Back in March of last year, I was emailing back and forth with Noah Namowicz of Cafe Imports. Around that time I had the C-market on my mind quite a lot, and was trying to get a beginners understanding of all that influences it. Back then he brought up a technical analysis tool called the Fibonacci Analysis . I’ll be honest – I understand the Fibonacci series much better than this analytical tool. It would be pretty easy to join countless others in their obsession with both the Fibonacci series and the Golden Ratio , and its appearance in nature and in aesthetics. As much I could go off on a long rant about the Golden Ratio in design, architecture or design aesthetic (as it applies to coffee), I shall skip this for the sake of this blog post. Back to trading coffee… In March 2012 the C price had just fallen below 200, and this seemed contrary to what ought to be happening. To quote from Noah’s email:1 That being said, I think the technical traders and technical theory (so just based on trend lines) give a good idea of where coffee is heading, but right now technically this market is broken, there is no technical analysis aside from Fibonacci that is indicating where this is going. Fibonacci analysis has this going down to the mid 130s. That is a huge fall, so most technical traders are not following that theory right now. Obviously there are external environmental factors like weather than can throw a wrench in technical analysis, but it is more often than not correct. (emphasis added) Even though it was a declining market, back in March last year the mid 130s did indeed seem like a huge fall. That is, however, exactly what has happened. I checked the C-market a few days ago, to see it sitting at 136.5, so I emailed Noah again. His response: What this says is…traders are using technical analysis, and in a year with mild weather swings, that analysis is most likely going to be very accurate to how the commodity is traded. This is evidenced by the fact that these traders are completely ignoring the rust issue in central America. Coffee is low now, but once the real shortage of washed milds are felt, the market will begin to trade on fundamentals again I would bet. Traders aren’t feeling that washed mild squeeze yet because there is a lot of coffee still on the table from Colombia, Peru, and Brasil, but once that fades out, the market may jump back up. A jump back up does seem increasingly likely – though if anything I’ve learned that I don’t really want to get involved in gambling on the C-market. It once agains feels frustrating to be in an industry where livelihoods are so dependent on something as fickle as this. Right now there are strikes in Colombia (not jut in coffee ), which are of course tied to the prices farmers receive. The market is paying less than the cost of production, and government subsidies aren’t closing the gap fast enough. In truth I don’t know if this post is meant to discuss the C in general, or the mechanisms that people use to trade on it and their impact on our industry. The only thing I can be sure of is that it is interesting and worth sharing. Footnotes:Emails are quoted with kind permission Related posts: Unnovation in coffee This is just what we need: Melitta’s brand new Smart Brewer. Not only does it brew coffee, but it checks the weather for you by communicating with MSN. Heaven... Coffee Leaf Rust There are many large and embarrassing gaps in my coffee knowledge, and coffee leaf rust is one of those. However, it seems that this is something that is having an... The change when coffee cools My last post on this generated some amazing comments, for which I am very grateful. It has also meant I’ve been talking about and thinking about the change in flavour...

Hey Mcfly !! Welcome to the third in the guest blends of 2013, and for march it is back to thew future. why ? well the clocks go forward the end of march, which means we will all be returning to the future (a tenuous link its mainly because it’s one of my childhood favourite [...]

Just as a follow up to this previous blog post , I received an email from Oliver Strand that linked me to one clear definition of a chain. It comes from San Francisco’s Planning Departmen t. Formula retail uses are commonly referred to as “chain stores.” Under Section 703.3 of the San Francisco Planning Code they are defined as “a type of retail sales activity or retail sales establishment which, along with eleven or more other retail sales establishments located in the United States, maintains two or more of the following features: astandardized array of merchandise, a standardized facade, a standardized decor and color scheme, a uniform apparel, standardized signage, a trademark or a servicemark.” In other words, retail stores with multiple locations and a recognizable “look” or appearance. There’s something pleasingly damning about the phrase “Formula retail use” for a chain. It is also pleasing to see this so clearly detailed out, in a relatively objective way. That aside – it is interesting to see how far you could go under these definitions without technically being called a chain, though you’d probably end up with a dangerously interesting business at the end of it all! (Or a completely incoherent one….) Of course – defining a chain is a pretty poor way of defining an independent. Coffee shops don’t exist in two categories – no matter how convenient or easy for us it would be if they did. Related posts: Starbucks and their plans for growth Some time back in late 2010 (I think) I made a comment on twitter about Starbucks’ direction in the US.1 An intriguing response to this turned up fairly rapidly in my direct... GCQRI Day Two – Identifying Research Projects I think a lot of people came to this event brimming with ideas for research into coffee cup quality. This part of the day was something of a data dump... Rosettas – one or more? This is something I’ve been thinking about for a while. A year or more ago I was really into doing multiple rosettas. 3 in a 5oz cup type of thing....

We all agree that when brewing coffee, that the ingredient you choose is very important. The consumer understands there is a choice, even if that choice has nothing to do with how the coffee tastes. The most successful here have been the ones that have told the simplest story: this one is traded fairly, or this one won an award for its taste, or this one is from a single farm. I think coffee has done a reasonable job of communicating the importance of grinding coffee freshly. While grinders at home aren’t as common as we’d all like, the fact that “Fresh Ground” is still used as a heavy handed piece of advertising suggests that overall people understand that freshly ground = good. We’ve all had fun with communicating brew methods and techniques, there have been some great videos – both entertaining and informative, and they’ve been seen by a reasonable number of people. While I am not going to claim that people at home all have exceptional technique, I think those interested in brewing better can be pointed somewhere simple like Brew Methods. It isn’t a difficult message to communicate, and most of the time they reinforce the first two issues. Then we have water. Water is complicated. Water makes me depressed. Perhaps because I live in London, where the water is so bad for coffee, I am disproportionately frustrated. The taste impact of London water on coffee brewing is utterly shocking to those experiencing it for the first time. Coffee brewed with great water can be alive, sparkly, sweet and distinctive. Coffee brewed with London water all just tastes…. brown. Juicy lots from Nyeri, floral coffees from Yirgacheffe, jammy coffees from Huila – all of these and more end up tasting pretty much the same with London water. I am interested in people having a great experience with coffee. I am interested in people understanding that spending more money on better coffee can produce incredible and pleasingly variable experiences. Water is a huge hurdle and a problem. So a simple message must be communicated: You should use relatively soft water, free from negative tastes and odours. It should have a little hardness, but not too much. This is already a pretty complicated message (and I’ve already massively oversimplified it). Even if it is understood we get a difficult question in return: so how do I achieve this at home? This is where everything goes wrong, and I am still stumped for a good answer. The choices are the following: - Use bottled water. You can look at the mineral content on the side of the bottle – presented as “Dry residue at 180°C”. You can pick up water from places like Tesco relatively cheaply. However, you don’t really feel good about telling people to be buying bottled water (hardly the most sustainable idea in the world) just to brew their coffee with. Those that do see a massive improvement and realise the value, but it doesn’t feel like a practical or scalable solution. - Treat the water at home. Most people working on improving their water will use something like a Brita filter. These do remove unpleasant tastes and odours, but they do’t really soften the water very much, and you’ll still have a relatively high TDS. Not recommended for optimal results. The other option for home treatment is to install a reverse osmosis (RO) unit. In a commercial environment I now consider these to be absolutely essential, and you’re opening or operating a coffee bar in London without one then I strongly suggest getting one installed as soon as possible. You can produce great water with it ,and stellar results. At home you need to do some semi-serious plumbing to install one. For many people renting this isn’t a viable option, and even if the unit is relatively cheap it is still similar money to starter electric burr grinder – though this won’t have great production capacity. RO is without doubt the best commercial solution, and I will put one in my next kitchen – but I don’t know if people want to get this involved with their plumbing just for a cup of coffee. What’s left? Not a lot really. Cafes with RO units could sell or give away the water to people (with reusable containers) if they have sold whole bean coffee to them too. I’d love to see cafes give some away, if only so people could taste what they could be brewing at home. I pose this as a question about water to anyone and everyone reading, because I don’t have a good answer. This should be a question troubling more people. If you roast coffee in an environment where the water is hard, or has a high TDS, then it is likely that your customers are having very, very different experiences in their homes compared to what you’re enjoying on your cupping table. We need a solution for this that is practical, sustainable and affordable. I desperately hope we find one soon. All ideas are welcome… Related posts: Some thoughts on brew temperature I am fully expecting to have this picked to pieces or just generally rubbished, but I thought I would jot down a few thoughts having read a post over at... We underestimated water In my coffee work my number one frustration is with water. I think it is something that has been massively underestimated, both as an industry and very much personally. To... Fear of Water I was going to do revisit an old post about why someone’s coffee might taste bad, talking about the amount of dull burrs out there, as well as a bit...

We are really excited to share this tiny lot from Bolivia even though there’s not a lot of it and we could happily drink it all ourselves! There is only 5 bags of this micro lot, so it won’t be around for long. It’s from Felix Valeros farm which is situated in the Caranavi region of Bolivia. Bolivia’s speciality coffee production is small but the quality is definitely there, we hope that by purchasing this coffee we can give the farmers incentive to keep producing coffee instead of Bolivia’s other main cash crop coca.

We are really excited to share this tiny lot from Bolivia even though there’s not a lot of it and we could happily drink it all ourselves! There is only 5 bags of this micro lot, so it won’t be around for long. It’s from Felix Valeros farm which is situated in the Caranavi region of Bolivia. Bolivia’s speciality coffee production is small but the quality is definitely there, we hope that by purchasing this coffee we can give the farmers incentive to keep producing coffee instead of Bolivia’s other main cash crop: coca.

The recent coverage of Harris and Hoole has made for interesting reading. Coverage ranged from the laudable to the laughable. The one sentiment that popped up repeatedly was the idea that Harris and Hoole were being disingenuous by pretending to be an independent . This raises, in my eyes, a rather interesting question: What exactly is independence? What is it that Harris and Hoole were considered to be doing that they shouldn’t have been? Looking at the comments it appears they have been committing the cardinal sins of: - Fitting out their shops nicely, and not in an identikit kind of way. - Brewing the coffee properly on quality equipment. - Sourcing good coffee to brew and serve. - Not plastering the place from top to bottom in Tesco’s branding Essentially pretending to be an independent is simply not acting like other multi-unit operators in the sector like Starbucks, Costa and Caffe Nero. Unfortunately this point of view can easily expose one’s own hypocrisy. I’ve railed against the homogenous high street throughout the UK, the fact that everywhere I went the experience was pretty much identical, and pretty low in quality to boot. There are always going to be nationwide operators in any segment, and I certainly can’t complain if they start acting a little more sympathetically to their surroundings, or not cutting corners on fit-out or ingredient and preparation. (There are always going to be multiple unit operators because scaling is one of the very few ways to make selling cups of coffee adequately profitable – but this is a subject for another day!) In the past I’ve defined independence through access to capital for expansion. ”Independent” is an incredibly annoying term to use and define, but I think access to cash is at the root of just about everyone’s definition. People seemed angry about Harris and Hoole because they felt like they were lining the profits of Tesco, which has more than enough money already. People were indicating that their decision-making about which coffee shop to frequent was massively influenced by who they considered the ultimate beneficiary was. This is extremely interesting in and of itself. However, it quickly leads us into murky waters again. Every business requires startup capital – should part of a businesses identity be where this money came from. We like the plucky underdog in this country, and we do love to cut down the tall poppy. This would imply that people should avoid taking on serious investors (as they’ll expect a return, which of course will result in the destruction of quality because any form of profitability obviously requires “selling out.”)1 Yet, if we truly want independent entrepreneurs to have a greater chance of success, or even limited profitability, then surely we should encourage them to take on sufficient funding that they can open a business capable of that. (This is yet another topic for another day.) This other Guardian piece on Harris & Hoole in the Guardian was somewhat annoying, or mildly amusing – depending how satirical you take the tone to be. One particular sentence tickled me – talking about how you can spot a corporate business pretending to be an independent one: Low prices is another, since one of the main advantages of corporate ownership is improved negotiating power with suppliers. Seems like this might work with anything but coffee. Our industry’s tendency towards a kind of false competitive pricing – where an independent with limited buying power prices the product comparably to a multiple outlet, or even multinational, competitor. In the short term this seems sensible, but of course the long term effect is that the consumer doesn’t see pricing being a suitable differentiator of quality, and the business doesn’t make enough profit to be sustainable. (One day I promise I’ll stop ranting about this stuff – perhaps when our industry doesn’t have one of the highest failure rates of new businesses.) In Summary This post isn’t really about Harris and Hoole. It is about how consumers perceive our business. We talk a lot about the things we think matter in the decision making process when someone chooses a coffee shop: location, quality, convenience, price and brand are all discussed. We don’t really talk about how the financial transactions involved actually make people feel. We don’t talk about what people expect of the financial transparency of a coffee shop. Has the independent coffee shop culture sold an image of the independent coffee shop as a begging bowl, a place to spend away our guilt over how we much most of us spend with corporate giants like Amazon, Tesco, Walmart or Coca Cola? Will this image turn from a boon to a shackle as we try to professionalise our industry, in the hopes of making it financially sustainable? Footnotes:I am hopeful that people’s sarcasm detectors are turned on here…. No related posts.

Now, that’s a burr. My new Mahlkonig Tanzania for home (crazy, I know). For medium to coarse brew methods. See previous post, and Brew Methods at Home page for details. An afternoon spent grinding and bagging reference samples from the Rocky and the Tanzania for calibration and comparison. Eventually got around to making a first coffee! A Woodneck of Idido natural.

Now, that’s a burr. My new Mahlkonig Tanzania for home (crazy, I know). For medium to coarse brew methods. See previous post, and Brew Methods at Home page for details. An afternoon spent grinding and bagging reference samples from the Rocky and the Tanzania for calibration and comparison. Eventually got around to making a first coffee! A Woodneck of Idido natural.

For those using the service we’ll be posting photos from around the roastery and other coffee related things on our instagram. Some stuff will also go to twitter, but we promise not to clutter up your stream too much! Square Mile Coffee on Instagram