22 grams into an espresso shot.

When it comes to single-serve systems, you’re not just paying for coffee, you’re paying for convenience and the technology that makes it possible to brew a single cup in seconds. Pop in the pod, push the button: it’s a sure thing every time. Supermarkets and specialty stores are filled with items that make it easier on you, and it’s up to the shopper to determine if it’s worth it.

Some decisions are easy (rendered pork fat, fresh pasta); others are a toss-up depending on who’s in the kitchen (chicken stock, salad dressing). Where single-serve coffee falls on that spectrum depends on whether you regard coffee as something you make or something you drink.

“Americans under the age of 40 are thinking about coffee pricing in cups,” said Ric Rhinehart, executive director of the Specialty Coffee Association of America. “If you asked my mother how much coffee cost, she would have told you that the red can was $5.25 a pound and the blue can was $4.25. If you ask people in their 20s and 30s, they’ll say coffee is $1.75 to $3.75 a cup.”

This generational shift helps explain why single-serve coffee is the fastest-growing sector of the home market. According to a study from the National Coffee Association, single-serve coffee is now the second most popular method of preparation after conventional drip brewers, by far the dominant method. In 2011, 7 percent of the cups of coffee consumed in the United States were made with a single-serve brewer, up from 4 percent in 2010.

The premium that single-serve coffee commands makes it especially lucrative. Julian Liew, a spokesman for Nespresso, said single-serve coffee is 8 percent of the global market, but accounts for 25 percent of its value. It’s likely that the number will continue to climb.

According to Keurig, 4 million of the company’s K-Cup brewers, for regular drip coffee, were sold in the 13-week run-up to Christmas 2011. During that same period, Green Mountain Coffee Roasters sold more than $715 million in K-Cup packs. The pods and brewers are now front and center at stores like Bed Bath & Beyond and Staples. Keurig licenses its technology to other companies, and last year, Dunkin’ Donuts and Starbucks started making K-Cup pods. Keurig even sells a refillable filter that you can pack with your own coffee.

Nespresso has sold more than 27 billion capsules worldwide since it was introduced in 1986. Later this year Ethical Coffee Company plans to sell Nespresso-compatible capsules for around 20 percent less on Amazon.com. So the United States might see something novel for single-serve coffee: a price war.

Will the K-Cup kill specialty coffee?

Probably not. I like this article by Pan Demetrakakes, editor of Specialty Coffee magazine. The link to the article is not working, so I am attaching the article here. Enjoy.

By Pan Demetrakakes




The Pod People are coming.

Green Mountain Coffee Roasters has become the biggest roaster in America largely on the strength of its Keurig pod brewing system. Keurig, which Green Mountain acquired in 2006, is the developer of single-serve K-Cup pods.

The K-Cup fits my personal criterion for a truly dynamic innovation: It looks painfully obvious, but only in retrospect. It’s a simple plastic cup filled with ground coffee and topped with induction-seal foil. A Keurig brewer pierces the pod and brews a perfect cup of coffee—or at least, one that’s a lot better than the alternative, which is often the dregs of a pot that’s been sitting on a burner for heaven knows how long. It makes the K-Cup an attractive alternative for offices (including my own), as well as gas stations, waiting rooms and any other location where coffee of indifferent quality is often consumed.

That includes home kitchens. Green Mountain is counting on home sales of the K-Cup brewer to push sales even higher. And they’ve already had dizzying success. Green Mountain now is the leading roaster/packager of single-serve coffee. Its sales have multiplied by five in the last three years, and its stock reached an all-time high in September (although it’s dropped sharply since then).

Green Mountain succeeded in large part because of a smart basic decision: making K-Cup technology freely available. Coffee roasters who want to use the Keurig system need only license it from Green Mountain. Major retailers who have taken advantage include Starbucks and Dunkin’ Donuts, both of whom are planning to use K-Cup pods to expand the already substantial grocery sales for their branded coffee.

Contrast with Nestlé, which has a similar pierce-the-pod system in Nespresso. Since introducing Nespresso in 1986, Nestlé has tried to control it down to the last coffee bean. It markets both the machines and the pods that go into them, and allows no one else to do so.

This business model worked great for Apple Computers. But ground coffee, however complex and subtle it may be, is not software. And while Nespresso has consistently been lucrative for Nestlé, the company is now embroiled in lawsuits in France, Switzerland and Holland over pirated Nespresso capsules, while the Keurig system soars past.

What does this all mean for the specialty coffee retailer?

Movie buffs will recognize this column’s headline as a play on “Invasion of the Body Snatchers,” a sci-fi classic from 1956 (there have been a couple of remakes) about an alien invasion of human lookalikes. They start out as pods that bloom into identical replicas of whichever human is unfortunate enough to be nearby.

Is that destined to be the fate of specialty coffee? Will the K-Cup pod become the incubus for mechanically brewed coffee that smells and tastes so much like the good stuff that it will confuse consumers?

I don’t think so. In fact, the K-Cup could be a net positive for the specialty coffee industry by raising consumers’ expectations. The more people are exposed to good coffee, the more likely they are to seek it out, in whatever form.

Your competitor can sometimes be your ally. That’s true for Starbucks, which raised the general consciousness about good coffee enormously, and it may very well hold true for the K-Cup.

Cupping the Nicaraguan coffee from Esteli

Cupping this Nicaraguan coffee was a great way to start our day! This coffee which came from the region of Esteli, has an amazing aroma when roasted light. We received samples from this coffee a week ago and decided to wait for a bright morning to give it a shot. We so much prefer sunlight rather than artificial light, to analyze the roast. All in all, the cup presented an amazing nutty aroma and made the whole room smell like we had just baked chocolate peanut butter cookies. The flavor was full and a great aftertaste. 

    

Is Fair Trade really fair?

While the fair trade certification has played a key role in bringing awareness to the public, about the livelihoods and complexities of the coffee supply chain, recent events seem to indicate that the movement, and the FT certification is becoming nothing but another profit driven business.  See article:

http://blogs.cgdev.org/globaldevelopment/2011/12/a-bit-of-context-on-the-fair-trade-kerfuffle.php

Fair Trade USA's split from the FLO system, is not just a difference in opinions. It represents a trend in the commercialization of the "fair trade" brand and certification. I call it the commoditization of certifications. Everyone and anybody is now attaching the "Fair Trade" label on products. The split of the FT USA label from FLO system is just the culmination of this drift from commitment to commoditization. "Certifications" need to make money.  And to this end they need to get more subscribers and buyers of their labels. And to do this, they need to "certify" larger tracks of land and farm. Since this is not economically rational to do with small farmers, they must now certify "large farmers". Plantations actually. Big land owners who not necessarily practice "fair" standards in employment, sustainability or procurement. And while nobody is saying that they are "bad" or wrong and that we can certainly but from them, what we are saying is that they dont deserve the "Fair Trade" label. And that FT USA is bending the rules to allow these large plantations to use their label. Since these labels are private, no one regulates them, in the end, it will be us, you and me, who will decide the fairness of this. Will you buy and pay more for a Fair Trade USA certified product? Certainly not me! You make the call....

What is Sustainable Coffee?

There is a lot of talk about sustainable farming and sustainable products  nowadays. Specially in the coffee industry, increasingly people want to know if the coffee they are buying is "fair trade", "organic", "shade grown", or "bird friendly". Its quite amazing how these preferences have taken off and become "mainstream" in many places and regions of the world. And while all these "wants" by consumers are good, in that they have created a number of mechanisms in the form of certifications, to help validate these claims, there is still much more that needs to happen, so that those farmers producing coffee at the end of the day, can really benefit from these market trends.

SUSTAINABLE COFFEE IN PERU


Take this couple from Northern Peru, where some of the best coffee comes from, and a region slowly becoming a major player in the specialty coffee market. San Ignacio, Cajamarca. This simple picture reveals a number of positive aspects about their farm that may not be too apparent at simple eye view. Lets see.

1. Look at the soil. Its covered with leaves and organic material that falls from higher elevated tress around the coffee plants that are right in front and right behind them. Natural cycle of things helping in soil conservation and reduction of use of fertilizers.

2. The coffee plants right in front of them and right behind them, are small. Probably no more than three years. What does this mean? They are replanting. Important. But they are planted next to larger coffee plants, which makes for an excellent rotation strategy.

3. At the far end of the picture you can notice a banana tree. Awesome!! Coffee plants growing under the part shade of banana trees and other shade trees.

4. Some of the leafs on the ground are coffee tree leaves. Excellent!! This means they have been pruning. A much needed yet often forgotten practice that enhances the life and productivity of their coffee plants by as much as 30%.

5. Finally, a thought. The couple is getting older. And their kids? Will they farm this well kept coffee farm? Will certifications encourage their kids to stay in the farm? Or will access to water, health facilities and education be the determinant factor in the long term sustainability of this stellar coffee farm?

What can you do?

Start thinking where your coffee is from.

Did you know the 2011 World Barista Champion is from El Salvador?

Baristas are one of the most important pieces of the coffee chain. They are the ones that transform that brown roasted bean into a specialty drink that inspires and motivates people around the globe. Baristas have a lot of responsibility in their hands. When they craft that drink, they are not just making a product for sale, but they are working at creating a piece of art, a delicate combination of water, pressure and coffee.

And it is no coincidence that Alejandro Mendez, from El Salvador, was picked as this year's World Barista Champion. This is a hotly contested event. Contestants from all over the world flocked down to Colombia this year to participate. And yet, for the past ten years, the Champion has come from the coffee "consuming" countries, not the producing ones. In part this is due to the fact that it is in these countries (US, Holland, Spain and the UK) that the most demanding coffee connoisseurs live. And so baristas from these countries are more accustomed to preparing high quality coffee beverages. But in 2011, the honor of the Championship was given to a young man from a very poor country, where increasingly, top quality coffee is grown. A country where young people desperately need role models like Alejandro, and jobs, to combat violence and unemployment. This is an exciting time for El Salvador. And for the Central American region as a whole. This event has been an inspiration. I've had the opportunity to travel to some of these coffee growing countries in the past three months. And the word is out about the Barista World Champion. People speak of the event and of Alejandro with a certain degree of pride and admiration. Enthusiastic that a world champion can emerge from a tiny little country such as El Salvador.

So our double congratulations go for Alejandro. Not only for being a great coffee master, but also for being a great young role model for his country and his region.  Adelante Alejandro!!        

Did you know coffee is not really a bean?

We've started our series of "Did you know?" questions about coffee. Revealing the simple yet often unknown facts about that magical drink we can't live without. And we start with a basic one:

Did you know coffee is not really a bean but a cherry? And a beautiful one too! Take a look.

Coffee, and in particular, Specialty Coffee, is grown in many regions of the world, where the altitude is at least 1000 meters above sea level or 3300 feet. So while conventional coffee can be grown in the low lands and at sea level in subtropical and tropical regions, Specialty Coffee, that is, the really good quality coffee, can only be grown in altitude areas, where they are exposed to some shade and colder temperatures. This is where the “Arabica Coffee” variety is grown. And this is what coffee roasters sell in their labels on most bags of Specialty Coffee, when they designate their coffee as 100% Arabica beans.

The cherries grow on plants that can be as high as 20 feet, although farmers seldom let them grow beyond a manageable 6 to 10 feet. The tree has a broad dark green leaf, just like in the picture. Specialty Coffee is grown primarily by small farmers because it is labor intensive and it needs careful attention. The picking of the cherries is the most labor intensive part of the coffee process, and this is where farmers develop a skill to pick only the best and most mature cherries. It is an art.

Cherry picking is the initial stage of the process which will allow the coffee bean inside the cherry, to develop into a great cup of coffee. More on the whole coffee production process later. 

And more "Did you know?" questions about coffee, coming soon. Stay tuned.