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Feb 27, 2009

Local speciality coffee sales may experience some decline

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Lionel de Roland-Philips discusses the coffee industry in South Africa.
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Given the current economic climate and the resultant curbed consumer spending, coffee shops and speciality coffees could experience a downturn in South Africa, as has been the case in the US with international coffee shop giant Starbucks.

Starbucks has announced the intended closure of 600 franchise outlets in 2009, 200 of which are in the US, resulting in the retrenchment of over 6 700 employees. Although Starbucks’s problems stem from a variety of internal strategic issues, a large part of the problem can be attributed to the international economic crisis, which is affecting businesses across the board.

Speciality Coffee Association of Southern Africa (Scasa) member and previous vice-chairperson Lionel de Roland-Philips, says that speciality coffee sales in South Africa could face similar hard times, as people are likely to buy cheaper blends in an effort to save money where they can. Likewise, they will cut back on the luxury of eating and drinking out and will tend to consume more at home and at their place of work, which will favour the supermarkets over the traditional coffee shop retailers.

He explains that South Africa already has a preference for the cheaper coffee/chicory soluble blend, which is a blend that gives the coffee a malty taste profile. While many coffee/chicory blends exist internationally, in South Africa this particular blend dominates the coffee market and is unique to the country.

This is a preference that followed the economically inspired coffee/chicory mixtures of the early 1900s, and was followed in the late 1900s by the development of a similar price competitive soluble coffee equivalent.

Since South Africa became a member of the Southern African Development Community and the World Trade Organisation, and since being allowed to participate freely in imports and exports, local raw coffee production has dropped to about 1% of local consumption, with the rest being imported.

This is because it is simply more economical for coffee to be imported than for it to be locally farmed. “It is like trying to grow cucumbers in greenhouses in Iceland. “It can be done, but it is not economically viable,” he comments, adding that the rich history and more economically viable conditions for coffee production in traditional coffee producing countries within the tropics, such as Brazil, make it very difficult for South Africa to compete.

However, despite the access to the wide variety of international coffees that are used in a wide variety of well-made local coffee blends, De Roland-Philips says that many, if not the majority of, South Africans still prefer the chicory/coffee/dextrose soluble coffee blends, which is a taste profile they are well used to. It is often not even a matter of its being a cheaper product.

“Many South Africans simply do not know what a high-quality coffee should taste like,” he says. He explains that Europeans may be brought up in homes where pure filter coffee blends are the norm, allowing people to learn to differentiate authoritatively in those terms, whereas many South Africans’ taste profiles are different, owing to the historical market dominance of the coffee/chicory blends.

He adds that many local restaurants and coffee shops often do not know how to make a cup of coffee properly, using esspresso machine blends to make filter coffee or filter coffee blends in esspresso machines, resulting in bitter or bland tasting espresso or filter coffees. This misapplication of coffee blends serves to further confuse many South Africans about what is good, fair or bad coffee.

However, De Roland-Philips says that efforts are being made by Scasa to educate local coffee makers and consumers as to the different options when it comes to coffee blends.

Much headway has been made in this sense over the past 40 years, with many inter- national-quality speciality coffee shops and retail market blends coming to the market, many of them locally manufactured by experienced coffee roasters and blenders. However, South Africans still seem to display a preference for internationally branded blends, such as Italian coffees, and display a relatively unsure and untrusting attitude toward local products.

De Roland-Philips says that South Africans are not fully aware of the fact that the quality of South African coffee blends easily rivals the quality of such international blends, if not bettering them altogether. This too, is part of the education Scasa wishes to develop in the South African public, so as to further stimulate the market for coffees that are roasted, blended and packaged in South Africa.

Edited by: Laura Tyrer
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