We’re all familiar by now with third-wave coffee not only as a concept, but also as a cup of coffee. We’ve tasted the difference, tasted a new kind of cup. Superior quality beans, sourced directly from individual farms are offered at prices within the reach of most and we’ve come to expect much more from our morning cup of joe than caffeine; we expect an experience.
These trends are still in their infancy, leaving it difficult to see how they will play out as they mature. Yet right on the heels of a major advancement in coffee quality rooted in improved practices, we see people predicting the demise of single-origin, high quality, affordable coffee, often through parallels, both accurate and inaccurate, drawn to the wine industry.
As awareness of these superior beans spreads, they argue, demand will overwhelm the relatively small slice of the global coffee supply (specialty coffees currently represent 8% of the coffee market and is growing 20% a year). The increased demand will rapidly drive prices higher, pricing high-quality coffees beyond the reach of the everyday and into the realm of a luxury on par with cellared wines from famous vineyards. Just as quickly as we fell in love with third-wave coffee roasters such as Stumptown, Intelligentsia, and Counter Culture, we'll be priced out of the market.
I don’t see it that way, and I’ll tell you why.
Third-Wave Coffee sources employ a much lauded (and often discussed) direct-trade model. Direct trade buying involves more than cutting the middlemen out of the picture, so as to directly reward farmers for quality.
Top tier third-wave roasters employ people who are experts in the proper techniques of planting, tending, picking, washing, storing and shipping. These field agents are charged with not only finding and purchasing the best coffees, but also with working with the farmers to improve their techniques and infrastructure. Farmers are incentivized to improve their craft by the premium roasters who are willing to pay for coffees that measure up to their strict standards: standards which can only be achieved through careful picking of only the ripest berries, vigilant washing, and prudent storage and lot separation.
Until only recently, all scientific attention directed at coffee has been focused exclusively on improving yield and disease resistance (another word for yield). The paradigmatic shift in focus from quantity to quality through farmer education and capital improvements has only just begun. With room to run, progress in coffee farming techniques will translate directly into an increased supply of the high end coffees we love.
Indonesia is a perfect example of this, where many beans, even the some of the best beans, succumb to moisture inspired rot, yielding a muddier cup and mouthfeel. These beans do not inherently have a earthy taste, and given the right tools, education, and infrastructure some can be as bright and crisp as a Costa Rican. Simply put, only a small portion of the worlds coffees are optimally picked and processed, leaving ample room for growth in the supply of high end coffee beans - a supply trend that mitigates the 20%+ growth in demand.
Medium Term Considerations:
While improvements in picking, storage and washing are necessary to allow a coffee bean to taste the best that it possibly can, they cannot make a bad bean good. Different coffee varietals have inherently different characteristics, and different characteristics when grown at different elevations and on different soil, not all of which are desirable. Perhaps it is this idea that has led people to anticipate that third-wave coffees will price themselves out of existence; like famous vintages, the number of plants with a pedigree capable of yielding the highest quality is finite. But this is a false parallel to the world of wines, where a particular vine may be hundreds of years old and where that age is an inherent part of the quality of the wine it makes.
Coffee plants, by comparison, have a life cycle of approximately 20 years, after which yield and quality begin to rapidly deteriorate. The trees must be uprooted and new trees planted in order to maintain yield and quality. Even just this need to plant alone will improve the quality of coffee over time, as better yielding and tasting trees have their progeny planted, while lower yielding and less delicious trees see the end of their genetic lines. The focus on coffee at the source by third wave Sourcers/Roasters has initiated this process, but 20 years is a long time and even after trees are replanted, it takes about five years before they begin yielding fruit. Nevertheless this trend has begun and we will be happily enjoying it fruits years down the line. In addition to the improvements in technique and infrastructure, this gradual increase in the availability of higher-quality yielding coffee trees should also prevent the best beans from pricing themselves out of our everyday reach.
Now let’s take a longer view.
The shorter life cycle of the coffee tree allows for selective breeding in a way which wine does not. In short, we can mutate coffee to be better than it is today. By selectively breeding better tasting trees with better tasting trees, over time, beans will improve to a point beyond anything we have tasted to date. Let us take the example of corn which began its life as a bitter, two-inch long grain and today can be upwards of a foot of delicious, sweet goodness. A mezo-american of two millennia past would look at our super-market corn with unbelieving amazement. I am not advocating we try to breed massive coffee beans, but rather better ones.
In the past, the importer/exporter system and unfair trade practices have incentivized quantity above all else. As a result farmers have, since the globalization of the coffee trade, selected their plants for yield and disease resistance. Better tasting coffee was lumped with worse coffee and the whole batch was shipped off, leaving little reason to try and find the better tasting plant. With the new roaster-farmer relationships, the focus has turned to quality. This shift, however, has only just begun and will take time before it manifests itself in quality improvements.
In the short term, the price of high quality beans is likely to rise at rates that outpace the increase in coffee costs on a commodity level. Famous varietals, such as the Geisha, will (or may have already in certain circles) undoubtedly achieve a status similar to a Chateau Rothschild. Nevertheless, the factors I have chosen to highlight will lift quality coffee production closer to its real quality coffee output potential through education and capital improvements, and will eventually raise the world’s quality coffee output capacity through new, additional, higher quality plantings.
The world of coffee has only just entered the beginnings of a Golden Age.
A clear improvement in the general quality of coffee should be expected in the shorter run due to the improvements discussed above in farming practices. In the middle run, trees that sell expensive beans will be replanted more frequently than those that do not and poorer quality trees will be replaced with higher quality trees. Finally, careful genetic improvements of the beans themselves will eventually lead coffee to a place we cannot even imagine today.
The Third-Wave of coffee is no fad. It is a trumpet blow announcing the start of coffee's Golden Age. Third-Wave Coffee Roasters are the heros who have layed the groundwork for this new era in coffee, this fundamental shift in how coffee is produced, purchased, consumed, and enjoyed.
Long live the Third Wave!