Let’s keep this within the bounds of the mass-produced, instant coffee brands that majority of the population drink (probably every day), shall we. You can argue that there are the “premium lines” that these instant coffee producers have that are supposed to be better (and thus more expensive). To me, though, that’s most probably just marketing and it’s almost the exact same ingredients there.
Mass-produced – Instant coffee products sold in quantities, and at such a low price point that anyone can get that caffeine kick, thus thousands can be sold every day. That is what I am pertaining to here. This will be key for this article as it will all boil down to a little accounting/finance term called: Margins.
By the way, if you want to contest what I just wrote that instant coffee provides caffeine just as much as fresh-brewed coffee, you can read my article about the caffeine content in instants here.
Coffee beans and what they mean for your cup of coffee
Let’s just focus on the two main species: Arabica and Robusta
As seen from that super simple and straight-to-the-point infographic, instant coffee almost always uses Robusta as their bean of choice. To be fair, high quality robusta is allegedly the bean of choice for hardcore Italian Espresso drinkers; it allegedly yields the most crema and apparently adds a distinct taste essential for a classic espresso. By hardcore, at least according to EnjoyJava, we mean actual Italians that sip espresso… in Italy.
Coffee Fact! (Sorry BuzzFeed): The Philippines is one of the few countries that produce both Arabica and Robusta. It also produces Liberica, the bean responsible for the (in)famous Kapeng Barako! (Wikipedia)
Take note: I said High Quality Robusta (Barista Magazine). I am in no way qualified to tell you how the quality of Robusta beans is determined (and I cannot find a definitive article at the moment I am writing this), but I most likely assume that these are not what our friends from the major instant coffee making companies use. Why? It will be too expensive to source. Remember, this is about: Margins.
Why we should be worried about an increasing reliance in Robusta
Similarities in a 2014 Huffpost article and a 2018 one from Ecowatch is startling. As coffee farmers plant more Robusta trees in low-lying areas, which can tolerate direct sunlight, the need for bigger trees to protect them dwindle even further; in turn furthering global warming.
But why are coffee farmers choosing to plant these supposed inferior, sunlight tolerant, Robusta yielding coffee plants over the higher quality Arabica in the first place?
I read in an article by Reuters that some Latin America countries, who once prided themselves about only purveying the highest of quality Arabica coffee beans, have now began to plant the notorious Robusta. Why? According to Evelio Matamoros, a farmer from Nicaragua, “It has good productivity and a good price… has better yields and it doesn’t need shade. That matters.”
It’s gotten so bad that even Costa Rica, who before decreed planting Robusta within the country is illegal, is getting in on it (Reuters). Though the agriculture minister said that these will be planted “in specific areas that the national coffee institute ICAFE will determine”, it still shows (what some may say) a desperation to plant Robusta to ensure farmers continue to have a source of income.
Global warming is destroying the areas where good quality Arabica beans can be planted. If coffee farmers want to uphold the quality Arabica they harvest, they need to invest time and money in reviving these areas. By doing so, they might need to wait months or years just for the area to be useful again, and then that’s when they can only begin to once again grow their crops. If you were a farmer who has to feed a family, would you care about what some person in a coffee shop thinks the taste of his/her coffee is? No. You want need to make money. Low-lying, disease resilient, sun-loving Robusta allows them to do just that.
But isn’t it ironic that because of global-warming, coffee production tried to find a way to adapt, but is also slowly propagating the very thing that threatened it in the first place? Again, it’s because of: Margins.
What the hell do you mean by: Margins?
Okay, I am only referring to Gross Margins:
Gross margin is the difference between revenue and cost of goods sold (COGS) divided by revenue. (Wikipedia); A company’s total sales revenue minus its cost of goods sold (COGS), divided by total sales revenue, expressed as a percentage (Investopedia) if you want a more scholarly source.
You can argue that I should be talking about gross profit but percentages seem more sexy to me. I digress… If you are a business that’s really keen on earning profit, the more you can yield a higher gross margin, the better for your business. It means more working room for expenses like, you know, paying your employees (executives because – capitalism) higher. It’s also important if you want to keep your investors happier and with you forever.
So you see, if instant coffee companies want to earn more, they cannot be fixated on “providing the best quality coffee beans in every cup” because that will dilute their margin. You may want to argue: “Well if they use high-quality Arabica or Robusta, they can increase the price and everybody will be happy”. They won’t.
I have spent the past 10/11 years working for companies where I have had to study some of the biggest companies in the world (like you know, a certain fast-food chain, a certain silicon-valley conglomerate, a social media site – those lot) and most if not all of these companies will always want to make sure they earn money but continue to make themselves happy. To do so, they need the people, us, to really use/buy whatever it is that they are offering. For instant coffee manufacturers, if they raise the price of instant coffee, they lose the advantage of why people buy their products in the first place: it’s cheap.
So they need to keep prices down but increase earnings over time. To do so, they need to sell a copious amount of those packets (or jars if that’s your thing) so that everything else increases. A sudden increase in their COGS will be devastating for their bottom line (net income). I fear that is also the reason they add too many substitutes (and coffee flavoring) because those are cheaper alternatives. Now, since these companies have so much demand, coffee farmers cannot help but be enticed to plant cheaper beans that they can plant more easily. Therefore, instant coffee is not helping with spreading of proper coffee tree farming, worsening global warming, and making quality beans more expensive because: Margins.
Side note: Talking about Latin America (which includes Colombia) and high-quality product, I cannot help but think of Pablo Escobar’s manufacturing operations from Narcos. Just replace the name of <insert illegal drug here> with our favorite drug (caffeine) it will still totally work.
I have to set a disclaimer here: This is merely the opinion/analysis of a lowly blogger. Take it with a grain of salt. I’m not calling an all out boycott of instant coffee. If the only way you can drink coffee is by buying that 3-in-1, then by all means continue to do so. You need that energy. But for those who have a choice, think about what that packet means for the environment (not mentioning the waste those sachets produce).
Verdict for level 2: It is not Kape. Kape should thrive in a canopy of trees, promulgating wildlife. Demand for cheaper beans for instant coffee is helping call that very notion.
This is part 2 of a 3-part series. Next up: Does instant coffee taste like Kape?
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Categories: serious Kape