Show Notes
Welcome to Recap, a new podcast from the Specialty Coffee Association offering a brief overview of recent coffee developments every two weeks.
Since November, the commodity futures price for Arabica has risen. Peaking around US$1.40 per pound in December – a full 50 cents higher than its low point in May of 2019 – the price now hovers around US$1.20. While this increase brings a measure of much-needed relief to growers around the world (and particularly to those that are in the middle of harvesting their coffee), high market prices carry risk for producers as well as for buyers and volatility poses a barrier to long-term planning at every stage in the coffee value chain. As one of the factors contributing to the price rise was low exports from specialty-coffee-producing countries, specialty coffee buyers and coffee drinkers should beware of celebrating what appears to be the end of the price crisis.
China’s Luckin Coffee made three significant announcements across the week of January 6. Less than a year after Luckin raised US$645 million in an initial public offering in May 2019, the company raised US$778 million from a combined additional share sale and convertible bond offering. Shortly after, Luckin also announced a new retail strategy focused on unmanned terminal devices and confirmed it broke ground on a new coffee roasting plant. The roasting facility, built in collaboration with Louis Dreyfus Company, a Dutch agricultural commodity merchant, will have an expected annual production capacity of 30,000 metric tons beginning in 2021. As of December 31, 2019, Luckin operates 4,507 in more than 40 cities across China.
In 2013, Turkish coffee was given World Heritage listing by Unesco, the United Nations Educational, Scientific, and Cultural organization. Now, two groups in Italy are seeking the same recognition for different styles of Italian espresso. Along with a bi-partisan group of Italian politicians, the Consortium for the Safeguarding of Traditional Italian Espresso Coffee claims that Italian espresso should have a world heritage listing. Citing specific brewing and serving parameters, the group's application also references the cultural impact surrounding Italian espresso, notably the democratic nature of how espresso is consumed at standing bars. In the same week, a group from Naples also applied for World Heritage listing, but for Neapolitan coffee – referencing a preference for spending more time with a coffee at home compared to the standing bar cafes elsewhere and the caffè sospeso, a drink where you pay for two coffees – yours and one for someone else later. The tradition is seeing a recent surge in popularity.
And finally, in response to bushfires currently devastating large parts of South West Australia, coffee companies around the world have taken steps to help by donating a portion of their retail sales profits to the Red Cross bushfire appeal, County Fire Authority, and many other organizations working in the area. Fueled by extended dry periods, high winds, and some of the hottest days ever recorded, these fires are further evidence of climate change's impact.
Thanks for listening!
Read More
- Arabica Coffee Futures
- Luckin Coffee
- UNESCO World Heritage Application for Espresso
- Australian Bushfire Relief