Bean counters note: coffee at 10-year high

February 29, 2008

The price of coffee surged Thursday, hitting its highest level in a decade, as continuing weakness in the dollar kept many commodity markets in rally mode.

Coffee futures for May delivery rose 3.4 cents, or 2.1%, to $1.675 a pound in New York. Earlier in the day, the beans traded at $1.68, the highest price for a most actively traded contract since February 1998. Coffee is up 41% in the last year.

The slide in the dollar has been lifting nearly all commodities, including oil, gold, corn and soybeans, all of which touched record highs Thursday. A UBS-Bloomberg commodity index also hit a record, rising as much as 1.8%.

The dollar marked another in a string of lows against the euro Thursday, and an index of the dollar's value against six major currencies also hit a record low, prompting investors to buy commodities as an inflation hedge.

"All the crude oil available is being vacuumed up by investors, in part because interest rates are low and there's no alternative to commodities that looks very good," said Tim Evans, an analyst at Citigroup Global Markets Inc.

Much of coffee's rise has been driven by speculation rather than supply and demand of the physical commodity, analysts said.

Coffee is now "a playground" for investment funds, Nestor Osorio, executive director of the London-based International Coffee Organization, told Bloomberg Television.

The good news for coffee drinkers is that rain in Brazil, the biggest producer of coffee, has increased since October, when dry weather spurred concern the crop might shrink.

Coffee cuisine

Cooking and pairing food with coffee is seen as a coming culinary trend.

Frozen Mocha Mousse. (CP photo)

Cooking with coffee isn't new. But with all the varieties now available in the marketplace, using coffee as a food, along with pairing different coffees with specific foods, is undergoing a resurgence in popularity.

"My 93-year-old grandmother in her generation cooked with coffee a lot," says Trish Magwood, owner-operator of Dish, a Toronto cooking school and culinary centre.

"Her original recipe for Mocha Mousse, which I refined a little (for this story), was made with instant coffee."

The use of coffee as food goes back to its earliest history. Coffee is a fruit of an evergreen bush, and it resembles a bitter cherry. Among the tribes of Ethiopia, where coffee originates, coffee was often eaten rather than drunk, according to Antony Wild's Coffee: A Dark History. Coffee is now widely grown in high-altitude tropical regions.

Magwood believes that the use of coffee as food has made a comeback because there are so many different blends now "that it is not just how do you pair coffee, but how do you pair specific coffees to specific foods?"

People, she says, are delving much deeper into single products like coffee and chocolate.

The pairing trend is also happening with tea, wine, cheese and other foods and beverages, she adds.

Here is a sample of Magwood's coffee pairing notes:

Cheddar, Spinach and Tomato Omelette: "A traditional medium dark roast blend with bold European style stands up to aged cheddar and oven-roasted tomatoes."

Grilled Chili Pressed Strip Loin Steak with Spicy Broccolini and Sweet Potato Fries: "Ground peppers and a big flavoured steak needs the power of the seriously dark and robust Columbian with balance to not overpower the sweet potato fries."

Frozen Mocha Mousse Spiked with Crushed Whole Espresso Beans: "Sip an espresso after dessert and let the flavours linger."

COOKING WITH COFFEE

Here are some tips for cooking with coffee:

- Coffee should be treated as a spice. Lighter roasts are more acidic, while darker ones are robust, toasty and strong. It's these that work best in cooked dishes where the coffee must hold its own against other powerful flavours.

- Coffee can also be used to add a nutty, burnt-sugar tone to all kinds of dishes. The fact that it's roasted is the key thing to remember. It works with other toasty flavours, from chocolate to caramel to nuts.

- A simple idea to get a coffee kick is by adding syrup, which is perfect for drizzling over creamy mousses, hazelnut meringues or chocolate brownies.

CRANBERRY APRICOT BUTTERMILK SCONES

(Makes 8 servings)

3 cups (750 ml) all-purpose flour

1/3 cup (75 ml) sugar

2 1/2 tsp (12 ml) baking powder

1/2 tsp. (2 ml) baking soda

3/4 tsp. (3 ml) salt

3/4 cup (175 ml) unsalted butter, cut into small pieces

1/4 cup (50 ml) dried cranberries

1/4 cup (50 ml) chopped dried apricots

1 cup (250 ml) buttermilk

2 oz (60 g) unsalted butter, melted

1/4 cup (50 ml) rock sugar, for dusting

1. Preheat oven to 425 F (220 C).

2. In a bowl, stir together flour, sugar, baking powder, baking soda and salt. Add butter pieces and, using fingertips or pastry blender, work butter into dry ingredients until mixture resembles coarse cornmeal. Leave a few larger pieces to create flakiness.

3. Toss in cranberries and apricots. Add buttermilk. Mix with a fork until ingredients are moistened (do not overmix).

4. Gather dough into a ball, pressing gently until it holds together.

5. Turn onto a lightly floured work surface and knead briefly. Gather and lightly press into a circle (about 1 inch/ 2.5 cm high). Brush dough with melted butter and sprinkle with rock sugar. Cut into 8 triangles.

6. Bake for 10 to 12 minutes or until bottoms are golden and scones are cooked through.

Note: Use this scone recipe as a template for any sweet fruit or savoury scones. Substitute currants or apples for the fruit called for here or try different herbs and cheeses. Omit sugar for savouries.

Add coffee to a luscious Mocha Mousse and enjoy a cup with crumbly Cranberry Apricot Buttermilk Scones.

For the mousse, Old World European-style espresso beans work well with the richness of the cream. The coffee flavour pairs nicely with the toasted almonds.

The scones, which are studded with dried fruit, make a nice treat teamed with mid-morning coffee.

FROZEN MOCHA MOUSSE

(Makes 8 to 10 servings)

2 egg whites

Pinch salt

4 Tbsp. (60 ml) sugar

2 cups (500 ml) whipping cream

1 Tbsp. (15 ml) finely ground espresso beans, plus extra for garnish

2 tsp. (10 ml) vanilla

1/4 cup (50 ml) sugar

1/4 cup (50 ml) slivered almonds, toasted and cooled, plus more for garnish (optional)

1/2 cup (125 ml) chocolate, grated

1. In a medium bowl, beat egg whites. Add salt and beat with an electric mixer until foamy. Add sugar and beat until soft peaks form.

2. In a separate bowl, whip cream with finely ground espresso beans until soft peaks form. (Whipping together helps to infuse coffee flavour and mocha colour.) Add vanilla and second yield of sugar.

3. Fold cream into egg white mixture. Fold in 1/4 cup (50 ml) slivered almonds, if desired, and transfer to a large glass bowl or individual glasses and freeze for at least 4 hours.

4. Garnish with slivered almonds, if using, grated chocolate and additional crushed espresso beans. For a decadent garnish, add espresso chards or chocolate-covered espresso beans. Serve in a trifle bowl or cappuccino cups.

Tip: It is always best to dry toast nuts in a single layer on a cookie sheet in the oven or in a dry frying pan with no oil. When the nuts become fragrant, the natural oils are released. Allow them to get light brown, remove and cool. They can be kept in an airtight container for a few days.

Wake up and smell the coffee: We need to make time for each other

SUSAN SCHWARTZ, The Gazette

Published: 4 hours ago

Sometimes, with before and after, there is a firm, clear line; other times, it is blurry and fuzzy - but no less real. With me and coffee, it is the second kind of line.

There was a time when it seemed we all drank coffee; we went out for coffee together and we invited each other in for coffee. We had lazy weekend mornings and evenings out with friends in places with red vinyl booths and white paper placemats, mugs re-filled over and over as we talked.

And then we didn't anymore.

We got too busy, too preoccupied. We let slide the fact that we needed time just for ourselves and for one another.

In time, I stopped drinking coffee altogether. At first it was to be temporary: antibiotics prescribed for a gum abscess were chewing up my stomach. But that was two years ago - and I never went back to it. In retrospect, I believe I stopped because my heart wasn't in it anymore.

At first, a part of me missed the ritual of preparing the strong, sweet brew - and its bracing effect in the early morning on my sleep-dulled brain. But drinking coffee, I believe, is not a solitary activity. It is an inherently social practice, an exercise that shows us and others that we are companionable beings. And these days, sadly, we are less social, less companionable.

Writer Judith Warner, whose Domestic Disturbances blog appears Fridays on the New York Times website, used a recent post to describe her attachment to coffee as being "about the taste, and the smell, and the gesture ... I mean the kind of gesture my mother's brother Mel used to make, waving toward the coffee pot, when you walked into his house in Brooklyn.

"There was, first, the gesture toward the pot, always on, always ready, always warm. Then there was a gesture toward a cup, then a gesture toward a chair ... you'd sit down at the table, in the breakfast room off the kitchen, and you'd gesture into conversation." These days, "no decent person keeps the coffee pot brewing all day. No one would dream of drinking that much caffeine. No one would dream of sitting still all day to schmooze." Still, she wrote, the aroma of coffee could transport her back in time "to a brick row house overflowing with great-aunts and grandparents, a kitchen filled with the smells of coffee and cookies and smoked fish and, of course, cigarettes." It was an evocative piece full of what Warner called "the shared sense of comfort and connection" that coffee had created. She described how she was 9 when she first started to drink coffee - as teaspoons of warm, milky brew from her father's cup in restaurants after dinner - and an adolescence "over never-empty cups" in places with names like Joe Junior's. "There was time for this then ... I miss that world terribly." If much of her post was an elegy to times past and lost places, Warner also wanted to transmit a sense of what she called her "repugnance for a world where, when people stop by your house, on the way from there to there with never a moment for here, they stand in the doorway, cellphone in one hand, water bottle in the other, too peripatetic to even entertain the notion of sitting down for a warm drink." She explained all this in a second post - after the first garnered nearly 300 responses in just days. People wanted to share their thoughts and, mainly, their own memories. Some posted about four-course Sunday dinners and Silex coffeemakers, about talking over coffee, arguing about politics and music.

Last updated February 13, 2008 9:50 p.m. PT

Ronda Churchill / Special to the P-I

A new pot brews as Melissa Gaizo collects payment from a customer.

Coffee clash in the West

Starting in Vegas, Dunkin' Donuts is expanding into new areas to challenge the Starbucks empire

By CRAIG HARRIS
P-I REPORTER

LAS VEGAS -- In the land of glitzy casinos, an ambitious East Coast fast-food chain is laying its bets on Sin City as it expands nationally and challenges coffee's highest roller: Starbucks Corp.

Dunkin' Donuts, which despite its name generates more than half its revenue from coffee sales, plans to build at least 62 locations here during the next few years after it opened its first in mid-October. Initially, Dunkin' will build in residential areas, but if all goes well the company will move onto the Strip, where Starbucks has a huge presence.

After Dunkin' pulled out of Washington several years ago, Las Vegas is now its westernmost outpost. But Canton, Mass.-based Dunkin' Brands is laying the groundwork to possibly return to the Pacific Northwest after recently introducing consumers to its coffee in Puget Sound-area grocery stores. Even Issaquah-based Costco Wholesale Corp., which has a long-standing relationship with Starbucks, is considering putting Dunkin's packaged coffee in its Washington warehouses if it continues to do well in other markets.

The projected number of Dunkin's Las Vegas openings doesn't even equal half of the 146 Starbucks outlets here, but the expansion is significant. Consider that just two years ago Dunkin', with more than 5,000 U.S. shops, had just 50 of its stores west of the Mississippi.

"They (Starbucks) have had a lot of the market for a while, and now they are feeling the competition," said Don DeMichele, a Las Vegas Dunkin' franchise operator. "We are not afraid to be near a Starbucks."

In addition to Las Vegas, Dunkin' plans to open dozens of stores in Phoenix, Houston, Dallas and Austin, Texas, as part of its Western manifest destiny. And, in migrating from its New England base, the java and frosted-confections seller wants to open stores in Pittsburgh, Indianapolis and Nashville, Tenn.

The ultimate goal: Triple the number of U.S. locations to 15,000 stores by 2020.

"We have a lot of space to grow. In the U.S., we are in less than 40 percent of the country," said Frances Allen, Dunkin's chief marketing officer.

Dunkin's growth spurt comes as Seattle-based Starbucks, which has twice as many U.S. locations as Dunkin', is slowing its domestic openings.

Jake Kahle, who this month visited Dunkin's latest restaurant in northern Las Vegas, said he likely will switch his loyalties after buying a vanilla latte at Starbucks daily.

"The prices are lower here," said Kahle, a 44-year-old marketing executive. "And you get more."

Dunkin', which like McDonald's Corp. has peeled away some Starbucks customers by offering drip and specialty coffee at lower prices, said it has no plans to alter its growth plans despite a troubling economy. Dunkin' says its coffee drinks are 15 percent to 30 percent less than Starbucks'.

"I talk to a lot of peers in the industry, and there are challenges. But we are doing well," said Lynette McKee, Dunkin's vice president of franchising.

Dunkin' says it won't fall into the same trap as Krispy Kreme Doughnuts Inc., which expanded too fast, had accounting problems and had to close stores. The difference is that Dunkin' doesn't rely on doughnut sales for growth.

Instead, 63 percent of Dunkin's sales come from beverages, with most of that being coffee, while just 17 percent come from doughnuts, according to the company. The remaining 20 percent come from bagels, muffins and breakfast sandwiches. The company announced Wednesday a new "all-day" menu of pizzas and sandwiches, the biggest change since it launched espresso drinks in 2003.

The company, which is privately held, said it focuses on coffee because of higher margins, although it did not disclose sales figures.

Starbucks Chairman Howard Schultz, who took over the daily operations of the company last month and has implemented a number of changes to win back customers, said he respects Dunkin', but Starbucks remains in control of its destiny.

And, not backing away from a challenge, Schultz added that Starbucks, with more than 11,000 U.S. locations, does just fine in Dunkin's backyard.

"In New England, where they outnumber us 100 to 1, that is one of our best-performing markets," Schultz said.

Coffee Tasting Machine Stirs Industry

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These days, it seems no one’s job is safe from computerized replacements. Now it’s time to add coffee experts to that list. Scientists at the Nestle Research Center in Switzerland have developed a coffee-tasting machine that can sip and evaluate a brew almost as well as professional human tasters. The machine takes a sample of the gases produced by a steaming shot of espresso and analyzes dozens of ions associated with taste and aroma. Those ions are assigned to categories in a “sensory evaluation dataset.” But, that doesn’t mean the results are dry chemical formulas. In fact, the machine has a vocabulary that would make any sommelier jealous. After it crunches the numbers, it spits out words like “flowery,” “woody,” and “butter toffee” to describe its drinking experience.

Researchers say machines like this could be efficient monitors of quality control in the food industry. And no matter how many cups a day it samples, the mechanized coffee taster will never get jittery. Nevertheless, rumor has it that the machine has already demanded a daily 15-minute anything-but-coffee break.

—Adam Hinterthuer

We’re finally smelling the coffee

Quality is becoming the watchword in the local market

More South Africans than ever are getting their coffee rush from premium coffee.

Even restaurants at which price is a crucial selling feature have introduced premium coffee products.

Wimpy introduced premium coffee in 2006. They now account for 18percent of all its coffee sales.

Kevin Hedderwick, the chief operating officer of Famous Brands, which owns Wimpy, Steers, Debonairs Pizza, House of Coffees and Brazilian, said the market is extremely fragmented.

“Successful coffee operations are all about relationships. Operators have to know their customers — almost by name.”

He said Wimpy’s premium coffee was introduced to protect the brand’s turf in coffee.

“There’s no question but that the South African consumer is gravitating towards premium blends. Coffee is no longer only instant coffee.”

Mugg & Bean, one of the biggest sellers of restaurant coffee in the country, sells about 140tons of coffee a year.

Ben Filmalter, the founder and chairman of Mugg & Bean, said the company could not survive on coffee sales alone.

“Coffee sales account for only about 8percent of the company’s revenue,” he said.

“The Starbucks model, where they derive about 80percent to 90percent of their revenue from coffee, isn’t reasonable for a market like ours.”

Filmalter defines “premium” in terms of the origin of the coffee beans — mostly freshly ground and from regions known for growing Arabica.

“Input costs to produce a cappuccino are the same all round the world.

“At Mugg & Bean, we’re selling a premium cup of coffee for about R12.

“At Starbucks, you’d probably be paying about R25. Their margins are so much greater.”

“The increasing price of milk is becoming an increasingly big factor.

Filmalter said consumption of premium coffee continues to rise.

“Our statistics show movement from filter coffee to bean-to-cup, espresso-type coffee,” he said.

Nyasha Mugadza, BP’s national convenience manager, the force behind the rapid growth of the Wild Bean Cafe, said the coffee industry is in great shape.

Mugadza said: “Our figures show that consumers are gravitating towards premium coffee.

“The value of coffee sales in South Africa has increased by almost 140percent since 2001 and sales of premium coffee are rising in excess of 20percent a year.”

Recent surveys have found that tea is increasingly losing consumers to coffee. Almost three quarters of consumers prefer coffee to tea.

Grant Dutton, managing director of niche coffee outlet Vida e Caffe, said: “Growth has been fast. Of our 29 shops, 15 are new.

“But we are not going to grow at the same rate this year,” he warned.

Dutton said the South African market has a limited capacity for absorbing premium products.

Brazilian coffee – A heady brew of higher standards

Brazil produces about a third of the world’s coffee. Ethical certification means more of it now commands a premium

Neat rows of coffee bushes cover the rolling hills surrounding Estancia Lecy. Dotted around the plantation are attractive copses of natural forest, recently renovated workers’ cottages and a lake brimming with fish.

About 250km north-east of São Paulo, in the heart of Brazil’s coffee-growing country, Estancia Lecy is at the forefront of the country’s gradual take-up of ethical certification.

“It has taken us just under a year to meet all the necessary social and environmental requirements,” says João Carlos Gabriel, manager of workplace safety at Estancia Lecy.

The farm, which produces 9,000 100kg sacks of coffee a year, received formal certification for 812 hectares of its coffee plantation in January. Work is still being carried out to certify the farm’s remaining 500 hectares.