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On your mark: Ethiopia, Starbucks and a tempest in a coffeepot: protecting a mark to insure that consumers are protected, and the people at origin are properly represented by goods in the marketplace that are truly from the origin that is named on the label of the goods, is an important goal in commerce.

OVER 30 YEARS AGO, in an age when it was the fashion to describe the product within coffee packages in the U.S. with phrases as, "A blend of the World's finest coffee," Michael Sivetz wrote, "A man has the right to know what goes into the coffee he drinks." It was in its day a call for origin labeling, and it was heard by the specialty coffee movement which built its early success in part by being up front with what coffees were in the coffees they offered. Today words as Blue Mountain, Antigua, Lintong, and Sidamo define to coffee lovers the world over qualities that they will find in a cup of coffee so labeled. For this reason it is very important that the integrity of the labeling be insured.

A decade ago Michael Norton, a large seller of Kona coffee on the mainland was indicted for selling Central American coffee as Kona. Mr. Norton's attorney defended him by saying no one thinks that all French bread is baked in France and no one thinks that all Kona coffee comes from one beach in Hawaii. The trade was outraged by the boldness of the man's brass.

The Colombians protect their name, and Guatemala has declared "Antigua" an appellation and Jamaica defends "Blue Mountain." By moving to insure that bogus beans are excluded from the marketplace, an origin ensures that the limited qualities of their best coffees are marketed to their best advantage that the consumer is never disappointed with what they buy, and the farmer producing the real thing is fairly compensated. The perfect beverage world models of this ideal are Scotland (Scotch) and France (Cognac). In these cases the goods are grown, processed and bottled in-country, guaranteeing a level of control that is unattainable in the coffee world where most roasting, and all brewing is done at destination and often in very small batches, or often one cup at a time.

Custom and usage in older times such as "Java" and "Mocha," both geographic place names of coffee's origins, have been synonyms for any coffee for over 150 years. Other food place names linger in the language as Wisconsin Swiss Cheese accepted when so labeled and made in the U.S. A century ago almost all Mocha coffee entering the U.S. was grown in Brazil originally from Mocha seed it is true, but by way of French Bourbon (now Reunion Island) in the Indian Ocean and generations removed from its home inland of the old Red Sea port of AI Mukah.

Ethiopia's agrarian economy represents 60% of the country's exports. Of this the largest product in this cradle of world coffee are the beans that brought home about $156 million in 2002. The coffee crisis of 2000-04 was a great hardship to this poverty-stricken country still recovering from a war with Eritrea that consumed them in the last years of the last century. Drought has further hurt coffee production, and because of its situation The International Monetary Fund forgave Ethiopia's debt to the IMF in 2005. You can't read of Ethiopia's history, or visit without being touched by the need to support these people. Much of Ethiopia's coffee ranks high among coffee roasters worldwide, and their best of cup coffees fair well above International Coffee Organization (ICO) "Type" pricing in the marketplace of beans.

Where the Ethiopians differ from other nations in moving to protect their good name in world markets is that they appear to be requesting licensing agreements and individual fees from roasters for the use of the origin names of Ethiopian coffee as an added privilege for marketing the goods. The roaster, in effect, is being asked to pay for the coffee and again for the right to put the name of its origin on the coffee. Something akin to Idaho deciding that stores and restaurants that want to identify Idaho potatoes as from Idaho pay an added fee for using "Idaho" in marketing. I understand the desire to want to shake more money from the sale of the produce, but is it equitable, on the one hand, and will Oregon not move to take advantage of Idaho's greed by making their potatoes available without a licensing fee?

In the U.S. you cannot trademark geographic place names such as Skokee, Sawanee, or Sonoma. The Ethiopians are asking the fee of mostly small roasters and roaster retailers half a world away, with the intent to attempt to enforce their ideas on licensing fees in these roaster's home countries. The Ethiopians see their "brands" bringing extra money to their farmers in the free market of specialty coffee every day. In specialty coffee, where merit rises inexorably to the top, Ethiopia has reason to rejoice. Whatever good things are happening in the Ethiopian economy, much of it is due to the value that a free market puts on their beans over those of others. In the value added market of coffee produce programs such as Fair Trade and Rainforest Alliance help Ethiopian goods reach even higher in the value scale.

All can agree with Oxfam America, a non-profit organization that works to end global poverty by campaigning for change when it writes, "the poor farmers deserve a fair share of the profits." Where the market is not providing a fair share back to the farmer in part this is due to the higher gains being siphoned away from the farmer in Ethiopia by those people who have the power within the internal Ethiopian coffee economy to benefit at the expense of the farmer keeping the farmer from realizing more for his crop. We know from other origins that this is an issue that affects the farmer in many coffee Lands.

You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time. This maxim attributed to our sixteenth president, rings true today. I first heard the argument about the $4.00 latte vs. the pittance that the farmer gets for his beans some years ago when I was on a panel at a Tea & Coffee World Cup conference presented by Tea & Coffee Trade Journal in Amsterdam. It is more than a claim to someone else's hard earned gains put forward by those who have not and envy those who have. It is made by a claimant who has chosen to close his eyes to the struggle to make a living at destination. Some folks think that if they repeat that stuff over and over again people will begin to believe it.

The economics of the many layers of the specialty coffee industry, with their inherent entrepreneurial risks, and intensive capital and intellectual property investments required to bring products to market justify their retail value, and the honest profits earned by retailers many of whom put in six days/seventy hour work weeks behind the counter, or standing by their roasting apparatus. The bankruptcy courts are littered with the paperwork from the many specialty coffee businesses that have begun with great hopes and failed in the U.S. during the last quarter-century.

A recent real estate value report found that the average asking rents for prime ground floor space on 34th Street in New York City was $299 per square foot while 125th Street in Harlem brought $77 per square foot. It is not unusual for concept, design, menu development, build-out and fixtures to run $300 per square foot. It is a marvel that a coffee bar operator, taking the risks she does, at the costs she absorbs in getting the doors open can be successful at only $4.00 per latte. It is no wonder that what were a decade ago exclusively coffee emporiums now serve salads, soup, and paninnis. The proof that a well designed and executed coffee beverage business can succeed is found however in the lines in which folks stand for their Joe in Seattle, London, Athens and points east when 40 years ago we were having trouble giving away a cuppa for 35 cents. I would expect anyone wanting to take a poke at specialty coffee to take a poke at Starbucks as the most visible and most successful of the specialty roasters. I expect that Starbucks appreciates but fails to enjoy the rare privilege that this affords them for having an unusually high profile and successful business.

I am ambivalent about Starbucks in their postmodern corporate business design. There are Starbucks practices I do not admire, and there are things about the company that I do admire. One of the things I admire is the way Starbucks stood up during the recent price crisis and supported farmers with long term contracts and pricing practices. Oxfam, a worthy organization fighting for the little guy in the developing world has chosen an unfortunate way of expressing its desire to get more revenue to the farmer in this Ethiopia/Starbucks imbroglio. In their recent report web headline Tell Starbucks to Give Ethiopian Farmers Their Fair Share Oxfam America (The US affiliate) spins what should be a valuable discussion of how to help folks at origin into a mistaken slash at a company that has been a leader supporting farmers at origin in recent years when others held back. For sure Starbucks creates these business models to help it make money by helping it look good to consumers at home. No business can accomplish anything if it fails to make money, and the more money, it makes the more it can leverage its success in support of good business models useful to society. Attacking Starbucks over an issue that is not nearly as clean and clear as Ethiopia would have folks believe may prove to be a well meaning error. A fellow who has set a good example is likely to think twice about putting himself forward again if all he has received for his trouble is a bitten hand.

Ethiopia is wise to defend its market names in the marketplace of coffee and coffee ideas. They might want to rethink this particular initiative and work with folks at SCAA, NCA SCAE to move toward creating and protecting universally accepted labeling practices. This would be a meaningful way to give greater value to their coffee produce through education, and cooperation with all concerned. Removing the element of luck from coffee Labeling would stir a growing taste, renewed intellectual curiosity, and marketing value to great coffee, and this is what specialty coffee is all about. The sage of Corvallis had it right again when he penned, "When it comes to buying coffee the last thing to trust is your luck."
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Title Annotation:cup Service
Comment:On your mark: Ethiopia, Starbucks and a tempest in a coffeepot: protecting a mark to insure that consumers are protected, and the people at origin are properly represented by goods in the marketplace that are truly from the origin that is named on the label of the goods, is an
Author:Schoenholt, Donald N.
Publication:Tea & Coffee Trade Journal
Date:Feb 1, 2007
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