Coffee in the global village

Soaring global coffee consumption is good news for the economies of the countries reliant on the trade, also known as origins. In a growing market where there is huge demand for new flavours.  Coffee origins are key to flavour profiles and have become distinct in their own right, similar to that of wine producing regions.  This has allowed many smaller producers, like Charles Mutwiri, who produces the single origin beans for our Green Ocean Dorinish coffee, gain an international foothold enabling them to sell direct to businesses like ourselves.  Selling directly allows producers to bypass the commodification of their harvest in the futures markets and coffee bean dealers of the stock exchange.  We have labelled this process ‘Direct from Farm’.  There is a clear line from the farm to the cup which improves transparency and providence as well as giving farmers like Charles Mutwiri visibility on future orders which is key for him in making investment decisions.  Our focus with ‘Direct from Farm’ is to support developing communities by proving opportunity for them to grow and prosper.

What is coffee?

A coffee bean comes from inside a coffee cherry, which grow on coffee trees from a region of the world known as the coffee belt (between the tropics of Cancer and Capricorn).  We use Arabica coffee beans in all of our Woodland Coffee and Green Ocean Coffee brands. Arabica coffee beans originate from Ethiopia and accounts for over 60% of the world’s coffee. Usually grown at higher altitudes and in mountainous areas under a variety of different conditions like shade / partial sunlight etc which impact the flavour of the coffee.  Much like wine, coffee flavours reflect their ‘terroir’ of climate, soil type and geomorphology.

What makes some coffee stand out?

Once the coffee cherries are harvested (when they turn bright red) they are dried and graded. As you would expect, grading is critical to the blending and roasting process and is carried out with reference to the SCA (Specialty Coffee Association) rules.  Once a coffee achieves a grade of 80 or above, it is categorised as speciality grade arabica.  Both Green Ocean and Woodland Coffee are all specialty grade, and this has been a key reason why we won 3 out of the 6 prizes in the two coffee categories at last year’s Blas na hEireann Irish Food Awards.

Woodland and Green Ocean Coffee

Each of the coffees in the Woodland and Green Ocean ranges offers difference, the flavours are contemporary, balanced and nuanced. Roasted in Ireland, all of our coffees proudly carry the ‘Guaranteed Irish’ logo and both Woodland and Green Ocean fund real environmental projects here in Ireland which deliver long term measurable benefits in terms of carbon sequestration and biodiversity improvement on land and in our coastal seas.

If you fancy finding out a bit more about our award-winning coffee that makes the world we live in a better place, then please get in touch!

More about Woodland Coffee here

More about Green Ocean Coffee here

At Watermark we believe that individual action is also essential in playing our part in tackling climate change and we are ardent advocates that every action makes a difference, no matter how small.

We installed solar panels on our warehouse roof in July 2021, the motivation for making this investment at the time was not to lower our reported carbon footprint, as we were already using green electricity from Airtricity.  Nor was it financial, as the payback at the time was 8 years.  The motivating rationale was to do with the sustainable concept of ‘additionality’.  By installing solar panels, we are reducing our reliance on the national electricity grid allowing this green electricity to be used elsewhere in the economy reducing the requirement for fossil fuel to power electricity generation.

On our most recent Airtricity bill, we have reduced the electricity we used from the grid by 50.3% over the 6 months from April to October 2022 when compared to April to October 2021.  This gives us great satisfaction. While this single reduction is insignificant in the overall scheme of COP and the Paris Agreement, imagine if most businesses in Ireland were able to achieve a similar reduction?  It doesn’t take a great deal of imagination!

The net effect of this is a reduction in available supply of coffee for export and accordingly a steady and continuous rise in green bean coffee prices. In July 2019 the traded price for arabica green beans was USD$2.99 per kg, this had increased to USD$5.84 by February 2022. For those of us in the coffee importing countries, this is a significant price increase which makes us look at our own businesses and decide what we need to do to stay competitive while offering our customers an attractive proposition.

But before we blame climate change and covid for our woes, it’s worth looking at this from the coffee producing nations’ perspective. Up until 2019, there was an oversupply of green bean coffee (primarily from Brazil).  As a result, the price of coffee was steadily falling; in economic terms, coffee is considered to have ‘inelastic demand’ (as the price of green bean coffee drops this does not lead to similar increases in demand) but the price is hugely influenced by the amount of supply.  The reasons for the steady price decrease occurred due to the rapid rise in production capacity (in Brazil), slower growth in coffee consumption (most people don’t drink more coffee because it’s cheaper), excess power by the major coffee roasters and a depreciation of the Brazilian Real against the US Dollar.

The net effect of this was calamitous for smaller producing countries (Kenya, Uganda, Rwanda, Honduras, Columbia etc) who are almost always in the developing world and are hugely dependent on exporting green bean coffee to fund the basic running of their countries.  For the farmers themselves, this resulted in communities adopting ‘coping strategies’ that include reducing the maintenance on coffee plants, reduced expenditure on health, education and so on.  The governments of coffee producing countries did try and club together to set up minimum price per kg but these have largely been unsuccessful due to the temptation to break ranks.

So in May 2020, the Brazilian coffee crop has a fright, the challenge of Covid put pressure on previously efficient supply channels and the western coffee drinking world had to stop and rethink their strategy.  Smaller coffee producing counties come back into focus as the prices look reasonable. At Watermark we are no different, we launched our Tibradden single origin blend from Kenya at the beginning of the year and the coffee has been a great addition to our Woodland Coffee range.

Who knows what will happen over the next few years but what has happened recently to the price of coffee probably reflects an inherent fairness. The price increases seen of recent times merely reflects a more equitable situation whereby growers are getting a better deal.