#20 | October 22, 2020

10/22/20 • 3 min

Welcome to Recap, a brief overview of recent coffee developments every two weeks from the Specialty Coffee Association, made possible with the support of BRITA.

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A recent Euromonitor International report suggests that the number of American coffee and tea shops will decline for the first time since 2011. The report estimates that the US will have just over 25,000 outlets specializing in coffee or tea by the end of this year, a reduction of 7.3% from last year. It also estimates that annual sales will drop 12% to approximately US$24.7 billion. In a feature exploring the effects of COVID-19 on the coffee shop landscape, Bloomberg reports that Canada is also seeing a similar contraction. According to Allegra World Coffee Portal, annual sales in Canadian coffee shops are expected to drop 22% from 2019 to CA$9.5 billion. Allegra also suggests that local independents will take a greater share of Canadian suburban trade. In the Bloomberg feature, Rabobank analyst Jim Watson noted that the most challenging situations for independent cafés are based on their location. According to Watson, residential coffee shops are outperforming those based in office or city center locations. And while independents have shown to be nimble in adapting their businesses to their community’s needs, they’re generally more at risk due to highly-variable factors beyond their control, like rent negotiations and government assistance.

Last week, the National Coffee Association of the United States of America released the results of a major new national poll. Highlights from Coffee, Consumers, and COVID-19: Road Map to Recovery indicates that the pandemic has not changed how much coffee Americans drink, although it has changed where they drink it. According to the poll, 6 in 10 Americans drink nearly 3 cups of coffee every day. While home consumption has always been strong in the US, the results of the poll indicate that pandemic closures of coffee shops have grown the volume of coffee consumed at home significantly. But the desire to return to coffee shops is strong: more than half of typical coffee shop visitors indicated that they had already begun to return to coffee shops, or planned to do so in the next month. Avenues like app-based ordering, delivery, and drive-through ordering all saw an increase among people who reported drinking coffee regularly. The poll also reflects current tensions around mask-wearing, which is an effective barrier to COVID-19 transmission. Of those polled, 44% said they were comfortable visiting coffee shops when face coverings are required for all staff and guests, but 48% said they felt comfortable when workers alone wore protective items.

This episode of Recap was made possible with the support of BRITA. If you want to dive deeper into anything you heard today, check out the links in the description of this episode. Recap will be back in two weeks’ time. Thanks for listening.

Further Reading:

Number of Coffee Shops Set to Decline for the First Time Since 2011
- Say Goodbye to Your Local Coffee Shop in America’s Cafe Shakeup (Bloomberg)
- Number of Coffee Shops Set to Decline for the First Time in a Decade, Says Report (Food & Wine)
US National Coffee Association Releases Highlights from Coffee, Consumers, and COVID-19: Road Map to Recovery
- US Coffee Drinkers Consume as Much at Home During Pandemic - Poll (Reuters)
- Americans Drinking as Much Coffee Now as Pre-Pandemic (Global Coffee Report)
- Americans Still Drinking Three Cups of Per Day, But More At Home, NCA Report Shows (Daily Coffee News)

Welcome to Recap, a brief overview of recent coffee developments every two weeks from the Specialty Coffee Association, made possible with the support of BRITA.

Further Reading:

Number of Coffee Shops Set to Decline for the First Time Since 2011
- Say Goodbye to Your Local Coffee Shop in America’s Cafe Shakeup (Bloomberg)
- Number of Coffee Shops Set to Decline for the First Time in a Decade, Says Report (Food & Wine)
US National Coffee Association Releases Highlights from Coffee, Consumers, and COVID-19: Road Map to Recovery
- US Coffee Drinkers Consume as Much at Home During Pandemic - Poll (Reuters)
- Americans Drinking as Much Coffee Now as Pre-Pandemic (Global Coffee Report)
- Americans Still Drinking Three Cups of Per Day, But More At Home, NCA Report Shows (Daily Coffee News)

Previous Episode

#19 | October 8, 2020

Welcome to Recap, a brief overview of recent coffee developments every two weeks from the Specialty Coffee Association, made possible with the support of BRITA.

International Coffee Day may have come and gone, but many of the initiatives launched on October 1 are long term projects. The International Coffee Organization, who first organized the holiday in 2014, focused this year’s activity on a project titled, “Coffee’s Next Generation.” While details are yet to be announced, the ICO said the program will involve financial support and training for young entrepreneurs in the coffee sector. The International Women's Coffee Alliance, or IWCA, launched a fundraising campaign called, “Empowered Voices.” The campaign will run until October 15, the International Day of Rural Women, and aims to recognize 100 women while raising US$10,000 to continue the work of the organization. The holiday also marked the launch of the Coffee Coalition for Racial Equity, founded by Phyllis Johnson of BD Imports. The coalition is described as “a robust, global community of coffee advocates driven to bring about more equity and diversity into the coffee community.” In its first webinar, the group introduced its first board members and set out a one-year timeline of activities that includes a range of educational and outreach initiatives.

Indonesia’s coffee producers are asking for help with financing as the pandemic continues to impact the demand for coffee. The Jakarta Post reports that tons of coffee are being held under what is known as a warehouse receipt, a system that allows smallholders to deposit their harvest in a warehouse as collateral for a loan. Both smallholders are exporters face difficulty under this system, particularly when prices are low and there are few buyers. And this is before most of the coffee has been harvested: almost 70% of Aceh’s harvest, currently projected at 52,000 tons, will take place between October and January. Indonesia’s Ministry of Cooperatives and Small and Medium Enterprises is preparing multiple financing schemes. Other financing organizations, like the state-owned bank, are also offering support through warehouse receipt subsidies.

Australian-based Breville Group has acquired the US-based grinder maker, Baratza, for US$60 million according to a report in Finance News Network. Breville produces a range of small kitchen appliances with an emphasis on the home coffee segment. Baratza, established in 1999, is known for its production of commercial-level quality burr grinders for home use. Breville Group says the acquisition brings together two of the world’s leading companies in the design and global distribution of coffee products.

A recent feature in Asia Times explores how women entrepreneurs in the Gulf are working to overcome the additional hurdle of the COVID-19 pandemic. Amid the backdrop of recent economic and social reforms aimed to increase women’s participation in the workforce, the feature explores how gender biases have made it more difficult for female entrepreneurs to access to stimulus packages, lending, or private investors. Nooran Al Bannay, the founder of Coffee Architecture in Abu Dhabi, is among those interviewed. The first female Q Grader in the region, Nooran opened her shop in 2018 after convincing her family members of her dream to open a coffee shop.

Further Reading:

International Coffee Day Announcements
- International Coffee Day 2020: Supporting the Next Generation (International Coffee Organization)
- ICO Seeks Support for Coffee’s Next Generation on International Coffee Day (Daily Coffee News)
- Celebrate Empowered Voices: 2020 International Coffee Day and the International Day of Rural Women (International Women’s Coffee Alliance)
- Coffee Coalition for Racial Equity

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#21 | November 5, 2020

Welcome to Recap, a brief overview of recent coffee developments every two weeks from the Specialty Coffee Association, made possible with the support of BRITA.

On October 28, the International Coffee Organization, or “ICO,” held its 128th council session. The council is the governing body of the ICO, and council sessions bring governments of exporting and importing countries together twice a year to discuss coffee sector issues. At this most recent session, the ICO confirmed and endorsed a ten-year road map to action the so-called “London Declaration.” Signed in September 2019, the London Declaration is an international pledge to address the growing economic unsustainability of global coffee production as outlined in the ICO’s Resolution 465 on coffee price in 2018. Signatories of the 2019 declaration included both public and private companies, including producer organizations, some of the world’s largest coffee roasters and retailers, and sector organizations. It was widely reported as the first time that major private sector actors across the value chain came together to agree to jointly implement solutions in a spirit of shared responsibility.

A Coffee Public-Private Task Force made up of equal numbers of representatives from the private signatory companies and ICO member countries identified priority issues and suggested actions. These actions are introduced in Communiqué 2020, which was published shortly after the ICO’s council session last week. The joint commitments are built upon similar visions and actions articulated by signatories and task force members, Global Coffee Platform and the Sustainable Coffee Challenge, who engaged smaller groups of private stakeholders. Other efforts to understand and address the crisis, including the SCA’s Price Crisis Initiative, have come to similar conclusions around the role of price volatility and low producer income in perpetuating the cycle.

The actions have all been designed to facilitate a broad long-term vision, also agreed by the International Coffee Council and the Coffee Public-Private Task Force. Spread across four key areas of action, the vision is highly ambitious. It includes economic resilience and social sustainability; environmental sustainability through sustainable production; balanced demand and supply and responsible consumption; and effective enabling conditions. Although this is the broadest group of public and private organizations to address the economic unsustainability of coffee production so far, the vision will be further developed through public consultation.

Specific actions for 2020-2021, most focused on exploring and identifying the work to come, are outlined through seven “technical workstreams.” Some of the key activities outlined for this year include establishing Living Income as a foundation to reach the vision’s “Prosperous Income” for coffee producers and the exploration of multi-stakeholder and green price stabilization funds. When successfully executed, the activities will contribute substantially to reducing uncertainty and economic hardship borne by producers. However, unlike the recommendations laid out in the Price Crisis Initiative’s Summary of Work, they do not suggest that a reassessment of value creation and reward will be required to achieve long-term sustainability.

Further Reading: