Coffee is the world’s second most-traded commodity and one of the oldest as well. As the world’s main source of caffeine, it is the most socially accepted chemical dependency with several proven health benefits including increased energy levels that jump-start the body’s metabolism, improved productivity, and brain functions such as memory and reaction time.
The earliest credible evidence of coffee consumption dates back to the middle of the 15th Century, but we know not from where exactly it originated. Specialty coffee, on the other hand, was not conceptualized until late into the twentieth century where its first mention can be found in a 1974 issue of the Tea and Coffee Trade Journal, a term coined by the late Erna Knutsen, revered as the godmother of specialty coffee.
Coffee has come a long way since the days of old, with new-age specialty coffee bars popping up all over town at an unprecedented rate. As the coffee scene progressed into its third wave, we saw a greater emphasis on the quality and consistency of coffee products, especially with an increased demand for freshly roasted, whole coffee beans. It was then that the beverage evolved from an abused energy booster to a cultivated sensory experience.
As the coffee industry evolves it becomes more complex and multi-faceted. In the last few years, we have seen a rise in awareness of the importance of sustainability and ethical trade practices, as well as a greater focus on convenience. How did this happen and what is the importance of these new complexities?
What does it actually mean? When we think about complexity, the first thing to pop into our heads would be flavor. The inflation of specialty coffee culture meant that the dark and bitter wake-me-up that we all knew too well became a thing of the past and brought about an uprising of flavor chasers who sought after a myriad of fruit flavors and the occasional hint of florals. With the help of modern apparatus, researchers found over 1,000 volatile compounds present in roasted coffee beans. Coffee professionals and consumers alike grew obsessed with the complex flavors that modern coffee had to offer.
Since buy-and-go coffee had dipped in popularity, coffee shops turned into sanctums where one could hang out in the company of friends, or simply bask in the pleasures of watching the world turn as they sip on a delicious cuppa. Social media has had much influence on the industry as well, in order to cater to a new generation audience, we’ve witnessed an influx of coffee shops pouring bigger investments into aesthetic interior and crockery, all for Instagram.
The rise of specialty coffee brought about tailored service offerings and experiences, each cafe had its own personality and signature style of roasting or even brewing coffee, which would come to be its unique selling point. Specialty coffee baristas undergo rigorous training to master the craft of coffee-making to deliver paramount flavor in the cup. This skill set includes brewing techniques, milk steaming, latte art, and regular cupping sessions to refine their taste buds for flavor calibration.
Of course, the exquisite taste would be for naught without world-class hospitality, a huge part of the gig includes providing the highest standards of customer service and the ability to assess a customer’s taste preferences in order to recommend a coffee that each individual customer might enjoy. At the pinnacle of that craft, we have barista competitions—a yearly affair where coffee professionals from all walks of life gather and battle it out for the championship title. Competition season is always rough, but showcasing their talent on the world stage can be a huge game-changer for professional baristas, opening doors in their career.
While complexity in flavor meant the world to specialty coffee, it was not the only complexity introduced in the third wave. The growing concern for the effects of global warming sparked widespread awareness for sustainable living habits. As such, coffee businesses had to roll with the punches and rethink their business practices to support the sustainability movement.
Broadly speaking, sustainable practices are concerned with the conservation of our biodiversity.
When talking about sustainability in the coffee sector, we’re mainly referring to two main branches—ecological preservation ideologies dictate that resources used to produce goods and services should not be harmful to the environment, and socioeconomic factors such as sustainable agricultural practices and fair trade.
First off, let’s address the elephant in the room. Why do we have so many kinds of milk these days? The rise in popularity of milk alternatives was not only a result of businesses adapting to customers with allergies or lactose intolerance, you’d be surprised to find out that dairy-free living is becoming a fairly common lifestyle choice. On top of this, plant-based milk requires less land and water to farm than dairy and produces fewer greenhouse gasses. For that matter, cows, or really any other livestock, are high maintenance as compared to crops, resulting in higher consumption of resources.
With the consumption of animal milk on the decline, plant-based milk is fast becoming a lucrative market with no signs of stopping anytime soon, especially with the younger generation; some crowd favorites include oat, soy, coconut, and almond. Offering plant-based milk on the menu opens doors to a whole new market. There aren’t many reasons for a coffee business to not provide such alternatives, especially since turning away a large population of paying customers could be detrimental to the business in the long run. Furthermore, plant-based milk has a long shelf-life and does not necessarily have to be stored in a refrigerated environment which could improve inventory management as it would be less likely to induce unnecessary wastage. Although an added complexity would be that baristas will have to be well-versed in multiple milk preparation techniques, as different types of plant-based milk taste best at varying temperatures and may require different degrees of texturing by steaming.
Yet another pressing issue is sustainable farming which aims to tackle two troubling issues—to minimize the carbon footprint of the production and consumption of coffee. On the surface, coffee shops are pressured into replacing disposable wares with environmentally-friendlier counterparts such as wooden stirrers and biodegradable paper cups and lids.
Down the complex supply chain, the rest of the industry holds a responsibility to practice sustainable business activities as well by adopting climate-positive agricultural management practices which also incur higher costs. Although sustainable and ethical coffee beans are able to command a higher selling price, coffee farmers might suffer where the higher returns are marginal or insufficient to cover the inflated cost of production. Whereas for consumers, it is much simpler for us to minimize wasteful behavior and develop sustainable habits.
Building a sustainable business, in every sense of the word, is certainly no easy feat. Even with advancements in agricultural practices, roasting methodologies, and brewing technology, there are humanitarian aspects that must be considered such as equitable distribution of resources, and fair trade prices paid to producers.
There are an incredible number of factors that influence business activities employed by coffee producers across regions. In order to achieve a sustainable economy, the production of exceptional specialty coffee requires economic stability at the source. Fair prices paid to farmers would allow them to invest back into the farm and their community. More often than not, the prosperity of the farm is reaped by the community—providing jobs, and even financing structural development or resources for education.
Because of the seasonal nature of coffee and the fact that it is a volatile crop grown in abundance, each purchase is part of its own economy. The C market represents the current exchange rate for arabica coffee regardless of origin. This means that coffee prices are not set by the producers, but rather are determined by market forces. Thus, coffee prices may not always cover the cost of production. In fact, it is often considerably less, which is devastating to the producers.
Sustainable farming practice is still a major issue that we are working on across the industry, it is a delicate problem that requires tact and finesse from the top down. Ultimately, what specialty coffee businesses are trying to convey through their staple product offering is that premium taste does not necessarily have to come from premium produce. By improving the average cup quality of coffee, producers stand to earn more from their harvests, and consumers will find themselves paying less for a decent cup of coffee as businesses reap higher margins
Come 2020, the pandemic spurred nationwide lockdowns on a global scale, and society was forced into functioning from the comfort of our homes. When you think about it, this new normal turned out better than we thought. Social butterflies transitioned into homebodies and because of this, another level of complexity was born in the coffee sector.
The global health crisis neither conceived nor inspired customers to demand convenience, but it has certainly kindled these trends to new heights. As the world transitions into a new normal, businesses are compelled to explore omnichannel retail offerings to stay above the market—even as consumers leave the comfort of their homes.
A recent study from the e-commerce automation platform, Linnworks, found that while cost is still a major factor in purchasing decisions, nearly one in two consumers surveyed stated that convenience was now more important to them than price when choosing retailers to shop at. What does this mean for specialty coffee shops, and how can they act to adapt to the needs of consumers while maintaining the good name of their brand that they have worked painstakingly to establish?
Food delivery is a booming industry and has been over the past five years. Even though today we’re legally permitted to step out into the open world and touch some grass, there’s a bunch of us (you know who you are) who would much prefer setting up camp in front of our computers rather than take a hike and get some fresh air, or lunch. Adapting for delivery has been a challenging process for dining establishments, having to assemble a dedicated delivery menu while allowing customers to customize their dishes based on dietary preferences, rethinking store design and kitchen flow to keep up with delivery orders, and some are even extending hours to meet the growing demand for off-peak orders. Essentially, food delivery gives customers only a taste of an establishment’s offering but many prefer it as a more convenient option. Moreover, the establishment has to provide a wide variety of food and drink options all at an affordable price to counterbalance the commission and delivery fee imposed by the delivery service.
Specialty coffee businesses have been resisting automation wherever possible, believing it would detract from the quality that they take pride in. Albeit, the longterm shift of global demand toward instant coffee is only growing stronger, with close to no developed countries left where the majority of coffee consumed is instant, and the demand is more than enough to compensate and keep global growth projections quite positive. These complexities inspire business leaders to differentiate and leverage technologies in new ways to make their offerings stand apart from the competition and better adapt to consumers’ changing preferences.
Ready-to-drink coffee is growing to be a norm in specialty coffee shops. You might be familiar with the usual suspects such as cold brew or even nitro on tap, but have you ever had hot black coffee from a tap? Conceived in 2018, the now prominent Single O from Surry Hills, Australia, was one of the first known self-serve batch brew bars. The proprietary prototype supposedly brews a whopping forty times faster than a traditional espresso machine and promises to serve up your morning joe in no more than 15 seconds. It was a bold move for the cafe to invest in its black coffee offering but an unsurprising one considering that batch brew coffees have grown to make up an average of 23% of orders in coffee shops these days.
Let’s not forget about the offerings available to our avid home brewers, an “athletic” lifestyle choice that we take pride in. While some of us have just started exploring the world of brewing higher-quality cups at home, sometimes we simply do not have the luxury of time in-between Zoom meetings to fully immerse ourselves in an extended brewing process. Coffee capsules and coffee drip bags, or what some of us may call coffee pouches, are quick and surefire methods of brewing a decent cup of coffee at home. While some may argue that the trade-off for quality is simply not worth it, there are many in the industry that have been working to address this concern.
Following in the footsteps of Nespresso™, automated home brewing apparatuses have been sprouting up over the past decade or so. The most notable contraption that has made strides in recent years would be The Morning Machine, an intelligent Nespresso™-compatible pod machine that brews your coffee to perfection every time, just as the roaster intended. Roasters are able to dial in dedicated recipes for different capsules and upload them onto a database, which users may access from their smartphones connected to the device through the mobile app, in which the coffee will be brewed according to the pre-defined parameters. The Morning Machine allows for custom recipes to be defined by the user, and also features a mode for brewing drip bags!
While all that is impressive, coffee drip bags and capsules have raised environmental concerns as they grow increasingly popular in households. In response to the negative environmental impacts, coffee product manufacturers have begun developing biodegradable and even reusable coffee capsules and filter pouches. These are mainly made from recyclable composites that can be broken down into microorganisms to reduce the dent caused by waste and pollution, promoting sustainability.
Instant specialty coffee, yes it’s a thing. It comes in different shapes and forms. On one hand, we have frozen coffee capsules from the likes of Cometeer, and on the other end of the spectrum, we have instant specialty coffee which utilizes a low-impact freeze-drying process to form instant coffee granules rather than the typical commercial methods of creating instant coffee through a high heat drying process which negatively impacts the flavors and aroma of the coffee. They do have one thing in common though, and it is that all we need to do on our part as consumers is to add a little hot water, give it a good stir, and enjoy a delicious brew of actual specialty coffee made in seconds.
At the end of the day, the solutions to balance coffee quality and convenience are as unique as the environments in which they operate. One look at the evolving retail landscape demonstrates that there is no “one size fits all” approach. The retail environments we visit on a regular basis will always reflect a focus on the coffee experience with unobtrusive solutions, minimal waiting time, and expanded beverage options. Whereas the reality is that the majority of coffee drinkers at home will prefer automatic drip or single-serve pod machines because they appreciate the convenience and minimal fuss.
So how important is convenience in coffee? Simply put, the demand for convenience is certain to increase at a staggering rate, even as we transition back to our usual routine. That being said, consumers are willing to sacrifice quality for convenience so long as the trade-off does not surpass a certain threshold, which varies for each individual. All in all, convenience and sustainability seem to be two complexities that are here to stay. The good thing is that they are not mutually exclusive, and it is up to the industry to provide solutions that satisfy both. So, what do you think will be the next complexity introduced in the coffee industry?