Business World

NCA Annual Convention
Continues to Grow

At the National Coffee Association's 90th annual convention in Scottsdale, Arizona, an expanded program of seminars highlighted a 3-day convocation of industry professionals from around the globe, who offered some innovative solutions to the issues facing the global coffee industry.

In response to the current decline in world coffee prices, the talk at the convention centered around consumption and overall coffee quality. Some speakers blamed over-production for the low prices, while others said under-consumption is the biggest problem facing the industry.

Brazil's Ecom Group's Eduardo Esteve, part of the under-consumption contingent, said an overall improvement in the sustainability of specialty coffee just isn't possible with current consumption levels. However, he placed the onus for the situation on producers, which he contended weren't doing a good job at increasing consumption.

Esteve believes that a big part of the problem is that coffee producers are selling defective coffee to the same market to which they sell their good cof­fee. On average, Esteve said, every grower produces 10% of low quality cof­fee that's sold at one-third the market price. That practice is now dragging down overall quality, and encouraging roasters to demand cheaper coffee due to competition. Esteve suggested producers set a minimum quality stan­dard for coffee and refuse to sell coffee below that standard for consumption.

In fact, Esteve's suggestion is part of a recent trend by producers to fo­cus on quality, where a recent initiative by Central American, Colombian and Mexican coffee officials aims to remove low-quality coffee from the market to help improve prices and increase demand.

Along these lines, Jerry Baldwin of Peet's proposed that coffee growers adopt a coffee appellation system similar to that that exists for wine. As with wine, the main responsibility will be on the producers to establish the criteria and enforce the rules.

In the wine industry, there are two advantages to such a system, noted Baldwin. "One is that it is taxed, which means that government has an in­centive to keep track of the entire process and therefore ensure its viability.

The other benefit is that an accepted system would expand the price structure for coffee, as it has for the wine industry." Of equal importance was his suggestion that coffee producer nations promote coffee in their internal markets to help raise overall consumption.

Despite the intense policy discussions, there were plenty of opportuni­ties to unwind with the major coffee players in the U.S. and overseas. All in all this conference was a promising start to the millennium.

Jane McCabe
Editor & Co-Publisher

Tea & Coffee - July/August 2001

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