Notes from SCAA 2012 (plus a few more pics)

A few more thoughts about the SCAA Event:

First observation: the SCAA is a really big deal for the specialty coffee industry. I get that now.

Congratulations to Katie Carguilo, who works for Counterculture Coffee in New York, for taking home the championship trophy.

Devin Chapman, representing Coava, was the highest finisher from Portland. He finished fourth overall.

The biggest surprise for me was that the President of Honduras (yes, the head of state), Porfirio Lobo Sosa, showed up to give a speech during the opening ceremonies.  I had no idea he was even around until they introduced him.  He spoke for about 20 minutes, emphasizing several times that “behind each cup of Honduran coffee is a family that grows the coffee.”

The most “Portlandian” thing I saw during the week happened at Coffelandia, the big street party hosted by Portland Roasting (a great event, by the way). We were walking up to the front gate when a group of naked bicyclists rode up and rode a few circles in the street. At least I think they were naked. To be honest, I didn’t notice if they had shoes on.

In addition to the USBC, I also spent some time at the Exposition, checking out the latest and greatest things coming to specialty coffee. I tried to get a photo of as many Portland faces and displays as I could (check out the higher-resolution versions here). You might see a few people you recognize. 

Public Domain was pulling shots outside the entrance to the USBC

Publisher Ken Olson and Editor Sarah Allen greeted people at the Barista Magazine booth

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Pride comes before a...

Whenever you scoff at something, beware. Pride has a funny way of kicking you in the teeth when you aren’t looking.  A healthy sense of self-righteousness can set you up to feel stupid, as I did last week.

I was doing a little shopping at a local Fred Meyer when I came across a couple products I had not seen before.  On first glance, they seemed ridiculous.

Diet tonic water?

Isn’t that sort of like selling “cholesterol-free” peanut butter?

The second thing that caught my eye was the fat-free half and half.

Yes, that’s fat-free half and half.

Half and half gets its name from being half cream and half milk. If something is half cream, it cannot be fat-free. What did they substitute for the cream? Corn syrup and some other chemical agents (er, ingredients).

Obviously, with fat-free half and half, the food companies are catering to the weight-obsessed crowd. They’re trying to pass something off that substitutes corn syrup for cream as healthier for you (“It’s okay, go for it. It’s fat-free”). I scoffed at the idea of drinking fat-free half and half, and grabbed a carton of the real stuff, right next to it.

Or at least that’s what I thought. The part of the story where pride kicks me in the teeth is that when I got home to unload the groceries, I pulled out the carton, only to find that I had grabbed one of the fat-free ones! I had grabbed the name brand without looking too closely at it, assuming it was the real stuff. Ugh.

Oops.

After mocking the thought of fat-free half and half, I had fallen into its trap (the taste and quality difference was obvious, by the way). I’m not sure whether this was a case of complete absent-mindedness or just a case of “pride cometh before a fall.” Either way, I felt ridiculous. Next time, I’ll be a little less self-righteous and a little more careful about what I pick up off the shelf.

Coffeenomics, social responsibility, and CAN coffee (a review)

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Classical economic theory proposes that the sole purpose of a business is to enrich the shareholders of a company. The profits it generates will eventually circulate into the wider economy and improve the material well-being of everyone in the society (the idea that a “rising tide lifts all boats”). The conclusion of this is that focusing on anything other than profits would hurt the value of the company and therefore society.

The theory is controversial, to say the least. In the short term, its implementation ignores many externalities (pollution, labor market instability, etc.) that are detrimental to society as a whole. Another weakness of the theory is that it relies on the belief that money (and what it buys) is the equivalent of satisfaction (utility). Notwithstanding, it is an idea that many people subscribe themselves to. They believe that profits are the only important thing in business, and any discussion of business’ effects on the environment or the rest of society are dismissed as leftist conspiracies to bring down capitalism.

While there are some leftists who do want to get rid of capitalism, there is a wide middle ground between the two viewpoints. More today than ever before, select business leaders realize that taking care of the environment and the people who work for them are important too. In Portland, for example, many coffee companies have taken up the mentality that they want to treat their employees and coffee growers fairly. Portland Roasting is a leader in this area, but is not the only one building stronger links between the coffee growers and coffee drinkers. If you stop in at Stumptown’s Annex, for example, you can learn about several of the growers  who raise coffee for the company. By raising the profile of the growers, roasters can differentiate the coffees more easily and sell them at higher prices.

Whereas Portland is the leader in producing more sustainable coffee, the city’s coffee companies do not hold a monopoly on trying to make the world a better place. Smaller roasters in Seattle, San Francisco, Chicago, Kansas City, Durham and other cities across the country are building a movement that is benefiting coffee drinkers and coffee farmers.

CAN Coffee

One participant in this movement is an organization known as the Community Agroecology Network (CAN), based in Santa Cruz, California. In 2001, CAN was founded by Dr. Stephen Gliessman, a researcher in environmental studies at UC Santa Cruz, and Robbie Jaffie, also a lecturer in environmental studies at UC Santa Cruz. CAN comprises a network of coffee cooperatives that includes communities in four coffee-producing countries—Mexico, Costa Rica, El Salvador and Nicaragua—as well as resources from UC Santa Cruz. The coffee is grown and processed outside the US by the cooperatives then sent to the United States. Santa Cruz Coffee Roasting Company roasts the coffee once it arrives and CAN sells it under the AgroEco label.

CAN recently sent me a bag of AgroEco coffee for review [note: CAN sent the coffee at no charge, but none of the links are affiliate links]. The coffee arrived at my house in a vacuum-packed bag. It was labeled as a single-origin, light roast from a coffee cooperative in Nicaragua called Union de Cooperativas Augusto Cesar Sandino (also called UCA San Ramón, or UCASR). I looked for a roast date on the package, but could not find one. When I asked Daniel Fuentes, CAN’s Marketing Coordinator, about this, he told me the company roasts in small batches and goes through its inventory in less than two weeks, so when the coffee arrives in the customer’s mailbox, it will have been between one and three weeks since being roasted. CAN will grind the coffee if a customer chooses (but if you care about freshness, why would you do that?).

Fresh out of the French press, the coffee had a sweet aroma, but the sweetness did not dominate the coffee. I picked up hints of unsweetened baker’s cocoa and rose petals in the medium-bodied brew.

The thing that stood out the most to me about CAN’s coffee was its unique label. Most coffee labels trumpet the coffee’s unique flavors, or highlight its story, but the AgroEco label was primarily used to give the facts about the coffee’s sustainability. If you look at it in the picture, you can see what makes the label unique. CAN is very transparent about where the coffee came from, the demographics of the coffee farmers in the cooperative, and the prices that farmers received for the coffee. The cooperative received $3.42/lb for the coffee, significantly higher than the Fair Trade price or the market price for coffee.

How can the farmers be paid a higher price for the coffee and the roaster still make money? One of the ways CAN does this is by cutting out middlemen between the growers and the roaster. Coffee typically passes through several hands before it reaches the consumer, each of which take a cut of the purchase price. In this case, the coffee goes from the coffee cooperative through an importer directly to the roaster, who then sells the roasted coffee to consumers. The more direct supply chain lowers overhead costs, making the coffee more profitable for both producer and roaster.

Though not certified as organic, the coffee from UCASR is grown without pesticides or herbicides. The costs involved with obtaining certification can be too high for some farmers, and the return on the investment does not always pay off. One of CAN’s goals is to help promote farmers who produce their coffee without chemicals, whether or not they obtain the official organic certification.

The coffee from UCA San Ramón is also shade-grown, so instead of clear-cutting forests to grow only coffee, the coffee is grown beneath other trees. Mango, citrus and cacao trees are grown in and around the coffee, providing additional food and income for cooperative members. Thus, the shade-grown coffee helps diversify the farmers’ production risk and increases their food security. Raising coffee this way also provides more habitat for wildlife, especially migratory birds.

CAN shortens the supply chain to provide more benefits to growers

Overall, the quality of the AgroEco coffee was somewhere between Ristretto (perhaps Portland’s best) and Starbucks coffee. If social and environmental issues factor heavily in your coffee-purchasing decisions, AgroEco coffee would be worth checking out. Given the company’s transparency, you can feel confident you are supporting coffee growers and their communities. In a country where the collective spending decisions of consumers shape the direction of both economic and political decisions, choosing which products to carries much responsibility. The choices are yours, make them wisely.

For more information about CAN, visit http://www.canunite.org.

Expensive Water

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One of the phrases you hear in the service industry is “the customer is always right.” I disagree. Without a doubt, there are some customers who are wrong. However, retail businesses need to remember they are in the image business and try to build goodwill with both current and future customers whenever they can. Sometimes they succeed, and other times they fail. Here are a couple examples:

Today, I was sitting in a café that I regularly frequent when a woman walked in the front door and asked the barista, “How much is a cup of water?”

Without hesitating, the barista answered, “It’s seventy-five cents for the cup.”

The woman appeared to be hoping the water would be free, so unsurprisingly, she did not buy it. With a curt “thank you,” she turned and walked out the door. As a frugal consumer myself, I don’t blame her. I would balk at paying that much for a cup of water.

Trying to figure out how annoyed the woman was, I watched her as she returned to the parking lot, where her husband was waiting for her with a stroller (and, I assume, a small child).

From my perspective, the barista should have given the woman a cup of water. A woman walking around the neighborhood with her husband and a stroller likely lives nearby and could turn into a repeat customer. The barista’s response was an example of being “penny wise, pound foolish.” The cost of a cup is insignificant compared to what a loyal customer would spend in the future. However, I doubt the woman comes back anytime soon.

Somewhat ironically, a man came in a few minutes later, pleading for help.

“I know that restrooms are only for customers, but could I please use the bathroom?” he politely begged.

The barista nodded in assent and pointed him to the back of the store. This time, she didn’t figure it was necessary to hold the line on the rules.

The stories illustrate what Seth Godin would call  the “scarcity mindset” versus the “abundance mindset.” In the first case, the barista acted as if the cups were scarce and that by giving one away she would hurt the business. She missed an opportunity to help the woman (and maybe create a loyal customer). The second time around, the barista bent the rules to be generous with the customer, even if he did not buy anything. He was careful to thank the barista on the way out, and it appeared he was leaving with a good impression of the café.

Each of the two customers came in asking for essentially the same thing (something for nothing). The barista had the opportunity to build goodwill with both people who came into the cafe, but only did with one. She might think that being successful 50% of the time is good enough, but there are a lot of cafés out there competing for business, and whether or not “customers are always right,” they certainly think they are.  Treat them well—your business will prosper.

Pursuing success with the Harada Method

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Over the last year, I have occasionally talked about creating a new path for yourself, following dreams and doing something that gives you a sense of satisfaction and success. Along those lines, today I am sharing a video that I put together from a talk that Norman Bodek recently gave at George Fox University.

Bodek is the founder of Productivity, Inc. and Productivity Press. Around 1980, he started the two companies to bring the best of Japanese management to America. Through them, he brought what we call Lean Manufacturing to this country. I have been working with Norman for the last couple years, helping manage his newsletter and website and doing some writing/editing for him. In the video below, Norman discusses the Harada Method, a personal/professional development system that he is now bringing to America for the first time.

The method is named after Takashi Harada, who developed the system. Harada is a former teacher/coach in Japan who teaches companies and individuals how to be successful. By starting with a goal in mind, the Harada Method helps you become self-reliant and create a clear path toward reaching your goals. The video gives you a better idea of how the method works.

(If the video doesn't show up in your browser, click here.)

This coming October, we are holding a workshop at the Marriott on the Waterfront and I wanted to share the video with you, in case you might like to attend, or in case you just happen to be interested in reaching your fullest potential in life. Whether you work for a Fortune 500 company or are thinking about starting your own corner coffee shop, the method can help you be successful. If you have any questions about it, you can send an email to bodek@pcspress.com or hutchens@pcspress.com and we will send you some more information.

Buckle up, we care about you (really!)

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Language matters.

Walking down the street near Belmont Ave. today, I noticed the following sign at the exit of an apartment complex’s parking lot. The sign caught my eye for its choice of words and for its callous connotation. Can you guess why?

Thanks for caring

Hint:

Tenant=person who lives at the place

Tenancy=agreement to pay rent in exchange for the right to live there

There is a subtle, but very important, difference between saying “we value your tenancy” and “we value our tenants.” By valuing tenancy, the sign implies that they want you to buckle up so that you can pay your rent. I am sure (well, I hope) that whoever wrote the sign for American Property Management intended to say they value their tenants but made a mistake in the writing/editing process. Surely, they care about the people that live in the apartments, right?

It could be an innocent mistake, or perhaps it was a Freudian slip.

Then again, maybe they were just being honest.

Flying high and keeping your costs down

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When you go to Coffeehouse Northwest (on West Burnside) and look at the menu board, you might choke a little bit when you see that an espresso costs $3. I know I did the first time I saw it. Even with the run up in coffee prices over the last year, most cafés still charge between $2.00-$2.50 for an espresso, so $3 seemed spendy. However, there is a way to get around the lofty price, by ordering a “flight,” something you won’t find on the menu. A flight is a pair of espressos, one of each of the two types of coffee on grind (my guess is that calling it a “flight” has something to do with how you feel if you drink them too fast). CHNW keeps two different espressos available, usually from Sterling and often both single-origin coffees. Today’s offerings were from Ethiopia and El Salvador, respectively.

If you order the flight, they only charge you $4.00 total for both of them. If you plan to spend more than an hour there, this is a good deal. Coffeehouse’s baristas know what they are doing, and they pull good shots. They will also let you spread out your espressos so that you don’t get buzzed too quickly.

That’s your bargain-hunting tip for the day.

On a side note, while I was sitting in the café today, I overheard an interesting conversation about stripping (I just report what I hear, okay?). Three women at the next table were having a very open conversation about how to make good money working at a strip club. It sounded like the most important rule is that you sell the customers without letting them know they are being sold. According to the most experienced of the three, between “acts” you get down off the stage and work the crowd—talk to the customers, shake their hands, ask how they are doing, etc. The more social you are, the better, because creating a connection with the customers pays dividends.

I’m sure there’s a business lesson in there somewhere…