State of COE

coffee competitions, auctions, best of panama, etc

State of COE

Postby Benjamin Myers on Tue Sep 28, 2010 9:05 am

Hello,

I have been following the COE for a couple of years now. I was looking through the list of buyers from recent Auctions and my reaction was: there aren't a lot of American small roasters buying COE lots or the companies I see as 'peers' aren't in the names of people buying.

Do people have any feedback as to why this is? I noticed that TARGET is buying...but we are very, very, very far from being TARGET. So my question is: Do people have negative experiences, reservations, etc.....or should we dig in and try to get involved this year with buying something. What is the state of reality for small American roasters to get involved in this process? Is it better just to try to work outside of the competition to find the best coffee?

Curious,
Benjamin Myers
1000faces and Slow Coffee
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Re: State of COE

Postby nick on Tue Sep 28, 2010 9:47 am

If you haven't, you should read this article from Fresh Cup about CBI and buying CoE for Target.

I think that the simplest comment that I can personally provide is that the companies that participate apparently seem to find value in participation, while those who were once active but are less active nowadays seem to find less value. Remember, not all make the final winning-bidder list... some were simply out-bid, which would imply that the winning bidders found more value in those coffee lots than those out-bid... as well as deeper pockets.

To delve a little deeper, I think it's understandable that you'd ask this question in light of the developments and changes to just the buyers' lists over the past few years. You see more Asian buyers than ever before, notably from Korea who was completely absent from anything "specialty coffee" just two or three years ago.

I think to further address your question it'd be helpful to think about the motivations and cost/benefit to the various buyers and buying groups, keeping their markets and cultural contexts in mind. Supporting the program and its mission and coffee quality would be the primary benefit to many, while the CoE brand and prestige would be the main benefit to others.

Negatives? The logistical nightmares of the past (months for the coffees to arrive, once with a catastrophic shipping/packaging mistake) have been pretty much resolved. I guess that the main "negative" (if you can call it that) is that CoE coffees are expensive.

Buyers will be calculating the cost-premium involved at the winning-bid prices, compared to the quality of the coffees, which must then also be compared to the price of other available coffees at a similar quality (outside of auctions), which itself relates to how much access a buyer has to great quality coffees in general.

You could say that the profile for an ideal buyer of CoE auction lots is a coffee roaster or importer who has generally little to no access to top-quality coffees, wants the prestige of the Cup of Excellence brand, has the money to spend, and a consumer base who will be receptive to the premium cost and quality.

I think that the absence of many of your "peers" has everything to do with that first thing: "generally little to no access to top-quality coffees." It would seem that that sort of access is generally greater than ever, which diminishes the value to a buyer. Many, if not all of the "usual suspects" from years ago have since established their own mechanisms for quality discovery and systems to incentivize quality coffee with their producer relationships.

All said, you could think of these developments as one of the success stories of the Cup of Excellence program. One of the main objectives had been to be a "matchmaker" for buyers and producers. A great many of the "relationship coffee" or "direct-trade" buyer-producer relationships have the Cup of Excellence program to thank. As the fruits of those relationships fill up a green-buyer's sourcing needs, there's less room for auction lots.

So Benjamin, I think that if you think there's value in Cup of Excellence for 1000faces, then you should dive in head-first! Don't worry that your 'peers' aren't on the buyers lists. They're not "over" CoE, they're just too busy enjoying the fruits of their prior participation!

Just my two cents,
Nick
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Re: State of COE

Postby Oliver on Fri Oct 15, 2010 7:56 am

Nick did a perfect job explaining why there are not many U.S. based roasters buying C.O.E. coffees.

I feel the need to add a few thoughts.

Cup of Excellence coffees are pricey, very true. But from my experience there is a small percentage of your customer base that wants to know which coffee to pick based on what the experts think is the best. Similar to the Coffee Review, (but frankly not quite as well) the Cup of Excellence program helps consumers feel value into their purchase.

The Roaster/Retailer isn't just charging me extra etc. It's special....

One thing I'm sad to see declining, is the number of buying groups of U.S. based roasters. Back in the day it was the norm to see all of todays big names in coffee buying the same lot of COE together.
I might suggest we stop fearing the high price of these lots if your only buying a few boxes. I know that some importers buy the coffee and sell it on their offering sheets etc, but it doesn't seem the same to me than putting in the winning bid together.

And honestly I wish more companies would buy COE to help the COE brand. The more customers know about the program the more I think they would be willing to indulge on a bag of COE coffee. If my competitor has a great COE coffee, or maybe even the same COE coffee it doesn't scare me because I feel comfortable and proud of how we distinguish our coffees through roast and preparation.
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