Corporate coffee

Coffee regions / Corporate coffee

Nasty old Brazilian coffee

My inability to completely connect the dots here is a testament to the lack of transparency of the big four mega coffee roasters and where they get their beans.

Dot 1:  Brazil, the world’s #2 coffee grower, has experienced drought conditions that means their 2007 production will be at a four-year low. This on the heels of a 16% decline in the 2005-2006 crop.  Therefore, the market is tight and stocks are quite low.

Dot 2:  Brazil will be selling off its federal coffee stocks, beans from the 1977-1978 harvest.  Not a typo.  Thirty year old beans, which they contend do not lose their flavor, only their color. Unroasted beans do stay fresh a long time, as it is the roasting process that creates oils and other compounds that oxidize when exposed to air.  But coffee beans are a once-living, organic crop, and changes do take place.  Most experts advise roasting beans within a year.

Dot 3: Who buys up all these tons of old beans?  Well, Kraft is the largest buyer of Brazilian green coffee.  Nespresso, a division of Nestlé, just announced it will be purchasing 45% of its coffee from Brazil. These are supposed to be “specialty” beans, but  I have no further information.

I cannot say for sure, but I would think it is likely that the large roasters are buying at least some of these old beans, given the low stocks, high demand, and their history of using — and needing — inexpensive Brazilian beans.  If used in blends, flaws would be less apparent.  Yuck.

Certifications / Corporate coffee / Jacobs Douwe Egberts/KraftHeinz / Rainforest Alliance

Yuban ad campaign

As I was perusing a magazine, I came across an ad for Yuban coffee with the headline “The coffee you make can make a difference.”  It showed their coffee cans, emblazoned with the Rainforest Alliance seal and a banner saying “Conserving the environment & supporting coffee farmers.  Minimum 30% Rainforest Alliance Certified Coffee.”

Let’s examine. Who are we dealing with? Yuban is a Maxwell House brand, which in turn is owned by Kraft Foods. (More on which corporations own which brands here.)

How big a deal is it that Kraft is buying RA beans? While Kraft will purchase 12,000 tons of RA coffee in 2006, this represents a tiny fraction (I’ve calculated about 1.5%) of Kraft’s coffee bean purchases.

What’s with the 30%? Rainforest Alliance (RA) allows use of their seal on products with a minimum of 30% certified beans (a fact for which they are sometimes criticized).  In order for Kraft to keep their prices so low (suggested retail for a 12-ounce can of RA-bean-containing Yuban is $3.89; a 13-ounce can of Maxwell House is $2.56), the other two-thirds of the beans in the can must be lower quality, likely technified/sun coffee.  I don’t see any other way they can do it.  The cost differential between certified beans and non-certified beans also means that I doubt Yuban will ever contain more RA certified beans than the 30% minimum required for use of the RA seal. (Update: As of January 2013, the Yuban can still indicates 30% certified beans. However, RA is requiring companies to scale up their percentages over time…read more here.)

Does this move really help farmers? While RA certification includes fair labor practices, and RA certified coffee usually commands some premium, the criteria does not set a minimum price paid to farmers. RA certification is cheaper for corporations that Fair Trade certification.  Oxfam is still pressuring Kraft to agree to buy Fair Trade coffee.

RA cannot be faulted for their efforts in promoting and making sustainable coffee available to mainstream consumers.  Nor can they really be criticized for partnering with Kraft, since RA certifies a product, not a company.

Still, it difficult for me to endorse supporting a corporation like Kraft which has a dubious ethical record (Responsible Shopper profile here). And while Kraft deserves some credit, as none of the other Big Coffee companies is making this type of effort, real environmental preservation and fair prices for farmers is far, far better served by purchasing sustainable coffees from small companies and roasters with relationships with their suppliers, especially those that provide information on the specific farms where their beans are sourced.  Plus I guarantee it will taste better!

UPDATE! The January 2007 issue of Coffee Review goes over supermarket coffees, including this coffee, which is “dominated by a cloyingly sweet nut character, the calling card of inexpensive coffees of the robusta species.”  Robusta tastes bad, and is sun coffee.  Very bad!  As for the Yuban Organic brand, that review notes it is recommended for “Those on a budget with a commitment to organic growing principles that transcends the desire to drink decent coffee.”  Please also read the accompanying article or my post about it.

More information:

 

Coffee regions / Corporate coffee

Poor quality Vietnamese beans (that end up in grocery store coffee)

A short article entitled “Quality of Vietnamese coffee poor”appeared recently on a Vietnam news site. It notes that Vietnam is the world’s second largest producer of coffee, but that 89% of its crop is low-quality robusta. And it adds, “The reason is the massive use of inorganic fertilizer, water, insecticide and poor processing technology.”

Where do these beans end up? In your cup, if you buy cheap coffee from one of these large corporations.

Nestlè (Nescafe, Taster’s Choice) buys 20 to 25% of Vietnam’s coffee. Kraft (brands include Chase and Sanborn, General Foods International Coffee, Gevalia, Maxwell House, and Sanka) is another major buyer; at a 2003 shareholder meeting, Kraft Chairperson Louis Camilleri said that the firm buys coffee in Vietnam that does not meet even minimum ICO [International Coffee Organization] standards, the first admission from a major company regarding purchase of sub-quality beans.  At the Folgers web site, Proctor & Gamble admitted to buying Vietnamese coffee: “We purchase our coffee beans from all over the world, including Vietnam. The percentage of beans from any one country varies all the time, depending on availability.” (Note that Folgers is now owned by JM Smucker, but probably uses P&G’s sourcing avenues). Sara Lee/Douwe Egberts (Chock Full o’Nuts, Hills Brothers) also buys coffee from Vietnam and is in a partnership with Kraft in that country.*

Kenneth Davids at Coffee Review sums up the problem with most robustas in today’s market:

Apparently with the support of the World Bank, robustas recently have been planted in very large quantities in Vietnam. These are mass-produced coffees at their most dramatic: stripped from the trees, leaves, unripe, ripe and overripe fruit and all, and dried in deep piles. All of which means the essentially bland, grainy robusta character is topped off with an assortment of off-tastes, mainly musty/mildewed and fermented. These coffees sell for considerably less than all other coffees, including better quality robustas. I am told that production costs for Vietnamese robustas are about 20 cents per pound or less, compared to, for example, production costs of 80 to 90 cents per pound for the excellent “100% Colombia” coffees competing in the supermarket. And now the current episode: Commercial dealers and roasters have learned to steam the often foul-tasting Vietnamese robustas, removing the waxy covering of the bean and muting (but not entirely eliminating) the offensive flavor notes.

To read about the human and environmental toll of coffee in Vietnam, read this article from Tea & Coffee by Mark Pendergrast, author of the outstanding book, Uncommon Grounds. The article includes a history of coffee in Vietnam, and describes how more than a million acres of the Vietnamese highlands were planted in mostly robusta coffee in the late 1990s, land which was abandoned after the drop in coffee prices, “leaving the exposed soils to the torrential rain. Erosion, siltation, land slips, flash floods, and water shortage are the obvious results.”

It’s enough to convince you to seek out sustainable coffee.

Background information / Corporate coffee

Who owns what?

[The coffee consolidation landscape has continued to evolve rapidly! This post is a starting point but not entirely up-to-date.]

You can find many different coffee brands on supermarket shelves, and frequently multiple brands are actually owned by one of only a few corporate conglomerates.  Some of these companies have poor records when it comes to environmental and social responsibility.

Below is a primer on common U.S. coffee brand ownership. Read about how much certified coffee these companies purchase here, and their role in the coffee crisis here.

Note that some brands may have split ownership representing different parts of the world, or a division of distribution lines between retail/grocery and coffee shop/restaurant. For example, Nestlè owns the distribution rights to Starbucks coffee in grocery stores and retail chains, but Starbucks does the coffee sourcing. I have tried to simplify here.

JM Smucker Co. — Through purchases of other companies, coffee is now the main business of JM Smucker, and their Folgers brand is the largest brand in North America, accounting for nearly 20% of the retail volume. Other brands include Millstone, Cafe Pilon, Cafe Bustelo, and Kava. They distribute Dunkin Donuts retail coffee (both companies have poor coffee sustainability records). Read more about JM Smuckers here and Dunkin here.

Kraft Heinz Company –Maxwell House (North America), Yuban, Gevalia, Nabob, Ethical Bean — about 10% of the U.S. market by volume. As of 2019, Kraft Heinz was exploring selling the Maxwell House brand. Ethical Bean is the company’s attempt at sustainable coffee as it is all organic; volume figures are not available.

JAB Holding Company — Privately held company that went on a large buying spree starting in 2012 and now controls an enormous market share through its subsidiaries and acquisitions. Some of the familiar and important brands under the JAB umbrella include: Jacobs Douwe Egberts/JDE Peet’s, Green Mountain, Caribou Coffee, Peet’s, Intelligentsia, Stumptown, Panera Bread, Krispy Kreme, Douwe Egberts, Einstein Bros Bagels, and many more. See a fuller list of brands under their subdivisions Keurig Dr Pepper and JDE Peet’s. Additionally, JAB also launched the subscription coffee service Trade. I rarely say this, but you may want to check Wikipedia to keep up! All together, JAB’s brands probably make up 5-6% of the U.S. Market.

Nestlè — Nescafè and Nespresso are their popular brands. Purchases 870,000 tons of coffee annually, around 10% of world production, of which only a tiny fraction of a percent carries eco-certification. Their market share in the U.S. is quite small, less than 5% if their distribution of Starbucks coffee in stores isn’t counted (Starbucks sources this coffee).

Tata Consumer Products — Eight O’Clock. This one brand makes up perhaps 2.5% of the U.S. market.

Massimo Zanetti Beverage USA — Hills Brothers, Chock Full o’Nuts, Chase and Sanborn, Kauai Coffee, Segafredo. Owns many of the brands previously owned by Sara Lee, which divested itself of its coffee operations. MZB is a huge privately-owned company which sources a lot of its coffee from it’s own massive full sun plantation in Brazil, said to be the largest in the world. Their profile at the Sustainable Coffee Challenge website indicates very limited and lackluster sustainability goals. About 2% of the U.S. market.

These large companies rarely divulge coffee volumes purchased. These figures are estimated based on retail sales by volume and retail volume of coffee sold, calculated in tons. Numbers for 2019 and 2020 were averaged due to the market skew that occurred during the covid-19 pandemic. Data was primarily from Euromonitor, but included other sources.