Archive for February, 2011

Starbucks CEO Howard Schultz squelched rumors Thursday that the coffee chain is on the verge of buying Green Mountain Coffee Roasters, a company known for a machine that allows people to brew a single cup using small ground-coffee inserts known as K-Cups.

Schultz instead indicated that he’s ready to take on the single-serve wonder from Vermont, which two years ago bought the wholesale business of Tully’s Coffee. Despite great success with K-Cups, Green Mountain is considerably smaller than Starbucks, with a market capitalization of $5.7 billion compared with Starbucks’ $30 billion.

“Green Mountain has done a very fine job introducing single-serve brewer technology to the U.S. market. And as a result it has emerged as an early leader. But as I have said, these are very early days, and history has demonstrated time and again that patents alone do not determine market winners — deep customer engagement, best-in-class experiences and quality do,” Schultz said in a memo to executives.

Speculation ramped up early this week that Starbucks planned to buy Green Mountain. Starbucks has said it wants to make acquisitions with its plentiful cash, and with a long-term relationship with Kraft ending March 1, some people thought it might be poised to buy Green Mountain to replace a similar technology from Kraft called T-discs.

Green Mountain’s stock surged to an all-time high on the rumors Monday.

The shares quickly deflated on Tuesday when Starbucks made its single-serve- coffee announcement: It will provide single-serve packages of ground coffee for single-cup brewers in half a million hotel rooms across the United States.

Shares of both companies dropped Thursday. Green Mountain stock fell 7.7 percent, to $40.71, and Starbucks dropped 0.2 percent to $33.50.


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Japan plans to buy more coffee outside its traditional African markets in an effort to broaden cooperation with producers on the continent, the state-run Japan External Trade Organization said.

The world’s third-biggest economy wants to increase purchases from Uganda, Rwanda, Malawi and Cameroon, Toyokazu Fukuyama, an official at the organization known as Jetro, said in an interview at a coffee conference yesterday in Arusha, northern Tanzania.

Japan’s traditional sources of coffee on the continent are Ethiopia, Kenya and Tanzania, Fukuyama said. Brazil, Costa Rica and Jamaica are the country’s other main suppliers, he said.

“As part of cooperation with African countries we want to venture into new markets for coffee,” he said. “We have started and we want to build on the small level from these countries.”

Japan consumes 84,000 metric tons of coffee annually, with per capita consumption at 1.7 kilograms (3.75 pounds), according to the International Coffee Organization’s website. Africa accounts for 12 percent of global output of the beans, according to the InterAfrican Coffee Organization, which represents 25 of the continent’s largest producers.

Jetro started seminars for Japanese coffee buyers to promote non-traditional markets as a source of beans, though volumes of purchases have yet to be determined, Fukuyama said.

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While enjoying a lovely cup of Mokk-a’s Cafe Holland this morning it gave me an idea…why not write a bit about Holland instead of updating you on the price of coffee.

“15 Miljoen Mensen” by Fluitsma en van Tijn is a song I heard shortly after living in the Netherlands. It talks matter-of-factly about the Dutch culture, and it’s title translates to “15 Million People”, which was at that time [circa 1996] the population of the Netherlands. The population as of July 2007 was officially 16, 570,613. Given you can fit the Netherlands 16 times into the size of the state of Texas, one can then understand better why here things are built so small and on top of each other. The song touches on how the Dutch seem to have their own opinion for everything, and how even though authority is not treated with seriousness, everyone respects one another. Except for their own neighbor and especially when one wonders what the neighbor does to afford his rent/house payment, his car and other luxuries. It speaks of how the Dutch are able to take care of each other and themselves. No one starves. I laughed outloud when I heard the lyric “gordijnen altijd open zijn” [drapes are always open] because one of the first things I noticed when I came to the Netherlands was how even in the evenings the people will leave their shades open. You can be at an intersection in your car, waiting for the light to turn green, and see clearly into many of the homes as people eat dinner or watch television in their living room.

For the song, I’ve included here below both the lyrics in Dutch and the lyrics translated to English. In the English translation, I have included some notes to help explain better what is being said.

“15 Miljoen Mensen”

Land van 1000 meningen
Het land van nuchterheid
Met z’n allen op het strand
Beschuit bij het ontbijt
Het land waar niemand zich laat gaan
Behalve als we winnen
Dan breekt acuut de passie los
Dan blijft geen mens meer binnen
Het land wars van betutteling
Geen uniform is heilig
Een zoon die noemt z’n vader Piet
Een fiets staat nergens veilig

15 miljoen mensen
Op dat hele kleine stukje aarde
Die schrijf je niet de wetten voor
Die laat je in hun waarde
15 miljoen mensen
Op dat hele kleine stukje aarde
Die moeten niet ‘t keurslijf in
Die laat je in hun waarde

Het land vol groepen van protest
Geen chef die echt de baas is
Gordijnen altijd open zijn
Lunch een broodje kaas is
Het land vol van verdraagzaamheid
Alleen niet voor de buurman
De grote vraag die blijft altijd
Waar betaalt ‘ie nou z’n huur van

‘t Land dat zorgt voor iedereen
Geen hond die van een goot weet
Met nassiballen in de muur
En niemand die droog brood eet

[Refrein nog 2 keer]

And the lyrics in English:

“15 Million People”

Land of 1,000 opinions
The land of soberness [down-to-earth]
All together on the beach [if it is a nice day, everyone and everyone goes to the beach]
Rusk [cracker] with breakfast
The land where nobody lets themself go [emotionally]
Except if we win [example: a sporting event]
Then the passion breaks loose
Then nobody stays inside [and everyone goes out to celebrate the victory]
The land with many rules
No uniform is respected [example: police, military]
A son who calls his dad by his first name
A bicycle isn’t safe anywhere [can be stolen from anywhere]

15 million people
On that small piece of land
You can’t tell them what or what not to do
You leave them in their dignity
15 million people
On that small piece of land
You must not put them in a straight jacket [you can’t hold them down]
You keep them in their dignity

The land full of groups of protesters
No boss is really “the boss” [the boss must behave on the same level as the employees]
Drapes are always open
Lunch is a cheese sandwich
The land full of tolerance [of religion, nationalitiy]
But not for the neighbor
The big question always remains
How does he pay his rent? [“Where is he getting his money from?”]

The land that takes care of everyone
No dog knows a gutter [everyone has substantial means, so not even a dog will starve]
With snacks in an automat [Dutch: automatiek]

[repeat chorus twice]

So maybe you should give Cafe Holland a try also! http://www.mokk-a.com Let me know how you like it!

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Just thought maybe it was time to give you a little perspective on today’s coffee market:

2010 was a year that should have been split in half. The first 6 months saw green coffee futures prices trade in a narrow range from 126.50 to 140.50. Then all hell broke loose in mid-June. The market took off on 6/11 from 137.00 and went all the way to 242.25 on 12/22. That’s a 77% increase in 6 months!

Why did it happen? And why did it start in mid-June when the hot summer usually causes prices to go down most years?

Well it actually started in April, when it broke through 140.00 but then the Euro collapsed as the financial problems of Greece and several other European countries came to a crisis point. The stronger US$ caused several hedge funds to sell their commodity holdings and buy back their short US$ bets. By the time that crisis subsided, a couple of months went by, and the hedge funds came back to buying coffee and other commodities. (We’ve all heard about gold/silver/cotton/copper etc making new highs, right?)

But it wasn’t just the hedge funds buying coffee futures. There were several, severe problems brewing in coffee, but they were ignored or discounted because Brazil was harvesting the biggest crop in their history – perhaps 55 million bags. Surely the market couldn’t rally in the face of that much supply, right?

Well, let’s see why it did just that…
• Consecutive poor harvests in Colombia (the largest supplier of washed Arabica) have reduced the availability of high quality washed Arabica, driving premiums up all across that spectrum.

• Worldwide consumption has risen to 131 million bags in the last decade but only Brazil has increased production.

• Because of the on-year/off-year cycle in Brazil, you have to look at a two year cycle of statistics there. Brazil needs 98 million bags each two year cycle, due to export demand (30 million) and internal consumption (19 million) each year. Last year’s 43 million + this year’s 55 million = 98 million. No help there.

• Stocks in the producing countries have been at their lowest level for the last 3 years since the USDA started keeping the stat over 45 years ago.

• Green stocks in all hands in the U.S. are at their lowest level in 10 years (< 4.5 million bags)

• Now we learned that Brazil exported a record 33 million bags in 2010 meaning they will have even less carry-over to help out with next year’s lower crop

What can we look forward to that might help this market slow down, or even better, turn around?

• Today, the Commodity Futures Trading Commission (CFTC) is holding public hearings about their proposed rule changes that might help limit the size of the positions that hedge funds and other speculators can hold. It could be months before anything is implemented though and it is not clear that they will truly help.

• A prolonged strengthening of the US$ would help as those funds that believe a weak dollar is best offset by investing in commodities would have to reassess their holdings.

• A “normal” harvest in Colombia of 12 million bags next year (2011/12) but we won’t know if that is possible until late summer. Early signs are not encouraging though as heavy rains fall in much of the growing areas, knocking off flowerings and disrupting late season harvesting.

If the largest crop in Brazil’s history couldn’t prevent this rally, the answer will have to lie elsewhere.

So you coffee lovers around the world….suppose we will have to wait and see what happens from here! In the meantime maybe it time to enjoy a nice "Cuppa Mokk-a!" Cheers!

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What is all this talk about Antioxidant Coffee! Have you seen what they put in it?? Take a look at the latest research from the University of British Columbia.

By Randy Shore, Vancouver Sun February 2, 2011

Roasting coffee beans creates abundant stable antioxidants, which are believed to help protect your cells from damage and premature aging, according to a newly released study from the University of British Columbia.

And you might want to go for the medium rather than the dark roast if you want the maximum dose of antioxidants to battle the dark forces merrily destroying your cells. The beneficial compounds created by the roasting process start to break down with excessive roasting at high heat, said lead author Yazheng Lui, a master’s student at UBC’s faculty of land and food systems.

The work of Lui and her co-author professor David Kitts brings some clarity to a murky brew of previous research that had produced conflicting data about the abundance and nature of the antioxidant qualities of coffee, which had been attributed to caffeine and to the presence of naturally occurring antioxidants.

Green unroasted coffee beans do contain natural antioxidants called chlorogenic acids, which are believed to have antiviral and antibacterial properties, but about 90 per cent of those are destroyed by the roasting process, Lui said.

The good news is that roasting creates a whole new class of potent antioxidants called MRPs, Maillard Reaction Products. Maillard reactions are responsible for the changes in colour and flavour that occur when foods are roasted, toasted or fried.

“During the roasting process the [chlorogenic acids] are decreasing while the new antioxidants are increasing,” she said. “We found that the main contributor to antioxidant activity is the product of roasting.”

Because a dark roast at one coffee shop might only be considered medium at another, you can’t always depend on the label to guide your quest to maximize antioxidants in your java. But the darkest roasts will be the lowest in chlorogenic acids and may also be lower in MRPs.

The high heat and longer roasting time that delivers the most flavour and colour also degrades the newly created antioxidants.

Don’t worry if you prefer decaf. Caffeine is not required for the roasting process to create MRPs.

Roasting coffee beans also helps to stabilize the amount of antioxidants in the coffee, because the MRPs created by roasting degrade very slowly over time, while the naturally occurring antioxidants in green coffee beans degrade very quickly.

“In the six months that we were doing tests we found that the antioxidants in the green coffee beans dropped significantly,” Lui said. “But in the roasted beans, it was the same.”

So maybe it’s time for a nice “Cuppa Mokk-a!” Enjoy in good health!


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