#26 | March 11, 2021

Welcome to Recap, a brief overview of recent coffee developments every two weeks from the Specialty Coffee Association.

Reuters reports that US coffee roasters have seen significant cost increases in their operations and expect to raise retail prices soon. Mid-size and smaller roasters are the most affected, but even larger companies confirm they are experiencing higher costs, particularly in shipping and transportation. As consumers continue to shop online, a higher demand for shipping services account for some of the increased costs to roasters. Imbalances in the flow of containers around the world’s shipping ports are also to blame, increasing the costs of transoceanic shipping. While larger companies have the ability to hold substantial amounts of green coffee stock to mitigate recent supply chain challenges and increased costs, small and medium roasters have also reported delays in the receipt of contracted coffee. 

Demetria, an Israeli-Colombian food-tech startup, closed a seed funding round of US$3 million in the first week of March. The company is developing artificial intelligence technology that will use portable near infra-red sensors to analyze the fingerprint of green coffee beans for biochemical markers. Citing the inaccessibility of cupping to the majority of coffee’s smallholder farmers, Demetria hopes the digitization of coffee aroma and taste will demystify coffee quality assessments and readdress the economics of the coffee value chain. The company is working with Federación Nacional de Cafeteros, or FNC, the Colombian Coffee Growers Federation, to develop a series of smartphone apps to help farmers track coffee quality throughout the supply chain and price it accordingly. Demetria successfully completed a pilot with Carcafe, the Colombian division of Volcafe/ED&F Man, and will use its seed funding to continue to develop its technology. 

Hurricanes Eta and Iota are estimated to have devastated more than 200,000 hectares of food and other crops in Central America last year. According to a recent report from the Instituto Hondureno del Cafe, or Honduran Coffee Institute, Honduras--the region’s highest-volume exporter--reported that shipments were down 18% in comparison to the previous year. The Nicaraguan Association of Producers and Exporters also registered a 40% decrease in coffee exports from October 2020 to January 2021 when compared with the same period a year before. Soppexcca, a Nicaraguan cooperative that works with more than 600 small-scale coffee farmers, is recommending crop diversification to avoid future vulnerability. Nicaragua’s central government has also announced a plan to support small coffee producers through workshops aimed at increasing harvest. 

A new TikTok trend, “Proffee,” where consumers mix coffee with protein, is receiving increasing media coverage. Where previous coffee trends sweeping TikTok have been focused on the enjoyment of coffee, “Proffee” seems to be focused predominantly on coffee’s chemical properties as a way of minimizing cravings and boosting weight loss. It remains to be seen whether this trend will boost home consumption of coffee the way that last year’s Dalgona coffee trend was linked to increased sales of instant coffee. The focus on coffee as caffeine delivery isn’t a new one, but a wide range of beverage categories have seen an increase in offerings with added caffeine, from sports drinks to fizzy waters. This is leading market analysts to ask: is there more room to explicitly talk about caffeine as a core driver of coffee consumption? 

If you want to dive deeper into anything you heard today, check out the links in the description of this episode. Recap will be back in two weeks’ time. Thanks for listening. 

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