Custom Brewed Lifestyle The Booming Coffee Industry and Those It's Left Behind
For decades, coffee was about as exciting as washing powder and detergent. But today it has become a lifestyle statement. The bean boom, though, hides the brutal economic realities behind coffee production. By DER SPIEGEL staff
When exactly did coffee become so important? It has long been Germany's favorite drink, but for decades it was hardly anything to get excited about. Ads touted its "rich aroma" in an attempt to turn it into a lifestyle commodity, but it was long merely a symbol of housewife heedfulness - in the same league as washing powder, detergent or low-fat margarine.
Times have changed. These days, coffee is a luxury product, almost a fashion accessory. Or at least that's the way it's presented. Coffee pods, as advertised by George Clooney, are presented in Nespresso shops as if they were pieces of jewelry.
Starbucks, too, is increasingly seeking to present its paper-cup lattes as luxury products. In Seattle, the company is testing a new café concept, with coffee beans not just ground but also roasted on site - in stout black machines made from cast iron, reminiscent of steam engines and designed to convey tradition. Cafés in Shanghai, Tokyo and New York are to follow.
The German company Probat, the world's leading manufacturer of roasting machines, built the model specifically for Starbucks. "A coffee brand's success," says Wim Abbing, the company's managing director, "is 90 percent about the story it tells."
And the stories that people want to hear are changing. Two decades ago coffee ads featured cozy family celebrations. Then Starbucks' paper cups began to represent a new laptop elite, always on the go, where home was nowhere and everywhere. Then along came George Clooney and his Nespresso pods, representing coffee individuality produced by a machine. Top-class espressos at home, as easy as frozen pizza.
"Quickly pop in another pod of this drug before your energy begins to wane and you will always be awake. It suits the new pace of our accelerated, individualized, thoroughly economized era," says Munich sociologist, Stephan Lessenich.
The new Starbucks roaster-steam engine is an attempt to tell a new story, one for our post-globalized age. Coffee roasted on site before your eyes by people you know. A place to slow down amid the hectic pace of life. An artisanal product, not an industrial one. It's a story told in thousands of smaller coffee shops where the barista celebrates the preparation of every cup of coffee as if it were a spiritual act and talks shop with the customers about the influence of the Arabica and Robusta beans on the structure of the crema.
It's part of coffee's success that no one talks about the reality behind these stories. The brutality of speculators, who push the price of coffee beans according to their whims. The global concentration of the coffee market. The protectionism of German roasters. The ridiculous prices for expensive espresso machines. The terrible quality of the 500-gram vacuum packs of supermarket coffee.
This is about one of the most important raw materials being traded globally. The market for roasted beans is worth over 50 billion euros and each year, around 1 trillion cups of coffee are drunk around the world. In Germany alone, each adult drinks an average of 162 liters annually.
Coffee is constantly being reinvented and repackaged for consumers. But its history is as old as the hills. It shows that much of what we today call globalization, is really just another name for colonialism.
I: The Harvest
A Nespresso pod contains 5.2 grams of coffee and costs between 30 and 40 cents. That's the equivalent of 60 to 80 euros a kilogram.
Starbucks charges 3.85 euros for a latte, paper cup included. Each cup contains roughly 15 grams of coffee.
It's possible that Juan Gonzales picked the beans for that coffee. He is 12 years old and works alongside his mother Maria, a Mayan woman, harvesting coffee on the slopes of Toliman, a volcano west of Guatemala's capital city. The beans that grow here are the Arabica variety, in high demand across the West. The boy and his mother work for a finca that belongs to Carlos Torrebiarte, who sells his coffee to Starbucks, among other clients.
"That sack weighs over 50 kilograms and Juan carried it himself," his mother says, looking at her son with a mixture of exhaustion and pride. She is barely 30 but looks over 50. She has a steel pin where one of her teeth is missing.
The coffee harvest is in full swing on the mountain and women with droves of children are making their way up the slope. It's difficult for journalists to speak with them, with an armed guard from the plantation immediately intervening. It's really only possible to speak with Maria, Juan and the other women and children if you jump on one of the flatbeds that take them back to the village.
The costs are low here at the start of the supply chain. The coffee-bean pickers earn 42 quetzales, around 5 euros, for a 50 kg. bag of picked coffee, a pittance compared to what will be earned with that coffee later on. And even in a country like Guatemala, it's a starvation wage. In a European Starbucks, it would be just enough for a particularly large caramel macchiato.
Maria shows a yellow control slip, which shows how much she and her son have picked each day. She is paid every 15 days, with the amount dependent on the total weight of the beans she has picked. Sometimes it's 75 kilograms a day, but usually it's less. Early in the season, after all, many of the beans have to be left on the bush because they're not yet ripe.
Maria's daily wage is usually under the 87 quetzales, or 10 euros, that constitute the legal minimum for a day's labor in Guatemala. It would be even less without the help of Juan, who is not officially allowed to work, since child labor is forbidden for those under 14. Yet it is a normal part of life for children to work on the big plantations. Without them, it wouldn't be possible to harvest the coffee so cheaply.
"If you saw children on the plantations," owner Torrebiarte later tells DER SPIEGEL, "then they are children who want to be with their families." He does not employ children, he says, adding that he even offers daycare for families.
Coffee company Starbucks also claims not to have seen anything untoward on the farm. The Santo Tomas Perdido plantation was designated a "Top Performer" after an inspection of suppliers in October 2016. The company claims it has a "zero tolerance" policy regarding child labor and that there would be consequences were the plantation found to have been violating it.
The drive home passes the farm's so-called galeras, concrete and stone huts that house around 100 pickers. Up to two families, including their children, are housed in just one room, which has little more than a bare concrete floor. Cooking takes place out in the mud in front of the huts. There are no private toilet facilities. This is where migrant workers, the poorest of the poor, live during the harvest season.
Emanuel Sabuc has a fair amount of experience with the less pleasant side of the global coffee trade. The 26-year-old lived as a child in one of the huts on the Santo Tomas Perdido plantation. "Back then, it was really like a village, every family had their own shack and lived there permanently," he said.
Then around 20 years ago, Torrebiarte bought the plantation and that precarious idyll was over. "The entire village was forced to leave the farm," Sabuc says. Torrebiarte, who is one of the most influential members of the national coffee association, Anacafé, dismissed this accusation. No workers were pushed off the farmland, he says.
Today the harvest is carried out by seasonal workers, while the plantation is cared for by so-called parcelistas, Sabuc says. They are employees of the farm and responsible for specific parcels - and are completely depended on the plantation owner or his foreman, Sabuc says. "If you complain, you're out."
II: The Roasting
Coffee prices have hit rock bottom. For too long, companies like Kraft and Melitta have prioritized mass production and in doing so, they have promoted monoculture in addition to environmental overexploitation in the source countries. They have also hurt their own margins: A kilogram of coffee often costs just 6 euros in supermarkets.
The parsimoniousness often displayed by German consumers is particularly apparent when it comes to the standard, 500-gram vacuum-packed block of ground coffee. The price has remained low for years - with devastating consequences for the quality of the beans that go into the product.
To keep the supermarket prices low, roasters have to work with beans that are of poorer and poorer quality. Indeed, to produce a product that is at all palatable, they are forced to rely on tricks. It used to be that the different varieties of coffee that make up each brand were roasted and ground together. With the quality of the beans falling, that's not enough anymore. Each different variety is roasted separately to pull the last bit of flavor out of it. And they are ground separately so that the size of the grains can be varied according to quality. Only at the very end is everything combined, a procedure that allows good roasters to get the last bit of flavor out of even the poorest quality beans.
Roasting is the most interesting point in the production process, not only for connoisseurs, but also from a profit-margin perspective. It's here that cheap coffee beans are turned into a sometimes-expensive consumer product. It is at this point in the supply chain where value is added.
Brazil is the world's biggest exporter of green coffee, the raw material that is eventually turned into the coffee we drink. The country sells every kilogram that is laboriously picked in the fields for $2.70. Germany, meanwhile, is the world's biggest exporter of roasted coffee - and sells each kilogram for $6.21. That's a markup of over 100 percent.
Germany and the European Union protect their coffee industry. A tariff of 7.5 percent is imposed on roast coffee imported from most countries while green coffee can be imported tariff-free. One can call such an economic policy coffee protectionism or colonialism. The result, however, is the same.
Probat head Wim Abbing, the man who believes that narrative is one of the most important factors of success for coffee, knows more about coffee roasting than almost anybody in the world. His factory is located in Emmerich, a town just across the Rhine River from the Netherlands. The company founder invented the world's first "ball roaster" in 1870. Before that, most people had simply sizzled their coffee beans in a pan at home. Probat soon began supplying the entire world with its machines, from small coffee manufacturers to major companies.
Abbing speaks enthusiastically about the roasting process, about roasting time and amount, and how adding air can speed up the process. He notes the trend toward smaller, artisanal production. From big plants to drum roasters. He doesn't, though, want to say much about the tricks used by the coffee roasters themselves and avoids talking about the problems faced by his clients. He only says that he is sometimes surprised by the "swill" that is sold to the masses.
Probat doesn't sell any coffee itself but it produces its own brand of beans to test its machines, which is then only sold to employees at cost. "It's around 12 euros per kilogram," Abbing explains. "You can't seriously produce good coffee for anything less." However, most consumers are not prepared to pay that much.
III: The Pods
For a long time, no one at Nestlé, the world's largest food and beverage company, believed that coffee sold in small aluminum tins could ever be a success. Within the company, working for Nespresso was seen as a career killer.
Jean-Paul Gaillard was also warned before he began working in the hapless department back in 1988. Many of his coworkers tried to persuade him against making the switch.
But the executive managed to infuse the small tins with the allure of class, opening boutiques in which grand cru coffees were celebrated like expensive wines. Within a few years, a sort of sect had emerged, one that was as loyal to the Nespresso pods as Apple consumers are to its products. "We were the iPhone of coffees," Gaillard says.
The staging is phenomenal. George Clooney is the face of Nespresso in the ads while black-clad employees welcome visitors to the shops. In the "Tasting Area," they gently inquire about a customer's preferred flavor as though they were asking about something intimate. The entrance looks like that of a bank, with machines that look like ATMs, only classier. The customers swipe their credit card and pods fall into paper bags decorated with gold lettering.
Gaillard is no longer a believer. He never got much further at Nestlé after Nespresso and he left the company - and then sabotaged it. In 2008, he founded the Ethical Coffee Company (ECC) and launched his own pods, as a direct competitor to Nespresso. His pods not only could be used in Nespresso machines, but were also 25 percent cheaper and, he claimed, biodegradable.
Nestlé fought back and, for a time, introduced a mechanism in Nespresso machines that destroyed foreign pods. The ECC sued in response. A Nestlé spokeswoman now says that the company no longer produces those types of machines.
- Part 1: The Booming Coffee Industry and Those It's Left Behind
- Part 2: The Unfairness of Fair Trade