Coffee News, 2/20/2015
Watch for Falling Prices
Not long ago in this space, we noted that 2014 had been a high water mark for coffee prices due to a combination of drought conditions in Brazil and coffee rust, both of which had led to shortages and higher prices. In perhaps the surest sign yet that we should stick to coffee and not financial forecasting, the Wall Street Journal reported that Arabica coffee has fallen to $1.5885 per pound, its lowest closing price since February 18, 2014. The price drop was initially sparked by favorable weather forecasts in Brazil's coffee-growing regions, and accelerated as falling prices hit stop-loss levels and triggered preset sell orders. Further impetus was provided by a forecast by the International Coffee Organization, which forecast a rise in coffee consumption to nearly 176 million bags of beans per annum by 2020.
Starbucks Debuts Reserve Line Coffee Subscription Service
On February 17, Starbucks entered the subscription coffee service fray with its Reserve coffees. For $24 a month, the company will ship an 8.8 ounce bag of coffee roasted on the second Sunday of each month. Customers will receive the beans within three to five days of roasting (depending on location). Unusually for a subscription service, the monthly price is firm, so whether a customer tries the service for a single month or a full year, it comes with the same $24/month price tag. It's worth noting that customers buying Reserve coffee through the company's website typically pay between $12.95 to $14.95, with a typical shipping charge of about six dollars in the continental US. If you do the math, that's significantly less than the subscription service. Even the most expensive offering, which comes in at $17.95 before shipping, squeaks under the subscription service's price. It remains to be seen whether enough customers will pay an extra premium for beans that, at the end of the day, are still Starbucks, even if they're fresher than their store-bought counterparts.
Those Darned Hipsters And Their Fancy Coffees
Over at Time's Zocalo Public Square blog, Murray Carpenter makes the case for mass-market coffee with In Defense of Terrible Coffee (n.b., that's his title, not ours). Notes Carpenter: These days, gourmet coffee is everywhere. And we’ve got a million new ways to prepare it. In addition to cold-pressed coffee, we’ve got the Japanese siphon process, a plethora of pod brewers, and coffee that comes from fancy machines like the Roasting Plant’s Javabot. And there are concoctions like the flat white—an espresso-and-steamed-milk blend—that suddenly become trendy when the Starbucks marketers put them in heavy rotation. He points out -- correctly -- that the average consumer probably doesn't care if what's in their cup is Fair Trade Certified Ethiopian Yirgacheffe. They care if it tastes like coffee, and that it has a sufficient quantity of caffeine to keep them from falling asleep at the wheel. While we're on board with some of the things that Carpenter espouses in the piece -- we agree with him that sitting down over coffee with friends (or complete strangers) is one of life's best, if simplest, pleasures -- we can't help but think that the rest of the essay reads a bit like a coffee drinker's version of the "Macro Beer" commercial Budweiser ran during Super Bowl XLIX. While we're not above a diner cup of coffee ourselves, we like to enjoy our coffee instead of pretending it's strictly utilitarian. Perhaps we've been doing it wrong all this time?