【Board Member Update】A Word from Kai Koto (Fuglen Tokyo) – Transparency Through Coffee
Transparency Through Coffee
Kai Koto, store manager at Fuglen Tokyo in Shibuya, and board director in the NCCJ
Coffee is a reasonably old commodity but a young industry and when talking about the specialty coffee industry, with the earliest specialty cafes opening at the beginning of the millennium, it is very much young.
Despite the short presence in the world, the specialty coffee industry is seeing a rapid expansion in Japan and across the globe. The majority of new independent cafes opening are specialty café or use specialty beans, and for a significant percentage of consumers, coffee has become more than a drink, it has become a hobby and an obsession.
Specialty coffee has become an intricate science and a cultural phenomenon around the world with all demographics. With it, the industry is seeing growth in all of its sectors from the farmers to the cafes. In the past few years, big traditional players in the industry had realized and shifted their business model, like Nescafe who bought a majority share of bluebottle for over USD 400 million a few years ago, and Starbucks is spending big and redirecting their business to Starbucks reserve, their specialty coffee department. Furthermore, the market is expected to register incremental growth of USD 80 Billion over the next 4 years.
It’s clear that the industry has grown from a bunch of independent small cafes to spectacular heights and with an increasing share of the coffee industry, there is still much more to grow.
So how did this happen, how did we change the consumers' taste preferences from old traditional coffee, and how did we make consumers our biggest markers? There are many factors but I believe the main reason is thanks to the one particular principle which drove the people who started the movement from the beginning: Transparency.
The origin and growth of specialty
Going back to the start, the modern coffee industry is commonly divided into 3 waves, with the first wave being the domestic availability of instant coffee at home originating in the 1950s. Then the second wave came in the early ’90s with the Seattle coffee scene, the espresso café, and the global domination from the likes of Starbucks, which consequently helped foster a small interest of better-quality coffee to consumers. The third wave came in the early 2000s when specialty coffee cafes and roasteries came on the scene.
Other than the suppliers being much more quality-oriented and the roasting style experimental, what the specialty industry wanted to do differently from the previous waves was transparency in the raw material and supply chain. Just on a package of one of Fuglen coffees bags you will see information on the country and region of origin, the elevation of the harvest, varietal species of the coffee, the process of the coffee preparation, and the producer’s name, with the bean at the store often titled by the farm or the producers’ name. If that isn’t enough you can go to our website on the beans and you can see and read the story of the farmer, like the details of the processing system they employ and read about how they started their farm, and what they are looking for to do in the future.
Although I used Fuglen as an example this is what the industry standard is, this is the level of clarity that we give to our customers. When a customer drinks a specialty coffee for the first time and when they are surprised when they feel the delicious flavors of peach, jasmine, grapefruit, or say an Ethiopian coffee. By allowing the consumer to have all the information, they now can have an understanding of how this particular region or variety of coffee tastes, and when they try a different coffee, it gives them a base to compare with, and shows how all these factors of location, process, and coffee can have an effect on flavours. Many cafes hold public cuppings, an event where you can try many different coffees side by side and discuss the flavors with everyone else. This is similar to how the wine industry has grown and added value to their product, and this is how the obsession and fascination start.
Furthermore, a decent amount of the cafe's sales come from coffee bean sales, so we do not hold back information like brew methods and recipes, as that would only keep people from trying to make coffee at home. All information is essentially free information.
Giving the consumer the knowledge for them to grow on their own and deepen their interest is I believe how the specialty coffee has grown so rapidly.
Self-reflection in transparency
Transparency may also serve as a critical element in the longevity of the industry. By having the supply chain be transparent, it allows the whole world to look within at practices of the industry, we are able to find the flaws and weaknesses in our operations and leave ourselves to be criticised, but at the same time allows us to adapt to new ideas before it is too late.
The largest ongoing issue of the industry is the fair pricing of coffee. In a world where fluctuations in the commodity price of coffee are common and depending on the severity of the fluctuations, people lose not just money on their new harvest, but it may lead to them losing their farms or even homes. Individual roasteries within the industry have worked continuously on this issue; by paying above the market value and making cooperative organisations. The current method is by making multi-year commitments to farms to buy their product. This allows the farmers to have a reliable income and with stability in their future, they are able to reinvest money in themselves. This eventually creates a positive cycle where roasteries are willing to commit years for quality producers and the producers looking to have stability in their business will further improve the quality of their coffee.
This issue is in no way solved, and there are always other pressing issues within the industry, such as sustainability and balanced work culture. As much as we still have room to improve, I believe, without us looking into our own practices with accountability, these issues easily might have been kicked down the road to allow for higher profit margins. Eventually, if these problems were not looked at, they would grow to a point where they would be detrimental to the affected parties and the industry as a whole. Although allowing transparency creates volatility to the way you operate, it fundamentally forces the parties in power to face these issues head-on and not allow these bad practices to become standard.
In conclusion, there are many factors to the success of specialty coffee such as the increasing perception of value in the independence of stores, the freshness of getting beans at the roastery rather than a supermarket, and improvement in coffee grading standards and new ways to make better coffee. However, I believe that the primary reason that we have grown this large in such a short time is thanks to the belief in transparency which lies at the heart of the industry from its beginnings.