Coffee in Taos

July 27, 2010

After the two great articles by Steve Fox that Taos Horse Fly recently ran about Taos coffee houses and their uniqueness, we should feel pretty good about coffee in Taos. I’d venture a guess that we have more cool non-corporate coffee hangouts per capita than almost anywhere. Kudos to Steve for all that leg work and ambiance testing. But wait—could there be another perspective? What is it about coffee and coffee houses that have us all wrapped up in shots, skinny latte’s, macchiato and the like (you nearly need a dictionary to order)?

When coffee first came to Europe from the Arabic Peninsula and North Africa (Ethiopia, in particular) back in the 1700s, it was revered as a medicinal and spiritual drink that made pub owners worry about competition from coffee houses where people could get high without developing addictions and hangovers. In fact, the Sufi monasteries in the city of Mocha (yes, some more cultural heritage from our Arabic friends, although the drink Cafe Mocha was popularized by Europeans who borrowed the name of the Yemeni city where the coffee was coming from) were where the first credible history of the coffee tree and coffee drinking started. This, despite stories about the legendary Arab sheik who saw his goats jumping around after nibbling coffee cherries from a tree and decided to try some.

What we do know for sure is that coffee trees do not grow here and that as long as we have coffee it will always be imported from somewhere else. Coffee grows in tropical and subtropical climates around the world. Although its wild type was from Ethiopia and that is where it was first cultivated, it has been widely introduced in suitable climates around the globe. This also increases our current day obsession with coffee varieties and origins, so we can ask if you’ve tried that wonderful Sumatran or the Yirgacheffe from Ethiopia or that really great Nicaraguan. Indeed, unique soils and microclimates produce unique and interesting variation in the fruit of the Coffea arabica plant, which is the only coffee worth talking about. The other species, which accounts for about 20 percent of world production, is C. canefora, known as robusta, which has higher caffeine levels and inferior taste and is used by global corporations to blend with other beans and also to produce fad (or is it bad?) drinks high in caffeine.

This notion of global corporations and worldwide production—what’s that all about? Well, for starters, consider that coffee is the second most valuable traded commodity on the planet after number one—you guessed it, oil! The value of coffee is over $50 billion per year and most of this money is made by multinational corporations, brokers, roasters, coffee retailers and, oh yea, our coffee houses. Many of the world’s 20-25 million small coffee farmers live in poverty despite producing this second most valuable commodity in the world. These small farmers and cooperatives produce virtually all of the decent quality coffee available, and well over half of the world’s coffee (25 percent of which is consumed in the U.S.) They live in 50 developing countries, mostly in the southern hemisphere. The prices they are paid for coffee averaged about 60 to 70 cents a pound last year and have been as low as 50 cents in recent years. Half of that price a decade earlier (incidentally, did your price for coffee go down?)

So, where does the rest of the money go for the decent gourmet coffee you might easily pay $9.99 for in the store for a 10-ounce package? This translates to about $16 a pound, and a nice slight of hand by the marketers. In case the battery is dead in your calculator, that’s well over 20 times what the farmer got paid. Change that to brewed coffee in a coffee house, where 40-50 cups per pound is the norm and $1.50 is a conservative price, and the value of the coffee goes up to nearly 100 times what the farmer was paid. Believe me, no coffee house is paying $16 a pound, so double that to a 2,000 percent profit from where the farmer started. And, along the way, brokers, shippers, distributors and roasters have made handsome profits while the coffee farmer is stuck in a cycle of debt and poverty. Why are they stuck?

Coffee prices are as rational as gas prices—that is, they are determined by trading on futures markets in places like Chicago, New York and London. These prices bear little relationship to the cost of coffee production in the world. This has been particularly true since the 1970s and 1980s when a previous global coffee agreement, sort of like OPEC, collapsed. At the same time, two countries dramatically increased their production of mostly plantation coffee: Brazil, which is the leading exporter of coffee in the world; and Vietnam, the leading producer of Robusta beans in the world and third leading overall producer. Global prices are largely determined by what happens in terms of frosts and weather conditions in these countries. If you are a small coffee farmer in Kenya or Costa Rica, you are at the mercy of these so-called ‘C’ prices, set thousands of miles and cultural worlds away.

One hopeful—but by no means perfect—solution for small coffee farmers is a concept called Fair Trade, where farmers are guaranteed a minimum global price for their coffee, no matter what the corporations and futures markets say and do. Fair Trade is a social justice movement. The Fair Trade price for coffee is currently $1.41 cents a pound, with an additional 15 cents for organic coffee. When and if the ‘market price’ for coffee reaches this level, the Fair Trade price automatically increases above the market price. Sounds pretty promising until you consider that less than two percent of coffee sold in the U.S. and Europe—and less than one percent world wide—is Fair Trade. In the UK, Fair Trade coffee has a 20 percent market share while in the U.S. it is about three percent of the market. Nevertheless, these market shares have been growing at double-digit rates annually, making Fair Trade coffee the fastest growing segment of the coffee market in the U.S. and Europe. Recently, however, Fair Trade certified coffee farmers have been able to sell only about 20 percent of their coffee at Fair Trade prices, due to low demand. Maybe that’s where you come in?

One of the issues facing Fair Trade coffee is the single global price now established. While the Fair Trade price may produce a reasonable income in Kenya, it is not even covering the costs of production in a country like Mexico. Incidentally, 84 percent of the Fair Trade coffee sold in the U.S. is produced in the Latin American countries of Peru, Brazil, Colombia, Mexico, Nicaragua, Costa Rica and Guatemala. Another issue facing Fair Trade coffee is the tendency of some Fair Trade roasters, distributors and retailers to unfairly increase the cost of their coffee that is certified Fair Trade. According to Peter Miceli at Taos Roasters, he has to pay only ten cents per pound to be a certified Fair Trade roaster, and his prices reflect that. He can sometimes buy good Fair Trade coffee for less than non-Fair Trade coffee. Some roasters and retailers, however, may increase their prices up to several dollars a pound. Even worse are retailers who do this with presumably gourmet or specialty coffees that are not even Fair Trade!!

So, let’s go back to that issue of demand and why it is so low that even Fair Trade certified farmers can only sell 20 percent of their coffee at Fair Trade prices. Whose fault is that? Well, I’m afraid it’s YOU and ME—the consummate U.S. consumer. Why would we behave this way, especially when Fair Trade coffees are among some of the finest coffees to be found in our coffee houses and grocery stores? First is awareness. Most of us are not aware or educated about Fair Trade and the benefits it offers to people and the planet at virtually no cost to us other than asking for it. We can probably do more good and have more impact by asking our grocers and coffee houses to carry and brew Fair Trade coffee than by voting in elections. Consumer power can be awesome when we exercise it. I don’t advocate telling businesses to carry only Fair Trade coffee, but just to give me the choice if I want to make it. Although I must admit that I have a hard time with the litany of excuses coffee house owners make for not carrying any Fair Trade coffee, let alone going 100 percent Fair Trade like Coffee Cats in the John Dunn shops. More about the excuses later. In the meantime, just don’t believe them and ask for Fair Trade coffee and tea.

Next time, we’ll revisit those esteemed and revered Taos coffee houses and see how the Fair Trade scene looks and perhaps examine some of the excuses—oops, I mean reasons. Support Social Justice-Support Fair Trade.

Steve Gloss is the founder of the local non-profit organization Sustaining Cultures and a member of the Town of Taos Fair Trade Committee.