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The future of specialty coffee.

Man is born "tabula rosa," literally meaning with a mind that is a black slate. The Seattle convention reminded me of this, in that some 1,500 people came, many with their minds as eager blank slates, ready to absorb new ideas, of which many were presented. Some were advanced by experienced people of sure knowledge, some by others with only a primitive understanding of their subjects, yet others by opportunistic, pragmatic players out for short-term profit at the expense of the long term health of the business.

On the whole, the fledgling SCAA is a wonderful thing to behold in this its youth, filled with verve, excitement, naivete, and potential for individual human success. I was reminded of the story of the old man observed crying at a wedding. When asked why, he said, nodding at the bride and groom, "Because they don't know how beautiful they are." (Of course the industry is |new' only in the sense of its very recent catching on with the general public. I owned a bean store complete with 25 pound Deere roaster in 1964).

And so it is with people of the Specialty Coffee Association, which has yet to become an older, tired, jaded entity such as perhaps other coffee associations, where sales and profits have eroded away, largely due to a self-destructive inability to understand the fundamental negative philosophy that always damage if not eliminate any business. And that philosophy could be crudely stated as: keep cutting quality and eventually you will lose your customers.

With the specialty people, growth and profit potential abound, as with all new industries that answer a public demand and where large amounts of capital have to be generated in a short time just to fuel the need for expansion. But the same danger of long-range attrition in profits and public goodwill lurks for the specialty people too. It is thus very important that they grasp the fundamental concepts on which specialty coffee is based, and upon which it has to maintain its stand.

Either specialty coffee is a fake, a short-term phenomenon, or it isn't. In other words, is it real, meaning based on reality, or is it some kind of shell game foisted on an unsuspecting public, a public that will one day see through the veneer of marketing razzle-dazzle.

First let's see what it is not. To hear some of the people at the Seattle convention tell it, high quality coffees has just been discovered, a la Columbus discovering the new world. Old roasters never heard of it. It never existed before we came along, unearthed it, and introduced it to the unwashed masses.

Not only that, but some other people led us to believe it was an esoteric, mystical substance to be understood only by a kind of gastronomic intellectual elite. This may be the psychological fuel we think we need to cover our embarrassment and guilt, justifying our paying perhaps 20 cents more for a pound of green coffee while charging $5.00 more at retail. Other people assured us that the business is so simple that any novice can grab a cheap roaster, open a store and soar off into an ionosphere of heady success.

Then what is this industry, anyway? Let's start by being honest with ourselves, admitting the reality-oriented truth; that the public is fed up with ordinary retail coffee. Specialty operators pay a bit more to ensure that the public gets what it wants, a decent cup. Of course these numbers vary widely and are intended to be symbolic, and need not be disclosed precisely to the public. My illustration here is by way of having people within the industry acknowledge the reality of what is being done.

Prices are not too high, but why might they seem so to the casual observer? Because of the further reality that sales volume in pounds is quite low, and there is a business to run, complete with that thing called overhead, and one has to survive. For proof, if sales volume of pound coffee in stores triples, selling prices, even through completely honest competition, will fall to a level of market equilibrium, while still providing decent profits.

Of course operators should resist the temptation to cut prices for temporary advantage over a nearby competitor. Here we can take a history lesson from traditional retailers. The consequence of cutting prices in a subjectively judged product like coffee almost always assures declining quality.

In the past, when profit margins eroded, traditional retail roasters maintained profitability in the short and medium term by a gradual degrading process, predicated on the idea that, if their own buyers couldn't really see the result of a small substitution in a blend, then surely the consumer couldn't either - and quite so. As with colors in a rainbow, slight gradations of difference might not be detected. But through time these gradual shifts over the taste spectrum taken together are noticeable, even if the judgment is subconscious. The public did indeed notice, and stopped buying, substituting alternate beverages. The old roasters reacted as if peoples' genes had changed over the years, blaming everything but the obvious - that coffee just didn't taste that good any more.

Thus was born, in reaction to this downward spiraling of quality, the specialty coffee industry. And a deep philosophical lesson for all of us is there to behold. Dishonesty, lying (over quality, for example), which is the faking of reality, is self-defeating. It may seem to be to your short-term advantage, but it will lead to your long-term destruction. When everything is said and done, all we really have for success in a business is public goodwill. This whole industry's health depends on it, and it is not just altruism, it is in one's own self-interest to contribute through honest merchandising.

This leaves enormous room for entrepreneurial marketing by the retailer. We never have to be embarrassed by out product, coffee. It is filled with many virtues, among which: it has no calories, it gently stimulates the central nervous system, brightening and enhancing our awareness. It acts as a body regulator. It is a mild diuretic. This drink has everything! Besides, exotic coffee names from far away places have a great deal of public appeal.

Now, ironically, the new industry that was spawned by public desire for a good cup of coffee is giving the entire coffee business a chance to recover. But we should beware. In 1965 another industry was new, with the same messianic enthusiasm and fervor as we saw in April in Seattle. It was called Coffee Service, born of the need for business offices to get a decent cup of coffee.

Until that time, virtually all the coffee consumed outside the home was supplied by local or regional "institutional" coffee roasters. Office buyers that were used to retail brand names at home were not making the same kind of value judgments as were restaurants. Thus retail coffee labels were often automatically demanded of the OCS operator. This gave traditional brand names a foothold in the away-from-home market.

The coffee service operator, just like today's new specialty coming into the industry from used cars, insurance, textiles, or whatever, had a golden opportunity to build a permanent and profitable bass for a long life cycle of prosperity. But the Trojan horse of old-time retail coffee has been implanted, and only enlightened selling, self-education and honest dealing by the coffee service industry could have done the job. Tragically the battle for quality was lost, and we saw coffee weights cut in half, over-roasting, flaking, and other methods of degrading in an attempt natural capability.

Thus coffee service health and profitability has suffered through the inability to identify the fundamental axioms giving it its birth and meaning - quality, consistent coffee, along with a high level of service and equipment. But that industry as with every other facet of the coffee business can be lifted up by the bootstraps through the influence of specialty coffee, if specialty can live up to its potential. It is not as if it has some kind of moral responsibility to do so, but it could be the happy consequence of its own knowledge, honestly and integrity.

Stuart Daw is the president of Heritage coffee in Canada, and Southern Heritage and Nationwide Gourmets, Inc. in the U.S.
COPYRIGHT 1992 Lockwood Trade Journal Co., Inc.
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Author:Daw, Stuart
Publication:Tea & Coffee Trade Journal
Date:Aug 1, 1992
Words:1389
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