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Coffee and Tea Reports
from the Front Lines

World Trade Center Collapse Aftermath:
The Effects on the National Coffee Association of the U.S.

New York - Since the National Coffee Association (NCA) of the United States’ headquarters is located less than two blocks from the World Trade Center, its staff witnessed the destruction of the Twin Towers and the mass murder of more than 6,500 people who worked in those buildings on September 11th. Within minutes of the attacks, all NCA staff was able to evacuate without injury, making their way by foot to safety in Greenwich Village, Manhattan.

After the Federal Aviation Authority announced a shutdown of all airports throughout the United States, the NCA was compelled to cancel its Congressional Coffee Event, scheduled to take place two days later in Washington, D.C. with members of the U.S. Senate and House of Representatives, as well as meetings of its Executive Committee and Board of Directors.

Being informed that NCA offices had lost all telephone, fax and Internet service, the Association reopened for business two days later by creating “virtual” offices - transferring mail service, setting up temporary phone and fax lines, and carrying on the work of the Association from each staff member’s home, where complete access to company e-mail was effected.

NCA staff were able to return to their office on Maiden Lane 10 days later, after communications systems had been restored and municipal engineers determined the building had not suffered structural damage. Despite the widespread destruction caused by the collapse of four buildings at the World Trade Center, all NCA archives and other materials were left intact and the association was able to immediately resume full operations.

Home Producers Get Together
To Take On “Premium” Brands

BRAZIL - Even though they are a leading exporter, Brazilians demand good coffee for their domestic use, and coffee companies are realizing this, states the Gazeta Mercantil.

Recently, this realization has led to a battle on supermarket shelves by such firms as Cafe Bom Dia, Sara Lee, Cafe Jardim, Cafe 3 Coracoes and Cia. Cacique. Brazilian cooperatives have responded to a raft of quality brands from overseas firms like Melitta by banding together to produce their own. Cooperative Cooxupe and entrepreneur Olivier Anquier, for example, have teamed up to make gourmet products, while supermarket chain Pao de Acucar is offering specialty brand Bravo.

The 45% price premium is certainly a factor eyed by producers. Specialty coffees only account for 1.5% of the 12.8 million 60-kilo sacks consumed annually, but analysts say the market is set to grow by 5% for the next three years.

Coffee Turns Bitter For Kodai Growers
INDIA - While farmers in other parts of the state are clamoring for protection of standing crops from wild animals, the farmers in Kodaikanal have been employing elephants to destroy coffee plantations in order to shift to other crops, it was stated in The Hindu.

Massive pest attacks, hike in labor charges, a periodical rise in fertilizer price and processing expenses including curing, poor rainfall, an all-time low in prices of coffee have forced many farmers to quit coffee cultivation.

Coffee has been grown on a large scale in Western Ghats, especially in the Kodaikanal range in Palani hills and Sirumalao. Arabica variety has now been cultivated on 11,000 hectares and Robusta on 1087 acres at Adalur, Panrimalai, K C Patti, Pachalur, Periyur, Solaikadu, Perumalmalai, Poolathur, Sempuramkulam, Manalur, Thadiyankudisai, Thandikudi and Pannaikadu in Kodaikanal hills, Sirumalai and Megamalai.

While last year the yield was around 5,500 tons, the Coffee Board forecast a yield of 7,000 tons of Arabica and 850 of Robusta this year. But farmers feel that the yield may not be as expected due to pest attack and reduction in acreage in certain pockets. The price of Arabica (parchment), which was oscillating between at Rs. 150 to Rs. 200 per kg, slumped to Rs. 38 per kg this year and that of Robusta (cherry) touched an all-time low of Rs. 12 per kg. compared to Rs. 30 and Rs. 60 in previous years. The sale price did not match the labor cost which was Rs. 50 per day for men and Rs. 40 for women.

Second Cup Pact Stabilizes Ownership
CANADA - Ownership of the Second Cup Ltd. coffee chain has been stabilized with a new agreement that leaves the current owners in exactly the same place they were two months ago, at the end of the previous five-year pact.

But reaching the latest accord took two months of negotiations and two standstill agreements that perplexed analysts with the sheer complexity of the talks.

Under the deal reached yesterday, the Bregman family and Cara Operations Ltd. of Toronto agreed not to increase their ownership stakes in Second Cup beyond current levels without notifying the other parties.

Cara currently owns 38% of Second cup, while Michael Bregman and his father, Louis, hold 22.4% between them.

The three shareholders are allowed to sell shares if they wish, or to make a formal takeover offer to all the other shareholders. Also, Michael Bregman has agreed to continue as non-executive chairman.

The new agreement also provides that the size of Second Cup’s board be reduced to eight members from 10. Of that, Cara will be entitled to four nominees and the Bregman family, Second Cup’s second largest stockholder, will be entitled to three.

The agreement can be terminated on 15 days notice.

Gabriel Tsampalieros, Cara’s president and chief executive officer, said yesterday that the agreement was simply an attempt to manage the company as responsibly as possible.

“We want to make sure that Second cup is governed properly in the interest of all shareholders,” he said. And that, he added, includes the minority shareholders.

He said that Cara, with a 38% stake, could effectively control Second Cup, something that it has no wish to do. He added that Cara has no plans to buy out the Bregmans-or sell its stake-in the foreseeable future. The Bregmans have expressed no desire to change their stake either, he said.

Alton McEwen, c.e.o. of Second Cup, agreed that the latest agreement simply stabilizes the ownership structure. “If somebody changes their mind, it gives the party time to digest [the news] and react,” he said.

Café Culture Growing Hotter in New Delhi
INDIA -- Qwiky’s, a coffeehouse chain in India recently opened its first outlet in New Delhi, Indian Coffee recently reported. In addition, another chain called Barista opened yet another unit in Panjabi Bagh market, taking the number of Barista units in Delhi up to 12.

Both chains are appealing to young people, and with the air conditioning and music, the stores provide the right atmosphere for young people trying to stay cool during the scorching Delhi summer.

The model for these cafés has been described as “Starbucks, with an Indian twist.” Qwiky’s and Barista both maintain a coffee house profile, yet they both serve a variety of drinks, and the offering of these extra beverages as well as snacks seems to be a growing trend in the area. For instance, Qwiky’s serves a frosty coffee drink with rose or peppermint added to it - not exactly your Seattle-style coffeehouse standard (although lattes and cappuccinos are not missing from the menu either). Qwiky’s also serves imported Da Vinci flavored syrups from the U.S., the popular energy drink Red Bull, non-alcoholic beer, and many cold drinks including granitas, ice cream sodas, and a thick milk shake-type drink called Strawberry Freeze Forever.

These openings are just part of a growing trend in coffee drinking in New Delhi. Since tea has always been the traditional beverage, the coffee-drinking mentality has been only reaching the area at a snail’s pace. So the fact that these coffee “plus” outlets are continuing to open is a positive sign.



Tea & Coffee - October/November 2001
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