Coffee: Possibly a Recession Proof Industry

In a recession a number of interesting things happen: couples eat at home more often instead of seeking out a different restaurant several times a week, wage earners push themselves to set aside more funds for savings accounts, families settle on lower-cost entertainment options like board games or movie rentals or local attractions, as people in general trade down not only to economize in the short term but to prepare for possibly even tougher times ahead. However, some things remain nearly sacrosanct in the rush to cut back, delay, or do without, things like cosmetics to bolster one's self confidence, gas for the car so that the possibility of a getaway always remains within reach, and coffee so that facing the day or taking a break appears perfectly normal and comforting. This last item is an interesting case in itself.

The coffee industry is a global phenomenon, incorporating growers in many third-world countries and imbibers in all first-world nations. The main exporting countries are Brazil, Vietnam, and Colombia, while the chief importers are the U.S., the European Union, and Japan. Sure, the global recession has had some effect on producers, most of whom operate on a very small scale, as prices have fallen pretty low; on roasters, whether the major brands or small-batch specialty companies, as cost issues are also an ever-present concern; and on coffee house businesses, now popular almost everywhere, as competition has grown and as some consumer resistance to paying premiums for exotic coffee blends and seasonal flavorings has cut into profits.

One company doing extremely well of late is Green Mountain Coffee Roasters, a Vermont-based concern founded in 1981 and now selling beans, ground coffee, and single-serving items in grocery stores around the country. Its partnership with Keurig in providing doses, the so-called K-cups, for brewing machines, which are sold by Wal-Mart and other discounters and retailers, has proven a winner. As proof of is success is a recent opening of a new plant on the West Coast, in Sumner WA. The fast-growing company also owns space in Boston and Knox County TN. Additionally, this company is environmentally and socially conscious; it has promoted green packaging for hot beverage containers and developed sources for organic and Fair trade coffee beans.

Starbucks, Seattle-based but an international corporation with thousands of outlets serving up probably tens of thousands of espressos and frappacinos daily, is also doing relatively well despite closing some stores, refurbishing others which may well operate on a trial basis without the Starbucks name, and introducing new products, like its recent debut item, VIA Ready Brew soluble powdered coffee, a variation on the freeze-dried instant offerings available in supermarkets. Social responsibility is also a goal for the company, a business which is so well known that it is frequently mocked, parodied, and criticized, even by people who are not avid coffee drinkers. But its strong support for Fair trade coffee, a product specially certified as purchased from deserving growers at an above-market price, is much admired. Fast food giants, like the highly competitive McDonald's and Dunkin' Donuts, have clearly noticed consumers' heightened interest in specialty coffee and have added McCafe offerings like Iced Latte and Dunkin's Turbo Shot.

Coffee is a commodity traded on the futures market but is also an agricultural product that has specific growing, harvesting, and roasting requirements. Dozens of countries in the tropics, from Mexico to Ethiopia, from Rwanda to Costa Rica, and from Colombia to Indonesia engage in coffee growing. Many countries back recent efforts to add country-of-origin designations to package labels, seeing such notices as signals of quality and addressing national pride as well as reaping potential marketing advantages.

The two main coffee bean types are Rustica and Arabica, with most countries focusing usually on one or the other type; yet variations in typical and abnormal weather patterns and micro-ecosystem details, including shade-grown and full-sun plantations, combine to create a startling range of green beans available for roasting, thus allowing international food conglomerates and craft roasters alike to develop light roasts emitting elusive flavors, darker roasts which may have more body, and any and all possible combinations. Tasting coffee samples, called cupping and similar to wine tasting in effect, is popular for some of the smaller operations and a treat occasionally offered by urban coffee houses.

Lastly, coffee, a stimulant largely thanks to its caffeine content, is noted for being somewhat addictive, yet its health benefits are generally considered greater than any of its drawbacks or side effects. Cappuccino anyone?

Avani Nadkarni, "Green Mountain comes to the Valley", Puyallup Herald
Phil Beattie, "Tailoring Your Roast to the Bean", Tea & Coffee Trade Journal
"Starbucks VIA Ready Brew Available in all US and Canada Locations on Sept. 29", Reuters
Philippe Juglar, "A denomination of origin for coffee: will it help?" Highbeam/Tea & Coffee
Natalie Zmuda, "Green Mountain Takes on Coffee Giants Cup by Cup", BNet/Advertising Age