Retail Perspective – Coffee Prices on the Rise
Yesterday I posted the below blog post to Coffee Bar’s blog. I hope it may help shed some light on how to handle the ever increasing green coffee market for cafe and coffeehouse owners out there. As always, your feedback is welcome.
What to say about coffee prices? Well, long story short: prices are going up. The “C” market on the NYSE has nearly doubled in the past year. Coffee is at a 14-year high, and most roasters have increased their wholesale prices 2 or 3 times during that period, between 15 and 30 percent (or more). What the hell is going on, you ask? Under normal circumstances, there are a few supply and demand issues which contribute to a rise in prices.
- Unstable weather conditions have produced smaller, disappointing harvests in countries in Central and South America and Indonesia.
- Rising global demand due to increased coffee consumption in emerging markets such as China, India, and Brazil.
- Real estate and political pressures forcing countries to abandon their coffee crops for more profitable, shorter-cycle crops.
Now, that all makes sense, more or less. Unfortunately, investment bubbles have moved from the stock market to real estate, to the commodities markets. The influx of new investor speculation has turned what would normally be a moderate increase into a much larger one. It used to be that the majority of green coffee traded in the Coffee Commodities Exchange was made by coffee companies; but with the new investor interest in commodities, it’s now estimated that 70 percent of the transactions are made by speculators. Commodities are the new stock market and all this new money has created volatility.
There is some consolation for those of us affected by higher prices. After years of rock bottom prices, coffee farmers are now able to yield greater benefits from their years of hard work. Additionally, the average quality of coffee served in San Francisco has risen dramatically over the past few years, which, for the consumer, is absolutely fantastic.
Now, there’s still plenty of crappy coffee out there, but never before have we been able to reliably locate within each neighborhood a “go to” coffee source for responsibly sourced and prepared, high quality, specialty coffee, as we can now. And a top notch cup of coffee is still a relatively inexpensive luxury that we can all afford at a café or at home.
At Coffee Bar, we’re committed to serving you coffee of the highest quality, and that means a certain level of commitment on our part. It means that we brew your coffee strong and within SCAA recommended levels (8 oz of coffee per 1 gallon of water). It means that any drip coffee that we serve has been brewed within the last hour or we throw it away. It means that if we make you an espresso drink and we’re not happy with the finished product, we start over and make you a new one. It means that, in order to have well-trained baristas, we’re committed to letting them practice making drinks during downtimes or training sessions. It also means using high quality and responsibly-sourced products to pair with your coffee like milk from Clover Stornetta and pastries from Patisserie Philippe and Tell Tale Preserve Co.
After it’s all said and done? We’ll be raising prices on drip coffee (all sizes), Americanos (all sizes), 16 oz lattes, and 16 oz mochas, all by a quarter. Everything else will remain the same. We tried to limit our increase to those products whose prices needed to be adjusted the most, based on their costs.
Because of these economic realities, and many others related to all food costs, we are also currently reviewing pricing on our entire food menu. No final decisions have been made at this time, but as a small business, it’s important for us to understand how current events shape our organization’s health.
We truly appreciate your understanding and patience through all of this, and we’re happy to field any questions you may have. Above all else, thank you for your continued patronage; we’re nothing without our amazing customers!
Bay Area Coffee Drinkers Feeling Squeeze (SF Chronicle)
High Coffee Prices May Not Be Enough To Increase Production (Wall Street Journal)
March Issue of Alameda/Oakland Magazine
Below are links to the online, digital version of the recent Mr. Espresso story featured in the magazine:
The Table of Contents Page, which has a photo of my father.
The Editor’s Page, where she talks about the company and the story.
The photos look good and believe it or not there is plenty more to the story!
Hot off the Presses!
It’s always a nice surprise and somewhat a bit of a thrill when you pick up a copy of your favorite magazine and find an article mentioning your company.
In the last three weeks this has happened more than once. It began with the February issue of San Francisco Magazine. On page 48 they featured William Werner’s addictive espresso caramels which are infused with our Golden Gate Espresso Blend. He is a talented and innovative pastry chef who just launched a new pastry business in San Francisco called Tell Tale Preserve Co. My grandfather was a patissier and baker in France and I can vouch that William’s pastries would get his approval!
Secondly, an article came out in the March issue of Saveur Magazine about Wood Roasted Coffee. Page 17 mentions Mr. Espresso and our Organic Bolivia out of Caranavi, Cenaproc. We have purchased from this same farm for the last eight years and it is one of our favorite single origins. This is exciting because Saveur has a nation wide following of over 300,000 readers who are just as passionate as we are about good food!
The upcoming March issue of our local Alameda/Oakland Magazine will have an article about Mr. Espresso and our family. We were interviewed by Keith Gleason several times last fall and Lori Eames spent more than a full day with us on a photo shoot. Both are talented contributors to the magazine and I have been following them for a while.
It was a pleasure to meet and work with them. I have not seen the article yet, it is due to come out any day now, but I anticipate that little thrill of accomplishment and pride in our family and company!
Roaster Maintenance Time
Carlo directing traffic while having the drum removed from the roaster
“Pitching in” with The Bread Project
We at Mr. Espresso are proud to sponsor the espresso and coffee program at The Bread Project’s School and Cafe.
The East Bay Express just published an article on the program which includes mention of Mr. Espresso’s involvement. Read here for more details, and please show your support for this great cause!
The Winter Fancy Food Show
Happy New Year! Or, as we say in Italian: Felice Anno Nuovo!
We are starting 2011 by keeping very busy in preparation for the 36th annual Fancy Food Show in San Francisco. We have been exhibiting at this annual show for almost 30 years!
The show will be at the Moscone Center in San Francisco, from this Sunday, January 16th to Tuesday, January 18th. We invite you to join us at the Mr. Espresso Booth #3720 in South Hall.
Stop by to introduce yourself, say hello and try some of our oak wood roasted coffee. We will be serving our latest offerings of single origins prepared by the cup and our favorite blends pulled from the E-61 espresso machine. Also, see the progress of our new look as we continue to look for ways to evolve and stay ahead of the emerging coffee trends.
We look forward to seeing you there!
recent arrivals – winter 2010 / 2011
John continues to work hard to select unique and high quality coffees for us all to enjoy. If you have an opportunity, please try one of our recent arrivals on your next order and let us know what you think!
Guatemala, Finca la Pila, Palencia – dark chocolate and plum, molasses, candied orange, and a long caramel finish. Recently received a 93 rating on The Coffeereview.com’s recent tasting of Guatemalan coffees. Stop by Coffee Bar (corner Florida & Mariposa in SF) where this coffee will be featured during the course of the next 4 months or until we run out.
Sumatra, Lake Toba, Lintong grade 1 – earth and cedar, heavy velvety body with vanilla and herbal spice. Rainforest Alliance certified.
Bolivia, Cenaproc Co-op, Caranavi - Dark roasted with delicate sweet and smoky tones, vanilla and caramel finish. Organic and Fair Trade certified.
Ethiopia, Oromia Co-op, Yergacheffe – strawberry and rose water, raw bourbon vanilla, sweet citrus and milk chocolate. Organic and Fair Trade certified.
Kenya AA, Ndimi, Kirinyaga – malted grains and vanilla with a bright, lively acidity, flavors of orange brandy and almond.
Mr Espresso’s Guatemala La Pila receives 93 points from Coffee Review!!
Coffee Review, an online buying guide and the industry leader for coffee ratings, recently reviewed our Guatemala La Pila and awarded it a 93 points score. They said the La Pila “has deep and sustained complexity in the aroma…and wine-like fruit” in the cup. Read below the review for yourself:
Blind Assessment: Deep and sustained complexity in the aroma: pruny fruit, dark chocolate, citrus, molasses, cedar. In the cup the tone lifts and a crisper, more wine-like fruit dominates: citrus, tart berry, carrying directly into a long, resonant finish. Very rich acidity, lightly syrupy mouthfeel.
Who Should Drink It: Slightly exotic, rich, complex.
Kenneth Davids, esteemed writer and coffee professional, and Ted Stachura, assistant editor, were the tasters in a blind taste test.
July is our anniversary
This month marks our 32 year anniversary at Mr. Espresso. I was in 8th grade when my parents had the idea of starting their own business. My father and mother were immigrants, hard workers, and lovers of good food. They had tossed around the idea of opening a café or restaurant for a while, and a wholesale coffee company seemed odd to me!
Fast forward 32 years and here we are – the whole family still working very hard to provide a product and service we believe in. We are unusual because the whole family is here, all of us having come back after earning college degrees and some of us working elsewhere for a while. I love the fact that many of us have been here since we were 18, young and single. We now have families and adult responsibilities.
Mr. Espresso will be hosting our annual company barbecue next week to celebrate this anniversary, to honor our employees, and to catch up with our growing families. I can’t wait!
Click here to see a few pictures from recent barbecues in our Facebook page’s album.
Tasting Kit
Our "tasting kit."
When working with new customers, we always extend an invitation for them to come to Oakland for a visit. We know how important it is for people to feel a connection with their roaster, and that starts with seeing things in action at Mr. Espresso. We understand, though, that sometimes life gets in the way, schedules are cluttered, and people are unable to pull themselves away from their restaurants/cafes long enough to make the trip to Jack London Square. Thus, we often find ourselves taking the experience to them!
The brewing process begins.
While not as comprehensive as a visit to 3rd Street, we think we provide our customers a great experience whether we are tasting coffee samples in San Francisco, San Jose or Carmel. As you will see in the montage of photos here, we are very proud of the “tasting kit” we have assembled! The kit allows us to present Mr. Espresso coffees the same way they would be prepared if being sampled from our showroom coffee bar in Oakland.
We won’t bore you with all the details (though if you would like to be bored with them give us a call because we love talking about them!), but the process behind sampling our coffees is fairly complex. We take a great deal of time making sure all the variables are properly monitored. From water temperature, to the grind setting, to timing each brew, we leave no stone unturned in the process. By focusing on each detail, we are able to provide our customers with the best sample possible. It’s a sample that replicates what they can expect from our coffee, paired with our brewing systems, as they serve it to their customers. We have a lot of fun with it and our customers do, too!
The "finished product." Time to enjoy!