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November 2016

mycuppa November 2016 Newsletter

 “If I had asked people what they wanted, they would have said faster horses.” - Henry Ford

mycuppa November 2016 Newsletter

Pony Express - limited lots of extraordinary coffees

Our team frequently receives requests to roast exceptional coffee beans for special occasions.

We take pride in carefully selecting and preparing these coffees to ensure a fantastic flavour experience for our customers.

Sometimes, these are one-off situations and other times, they might be infrequent but ongoing arrangements.

 

In almost all cases, the brief is abundantly clear - give me something that stands out.

 

We keep a special stash of impressive coffees not offered as regular products in our warehouse.

 

We can only buy it once a year, and they are typically expensive coffees that our peers sell for around $50 - $60 per kilo in the retail market.

 

In searching Google, I found some of these coffees sold for the equivalent of $75 per kilo, plus shipping.

 

I keep adding and subtracting from this stash every month. Our prized subscription customers are roasted fortnightly, while we are often thrown into "out of the box" challenges.

 

Roasting these coffees is exciting and fun - like driving a sports car on an open road.

 

We are opening up the gate on the Pony Express - a coffee experience to rival the best in Australia, available at affordable pricing.

 

The gate will be opened and closed at various times - it's something that is only sometimes going to be available every day, and sometimes the gate will be closed as we take our fresh-roasted coffee commitment seriously.

 

We will only roast these coffees when there is sufficient demand.

 

Our coffees are carefully selected from the highest quality specialty coffee range, starting from 85+ points and going up to almost 90 points.

 

We offer six lots of 20kg each in November, available until sold out.

 

These lots are limited in quantity, so grab them while they're still available.

  • Kenya AA Ichuga (89 points) - intense dark cocoa
  • Kenya AA Kireimbe (90 points) - plum, chocolate, raisin
  • Costa Rica Vera Blanca (87 points) - intense, sweet apricot
  • Tanzania Burka Estate AB (88 points) - perfectly balanced acidity, swiss chocolate
  • PNG Kuta Honey & Cherry (90 points) - tropical fruit, red berries, soaring candy sweetness
  • Ethiopia Sidamo Natural (86 points) - extremely fruity, aromatic, bold body, silky.

    First in, best dressed.

     

    The gate will close after these freshly roasted coffees are sold, which will be quickly (we put the product up in the store this afternoon before releasing the Newsletter and already sold 12 units in the first hour).

     

    All sold out, sorry, but you can still buy coffee beans online

     

    How well do you know your coffee grinder?

    They are often overlooked as noisy, messy, and rather ugly appliances consuming critical bench space in a kitchen.

     

    When sourcing coffee equipment, people often focus on investing in an expensive, shiny espresso machine and consider the grinder a secondary consideration.

     

    However, it's essential to understand that the grinder plays a critical role in brewing and deserves as much attention and care as the espresso machine.

     

    So, during the research and buying stage, giving equal importance to the grinder and understanding its significance in the coffee brewing experience is crucial.

     

    There is one bet I will always punt on - that coffee enthusiasts eventually come to appreciate the grinder is EVERYTHING.

     

    It takes a while for this realization to sink in, and typically, it's only after a few upgrades or extensive research involving sometimes exaggerated stories of stratospheric improvements read on an internet blog.

     

    Whilst it's tempting to be sceptical of such claims, the reality is that your coffee experiences and overall enjoyment will elevate to another level once you understand the dynamics of your grinder and manage it accordingly or acquire a decent grinder that produces quality espresso grounds.

     

    A wise saying has been circulated across the internet for over a decade - you can match a quality grinder with an average machine.

     

    Still, it would be best to avoid matching an average hero with a quality machine. In other words, invest more in a grinder than you had initially estimated.

     

    Many of the customers I speak to daily persist with sub-standard grinders or need to be made aware of the impact of the grinder on their beverage.

     

    For espresso-style brewing (or extraction), the grinder is the most critical element affecting the result in the cup.

     

    Of course, a technique plays a significant role in that statement.

     

    We have prepared a detailed article on the various factors that affect the operation of the grinder.

     

    It's a long read, but we hope you might glean something useful in helping improve your skills at using a coffee grinder.

     

    The link to the article is here - Improving your coffee enjoyment

     

    mycuppa asks is Ethiopia at risk of losing it's halo ? 

    Is Ethiopia at risk of losing its Halo?

    This month, we wanted to feature an Ethiopian coffee.

     

    We had planned to showcase a lovely new, fresh Sidamo lot but decided against it due to the looming risk of shortages.

     

    On October 9 2016, the Ethiopian Government announced a six-month state of emergency nationwide.

     

    The Australian media has been obsessively focused on the US elections for the past few months.

     

    They should have reported or covered many important events from around the globe.

     

    It follows a challenging year of violent protests and civil unrest against Government policies.

     

    Many people have been killed or detained, and the recent directive has been legally challenged for violating human rights privileges.

     

    The directive also justifies the Ethiopian Government's deployment of the army to enforce the law.

     

    It is now deemed unsafe to travel within Ethiopia.

     

    Ethiopia is the coffee universe's halo origin.

     

    Beyond being the world's 4th largest coffee producer (sometimes 5th if Sumatra has a good volume crop), its coffees' intensity, complexity and diversity command such a mythical cult following.

     

    Whilst it's early days and not much information is flowing out of the region (ironically, one of the recent directives), there are stories of coffee farms and plantations being abandoned at the most critical time of harvest and processing, a lack of labour to pick cherries.

     

    A raft of flow-on effects looming, such as stranded logistics and potential freight embargoes.

     

    Before the recent troubles in Ethiopia, it was already a complicated origin to source coffee reliably.

     

    For many years, I have been aware of challenges in accurately predicting when a shipment would depart Djibouti due to a constant state of gridlock from either poor productivity, red tape or port congestion.

     

    Goods have been known to sit in containers, sweating for weeks, waiting for the next available ship.

     

    One solution to the problem of slow import and export volumes could be to use ports in neighbouring countries.

     

    However, despite this idea being discussed for years, more progress has yet to be made in implementing it.

     

    Should the current issues develop into a broader problem with the supply of Ethiopian coffees, we are bound to see a sharp increase in global coffee pricing as buyers look to alternatives out of Tanzania, Burundi, Rwanda and Kenya that will put a rocket under their crop prices.

     

    We are seeing some of this showing up in new season offers for March 2017.

     

    We have Ethiopian coffees in our warehouse and on forward contract, but we need more as we would like to comfortably ride out the State of Emergency in the coming 12 months.

     

    Shortages will have an impact on every coffee company.

     

    They will force a re-engineering of blends to compensate for what is typically a bean implemented to perform a critical highlight function.  

     

    At this time, our strategy is likely to be long on Sidamo and short on Yirgacheffe Limu, and for Harrar, we will look to temporarily de-stock when our existing holdings run down.

     

     

    Disequilibrium

    Depending upon your interests, one of the most fascinating spectacles across our nation over the last four years has been the unbelievable rise or fall of property prices in Australia.

     

    In Sydney and Melbourne, records are being smashed, while Perth struggles after the resources boom.

     

    It's challenging to get any context on what fair or reasonable value is when it comes to property pricing, as the volatility and core fundamentals make no sense.

     

    Even the experts are dumbfounded and grasping at straws with the Reserve Bank of Australia unable to lead the market direction with fiscal policy - the old strategies of interest rates are no longer valid.

     

    I'm on the road early in the morning, and what's become abundantly clear over the last two years has been the sheer volume of Builders and Tradies on their way to sites around metropolitan Melbourne.

     

    Most of the traffic is Trade, whereas not so long ago, they were workers on the way to a factory.

     

    Whilst the factories are closing as manufacturing shrinks in decline, construction trades are booming.

     

    Try and hire a tradie for a small or medium-sized job, and you wait months. It's also apparent in almost every street with multiple building works in progress - primarily knock-downs and multi-unit higher-density housing.

     

    All of this reinforces how a market, all markets, function in cycles - influenced by the dynamics of supply and demand.

     

    For as long as I can remember, people have said that coffee is the 2nd most traded commodity after crude oil.

     

    With such volumes of Trade comes a high degree of price volatility and speculation.

     

    Weather patterns in critical coffee-growing regions like Brazil, Colombia and Central America can induce price spikes as futures traders drive the index up based on fears of crop forecast shortfalls.

     

    At times, it's more about traders in New York making money from rises and falls in coffee futures than any actual or possible outcomes.

     

    The coffee market has many segments, and without a doubt, the growth of specialty coffee and increased demand for higher quality grades see the pricing differential between a commodity grade and a top quality specialty grade vary by up to 400%.

     

    While commodity and commercial-grade coffees are more prominent in terms of volume, the specialty segment influences and shapes the dialogue of Trade in the market.

     

    A ripple in Ethiopia, a key supplier of grades to the specialty segment, generates waves across the coffee landscape.

     

    The price gap continues to widen between commodity and specialty at astonishing rates.

     

    Whilst most people might think a standard and common business strategy involves constantly sourcing at lower costs, when it comes to the market of retail coffee, particularly Australia's intense competitive retail and beverage industry, the risks of sourcing cheap and mediocre ingredients are almost immediately apparent and can be value-destroying for a brand.

     

    In other words, taking a chance to buy cheap and mediocre coffee will ultimately lose customers - trading short-term commercial relief for long-term damage to brand reputation and revenue.

     

    Since the explosion of specialty coffee around 2009, Australian coffee drinkers have developed a relatively fussy palate and expect, or quite rightly demand, only the absolute best when it comes to their daily fix.

     

    For some time now, many Australian coffee companies have struggled to manage their strategic imperatives to source increasingly better qualities and grades that fit commercial outcomes.

     

    Simply put, that means paying more for improvements in raw coffee grades that should, in theory, translate into a superior quality offering.

     

    The customer and the competition drive the market, not the coffee companies.

     

    Customers will switch to an easily sourced alternative if you don't constantly improve cup quality in line with the rest of the market or keep striving to be ahead of the market.

     

    Retail coffee in Australia changed many years ago from a game of margin management to a battle for customer acquisition and retention.

     

    Let's revisit the underlying factors affecting coffee prices.

     

    Raw coffee pricing changes daily, yet retail prices have historically remained relatively consistent.

     

    There are a few theories on why the retail price rarely varies, and most of the thinking centres around the principles of saturated competition amongst suppliers and the buffering effects of inventories built up within supply chains.

     

    Some of this inventory buffering is artificial due to the span across multiple entities (roaster, importing broker, shipping, exporting broker, farm) and hence is a flawed assumption as to why retail prices of coffee rarely change in line with input costs.

     

    The real reason for the relative harmony in retail coffee pricing is a lack of courage on the supply side and apparent fears of customer sensitivity to price volatility.

     

    Historically, it's a simple case of playing chicken or seeing who blinks first to raise prices.

     

    This fear of losing customers as a critical barrier prevents the coffee market from operating as transparently as, say, bananas, avocados, wine, meat or other commodities that trade at the mercy of supply fluctuations.

     

    In the last four months, the pricing for raw coffee has increased up to 25%.

     

    As an avid observer of market cycles in the previous ten years, we don't expect the coffee prices to retreat in the short term based upon the overwhelming growth in surging demand for quality grades and the outlook from forecast at origins.

     

    Consequently, we adjusted our pricing by approximately 5%, below the industry average.