How influential coffee companies can help develop markets for new products and stimulate consumption.
Notes
Read the original article here: In Defense of Tastemakers
Contributions
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Transcript
I wrote the article in 2018. And then in 2021, I did an overhaul of it. Part of that overhaul was to pull in information about the Cup of Excellence’s national jury. I find the CoE’s national jury, a good example of the upside to tastemakers. The work Ted Fischer has done to point out some of the unintended consequences of tastemakers is very useful. It can help us to improve the work of tastemakers, which can help drive consumption and increase revenue throughout the industry.
This will be a longer episode because the article is longer. I’ve spent a lot of time thinking about the topic and I hope this is reflected in the content. So without further ado. Here’s the article titled "In Defense of Tastemakers."
I recently read a paper titled “Quality and Inequality, Taste, Value, and Power in the Third Wave Coffee Market,” in which the author, Edward (Ted) Fisher talks about tastemakers, some of the most popular cafes, which are able to leverage their influence to steer consumer preference in the coffee market.
Quote; "The tastes of the barista consumers, and even more importantly of the roasters and baristas and their tastemaker peers at Stumptown, Intelligentsia. La Collombe Counter Culture and the other third wave coffee pioneers have serious consequences for the folks in Colombia, Yemen, Vietnam, and other tropical countries that produce coffee." End quote.
One critique made by the author is that because these taste-makers influence the market’s preferences, they have a power advantage over producers and the producers are left reacting to market desires rather than influencing the market themselves. Fisher states that what tastemakers value and what producers value are different. And I would certainly agree. The difference in what is valued is not limited to coffee, but common in many other crops, both horticulture and agriculture more on this later.
It’s not just that the two ends of the supply chain have different values. I argue that the two ends of the value chain have different, but related and dependent products. And different, but complimentary skills. Furthermore, I would argue that the tastemakers are essential to the success and progress of the producers and vice versa. Therefore to truly empower the farmer, I recommend the farmer leverage their unique skills as a farmer. While depending on the unique skills of tastemakers in order to coexist and improve their effectiveness and therefore the livelihood of the entire chain.
The tastemakers are dependent on farmers to provide the right products, to steer the culture. It goes without saying that a tastemaker must have access to a particular taste profile before being championed. Consider a particularly innovative farmer who experiments with different products. He, or she could introduce the tastemaker to a new taste profile. And allow the tastemaker to begin the process of establishing legitimacy of that particular taste. In this way, farmers sit at the very beginning of the tastemakers pathway towards validation.
The pathway begins with innovation and that leads to local validation and that’s local validation amongst tastemakers. And then to diffusion and then to general validation, which would be market-wide, to include consumer validation .
Different products, different goals.
The two ends of the coffee value chain have completely different goals and produce completely different products.
At the production in the farmer is producing a raw material, coffee cherries. There are often cases in which producers do mill their own cherries to produce unroasted green coffee. There are also farmers who roast and sell their own coffee. And in those cases, the farmers maintain a considerable amount of control over the product. But not all farmers, arguably not many want that. They want to be farmers.
In the case of farmers who just want to be farmers, they are producing a crop that when harvested has a value to intermediary players who can then sell a product to roasteries and cafes who turn the intermediate product into a consumable product. The intermediaries have language skills, sales skills, marketing skills, marketing channels, et cetera, that make them successful at finding an intermediate product that a roaster and or cafe wants to buy and turn into a consumable product.
Almost 80% of the world’s coffee is produced by small holder farmers, according to Fairtrade Foundation. These small holder farmers, most likely were born and raised in remote mountainous regions of developing countries. Likely with minimum education. Minimum exposure outside of the remote region and largely without the disposable income that would allow them to experience the kind of consumption of coffee that happens in developed nations, especially in the third wave coffee scene.
Without the language skills, exposure to, and understanding of conspicuous consumption, marketing techniques, et cetera, farmers have a hard time marketing and selling their intermediate product to roasteries and cafes. The same problem exists on the opposite end of the chain. Direct trade is challenging, primarily due to language and distance barriers, but also because of cultural barriers.
It’s all about the skills.
Another reason why those closer to the consumer are the tastemakers is the difference in skills. The tastemakers don’t generally have the skills to produce the intermediate product. Most times they don’t even have the proper geographical needs, i.e., a mountainous, tropical climate. But they do have the roasting skills, the cupping skills, the marketing skills, the sales skills, et cetera to create a symbolic value in the product that makes it more desirable to the end-customer.
The third wave of coffee is focused on the story. The story of the producer, where he or she is located. Where he or she grows or produces the coffee. The story then drives ethical consumption, which hopefully further benefits producers with its goal of responsibility towards society. Yes, this creates a shared aesthetic valuation and yes, all the players throughout the value chain have economic interest at stake. But when leveraged in the right way, these things benefit the entire value chain.
Tastemakers drive consumption.
The entire value chain depends on consumption and conspicuous consumption, especially drives up coffee prices.
Consider the history of the three waves of coffee. The first wave of coffee was widespread consumption of Folgers Crystals, Maxwell house, and in general, low quality coffee. That coffee was low quality for several reasons. We didn’t have a solid understanding of coffee staling. We now know that ground coffee when exposed to oxygen has a fresh life measured in minutes. Whole bean coffee has a fresh life just a few weeks once exposed to oxygen. Before we fully understood the staling process in coffee, we routinely drank old stale, flat coffee. We just weren’t aware of it. We didn’t know, there was a better way. We needed the tastemakers to tell us. We needed innovation in anti-staling measures, such as Illy’s use of nitrogen flushing. And we needed tastemakers to validate the higher quality coffee produced when staling is avoided.
Remember our tastemakers pathway; innovation leads to local validation, leads to diffusion, leads to general validation.
Another reason the coffee was low quality is because most coffee was a mix of different qualities of coffee breeds, processing techniques, et cetera. Even today, instant or soluble coffee is very often a mixture of poor quality coffee. It often has robusta mixed in as well as defective beans that have been damaged by insects or rotten or moldy, et cetera. There are two economically important breeds of coffee tree. Arabica and Robusta. Arabica has better sensory qualities, such as flavor and aroma. And Robusta has better agricultural qualities, such as pest and disease resistance. Thanks to the taste-makers of the second wave. We’re drinking less instant coffee and more espresso based coffee and especially of better quality than was the norm in the first wave.
Enter Starbucks.
Regardless of what you may think of Starbucks, they are largely responsible for introducing the mainstream west, especially the US to espresso based drinks.
They were largely responsible for ushering in the second wave of coffee consumption, which laid the groundwork for specialty or the third wave of coffee. Starbucks largely drove the early diffusion and then general validation of higher quality coffee. The results of the popularity and the ubiquity of Starbucks increased consumption drastically. An eventual outcome of that increased consumption has been a significant increase in the value of coffee in all of its forms, but especially green unroasted coffee.
Part of the solution.
Part of the solution to the problem of producers reacting to the preferences generated at the consuming end of the market is through innovation by driving the tastemakers pathway.
Farmers can do this by baking in optionality to their business.
Optionality for a coffee farmer means planting different cultivars and varieties around their farm, experimenting with what breeds perform best, where. It also means if they mill their own coffee to experiment with different milling techniques in an attempt to emphasize novel and unique aspects of a given coffee. This will produce innovative product options. These innovative product options can then be vetted by tastemakers. If the innovation gains validation among the tastemakers, they can champion it. Diffuse it. And guide it towards general validation. Which would be market acceptance at a broad level.
I would also argue that Q graders acting as go between for farmers and roasteries and cafes, have the ability to reduce the negative impact of tastemakers on farmers. Through a defined and shared lexicon or language of quality Q graders can help communicate the goals with both sides. As well as how to reach those goals. For example, currently the predominant flavor profile of third wave coffee is a floral, fruity character. Things that contribute to that are the processing method, the breed of coffee tree, the altitude at which it was grown, et cetera.
Part of the training in becoming a Q grader is learning those things so that the Q grader can bridge the gap between the two ends of the value chain. A good Q grader can work with a small holder farmer to understand which coffee breeds provide good yield, good pest and disease resistance, as well as a good sensory profile in the final beverage. They can also advise on the various milling processes one can use to manipulate and accentuate those sensory profiles.
This is a quote from Thomas Sowell that I think. Illustrates what I’m trying to get at.
A larger cultural universe is important not simply because of the products, technologies and knowledge that are transferred—important as these are—but also, and perhaps equally or more important, because people seeing repeatedly how things have been done differently by others in different places can break through the normal human inertia that keeps people doing the same things in the same familiar ways, for generations or even centuries, as happens in many geographically isolated societies.
Bridging the information gap between consuming trends and producing techniques will empower producers. They will have a better understanding of what the trends are and how to accommodate them.
National jury. A panel of tastemakers.
The Cup of Excellence or COE is a coffee competition and auction system that strives to find the best of the best a producing country has to offer. And then sell that coffee at the highest amount the market will bear through an auction process. Part of the explicit process of COE is the function of what they call a national jury.
They are the gatekeepers for the competition and only the cup profiles they choose during pre-selection continue on to compete. I really liked the idea of the national jury defining the cup profile of the best of their best rather than having an international group define it.
In the context of the CoE the national jury is a panel of empowered local tastemakers who define what is an excellent coffee from their country. More importantly in this fashion the national jury can be the very beginning of the virtuous cycle that is often referred to as local consumption In which some of the coffee country produces remains and is enjoyed Within the country.
Local consumption enables a national pride in what a country can produce and in that way i think tastemakers serve a very important role Local producers and coffee professionals can point to coe successes from their country and say that represents the level of excellence my country can attain in coffee production And that is quite empowering.
The coffee market needs tastemakers in order to grow and improve. We need experts who explore coffee and inform us on what they’ve learned and how we can use that knowledge to become better consumers. As we become better consumers more money flows through the value chain and eventually finds its way to the producers The system isn’t perfect. But it’s not intractable nor rigged. It’s complex