Latest / Coffee People Podcast / S5:E12 - Coffee Smarter: Climate Change Impacts on Green Coffee Sourcing

Transcript

S5:E12 - Coffee Smarter: Climate Change Impacts on Green Coffee Sourcing · Coffee People Podcast

0:00
Dominate the news and the ones that slip under the radar.
0:02
We also interview local, lawmakers policy, experts and
0:05
other investigative journalists voice.
0:07
San Diego podcast every Friday. Subscribe now, wherever you?
0:12
Listen? Hey, good morning everyone.
0:27
Welcome to season 5 episode 12 of the Roast West Coast coffee
0:31
podcast. I'm Ryan Walt.
0:33
And this is the show where I bring you the stories of coffee
0:36
professionals entrepreneurship and coffee education.
0:40
I'm back for the one hundred and first episode of this podcast
0:44
and trying to get a little bit. Coffee Smarter with this week's
0:47
returning, coffee expert, Jared Hales, green coffee, buyer and
0:50
co-founder of Hosea coffee Source in Anaheim.
0:53
California as say a serves as a green coffee resource for
0:57
fledgling and established Coffee Roasters and It offers regular
1:01
coffee education classes, covering a wide range of topics
1:04
that we cover on this show to from beginning, roasting to
1:07
brewing, and coffee history. Check out all of the Hosea
1:10
offerings online at Hosea coffee.com.
1:14
Assay is spelled h a cea coffee.com today, Jared and I
1:20
are going to talk about how climate change is impacting
1:23
green coffee sourcing in real time.
1:26
As usual, our coffee conversation viewers a little
1:29
bit. Yeah, but we get back to it
1:31
because as Jarrod says early on, it's a Hot Topic.
1:35
I don't think he intended to drop that perfect pun but you
1:38
can bet that I definitely do while you're listening today.
1:41
Check out at roast West Coast on Instagram and Facebook and
1:46
subscribe to this shows newsletter on roast
1:48
westcoast.com right now. It's time to get moving.
1:52
You know, the drill already. Make sure your coffee mug is
1:54
full and settle in for this coffee, smarter podcast,
1:58
featuring my interview with Hills of a say, a coffee Source
2:02
about climate change. I should say Jared, welcome back
2:15
to the show, welcome back to roast West Coast, the coffee
2:18
podcast, we're going to get people coffee, smarter a little
2:20
bit. Today, I appreciate you being
2:22
back and I wanted to ask you before we get started, one, what
2:25
are you drinking these days and to what's new at Hosea, coffee
2:29
Source today. I had an Ethiopian coffee is and
2:33
natural from Cartel coffee, lab in Arizona's.
2:37
Yeah, they've got a location in Palm Springs as well.
2:40
That's right, you're right. Forgot about that.
2:43
My sister roasted over there for a little bit.
2:46
Instead of she she gave me the bag.
2:49
Nice. Very cool.
2:50
Yeah. We stopped there on our last
2:52
trip to Joshua Tree and just had an unbelievable coffee.
2:55
Cool. Excellent at the Palm Springs
2:57
location and they're connected to this like Boutique Hotel and
3:02
rightly thought man. This would be so cool to come.
3:04
Stay here. And then we came home and like
3:06
looked up the room, rental rates Android we can just Camp.
3:11
I've been In there. I know what you're talking
3:13
about. Yeah, very cool.
3:15
And what about Hosea? What's new with you guys?
3:18
It's, you know, just busy sourcing, our coffees getting
3:21
everything shit and yesterday, just finished it another day of
3:25
classes. So just kind of plugging along
3:30
setting up the next year of coffee.
3:33
I saw you recently. I think we're a speaker at
3:36
something, called a cup of culture.
3:39
What was that about? Yeah, that was it.
3:41
Ted Next event with UC Irvine, so really more of just like a
3:47
discussion around how coffee affects communities and
3:51
cultures. I think originally it was
3:54
intended to be pretty local but someone someone put plug me into
4:00
that event. And the conversation went a
4:03
little bit more Global, which is cool.
4:06
Yeah. Just because of my experience
4:09
working with producers and exporters he's and says able to
4:13
kind of comment on how coffee affects people and other places
4:17
in the world, right? Hopefully think I got through to
4:22
some people and, you know, their, their cup of coffee as a
4:25
bigger impact on just. Just their neighborhood, right?
4:30
Yeah, absolutely. Well, that actually leads us
4:33
really well into our topic today, which was not my intent.
4:36
I do not plan that far ahead but I appreciate the coincidence.
4:41
I want to talk to you about how climate change is impacting, the
4:45
sourcing of green coffee. And I've talked to other guests
4:50
on this show about climate change.
4:52
Jay russki, who's a farmer in particular up in Santa, Barbara
4:55
area, a Goleta. And I've talked to some Roasters
4:59
about what they think they're seeing, or who have gone on
5:01
Origin trips and their direct trade partners are.
5:04
But you are really right in the middle of everything.
5:07
So, I'm hoping you can kind of talk us through what some of
5:10
those impacts are now. And maybe what you're preparing
5:13
for down the road. Yeah, it's a pretty big and a
5:18
Hot Topic in the coffee scene right now, right?
5:22
And actually, you kind of nailed the Segway even better than you
5:26
thought. At the end of that tedx event,
5:30
one of the last questions that I got, was this essentially.
5:35
And I think I had like four minutes to answer if it's oh,
5:40
okay. Not well, I'll give you four and
5:42
a half. But yeah, as you are kind of
5:47
hinting that climate change, is having a pretty deep effect on
5:54
the coffee industry. I can, I think what I'll do here
6:00
is kind of keep it pretty straight to my experience, so
6:04
people can kind of fit that into their own experiences but
6:10
basically, as of July last year, we saw the The Commodities
6:17
Futures Market of coffee the see Market.
6:20
It went from somewhere around dollar, 40 per pound up to like,
6:27
to 20, to 30 per pound, something like that.
6:31
And a matter of about a week or two, and this, nearly doubling
6:36
of the Sea Market, was purely weather-related.
6:40
So a big frost had come and hit. Hit Brazil and it's estimated
6:49
that it may have damaged about 10% of the entire country's
6:53
coffee production. Brazil produces like somewhere
6:58
around a third of the entire world's coffee.
7:02
So when a third of the world's coffee gets hit by 10%, it has a
7:07
big impact, right? Sure.
7:09
And I would want to clarify just for anyone listening one, the
7:13
the sea market price is true. Nationally depressed from where
7:16
it probably should be read like a dollar forty, right?
7:20
But when we're talking about some of this coffee in Brazil as
7:24
a producer and that price, that's actually still below.
7:27
What a roaster, my pay for craft coffee, like a specialty coffee,
7:31
right? We're talking Mass consumption
7:33
coffees to some extent that are being.
7:36
I'm not saying that craft coffees won't have the same
7:39
impact. They obviously do an in the such
7:41
a growing Market. But when you start thinking
7:44
about how much coffee E is is sold every day at say McDonald's
7:48
or a Duncan, or a Starbucks or a on and on and on and how much
7:53
coffee they demand just to keep their businesses operating.
7:56
Right. That's a lot of where that's
7:58
coming from, right? Yeah, I think Nestle is actually
8:02
the biggest coffee buyer in the world so so yeah, definitely the
8:07
see Market effects specialty prices, but specialty prices are
8:12
usually like CC. X, triple or quadruple.
8:17
What the see Market is at and really paid for based on where
8:22
the coffee is coming from and what it took to get them there.
8:27
Whereas the CE Mark is just pure Supply demand.
8:31
Like quality is not really talked about except in like free
8:36
of defects. We could do a whole episode on
8:39
see Market, probably well let people get excited anticipate.
8:45
That will stick to the climate change question today.
8:48
Yeah, but basically this at it's very core, see Market is kind of
8:55
an indicator of supply and demand for coffee globally,
8:59
right? I think we can kind of sum it
9:01
up. Is that for this conversation?
9:03
So, when, when Brazil gets had this Frost essentially, it took
9:09
all that Supply off the market in the future, right?
9:13
We can see that the plants. The plants almost look like they
9:17
were in a fire like I do Wildfire the leaves turn brown
9:24
overnight. They look like they've been
9:27
scorched and essentially the plant the plant may not die but
9:31
it will have to drop all of its leaves and essentially start
9:35
from nothing and so that if it's damaged hard enough, it could
9:42
take two years for the plant to over all of its leaves that it
9:46
lost well. So, it's a pretty devastating
9:50
event for coffee and that's why coffee, you know, doesn't grow
9:54
where there's Frost. And I think the last time
9:58
there's a frost like this, in Brazil is in the 70s.
10:03
So it's been a long time since the world has seen something
10:07
like this. So, just in the last year or
10:13
less than a year, we have been kind of dealing with the
10:17
consequences of that weather event, right?
10:21
Like real consequences as far as the effect on availability of
10:28
coffee globally. So yes, Nestle pays cheap prices
10:34
but they still need a certain volume of coffee to kind of feed
10:38
their machine. And when When 10% of Brazilian
10:41
production is off the table. Where, where do you get that
10:45
coffee? You know, demand has not shrunk
10:48
for coffee, if anything, it's grown, I don't have the number.
10:53
But globally coffee consumption is increasing year over year.
10:58
You know, Asia historically has not really consume coffee, and
11:03
they're starting to just kind of wake up to it.
11:07
Asia has a huge population, right?
11:09
So if India and China decided to drink twice, as many cups of
11:14
coffee in a year, that's going to have some major impact on
11:19
supply and demand. I was just reading sorry to
11:21
interrupt, but I was just reading about a craft coffee
11:25
shop that opened up in India and people are traveling from
11:29
hundreds of miles to go there because they're in a region that
11:32
just doesn't have, you know, craft coffee on every corner.
11:35
The way we might hear. In some communities and
11:38
interesting but you could see where that they were stoking
11:41
demand and and creating their the beginning of their, this
11:46
wave of coffee in interaction, right?
11:49
And this is a country with 1.5 billion people, you know, we're
11:54
talking five times the size of the United States who is the
11:58
biggest buyer of coffee. So there's a lot, a lot of
12:02
potential for demand to grow. But what is that look like as
12:06
far as Supply, right? And so, this is where the
12:10
climate change. Question really comes in It's
12:14
basically the the land that is viable for growing coffee and
12:19
shrinking. And so for the last several
12:24
decades, The world has kind of been trying to solve this
12:29
problem. What do we do?
12:30
You know, what do we do? So there's a few few things that
12:35
that can be done, like different varieties that grow at lower
12:40
elevations or grow at warmer temperatures, you know.
12:44
But with warmer temperatures, you have colder temperatures.
12:48
There's always a balance somewhere.
12:51
So you have like, places, like Brazil gettin Frost Just last
12:57
week, I think it was Wednesday or Thursday.
13:00
The coffee Market went up 8% in one morning because of
13:04
forecasted Frost. Now, it looks like it's not
13:08
going to hit, so the market settled down a little bit, but,
13:12
just in a forecast that market was able to run away eight or
13:16
nine percent right in a matter of hours.
13:19
So this kind of volatility in weather is causing a lot of Of a
13:27
lot of issues with speculative coffee buying you know, which is
13:30
what people are doing on the Sea Market as far as what this is
13:35
doing to like Farms right I mean you see what's happening to
13:40
Brazil you see Frost hitting Farms where that normally didn't
13:44
exist in other countries like Colombia.
13:48
A lot of our partners are complaining about rain so
13:53
normally coffee needs a A clear distinction between it's wet
13:59
season and it's dry season to produce a lot of coffee.
14:03
Now, Colombia has basically had record rains for about two years
14:08
straight and what that does is it really reduces yields.
14:12
I think I think Columbia and January said they were down
14:16
about 20% year-over-year as far as production and Colombia is
14:21
the third largest producer of coffee behind Vietnam and
14:24
Brazil. And so, so this is a lot of
14:27
coffee, like off the table, just off the global market and that's
14:32
driving up these, these commodity prices What happens to
14:37
a farmer in Brazil when that Frost hits or to the farm and
14:41
they can't meet the not only meet the demand, but their lots
14:46
have already been sold and those lots no longer exists.
14:49
What happens? Then that's a default.
14:52
It's a default on a contract. That's bad news for everybody.
14:56
Yeah. I mean, so as far as the coffee,
15:00
I mean, it can't just come out of thin air.
15:02
The coffee doesn't exist. So, What what can be done is,
15:08
you know, subsidies from government.
15:11
I don't know how Brazil implemented them but I know when
15:14
that Frost hit immediately, they were on it talking about it.
15:19
But I mean the coffee itself is just gone.
15:23
Sure. And I wouldn't imagine if you
15:25
were on the side of the contract where you had bought that lot
15:28
that no longer exists, obviously, that's not good for
15:31
you but you also don't want to like Essentially put this Farm
15:35
out of business because you're going to depend on them another
15:38
year down the road or two years down the road or three years
15:40
down the road, especially in a market where we're already
15:43
losing coffee growing regions. Correct.
15:48
Correct. And you know, we don't really
15:49
have to deal with this as much as some of the bigger buyers
15:53
that were talking about. But there's been even talked
15:56
about like lawsuits which I've never heard of before, don't
15:59
know if any are actually moving forward or what that's looking
16:03
like but just Just the fact that people are talking about it for
16:06
the first time in my experience is pretty interesting.
16:11
I don't know what you're going to gain as you're kind of
16:13
putting like, what are you going to gain by suing, a coffee
16:16
producer for not delivering you just got to put them out of
16:20
business, you know, like you're going to need him to grow the
16:25
coffee next year and hope that you can get it.
16:29
What we expect now, because of the way the climate has been
16:33
going is on the other end of this insane rain in Colombia,
16:39
who's got to be drought right on the other end.
16:43
So it's just this total out of whack cycle that we've never
16:49
really had to deal with. As I was saying, the plant needs
16:53
that clear line between wet season and then dry season wet
16:57
season and dry season. And so the plant can go through
16:59
its cycle when that's not happening.
17:03
You're getting Cherry production in little spurts.
17:06
All year round. So now you have to pick coffee
17:09
all year round and you got to go go through the whole Logistics
17:13
process, maybe four times, right?
17:17
Instead of once or twice, so it just becomes way, less
17:21
efficient, so, you're losing money and any efficiencies, and
17:26
that's on top of the yield Being reduced as well, the overall
17:31
yield. So it's quite a problem that I
17:35
don't know what the solution is, to be honest.
17:41
Varieties or species of coffee like Robusta, right?
17:44
Which a lot of people kind of frown on these are these are
17:48
much more Hardy plants and so there are varieties that are
17:53
more like hybrid varieties between Arabica and Robusta, and
17:57
they can grow. Throw in a wider range of
18:00
environments than like, let's say Geisha, right, which is
18:04
super picky on where it can grow and which is why you often see
18:08
price pretty high. But these hybrids just don't
18:12
taste this good. They don't taste like Geisha.
18:14
So there's going to have to come a point where the farm is going
18:18
to have to choose, you know. Do I continue to grow these
18:23
high-quality potential varieties that are not yielding or do I
18:28
take Now, and put more resistant or Hardy varieties.
18:31
Is that even enough will? If I plant these Hardy
18:36
varieties, it's going to take two years for them to produce.
18:39
What will the climate look like into 5 10?
18:43
20 years, you know, this is definitely not good answer.
18:48
I don't have an answer, but it's an issue that we're dealing with
18:52
today as the Importer. Then how is this impacting, you
18:58
and Your relationships with farms.
19:00
And then with the people, you're then selling coffee, too.
19:02
I mean, how are you how are the logistics on your side changing
19:06
as opposed to the farmers? I mean Logistics aren't
19:09
changing, but our conversations with vendors or changing the
19:15
most immediate impact that like, let's say that's Frost had,
19:18
right? And I think any any weather
19:22
events like this, that happened in the next few years, which I
19:25
assume that they will we're going to forget Have this kind
19:29
of flare up of the same issues again.
19:32
And what we're dealing with is let's say I mean I can use some
19:37
specifics. Let's say I have coffee Market
19:41
since I started buying coffee, and about 2015, has pretty much
19:47
been between like 90 cents a pound and a dollar forty a
19:51
pound. That's definitely under the cost
19:55
of production. For most of the people that I
19:58
bike Coffee from. But while the market was at
20:01
these prices, I was paying between 250 and 350 a pound.
20:07
And I paid those prices, no matter what the market was at
20:12
the market is at 90 cents. I paid three bucks, the market
20:15
was at a dollar forty. I paid three bucks, right?
20:19
Well, now, the market, when the market went to 250 this year, my
20:24
three bucks doesn't look so good anymore, right?
20:28
And so some groups, some producers decided to sell their
20:35
coffee, essentially on the market, like to just some
20:38
faceless random buyer. May be a broker may be a big
20:42
Co-op that's in their town. But essentially they just went
20:47
and sold it and then they get my call.
20:51
Hey, where's the coffee? Oh, I sold it.
20:55
Interesting, what am I supposed to do?
20:58
Right? What happened to me?
21:00
Paying you double or triple for the last six years, seven years,
21:05
right? And so that conversation goes
21:08
differently for each relationship and I can tell you
21:13
that, the better, the relationship, the more open the
21:18
communication, the less likely that is to happen and we've had
21:24
two already. Kind of shift and replace some
21:28
vendors because of issues like this.
21:32
And what's going to happen? I can already tell you what's
21:34
going to happen in two years. When some, when the weather
21:39
chills out and we're in a period of just a bunch of coffee
21:43
coffee, markets going to go back to a dollar twenty and those
21:46
guys are going to call me and I'm going to have replaced their
21:50
coffee already. And have started a long-term
21:53
relationship with somebody else, you know?
21:55
what I mean, so it's really not in anyone's best interest to
21:59
kind of Chase that I think I can speak for a lot of Roasters who
22:06
are trying to support direct trade and its different forms in
22:11
saying that our goal is to get Sustainability as far as like
22:19
monetary sustainability for coffee producers and that means
22:24
we can't use a Futures Market that changes when Brazil's
22:29
weather forecast changes, right? That's not fair for somebody in
22:35
Honduras or El Salvador. Like it's just not, it's just
22:38
not fair to them. I mean, why should I pay them
22:41
less? Because Brazil has Great
22:43
Harvest, Right? That doesn't mean that their
22:45
costs went down. Down.
22:47
So so I think I've been having a lot of different conversations
22:53
with producers and how we can maybe create some more
22:58
resiliency in situations like this, you know, it has to be a
23:02
win across the board for us and them and roasters.
23:08
So how can we do that? You know, one one idea that I've
23:12
been thinking about I get Different responses from
23:17
different people but just like a Mart more of a margin base
23:22
system, right where it's yeah, prices will increase when your
23:26
costs of production increase but it's not really related to the
23:30
Sea Market necessarily. But I think I think as far as
23:35
how we how we kind of prepare for future events, like this,
23:41
it's going to be in some sort of pricing structure.
23:45
Or negotiation structure that still benefits?
23:49
Everybody, but can be resilient against like, higher input costs
23:54
or labor shortages or what? Not, As a person who doesn't
24:00
have to worry about this everyday, I just go and buy my
24:02
cup of coffee. Which, I'm frankly, as I'm
24:06
listening to you thinking is the right way to go, no offense to
24:10
you and your chosen profession, I'm assuming at some point down
24:15
the line, these prices are going to start impacting coffee
24:18
drinkers. I mean, prices have already gone
24:20
up over the past several years. We're getting into you know
24:25
where I'm regularly. Lee seeing for five dollars for
24:28
a batch Brewer, a decent cup of coffee.
24:31
I've been going around San Diego County recently and like, kind
24:35
of just ordering a batch grew and tracking the pricing.
24:38
And anywhere from 250 to 450 for like a 12 ounce cup of coffee.
24:45
I'm imagining that this everything you're talking about,
24:48
will our prices on this end will have to go up in conjunction
24:52
with what you're seeing on your end.
24:53
Because all those it Take a while, but those those expenses
24:59
are going to have to get pushed down the line somewhere.
25:02
Yeah, alternately. They ultimately the final
25:05
consumer has to pay for it. I mean Roasters can't afford to
25:09
eat the margin. They already do eat some
25:13
fluctuation but they can't eat. Sustained higher costs like
25:18
this. So what we're seeing basically
25:24
now like as of April 20 22 the coffee's that have been affected
25:32
I miss Frost are starting to I'm sorry.
25:35
The coffee is that were purchased on a market that were
25:38
affected by this Frost are starting to hit, you know, the
25:42
us and we're saying, as I mentioned earlier, we're
25:48
finishing up. A lot of our buying around the
25:50
world mostly in Central America and our prices are higher.
25:55
We're paying a lot more for coffee.
25:57
So as that coffee starts arriving between now and August.
26:02
And the prices that Roasters are going to be paying is going to
26:05
be higher. And so a lot of Roasters this
26:10
year, this quarter, I think are starting to raise their prices
26:15
roaster here locally, Van Dyke, Coffee Roasters.
26:19
And I could see his menu is chalkboard menu.
26:22
Had a big dark line, like he had to erase something right?
26:26
And they were prices written over that.
26:29
And so I asked him, how did you change your prices?
26:32
He said it was the first time in eight years that he's had their
26:35
changes prices. So even even the holdouts I
26:40
think are going to have to raise them and you know, the good the
26:44
good news is honestly once it comes down to the final coffee
26:49
drinker, it's not terrible. You know if you raise the price
26:54
50 cents a cup that's not really going to break your bank.
26:58
But what that's going to do all the way down the line is pretty.
27:02
Massive, sure. If you're already drinking, like
27:06
a high-quality craft coffee, the pricing changes are a little
27:10
more acceptable to you because you are you're a little bit more
27:14
aware of the situation you're already going for a premium
27:17
product. I think where people will start
27:19
getting upset is when you see like a McDonald's coffee at two
27:22
dollars and it sounds crazy. Like it's already the cheaper,
27:25
like less, lesser coffee to an extent.
27:28
But I think my experience in beer was always, you know, if
27:32
Raised raised the price of a domestic draft 25 cents.
27:37
You know, all of the regulars who came in to get that happy
27:40
hour domestic draft every day. They're the ones who are going
27:42
to be upset, not the person who comes in to have a beer with
27:45
dinner, you know, it's going to be, you know, that guy just a
27:50
quick aside. I did have a gentleman once in a
27:54
bar that I was bartending at where we raised our happy hour
27:56
light beer prices from 75 cents to a dollar and he was Furious
28:02
Said he would never, come back, never come back ever and, and I
28:06
didn't see him, he didn't come back the next day and I didn't
28:08
see him for six months. And one day he came in and I
28:12
said, hey, welcome back, you know, can I get you a beer?
28:15
And he ordered a beer and I said, so what brought you back?
28:18
And he goes, well, he goes, I found this other place that was
28:21
selling their beers for 75 cents he goes.
28:24
But it was a 70 mile drive, round trip.
28:27
And I just like gas, gas went up.
28:29
So I didn't want to pay it anymore.
28:30
I was like, but I'm principal. He had been driving every day to
28:34
get tagged are here and I think that'll happen at some level,
28:38
but I don't necessarily know that and maybe I'm in a little
28:42
bubble because if I see a coffee shop has raised prices, I
28:47
generally assume it's because the coffee is more expensive and
28:50
or I've kind of vetted them and trust that they are paying more
28:55
for their, you know, the coffee's are buying from you and
28:57
you and Turner paying more for coffees right and the farmer but
29:01
it all comes back. back around to that consumer producer, Trust
29:06
Yeah, circle of trust here, right?
29:10
So I don't know what the big players are going to do.
29:14
I don't know what McDonald's will do because this will be
29:17
temporary but long term, you know, will see this happen
29:21
again. So I don't know if these larger
29:25
companies are okay. Just kind of like, tightening
29:28
the belt on their coffee, right? Like let's take a company like
29:32
Nestle, they probably could Make up their money somewhere else or
29:40
you know, they may have the Reserves that they need to
29:43
whether this. So I don't know what they're
29:46
going to do to prices which would be the consumer that would
29:50
feel the most right as you kind of put it.
29:54
But if if these these types of events continue which it seems
29:59
like they will with more frequency you know it's hard to
30:03
predict if we're going to have a frost every Ten years or every
30:08
20, you know, I don't know, or every two but I do think that
30:12
they're going to get more frequent.
30:14
So we'll see how they kind of respond.
30:17
I know a lot of coffee and the grocery store is already gone
30:21
up, but that that's even related to just cost to get it on the
30:26
shelf, right? Not even necessarily the the
30:29
coffee, the ingredient and I know Roasters are getting
30:35
Particularly hammered, with costs increases, you know, for
30:39
me all I do is I sell one product, so, yeah.
30:43
Okay, prices are going up on my one product, but coffee shops,
30:48
have to hear that answer for just about everything from their
30:51
staff, to their cups, to their everything, you know,
30:56
construction, if you're trying to open something or, you know,
31:00
get health department compliant. Everything is just so expensive.
31:05
so, for roasters, so I do think consumers should prepare to pay
31:10
more As we're talking, I'm thinking about other logistics
31:14
on The Roaster, end of it and just knowing it, let's say you
31:18
have a pound of coffee and it costs, you know, 450 or
31:23
something was with a roaster paid and you start breaking that
31:27
down. How many cups of coffee can you
31:29
get out of a pound? You know, at 22 grams say for a
31:32
pour-over you're talking you know let's say you can get if
31:36
you do it perfectly you're getting 20 cups of coffee give
31:39
or take out of that pound, right?
31:40
And you That breaks down to how much, how many, how much does it
31:44
cost you to make that? But on a one-to-one basis,
31:47
you're like, okay it's not so bad.
31:49
But then you start thinking about the sample roast that go
31:52
through to get that coffee dialed in you start thinking
31:55
about, you know, the efficiency, maybe somebody maybe the coffee
31:59
isn't coming out as well. So you're really only getting 15
32:01
or 16 cups per pound and all of all of that keeps increasing the
32:06
cost of every single cup that follows it.
32:09
And so I used to Build a ten percent, waste margin into the
32:14
products that I was selling for food and beverage, but I wear, I
32:19
would be worried, I think from a craft roaster side is that
32:24
either a? They are going to have to dial
32:27
in their roast faster. Using less waste less samples,
32:32
or they're going to short those efforts.
32:35
And as a consumer, we might be going along for the ride a
32:39
little bit. And even if they're serving the
32:40
same, Colombia coffee for six months, where they get it to, in
32:45
that Rose, two, three, four months down.
32:47
The line might be where it would have been in those first few
32:50
weeks, because they didn't take as much time and to go through
32:54
that process. But that's just speculation on
32:58
my part. I hope, I hope not.
33:01
I mean, the reason why specialty coffees possible, I think it's
33:05
because it actually tastes better, right?
33:08
Otherwise, why would people continue to drink it?
33:11
I think that actually the specialty industry is a little
33:15
bit more better suited for this than you know the big Market
33:22
players because as you kind of mention or hinted at like when
33:27
my three dollar coffee goes to 350, that is not as dramatic as
33:33
my one dollar coffee. Going to 250, right, right.
33:39
And so we can absorb it a little bit better, a little bit easier.
33:45
Just because we're already paying high prices and I
33:48
shouldn't say, you know there's some coffees we buy that we pay
33:52
six, seven, eight, ten dollars a pound for some really special
33:56
coffees. Producers didn't raise prices on
33:59
those. Enter.
34:01
So should we should a roaster by, you know, Eight dollar
34:05
coffees? It might, it might be the path
34:09
to resiliency, at least as far as pricing goes, if you can make
34:13
your margin at the retail end, right?
34:16
Yeah. It depends on your Market, to
34:18
some extent, you know, if you're in a neighborhood in a
34:20
community, that is at that level yet, as much as if they're not
34:24
at that level, as much as you know, that that coffee is worth
34:27
it. You just may not be able to get
34:29
there fast enough. You got to kind Grow with right
34:33
with your consumer. I recently interviewed a
34:35
gentleman, you Nelson from do McCarthy up in Idaho.
34:40
And one of the things we talked about was the changing consumers
34:43
that they had coming into their shop.
34:45
They've been a shopper, 22 years.
34:47
And so what people expected, you know, 22 years ago, is totally
34:52
different from what a new generation of drinkers is
34:55
expecting now. And yet they have to serve as
34:57
both of those consumers. How do you do that?
35:01
Let's tall order. It was just a really interesting
35:05
thought experiment for me to think about, okay?
35:08
You have essentially one generation who then their kids
35:13
are now the new generation and all the different things that
35:15
they've experienced. Whereas maybe 20 years ago, you
35:20
were looking for dark, kind of traditional rosti cheap cup of
35:24
coffee. They're your core there.
35:27
What got you here but now your new generation is going.
35:29
I want Big fruit bomb. That's, you know, and I'm
35:32
willing to pay five bucks for it.
35:33
So how do you manage the differences?
35:35
But I think education is Big, right?
35:39
And that's why I was pretty eager to say yes.
35:43
When I got invited to do that tedx event and even these
35:48
conversations with you are just more opportunity to share with
35:53
coffee Drinkers. And I think as people learn more
35:56
about coffee, they start to look at it differently.
35:58
They I ate it differently and they pay for it differently,
36:04
right? Absolutely.
36:06
I was just I was going to end this session with you by asking
36:09
which you felt was more prestigious the tedx event or
36:12
the rose to West Coast off podcast.
36:17
Probably the podcast. I mean you you reach more people
36:20
I think. Well I appreciate that.
36:24
Vote of confidence Jared. It's really great seeing you
36:28
again and just chatting. I'm looking forward to our next
36:31
conversation and thanks for helping us.
36:33
Get coffee smarter, thanks Ryan. Okay to recap I want to start
36:44
with some basic statements. First, I couldn't find any
36:48
recording of the tedx culture of coffee event.
36:50
That Jared participated in if anyone from UC Irvine is
36:54
listening and knows where it is, please send it to me more
36:58
directly related to our climate. Change conversation, the three
37:01
largest coffee-producing countries are Brazil.
37:04
Vietnam in Colombia Vietnam. In particular, is known for
37:07
reboost. Two coffees right now on the
37:10
green coffee sourcing side of the industry.
37:13
There are real life consequences of a changing climate in the
37:16
form of weather events, like frost or storm or extended rainy
37:20
Seasons. That impact, the availability of
37:23
coffee globally. The frost in Brazil last year,
37:26
the worst in half a century being an example, That bad
37:30
weather has existed isn't new, but how often these
37:34
unpredictable weather events are happening.
37:36
Is changing weather patterns are forcing producers to change
37:40
their growing and production schedules, which reduces
37:43
efficiency and reduces yields and ads growing Seasons which
37:48
increases labor costs and ultimately, at some point May
37:52
Force Farms to make some difficult choices on which
37:56
coffees, they grow the more popular flavorful.
37:59
But As Hardy Arabica or the stereotypically Lesser
38:03
respected, commodity grade reboost, a coffee or something
38:07
else altogether. There was a great column in the
38:09
Washington. Post this week.
38:11
Written by Marissa Garcia about Cafe, steno Fila, a formerly
38:16
lost coffee, species, and climate impacts on the coffee
38:19
industry, steno phyla. And I hope I'm saying that right
38:23
may have the potential to be the future of craft coffee, as it is
38:27
much harder than Arabica and it can grow it.
38:29
Much higher temperatures. It doesn't rate quite as high as
38:33
many Arab because yet but the ones that have been produced
38:36
roasted and brewed just meet the minimum scores to be considered
38:40
specialty craft coffee and that is with only a very short Runway
38:44
of experimentation on the growing side.
38:47
Jared mentioned the anticipated growth of the coffee industry as
38:51
its popularity grows in formerly.
38:53
Non coffee drinking countries like India and China which will
38:56
create massive logistical problems in trying to meet And
39:01
Marisa's article gives us some hard numbers.
39:03
According to the column by 2050, coffee demand is expected to
39:07
Triple from 165 million bags of coffee to 500 million.
39:13
And as I'm saying that, I'm realizing they didn't specify
39:15
how big those bags are, but either way it's a boat load of
39:19
coffee. Beyond just finding coffee
39:22
plants, that will not only survive, but thrive in a
39:24
changing environment, there are also impacts on supply chain
39:28
Logistics, storms, alter shipping routes flights, get
39:32
delayed Rising Seas impact Warehouse spaces near ports,
39:36
which are already backed up into Oblivion causing more delays on
39:39
the roasting production side. The list is never-ending, which
39:44
brings me to my final thought as I drink this medium, roasted
39:47
Burundi from father and son home Roasters David and I'm struck
39:51
by. How much more I appreciate
39:53
drinking coffee? When I take the time to be
39:55
intentional and appreciative of every single cup, when I'm
40:00
drinking coffee, while writing a script, or a story or designing
40:03
a new book, cover my coffees just disappear and then I refill
40:07
and they disappear again. When I take the time to sit
40:10
without obvious distraction and make the thing that I'm doing be
40:15
drinking coffee, not only does it take me longer to drink that
40:18
cup but I feel more connected to the world around.
40:20
Around me while I'm drinking and enjoying and seeking out flavors
40:24
with my mouth. I'm also more aware of
40:26
everything going on the passing of the moments.
40:29
And I feel at ease for one of the few moments I can remember
40:32
to be at rest every single week. I appreciate that cup of coffee
40:38
for the time that it gives me to be present as well as the way it
40:41
tastes. And when I'm done, I generally
40:44
don't need a second or a third cup in a changing climate making
40:49
time to Value the fruits of the world around us seems like a
40:52
good effort to undertake and will also help reduce strain on
40:55
that supply chain thanks to Jarrod for taking more than four
40:58
minutes to chat with me today. And check out a say, a
41:01
coffee.com or at Hosea coffee Source on Instagram to learn
41:05
more about Green coffee and coffee, education, offerings.
41:08
And of course, follow at roast West Coast, while you're there.
41:12
And check out this shows newsletter at roast
41:14
westcoast.com. Please subscribe to this show,
41:17
you can subscribe for free and I'll send this podcast to your
41:20
email every single week or help this show grow by choosing one
41:24
of the paid subscription options, you'll get access to
41:27
the bean journal and paid subscriptions.
41:29
And our sponsors are the reason we can keep this program going
41:32
every single week. A huge.
41:34
Thank you to Brad and his wife. Katie future coffee,
41:37
entrepreneurs themselves for subscribing.
41:40
I'm glad to have you as part of this coffee community, and, of
41:43
course, thank you to all of the shows industry Partners
41:45
including Cafe litter. I had a great coffee from
41:48
Crossings Coffee Roasters. They're just this week, most
41:51
your coffee company, steady-state coffee, roasting
41:54
Camp, Coffee Company, ignite Coffee Company, Ascend Roasters
41:58
Coffee cycle. Roasting first light whiskey.
42:01
Maria coffee and Cape Horn coffee importers Links to those
42:06
awesome, businesses subscriptions.
42:08
And anything else we mentioned on the show?
42:10
Today can be found in this episode's notes or online at
42:14
roast westcoast.com. Thank you all for listening for
42:17
supporting the show. And this show sponsors reading
42:21
the newsletter and caring about coffee and more importantly, the
42:25
people in coffee This episode of the roast West Coast coffee
42:30
podcast is was has been written produced and recorded by me Ryan
42:35
woulld. I hope this show is found you
42:37
happy healthy and with, at least enough sanity and coffee to make
42:40
it through the day. For those of you headed out for
42:43
a cup of coffee this week, please always tip your Baristas
42:46
and be sure to drink coffee. I like beer, hey, everyone.
43:20
If you like the roast West Coast coffee podcast, you might also
43:24
appreciate the, I like beer the podcast.
43:27
Listening to these guys is like being a fly on the wall of the
43:30
pub with a few of your favorite mates.
43:31
Having a pint these professional beer appreciators, have plenty
43:35
of stories to share on everything from the mating
43:37
habits of penguins to there behind the scenes Brewery
43:40
experiences check out the, I like beer the podcast where
43:44
ever, you are listening to this show about coffee or head.
43:47
To, I like beer, the Podcast.com.