I was recently interviewed by Kosta Kallivrousis for a piece in Coffee Intelligence on “bad” coffee shops that undermined the ethos of specialty coffee. My 2800 word response offered a broader reflection of thought on specialty coffee than a 1300 word (all-inclusive) piece of narrower focus would allow. (Para leer este artículo en español, haga clic aquí.)
Specialty coffee shops is a good opening for this broader discussion– especially since it readily conflates issues of “end consumer product” (often aligned with coffee beverages and stewardship, as was Erma Knudsen’s early defintions in the mid 1970s) with “end consumer experience” (often aligned with retail coffee “waves”). Whereas the former had a much richer centering of coffee’s supply-side, a focus on the latter in recent years has shifted to a centering of the demand-side.
So with permission to use my own responses and some editing, I decided to publish a fuller response to Kosta’s questions here on my own site.
On the Misrepresentation of Specialty Coffee:
KK: How do you think the absence of formal regulation around the “specialty” label has contributed to its misuse?
Nobody can clearly define what “specialty” coffee is and there is no consistency in the application of most of the definitions that currently do exist. Sure, the Specialty Coffee Association proposed a new definition in the past couple of years, but I’m hard-pressed to find consistency among stakeholders in who actively uses it. Not the least, changing these types of normative definitions requires a lot of stakeholder education. At the moment, that education disproportionately reaches consumption-dominant countries, rather than production-dominant countries.
During my four months in Colombia speaking with various coffee stakeholders, “specialty” coffee was defined as scoring 80 points or higher using the SCA cupping form (most stakeholders I spoke with in Colombia, including some higher end outfits, were unaware the form was revised to the SCA’s new Coffee Value Assessment). Some stakeholders said “specialty” was coffee that scores 85 points or higher. Some stakeholders included zero category 1 defects in their definitions. Some said that “it’s 80 points, but it’s really 85 in practice.” None of them referred to the SCA’s 2.5 year old definition.
This absence of an accepted definition that is consistently applied across all stakeholders makes it difficult to “do business” across the value chain in an equitable manner. There’s often a fetishization of production on the demand-side, as it’s used to “promote” coffee sales, however for most farmers, what matters most is cash flow. Period. Farmers are willing to oblige the informational demands of the demand side insofar as maybe it benefits them (I’ve also written about information asymmetry here and discussed its exploitation in creating a “reverse market for lemons” in my Fulbright capstone seminar). But the outcome is that specialty coffee tends to center around the consumer retail experience on the demand-side, which undercuts equitable value distribution to the supply-side. That is sustainable for no one in the long term.
KK: Should there be industry-wide standards or certifications for specialty coffee, and if so how might they be enforced without stifling innovation, or no?
If this is a global business sector– and it is– then it needs to have some sort of standardization or else there’s no way for stakeholders to know what they’re doing. This means that, when farmers are presented with opportunities for “growth,” they take risks to “compete” without a sufficiently standardized playing field.
Right now, there’s no common language between most farmers trying to sell to a buying station and a consumer buying from a cafe. There’s just not. Yes, there is the SCA Cupping Form/CVA. Yes, there is Q-Grader certification from the Coffee Quality Institute.
However, a smallholder farmer attempting to raise their quality of coffee may go to a buying station and find their sample lot is turned away because, while they believe they’ve met a buyer’s quality standard, the buyer doesn’t actually cup at that standard. Both stakeholders may believe they have an understanding of the definitional boundaries of “specialty” coffee, but clearly, there is an inconsistency in the application of the standards. You may say, “well the language/standards exist but inconsistent application of the standards is another issue.” I disagree. Interpretation is what makes language “work” beyond translation. That matters, not the least, in the context of doing business.
But even moreso than just a need for standards of sorts is that, if the cupping form/CVA is going to be treated as a lingua franca, then the commitment of resources to training the interpretation of those standards is imbalanced. According to CQI’s Arabica Graders database, there are 354 Q Graders in Colombia and 694 in the U.S. Aside from that being an absolutely larger number of Q-Graders from a consumption- vs a production-dominant country, if you were to control for variables like income per capita and so on, the magnitude changes in how and where standards are represented and distributed along the value chain.
In other words, the need for Q-Graders might be effective for the middle of the value chain, but it’s resource-depleting on the production side, and resource-inefficient on the consumption side other than its use as a signaling cue to the consumer downstream. And this is to say nothing of lapsed Q-Graders who have various motivations– some practical, some “political”– for letting their certifications lapse. A disproportionate amount of them are likely in consumption-dominant countries because, unless they are export buyers, certification is sufficient, not necessary, to be a roaster; one could let their certification lapse without negative effect. A Q-grader at origin would likely have a more difficult time doing business without re-certifying. Take from that what you will.
At origin though, assessments by Q-graders could make the difference for hundreds of dollars of farmer incomes. Despite triangulation during trainings, one grader on one day at origin scoring one sample lot an 84.5 might be the difference of hundreds of dollars vs another grader on another day scoring the same lot an 85, resulting in a the farmer earning a completely different payment tier of 15, 20% more per carga. And if a farmer is not a Q-grader themself? They are solely reliant on finding– and paying for the services of– a Q-grader so they know the value of their own coffee before selling it. How many farmers can do that when they are making between $1.80-2.20/lb, the differential between the c-price (based off a futures contract, not the value of its underlying asset) and the cup score often lags from market fluctuations, and a 0.5 point difference is an extra $0.25/lb? What is the incentive for the farmer to continue with taking the capital risks to produce specialty coffee when it is the demand-side that dictates the terms of “specialty?”
And this is the fundamental problem with trying to differentiate a commodity in a global value chain that relies on voluntary enforcement: It creates a paradox wherein all stakeholders need standard terms and conditions– be they ISO standards, Green Coffee Association standards, SCA standards, etc– so that the terms by which transactions occur are consistent, yet it is extremely difficult to create such standards that are consistently equitably applied (from a production-dominance/consumption-dominance perspective), and enforced without causing undue burden on production (see EUDR for demand-driven burdens on producers). So many of these standards are demand-side created and driven, with little equitable value return for the supply-side (in fact, they are usually costly obligations for the supply-side to meet). This then has a knockoff effect in producers taking undue risks to meet demand-side standards as best they believe will be applied. Who does “innovation” serve then?
On the Evolution of the Third Wave Movement:
KK: As specialty coffee has grown more mainstream, what factors do you believe have contributed to the dilution of its original promise of quality and care?
I would argue that the liberalization of global trade, particularly in response to the collapse of the ICA, is primarily responsible for the dilution of specialty coffee. Much of the reason is because, as much as eliminating the quota system changed the supply-side of production, it also changed the demand-side of choice as well. That was the point at which specialty coffee, with a primary promise of “quality and care” (as you put it), started to become differentiated to consumer markets, fanning out the importance of (costly) third-party certifications such as fair trade, organic, Rainforest Alliance, and so on. From these third-party certifications ultimately was the marketing genesis of the direct trade/relationship coffee movement in the mid 2000s (I believe Geoff Watts formed Intelligentsia’s standards around 2006? 2008?). The direct relationship between the roaster and the farm started to pull away as a differentiator to the consumer by demonstrating a commitment to the farmer and removing commodifying steps between the farmer and consumer.
Ultimately, these value chains became more horizontally-intermediated to meet market demand for “specialty,” which also became detached from direct trade/relationship-based coffee; vertically, these new value chains were not different than large MNCs, other than that there became more market choice of intermediaries, including small and large exporter/importers. Paradoxically, this intermediation through “sourcing partners” makes it more difficult to stick to “quality and care” in the absence of unified (though costly) third-party certs and standards by shifting around the voluntary risks, responsibilities, and enforcement to standardbearers along the value chain.
Around the same time as the models of trade started to shift around how coffee was bought and sold– first commodity market, then fairtrade, then direct from the farm, then adding differentiators such as organic and/or shade-grown– the industry was able to correlate with other demand-side elements such as “quality.” Though the SCAA was around since 1982 and the SCAE was around since 1998, the SCA merger in 2017 came at a time when the industry itself started to take off on the consumption side in consumption-dominant countries. But even moreso, the birth of the Cup of Excellence in 2002 started to identify individual producers within (and across) production-dominant countries. This created more competition (literally and figuratively) among domestic producers trying to connect with and satisfy the interests of the demand-side. (I would be a hypocrite if I said I didn’t enjoy drinking these coffees.) And the result of that competition has increased inequity among producers/farmers. A rising tide may have lifted all boats, but some boats have become yachts, while others are still dinghies, and yet others have been swallowed by the tide.
Framed another way, if the ICA didn’t collapse, there probably wouldn’t be specialty/craft/differentiated coffee. The Pandoras box of neoliberalism opened choice and opportunity on the supply-side as much as the demand-side, and various producers have benefitted from opportunity without necessarily being beholden to MNCs. Some farmers (especially those who have had access to capital and knowledge) have benefitted from these opportunities more than others. Closing that box by restoring a quota system could equalize the value chains, but it’s a fool’s errand to think that system would be easily re-attainable.
What exists now is specialty coffee’s shifting emphasis from single-origin to single-estate (and microlots and nanolots) and a demand-side romanticization/fetishization of how best to “prepare” the coffee, which subsequently translated to a cottage industry of brewing equipment and techniques that spurred a focus on selling the objectification of quality. And that subsequently fed demand back to farmers in the form of asking them to “innovate” with new varieties, with new fermentation methods in production, with infusions, etc.
There’s a certain amount of naval gazing by the specialty coffee consumer to which, the farmers are more interested in cashflow. There’s a gross disconnect between the hospitality in consumption and the financial positions for most farms– especially smallholder farms. Tell a farmer that a consumer in Norway is buying a $275 WDT tool– an amount equivalent to maybe a half carga of parchment revenue. When they respond that everyone has choices and is entitled to make those choices, you can read the subtext of incredulity over value accumulation on the other side of the value chain. Whatever “specialty coffee” is is a function of tastemaker dynamics on the demand-side and sold to consumers as such, more than it is about its foundational values.
KK: How can authentic specialty coffee shops differentiate themselves in a market where the term “specialty” has become so loosely applied?
I don’t know that I have an answer to this and the reason is largely because of my previous answers. What does “specialty” mean? Is it 80+ points? Is it “bean to cup?” Is it both? Some colleagues of mine published work in the Journal of Marketing on the difference between craft and commercial coffee from a demand-side perspective. It’s a really good read because specialty coffee is the context of their generalizable research. But again, it assumes that “specialty” is a function of the demand side, rather than the supply side. And in that instance, yes, perhaps shops could be “authentic specialty coffee shops,” but what does that mean to the Rwandan producer? What does that mean to the Thai producer? What does that mean to the Peruvian producer? What is “authentic specialty coffee” from a globally and economically diverse perspective? Is a specialty coffee shop in Bogotá the same as one in Chicago? I’m not sure that’s answerable because the perception of “specialty” is driven largely by those in net consumption-dominant countries as well as wealthy stakeholders in net production-dominant countries.
On Consumer Trust and the Future of Specialty Coffee:
KK: With consumer trust in the “specialty” label potentially eroding, how can the industry rebuild that trust and educate consumers about true specialty coffee?
Again, there is a focus in this question on the consumer and not on the producer. Specialty coffee– at least, as advocated for by the SCA– seems to think the issue is consumer education. If only the consumer was responsibilized to make better choices and pay more, farmers would do better. Yet the SCA’s own Equitable Value Distribution is evidence of that myth. The nominal price sensitivity of the specialty coffee consumer has decreased, while the real value farmers receive hasn’t increased. What does it mean for trust and education when a consumer in the US is faced with coffee choices from 13 countries at a retail shop, yet the farmer doesn’t realize they are “competing” with their own neighbors, let alone farmers in those other 12 countries, for that consumer to choose their coffee? How does a consumer make a meaningful impact through a single bag of coffee?
The real question is, is specialty coffee about the demand-side, the supply-side, or both (as it should be)? And if the answer is both, then what does market structuration look like beyond demand-side-centered advocacy branding?
You want to rebuild trust? You start at the farms, you start with producers, you start with farmers, and even more so, you start with the pickers– the hidden labor force behind the industry regardless if you’re talking about specialty or commodity. And by the way, many farmers who have the land and grow specialty coffee are growing commodity coffee as well because they need to diversify the risks the demand-side requests of them; they cannot necessarily rely on “specialty” coffee for income if a new variety fails or a new fermentation does not become trendy in the demand-side.
You want to rebuild trust? Start with giving farmers– small, medium, and large– not just a bigger presence at the consumer table, but a bigger stake at the table. Start with allowing the production side ownership of the value side closer to the demand-side (the Pachamama and Paso Paso models are good models of this). Start with green buyers not looking at quality scores as a one-off, but as a longer commitment. Start with green buyers committing to multiyear no-fault contracts– and following through with those commitments– even when the green buyer may take a loss. Start with roasters and cafes recognizing their responsibility in consumer taste-setting through their menu offerings– that many farmers aren’t considering how their parchment “competes” with other domestic farmers, let alone “competes” with production from around the world. Start with funding, promoting, purchasing demand-sided innovation such as espresso machines and grinders and tampers and roasters and… that also come from production-dominant countries.
KK: Do you foresee the emergence of a “fourth wave” of coffee focused on even stricter quality standards? If so, what might define this movement? Or what’s next?
“Waves” are bullshit. I’ve heard “fourth wave” called a number of different things: Ecological sustainability? Hospitality? Transparency and accountability? Modernization of aesthetic? A scientific focus on/objectification of quality? The commercialization of specialty coffee itself? Fermentation innovations? The prosumer/at-home barista? Technocoffee (AI, robots, blockchain, automation, all of the above?)? Barista equity and diversity? Micro/at-home roasters? Grassroots stability to producers? You could walk the floor of the SCA Expo any given year and find five different trends simultaneously playing out as “fourth wave” and most of which are based on the demand-side offerings. At this stage, there’s probably 20 different waves all overlapping and at best, you’ll define fourth wave after it’s already happened.
But if you want to know what I think the “fourth wave” should be, it should be a movement that, in all ways, centers farmers in the demand-side, rather than one that centers consumers in the supply-side. Coffee– whether specialty or not– won’t survive its many existential threats if that doesn’t happen (and don’t get me started on the beanless stuff).
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