World Cup Coffee Symposium
World Cup Coffee Symposium Convenes in Amsterdam
From Market Futures to Russia’s Future
On the second day of the Symposium, keynote speaker Mark Hubbard, of futures and banking house, ABN AMRO Futures Ltd., U.K., discussed how imperative an on-line presence is in today’s market and new trends in the digital marketplace. As chairman of the day, Bertel Paulig of Paulig Ltd. made sure that the presentations proceeded in a timely fashion.
Mark Fichtel of the New York Board of Trade (NYBOT) spoke about trading futures in this expanding technology market. During his PowerPoint presentation, he discussed the state of the coffee futures and options market, including some information about the infamous “C” contract.
The Symposium took a turn towards the science side of things when Dr. Gerrit van der Stegen, of Sara Lee/Douwe Egberts, the Netherlands, discussed the facts versus fiction of ochratoxins - an extremely toxic compound found in crops, grains, and a number of stored food compounds including coffee that may cause damage to the liver as well as the kidneys. He discussed the damages that ochratoxins can cause and why the industry should try and protect the beans from them. An audience member had some questions about the feasibility of regulating ochratoxins. He thought the cost would be too exorbitant and not worth the trouble. Other members of the audience were against any type of regulation because, in their opinions, ochratoxins are not dangerous enough. Van der Stegen listed simple and inexpensive procedures used throughout the harvesting process to protect the beans from being infected by ochratoxins.
Moving from the chemical side of coffee to the marketing of it, Suzanne Brown of public relations agency Hope-Beckham, U.S., talked about the slow movement of RTD coffee drinks. Her presentation touched on the competition that RTD coffee faces from sports drinks, soy beverages, and energy drinks. She informed the audience that the estimated amount of $232 million in wholesale dollars for RTD coffee in 2000 is expected to explode to $23 billion by 2005. The success of the Frappuccino and its lack of a competitor were also discussed. Brown spoke about the growing trend of consumers wanting a “grab-and-go” product and the popularity of coffee and coffee drinks, especially in Asia. She gave pointers in distribution, positioning, and creating a brand name. Her presentation included an example of a successful marketing campaign, which took the product to the consumers and let them sample the product to help create brand awareness.
We concluded the second day with a discussion about the opportunities that exist in the Chinese and Russian markets. Sergey Kassianenko, chairman of Orimi Trade said that we will continue to see coffee growing in popularity in Russia. Russian imports are expected to increase 16% this year. Coffee has become very popular with Russia’s more affluent and more educated population. Kassianenko said that traditionally Russians consume both tea and coffee, rarely are they solely coffee drinkers.
João Staut of Cafés do Brasil discussed the situation in China. Unlike Russia, coffee only has an audience in the big cities in China. He said that it had not been established if coffee had developed a following or is just a passing fad. If China could be tapped as a consuming resource, the benefits would be felt world wide for the coffee community. He doesn’t see an explosion of popularity for the next 10 years especially since coffee is only being marketed to the wealthiest Chinese people.
Pods, Marketing, and Don’t Forget the Birds
On the last day of the Symposium, Dan Cox, president of Coffee Enterprises, U.S., started the early morning session by discussing current global retail trends. He talked about the Americanization of Europe in terms of coffee marketing. He emphasized the explosion of companies like Dunkin Donuts and Starbucks. He discussed how the “on-the-go” mentality is easing into European consumers’ habits.
Patrick Bewley was the chairman of the day and jumped right into this day’s presentations. Fabio Franceshi, of IMA, discussed the espresso pod and its market potential. He went through the development of the espresso pod and its exploding popularity. He included pictures of pods - past, present and future.
Next up was Julie Barrett, category director for Dunkin’ Donuts, who discussed ways to keep a product’s popularity on the market. She went through successful Dunkin’ Donuts campaigns including their Coffee Coolata’s explosion on the market. She gave some useful tips to help promote a product including always putting quality first, having knowledge of customers, and being proactive.
Changing from marketing to quality in the cup, Krystell Guzman, Café Jade, U.S., and Willem Boot of Boot Consulting, the Netherlands/U.S., talked about producing the highest quality cup of coffee. They discussed developing coffee blends and marketing single origin espresso. Some of their advice for success in running a coffeehouse included beginning by investigating the most successful coffeehouse in town, making sure that baristas have extensive training and that shop workers know the equipment. For roasters, they suggested studying the two most successful local competitors’ practices and improving on them, attending a local cupping session at a local coffee importer and, maybe most important, visiting an origin country.
The final discussion of the Symposium revolved around Fairtrade, Sustainability, Shade-Grown & Bird-Friendly. Hans Bolscher of Max Havelaar, David Rosenberg of Royal Ahold, and Chris Wille of Rainforest Alliance talked about the benefits of socially conscious coffee and its feasibility on the market. David Rosenberg discussed how Royal Ahold - as one of the largest food providers in the world - continued to grow while maintaining a commitment to the environment. Hans Bolscher talked about the oversupply problem. And, Chris Wille discussed the economical benefits for small farmers when they grow shade grown coffee.
With all of the exciting topics and the knowledgeable speakers, the three days of the Coffee Symposium provided enough information to satiate any participant until our next conference in 2002 in Bangkok.
Tea & Coffee - September/October 2001
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