Magic Beans: What is the Future of the Coffee Sector?

Iris Spark

I am sipping a cup of coffee. This is not an unusual thing. In fact, if I am not sipping a cup of coffee first thing in the morning I would argue that something has gone cataclysmically wrong with my day.

Without coffee, I am not much. I have discovered that without coffee, I am some sort of half-creature – a maggot of some kind. If some disaster happens to me without coffee – a bad business call, or a calamity with one of the children or the dog – I am unable to cope. But with it, I will roll up my sleeves and manage.

Obviously I am not alone: coffee is, more than wine, beer, or even tea, our global drink. The high streets of south-east London, for instance, have a very fraught pizzeria scene: you enter that market knowing that a lot of people eat pizza, but not so many that you can’t fail. But our appetite for coffee feels of a different scale and of another kind: it’s hard to open a coffee shop and not find the customers.

There are so many of us who need coffee and who are prepared to pay for it. So prepared to pay for it that we didn’t especially notice when the price of a coffee went up to its present average of £3.40 a cup, making a £10 billion industry in this country alone, with the global market more like £100 billion.

Coffee doesn’t seem to be particularly bad for you – except if you have far too many per day. “There’s not much in it,” says leading nutritionist Lucy Epps, “Ground coffee is rich in polyphenols, which act as very important antioxidants in the body. In fact, coffee beans are so rich in polyphenols that for regular coffee drinkers they can provide a major source of these dietary compounds, and importantly, at physiologically relevant levels.

As well as increasing antioxidant activity, polyphenols can also down-regulate inflammation and provide beneficial effects on vascular, metabolic and cognitive health.”

Lucy Epps

That all sounds like excellent news. But there’s more. Epps continues: “Scientific research, including meta-analyses (a study that combines and evaluates data from several similar studies) have found that those who habitually consumed one to three cups of coffee a day, had a significant reduction in risk for mild-cognitive impairment, potentially conferring benefits for brain health over the long-term. In studies that looked at coffee intake and cardiovascular health, one to three cups of coffee a day was associated with a 21 per cent lower risk of stroke.”

Epps also argues that there are even more benefits than people typically realise. “We are also beginning to uncover the beneficial effects that regular coffee consumption can have on our commensal gut bacteria,” she explains. “These bacteria metabolise polyphenols in the large intestine, in turn producing by-products that are not only key locally for colon health, but have consistently been shown to have far reaching benefits on other areas of our health, including the immune system, hormones and the heart. Over 100 bacteria species have been linked to coffee drinking – both caffeinated and decaffeinated – it’s thought, due to the relationship between polyphenols and gut bacteria.”

This all seems like good news for the habitual coffee drink. And Epps is not alone in extolling coffee. The former World Champion javelin thrower Fatima Whitbread tells me: “A lot of people say you shouldn’t drink too much coffee because of the caffeine – but if you believe everything you read, you’d never do anything at all.”

Coffee Jobs

That all sounds positive, and of course it means that there are many job opportunities at every part of the supply chain. All the people I meet in the coffee sector are passionate about their work: they seem to have that same passion which sommeliers have but without quite so many burst capillaries.

Matt Macdonald is the procurement manager at Café Direct. He obviously loves his role which he describes for me. “I manage the quality of the coffee but also the buying function, and I also purchase directly from cooperatives. I also handle the pricing side of things – I love it.”

So how did he get into it? “It was a very obscure route. I worked in China for ten years – but nothing to do with coffee. But I gained a good understanding of supply chains and moved into a role on the supply side for Café Direct. But then the opportunity came up to move into the buying side of things, and so over the next few years I was learning on the job.” There seems to be an element of falling into the coffee world, and this in itself speaks to the accommodating, and cheerful nature of the industry.

It’s also an industry which asks for some interesting qualifications. “I had to become a Q grader, which is a qualification for judging arabica coffee; an R grader which involves judging Rubica coffee. It was a very structured method of tasting, and it’s best if you learn with someone who really knows what they’re doing. You have to be there every day in the roastery, and in the cupping lab.”

Did he worry about his caffeine intake? “I try to limit my caffeine intake. I try not to have too much for work. When you taste it, you spit it out and don’t swallow it.”

So how does he set pricing? “The price is linked to the quality but it’s not the sole defining factor for the price. There are several other components: there’s the stock market price, and then there’s the new stock exchange price which is the base price when you’re buying a container load. In addition to this countries attract different pricing premiums linked to the cost of production locally.”

Since many of the countries which produce coffee are also less developed economies a lively conversation has arisen in the industry around fair trade. “With fair trade,” explains MacDonald, “you have a minimum trade and we’re well above it. If the price falls below that point, you pay a premium. We’re about 60 per cent fair trade organic – and to be organic you pay an additional premium.”

It all strikes me as fascinating and I begin to see that the role is exciting because it includes a product he obviously loves – but the economics are also intellectually challenging, and in addition open up onto moral concerns. This is an industry which, partly due to geopolitical considerations, and also due to climate aspects, is having to reinvent itself – and fast.

The Fair Trade Question

I talk to Edward Harvey at Fair Trade, who is on the frontlines of this conversation. “I joined Fair Trade in our programmes and partnerships team,” he recalls. “Initially I worked on developing fund-raising proposals which we took to donors like the UK government requesting funds to implement projects in fair trade supply chains. Our bread and butter is fair trade certified supply chains to help businesses to source on fair trade terms. Recently I’ve been supporting on coffee, and am a senior supply chain manager which is a really interesting experience.”

What are his impressions of the coffee sector? “There’s lots to be excited about and some challenges. The fact remains that a lot of coffee producers still live in poverty,” Harvey explains. “Coffee is a commodity which supports a lot of people. It’s roughly 125 million worldwide – of those there’s about 12.5 million smallholders. Coffee’s a crop which is largely produced by smallholder farmers with small plots of land. They’ll sell their beans to a cooperative who will sell to a trader and then ship to the consuming country. The position of a smallholder farmer in that supply chain is quite fragile.”

Why is their position so fragile? “They can be vulnerable to changes of price – coffee as a commodity changes price every three minutes. Changing weather patterns can very quickly change the price of coffee. At the moment it’s very high – there are a few reasons for that. Some of it is to do with conditions in Brazil. Frosts impacted the volume they’d normally expect to export. The Ukraine War has also affected the availability of fertiliser and the number of shipping containers. That effects things on the ground. High prices aren’t necessarily good – it leads to uncertainty.”

So what are the longer term trends? “The price of coffee is quite historically low. Even though it can jump in the short term – in the longer term it is falling. The way fair trade approaches it is through its standards which cooperatives have to meet to be fair trade certified. The approach of fair trade is that companies that buy fair trade coffee have to pay a fair trade minimum price at a fair trade premium. It’s a safety net for farmers: when the price of coffee falls, it protects them from volatility.”

What incentivises the companies to take part in fair trade? “A lot of different things. For a lot of consumers they want to know the coffee they’re buying is sustainable and supporting farmer incomes. 25 per cent of coffee sold in the UK is on fair trade terms. For businesses, there’s a strong connection and fair trade is known as the gold standard.”

Have the big chains signed up? Macdonald lists Starbucks, Gregg’s and Leon as some of Fair Trade’s bigger partners. “The goal is to say that growing coffee is difficult and that the farmers are often overpaid and intervention is needed.”

What about companies who opt out or perhaps haven’t yet come in? “There are ways we can persuade them. The UK market has a long term relationship with fair trade; there are also fair trade towns and schools and faith groups in the UK: there’s a wide network here which we can tap into. These networks are supportive of fair trade and so we want to talk about that broad willingness we already have.”

And the challenges? “The challenges are through the costs, but we talk back through the impacts we do have.”

At the Roastery

I’m keen to see how this supply chain works and so head down to Cafe Direct’s roastery in Hoxton where I meet with Dariel Petrov, who is a Senior National Account Manager at Café Direct, and Sam Harlow, roastery manager. Cafe Direct is a fair trade partner. I am immediately offered a coffee and chat to Dariel next to an industrial blender surrounded by coffee. So do they like coffee? “It’s more of an addiction than anything,” says Sam, laughing. “Coffee is on the rise and we have a very developed supply chain. It felt right for us to really go for fair trade. My mind is blown away when I taste different coffees. I think more people should know about the coffee sector. Not enough people think of it as a possible option.”

Sam and Dariel make sure I go home with a bag of coffee and my own coffee-making apparatus. It’s Sam’s job [though since being interviewed he has moved to a new role] to create the subscription package for Café Direct subscribers: “The concept behind it is that you subscribe and receive a menu through your letterbox, and it tends to be higher quality than what you find in your supermarket. They’re premium quality and often you can go back to the farmer who’s produced it. There’s traceability here. We aim to broaden the horizon of our producers.”

This strikes me as being exactly what I need to take my coffee addiction to the next level. Petrov explains: “We discover too. We’ve had coffees from Papua New Guinea and Indonesia – we know what’s good at the time of year and we know which origins will work well. We have an idea of flavour.” Is it satisfying to do this job? “The most fun is to find the importers, get the samples in, and to find stuff in our price range. Then when it comes into the roastery for the first time – it’s quite a special process.”

So how do they know what options there are from the countries of origin? “Each country has its harvest. So we know through experience when to start looking. We also have good relationships with importers whose job is to find, store and bring it to the UK. Sometimes we’ll try it at origin – we have pre-shipped sample and arrival sample. Between those two there can be a three to six month gap. It’s important to cup in the UK at origin.”

As ever, the role comes with a dose of pragmatism and is partly also to do with relationships. “Sometimes it’s a case of going to an importer and seeing what’s good.”

Petrov adds: “This table here turns into a big tasting table. You’ve got ten parameters by which you can measure a coffee: depth, sweetness, acidity, body, flavour – and that leads into balance. Balance is what makes or breaks an exceptional coffee. You can have amazing flavour but the body is watery and it tastes like tea.”

The coffees are then scored, and need to come in over 80 in order to make it onto the menu. Anything above 85 is a really high score. A good instant from Caffe Direct will be 82. How much will an unpleasant Tesco instant coffee score? Petrov and Harvey both wince, but they soon recover. “That bad quality coffee needs to be sold somewhere, so every coffee – even pre-dried – has its place,” they say, without directly answering my question.

Climate Concerns

However, despite the enthusiasm of all the coffee professionals I meet, there are signs too that the current rate of consumption is unsustainable – coffee regularly comes in just after beef as one of the chief perpetrator of carbon emissions. This is something of which the sector is acutely aware – it’s an anxiety I encounter throughout the supply chain.

But is the problem soluble? I ask Dr Claudia Arajo, a plant scientist at the Natural History Museum, what the sector needs to do to make sure it plays its role in the biodiversity and climate change conversation. “I believe the starting point is to understand how plants work and how they interact within the ecosystem (or vegetation) to which they belong and have evolved, alongside other organisms. It is also paramount to bear in mind that living organisms are always evolving,” she explains.

“Plants interact in many ways with other plants, animals, fungi and bacteria. They exchange favours in order to survive. When we extract portions of a natural ecosystem, we are not only putting at risk the future of the species directly affected, we are jeopardizing the system that they have built over millions of years, which works well because it is balanced.”

What’s worrying is that, according to Arajo, we can continue for a good while without really noticing the harm we’re doing. “At first, we won’t notice the difference much because nature is resilient, it tries to reinvent itself, cure itself, forms a scar. However, in nature everything is linked, like in an engine, and once we remove one key player the rest may fall apart. Imagine if you built a tower of flats and right in the middle someone decides to make an open space in their flat removing an entire wall? If several people decide to do a similar thing then at some point the building will collapse.”

The problem is really the finite nature of the planet. Arajo continues: “Humans clear vast areas of the planet for crops. In doing so, we are eliminating the system that regulates the ecological functions of the area. It is not just the ‘green’ that is disappearing, it is everything else that we cannot name because we don’t see or even know it exists or how it functions and affects our ecological ‘engine’.”

Arajo continues: “We know plants purify the air while producing ‘sugars’ (energy), capturing carbon dioxide and returning oxygen. Plants also breathe and transpire. In performing these processes of photosynthesis, respiration and transpiration, plants bring water from the soil to the air, which accumulates, travels and falls as rain elsewhere. But water is becoming scarce. Forests are a mass of plants, of different sizes and shapes, each producing a network of roots that act like a sponge when it is the rainy season.”

It is all an exquisitely calibrated system which we have got into the habit of disrupting: “Branches delay the fall of rain to the soil, roots above the ground trap water and roots below ground help the plant to absorb water efficiently and the excess travels to the water table. Saturated with water, plants transpire and the cycle is maintained. But in the dry season the plants have the reserve of a full water table. In this process plants help regulate the weather over the short term and the climate over the long term. Also important is the nutrient level of the soil, which comes from bark, leaves, flowers and fruits falling to the ground and being decomposed by fungi, worms and bacteria.”

And this process, which Arajo describes with such passion and wonder, is of course happening in coffee too. “Now, coffee like any other crop needs to have natural vegetation cleared to create the space for it to be grown – that is the first issue. Because it is a small tree, like other trees such as avocados and almond, coffee demands large areas of rich soil and regular rainfall.” That sounds bad in itself, and I am already beginning to feel guilty about my coffee consumption. Unfortunately when it comes to describing the scale of the problem, Arajo is only just getting started: “The biodiverse area that previously had many species was supplanted by a crop that demands too much of what the area can no longer provide. To start with the coffee grows well, but the more coffee we plant, the poorer the soil becomes, and the poorer the soil is, the greater the need to advance into areas where remnants of forest still stand, and thus more forest is felled. Eventually there will be nowhere suitable to plant coffee.”

It is as if we were enacting in plain sight the plot of Dr Seuss’s The Lorax. And it is all happening at a scale which we might vaguely intuit, noting all the coffee shops on our High Streets, but to which most of us are turning a blind eye. “Coffee is the world’s second largest traded commodity by volume after petroleum,” Arajo explains. “But the plant takes about five years to bear its first full crop of beans and will be productive for only fifteen years. Harvest is picking by hand because this is selective. Between collecting and preparing the ground coffee there is a long process: the wet method requires reliable pulping equipment and adequate supply of clean water.” So that’s another issue? According to Arajo, it certainly is: “The dry method involves freshly harvested fruits being spread on clean drying yards and ridged once every hour, which takes 12–15 days under bright weather conditions – and the weather pattern is changing.”

All of this makes coffee production extremely expensive. “It needs financial investment in certain areas to protect the industry. But the fear is that for the industry this investment will be wrongly read as ‘losing’ money, instead of investing. The price of producing coffee would be higher and will be sent straight to consumers instead of the increase being shared between producers, the industry and consumers. So, in my view, the major obstacle is changing perceptions within the industry. I might be wrong; I hope I am and find there is someone out there trying to make the necessary changes.”

So what exactly would Arajo recommend in order for this change to come about? “The sector needs to invest in creating and maintaining prime natural vegetation in an untouched state – particularly where the wild species of the genus Coffea (Rubiaceae) are found. Wild varieties can be a source of new cultivars that can produce crops quicker, demanding less resources. I am not advocating that the industry should own natural vegetation for their own advantage but support the maintenance of existent protected areas and advocate for new ones to be created.” Arajo adds that the sector also needs to “support local communities alongside local scientists to supervise the collection of surplus seeds from natural vegetation and try to re-create or boost natural vegetation in areas that have long been deprived of it.” She adds: “Again, I am not suggesting planting coffee trees in forest remnants but rather to let the forest retake the areas of crop and try to keep both at bay.”

The Road Ahead

All of which makes this a fascinating career where everyone I meet seems professionally fulfilled.

So would all the interviewees for this article recommend this career route? Ed Harvey says: “I definitely think it’s a rich and interesting career. My sense is that there is a long supply chain and very different and varied jobs on that supply chain. The traders are an example of that, then in retail and in branding, finance, and in fair trade certification. There’s lots of diversity there, and sustainability has come into the conversation too.|

And what would Dr Arajo advise young people who are interested in going into the coffee sector but also mindful of the environment? She is highly enthused: “Get involved! Have an open mind. Do your research. Maintain a healthy scepticism: don’t take everything at face value. The 21st century gives the young mind the privilege of global communication, so use it wisely. Also, you may be in the crop production industry or hospitality sector or be a farmer and became a volunteer for a scientific group like ours or become a ranger in a protected area or national park that you know of.

Arajo continues: “Give yourself the opportunity to hear what the ‘other side’ has to say, try to have empathy, listen to a different opinion – you don’t have to accept it but give yourself the opportunity to improve/boost your knowledge on the subject. Knowledge is power. When you know the different sides of the same truth you are closer to finding a reasonable solution. It is all about knowledge and compromise.”

Whenever I meet people who work in industries like this, I am struck by their happiness at what they do. “It’s a narrow pond, but deep,” as Dariel Petrov puts it. The generalist and the possessor of the portfolio career sometimes think they have it all. I’m not so sure – sometimes, when you focus on one little thing you love, you can find the whole universe enters in.