Archive for the ‘Coffee Prices’ Category

Jeremiahs, The Official Coffee Of ZAP Festival

Tuesday, February 3rd, 2009

Coffee and wine usually don’t go together. In fact, you can argue they are vastly different. One is served piping hot while the other is served at room temperature or chilled. Coffee gets us going in the morning and wine helps us unwind after a long day. Wine that is aged often tastes better. The same could not be said about that cup of coffee that has been sitting on your desk all day. As the official coffee of ZAP, a four day festival that celebrates everything Zinfandel, we tend to disagree.

Zap’s Zinfandel Festival is an internationally recognized series of tasting events. Renowned as the premier single-varietal tasting in the world, an estimated 275 wineries and over 10,000 attendees partake in the four days of Festival events. The ZAP Zinfandel Festival is held exclusively in San Francisco, and traditionally is a sell-out. ZAP also sponsors cruises and tastings all around the United States. Our philosophy is that you should savor a cup of coffee just as you would a glass of wine. It is important to sponsor wine events like these because the same consumer that enjoys well produced wine also enjoys a flavorful, well roasted cup of coffee.

For Jeremiah’s Pick, the world of coffee and wine intersect at events like ZAP but are carefully intertwined in the conception of a new blend or varietal by the way we purchase, produce and package our coffee. The hustle and bustle of everyday life melts away with a properly brewed, flavorful cup of coffee. Next time you have your morning coffee, try it without milk or sugar(if you don’t already drink it black!). Note its aroma, swish it in your mouth and try jotting down your own tasters notes! We would love to hear from you. Email your notes to office@jeremiahspick.com. We would also like to thank everyone we met at this years ZAP festival, and hope to see you again next year!

Jules’ musings

Wednesday, March 5th, 2008

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Thoughts on the current commodities crisis and the effect on coffee.

As we look at 2008 the world commodities markets, including coffee, are experiencing a huge spike in prices. There are many reasons for this, some of which are fundamental (caused by market forces) and some are technical (caused by traders). The net result for consumers is a rise in food prices that is unlike any we have experienced in recent times. Our company’s goal this year is to manage these increases in raw material pricing, stay in business and keep our prices to the consumer as reasonable as we can under extreme circumstances.

Starting in January of this year the coffee market began to see price increases such as we have not experienced in decades. In the last two months green coffee prices have risen by some 33%. Many coffee companies, including ourselves, have been forced to raise prices. The sad part of this story is that this money is not going to the farmers or to the roasters. So why is this happening?

Some causes are fundamental.

First cause is the weak dollar. A weak dollar means more expensive imports.
Second cause, increased costs of transportation. Blame here goes to increased fuel costs and port charges (due to increased post 9/11 security).

Traditionally, this would equal a 10% increase or so and that is what happened last year.
But that is not what is going on.

The real cause is technical. Coffee, a so called soft commodity, has become an investor’s darling. I see articles written by traders who have abandoned stocks and bonds and are looking for the next best thing. After the oil and grain markets went crazy (bought gas, bread or beer lately?) they started looking at the remaining commodities and decided there was money to be made. So much money has poured into the coffee market that prices have exploded.

These investors don’t really care about people’s lives or small businesses like our own. They see a market that is “undervalued” and bid it up hoping to make a profit along the way. What they don’t realize is that the consumer will only take so much of an increase and many coffee roasters will be badly hurt in this crisis.

As a result coffee growers, hoping for more profits, are raising their prices and in some cases refusing to honor contracts made before the increase. Roasters are stretching their inventories and staying away from buying until absolutely necessary. Remember the car game called chicken, well this is what is happening.

And there is plenty of coffee around the world waiting to be purchased. Mills are filled to the bursting point. In that old world of supply and demand this would lead to downward prices. But not these days. You can thank the guys and girls who are trying to make a dollar in commodities for that $5.00 latte that is coming with $4.00 gas. Or is that already here?

Jules