Coffee in Australia

admin · January 2016

Take a look at this link: http://www.theage.com.au/victoria/instant-gratification--the-myth-of-australias-coffee-culture-20160120-gma324.html

Have to say I'm not really sure about this one; we may still have a high incidence of instant, but to be honest I'm pretty sure our espresso scene's pretty advanced on a world scale… they talk about quantity but to my mind quality's a more important indicator of the state of the coffee market in a country.

I may not have travelled as much as the Lavazza family in Europe, but I spent a lot of time in France before starting Crema and have managed to get to Paris occasionally since, and if they're using France as an example of a great [advanced] coffee culture, they're sadly mistaken. The quality of espresso coffee in Paris is generally appalling and as recently as two years ago, it was only just starting to improve and even then, only in isolated pockets. So to imply we're not as advanced as France in coffee, to me is complete rubbish.

A

Brett H · January 2016

Aritcle smells like a marketing fluff piece to keep the Lavatsa name in the public image and associate the ailing MNC with family, provenance and investor hype. Self fulfilling prophecy attempt #1 453 411!!!

Brett H · January 2016

Another take: http://www.brw.com.au/p/business/luigi_lavazza_great_grandsons_reveal_MPOlGGLLwJ1w03q8xB1TRN Distributor is valcorp.

Brett H · January 2016

Last one I promise: there is lots of provenance here.... brilliant marketing and very clever folk! http://www.brw.com.au/p/entrepreneurs/rich_families_how_the_valmorbidas_fqAUG9L1Oa1OK2q2G3gzLP

mycuppa · January 2016

Thanks Brett - always good reading. As for the Age article - I read it last night online at theage.com.au and could not decide whether to be outraged at the sloppy journalism and ludicrous claims......or amused at the blatant PR copy. The article has quoted stats that are quite frankly rubbish. As usual, o source and no research went into this published article. The figures are ridiculous given no central body/regulator or other is collecting big numbers (data). Very few, if any, coffee companies respond to requests for surveys or are willing and forthcoming with precise data........and given our unregulated industry......who knows......exactly just what is what and how. IBIS make a half-baked attempt but I suspect most of their raw data is from supermarkets and segments of retail. Again it comes back to who is keeping score and tally ? the closest and most reliable source of data is by cafe marketer KISS, but that primarily deals with a segment, not the whole. The notion that our coffee culture still has a long way to go is typical of the Italian coffee insult - ironic given their market has been stuck in a time warp for almost 30 years and even more ironic that Aussie competitors typically ranked in the top 3-5, including more than a fair share of winners and runner-up for all the world championship barista, latte art and cup tasting championships over the last decade. We have seen this type of marketing tactic before by Italian-inspired brands on the Australian market at it has ended in tears - a good lesson is don't insult the industry or it's customers. A Melbourne-based Italian-styled brand comes to mind - trying to take the high-ground with their "heritage" of better coffee versus the inconsistent local product. Ho-hum..... It's also very interesting that many of the top Italian brands have sent out their SWOT teams to Australia and New Zealand over the last 12 - 18 months in attempts to discover - "why are those ANZACs so good ?". It also begs the question why some of those same global brands are currently implementing a major U-turn in their marketing strategy to ramp up local sourcing via either direct investments or contract roasting partnerships. I will leave the debate about purist espresso preparation alone.....it's not in scope of this article thank god. Instant manufacturers are also dominating the global news with mergers - why ? because a future carries the dangerous risk of going alone and uncertainty - so a merger gives them some "competitiveness back through scale efficiency". Add to that they are also the same companies bulking up their cafe supply capability to combat shrinking volumes - we have seen this in the NSW market - a renewed attack by global brands to take back some of the lost share. The real question on my mind is this..........A brand in a death spiral ? A couple of years ago I enjoyed a privileged situation of knowing a bit more about the back-story leading up to the change in that brand's local distribution. It's not appropriate for me to share what was discussed in confidence, however, it was rather fascinating at the time. As you can already guess, supermarkets were on a rampage with their own private label products and cafes were pushing for a fresh and localized offer - competition that the local distributor was acutely aware of (and I will say, very astute and respectfully aware of), yet the global brand struggled to fully understand and as it turns out materially failed to *support*. One of the strategies involved pushing out single serve portion control (the proprietary capsules and pods) and that has been relatively successful for the brand, but my opinion is that the a peak has been reached for that brand in our local market and that segment

because it is currently being outplayed by a considerable margin by Nespresso's commercial offer......so again, there is stiff competition and a tougher run for this brand in that segment - which maybe answers the question of "why the interest in instant" ?. Our domestic market is complex mix of mature, tight and fragmented...........all at the some time. Not easy at all.

Brett H · January 2016

Now there's an article worth reading! Bravissimo Jeff e mille grazie!!

on 1453367184:

. The real question on my mind is this..........A brand in a death spiral ?

My thoughts exactly: "ailing"! I've no knowledge of marketing but I'm a world-class smart-arse and bullshite artist. This possibly explains why I can spot them a mile off!

on 1453367184:

. Our domestic market is complex mix of mature, tight and fragmented...........all at the some time. Not easy at all.

Very well said!

askthecoffeeguy · January 2016

have to say i questioned the stats as well in terms of how they're generated do we have a sophisticated market though? Im not so sure about that. Well developed? Unquestionably. But try and get a 'good' coffee in Melbourne CBD and nine out of ten places that i have tried recently are serving coffee that I cant and wont go back for. There's still a ton of places using 14g baskets and splitting shots then having the audacity to charge 'extra' for an additional shot when the 'additional' shot should be standard anyway or ask for a double shot and its over extracted to the max, and unpalatable and as for the new age coffees that taste like unripe walnuts and pear Tarte Tatin, with their coffee beans roasted just past green, well... you can keep that rubbish - I want my coffee to taste like coffee and not like some fancy dessert that you would find at a high end restaurant is there good coffee in the city? yes, undoubtedly and even great on occasion, if you're prepared to trek all around town to find it but im talking about walking distance from my work where I've tried at least ten different locations, and there's only one that I go back to on a regular basis, and that's not even close, but it is conveniently located near to the tram stop that I disembark from on my way into work still... all this will be a distant memory soon as we're relocating to noosa in just over a weeks time, where im happy to be taking my three coffee grinders, two coffee roasters, and two coffee machines, just to be sure that I have a constant supply of the good stuff! my five cents worth Pat

FreshCoffee2 · January 2016

Glad to see it is a "quick and dirty" story to read... It is blatantly obvious that a certain L company is interpreting some stats (bona fides unknown) in its own way to suit its own purposes. The stats can just as easily be interpreted in opposite ways, and those with a little experience in coffee industry also have (as stated by J above), insider information that can paint quite a different picture of what's really going on. You don't have to be a rocket scientist to know that their local (Australian) market share has been significantly degraded / eroded through the large and fast growth in Australian coffee culture in the last 10 years and the demand for coffee quality to increase. They also haven't (and probably cant for internal reasons by virtue of their size) kept up with the trend in "new espresso" being pushed here to use extra large filter baskets, changing the style of our espresso VS theirs (Italian style). The figures for them are probably frightening, & they've finally woken up and decided they need to do something, and are not happy with how their Australian agent has handled the situation...so they want to intervene..... That opens a pandoras box of stuff for them to try in order to try and regain what they have lost (which incidentally they took by force when they first entered the market here, by throwing their infinite mega company weight around in the market place to buy the share they have since been losing...). That's it in a nuthshell, 'Nuff said.

petenank · January 2016

As a newbie all I can say is that, at least I had a great cup of coffee to drink while reading those articles!!

Brett H · January 2016

Crikey gents, wonderful contributions and yes Petenank, :coffee2:

admin · January 2016

on 1453367184:

As for the Age article - I read it last night online at theage.com.au and could not decide whether to be outraged at the sloppy journalism and ludicrous claims......or amused at the blatant PR copy. The article has quoted stats that are quite frankly rubbish. As usual, no source and no research went into this published article.

absolutely, it's terrible journalism - an 'article' based on a PR release, presumably from Lavazza; will twitter this on the Cremamagazine twitter handle and see if it generates any more general interest

FreshCoffee2 · January 2016

Playing devil's advocate A, what does it matter if one more player starts into the BS when everyone else has already been there? Professional coffee industry has been taken over by entrepeuneurs. What they dont have in professional, coffee and coffee industry expertise, has been replaced by aircraft carriers full of either bald faced gall, or investor money. Career coffee roasters are being squeezed out by BS mongers to the left and to the right. Sales tactics are dirty, unprofessional practices are rife, and the industry on its knees through fragmentation from too much competition leading selling prices south. Costs increase they dont reduce, and as a result of the level of fragmentation and overburdened competition, profitability is at the lowest point ever. And ever, the boolle sheeters sink lower and lower in the vicious circle to try and gain market share. Of greater concern, is that the piece in the age has been passed off as a bona fide article instead of the advertorial manipulation that it really is... Otherwise....onwards and outwards

mycuppa · January 2016

on 1453590449:

Playing devil's advocate A, what does it matter if one more player starts into the BS when everyone else has already been there? Professional coffee industry has been taken over by entrepeuneurs. What they dont have in professional, coffee and coffee industry expertise, has been replaced by aircraft carriers full of either ball faced gall, or investor money. Career coffee roasters are being squeezed out by BS mongers to the left and to the right. Sales tactics are dirty, unprofessional practices are rife, and the industry on its knees through fragmentation from too much competition. Costs never reduce, ans as a result of the level of fragmentation and overburdened competition, profitability is at the lowest point ever. And ever, the boolle sheeters sink lower and lower to try and gain market share. Of greater concern, is that the piece in the age has been passed off as a 'journalistic' article instead of the advertorial manipulation that it really is... Otherwise....onwards and outwards

Roger that FC. Reminds me of a phone conversation 2 weeks ago. A company needing about 30kg a week ongoing, no equipment, not an existing client, wanted to get our "best price" because according to them the market is quite volatile and they could make some savings. Seems their existing supplier had put up the price (the word unjustified was repeated over and over) and they were not happy - a conversation that was now bordering upon a mild rant. They went to great lengths to inform me they had been doing a lot of research and formed the opinion that raw coffee was at an "all time low" right now thanks to the soundbite journalism that dominates the press these days - reporting current levels of the global C-Index. The lecture continued with the statement that offers by roasters should also reflect this **position** according to them. What followed from me was a rapid-fire, detailed response about why in fact the price for quality coffee used in Australia has literally no bearing upon the C-Index and along with myriad of other factors how we are currently paying a more for raw coffees than the same time last year and a lot more than this time 2 years ago. You see, this customer wanted to have high-end Costa Rica, Panama and Ethiopians in their custom blend but pay a price similar to supermarket private label discount offer, fully delivered to their door along with generous credit terms, etc. After expressing politely that we were not interested, the person became offended by our stance and ended up trying to abuse me on the phone. Proves the point that all the BS being churned about in the industry does in fact get into the minds of some believers. Happens a few times a month actually.

Brett H · January 2016

Wow Jeff... Yours and FC's books complete with names and shames will make Phil Di Bella's book read like a door stop. Oh, well done!

FreshCoffee2 · February 2016

Another one that recently came to my attention. A first time newbie café buyer with no experience is recommended by the outgoing café vendor to sign up with a particular coffee supplier who runs a complete service and will be able to cater to all the client’s needs. The client approaches the supplier. He also approaches 3 other possible suppliers, but after completing his due diligence, settles on the original supplier recommended by the café vendor. The client specifies the supply of gear to a figure not far short of $20,000.00 worth, and a special signature blend, in addition to other services as negotiated including specialist training. At the end of the negotiations and in consideration of the total package specified by the client, the client is asked to enter into a supply agreement. The client is advised beforehand by the supplier, to take the agreement away to re read and think on and seek advice before signing, but the client declines to do so on the basis that he has definitively made up his mind to run with the supplier. He signs the agreement. This sets in motion all that is required to get the client started. The purchase of the equipment is initiated, as is development of the signature blend according to the particular spec. Meetings take place etc. ie the meter has started to tick over on developing the account. The client makes his first purchase and is loaned a small commercial machine for his professional development. All is good and amicable and proceeding with the intended goal in mind, however two weeks after signing up the client contacts the supplier and requests to be unconditionally released from the agreement. This is not an outcome the supplier has in mind and the client is requested instead to allow the negotiated supply of goods and services go ahead as already agreed. The client refuses and wants an immediate out. The unilateral refusal of the client to discuss or negotiate with his contracted supplier, causes two actions of last resort: 1) the client renders worthless all the good intent and considerable work that has already transpired, and the old chestnut is thrown to the wind: “...what are you worried about, business is business”, as a result of which 2) the supplier does the only thing left and brings up that there is a legally binding agreement to satisfy. Either or both of these usually ensure the irrevocable breakdown of the relationship. This leaves only one realistic course of action, which is for the parties to decide on a mutually agreeable figure to release the client under the terms and conditions of the agreement they both entered into in good faith. A legal letter is later sent by the client’s solicitor putting a silly offer on the table, which is par for the course. Sound familiar? It has nothing to do with per kilo pricing, and it eventually transpires that one of the other suppliers has returned to the scene to push the client into thinking it is in the client's best interests to go with him instead...despite knowing that an agreement has already been entered into and the wheels are already in motion. This is not an isolated case. It's just another example of the dirty tactics used by some suppliers in the over competitive and fragmented coffee bean supply industry in Australia, to wrestle kilos from wherever they can be found at whatever cost including advising and leading clients to break serious, legally binding agreements. It also indicates the low “base line” quality of many newcomers to café and coffee industry , where seemingly intelligent well educated people are susceptible and open to manipulation, cant spot "poison pen tactics" despite they are staring them in the face, have no idea of their own due to no expertise in the industry they are entering, and have no regard for ethics. Also note. High pressure suppliers sheeting in their own nest effectively as other suppliers adopt the same tactics to compete causing these practices to become more and more widespread and also, teaching their client base (cafe owners) how to play harder and harder ball and to become more and more aggressive in their demands on their suppliers. Welcome to "Coffee in Australia".

Brett H · February 2016

Brilliant! Read it twice... Loved (hated) it! I've told this story before but.... There's a cafe in Townsville selling a well known specialty coffee complete with fancy machine, grinder and excellent training. Two commodity coffee reps compete with shirt and clipboard enter, have lunch, multiple coffees and then call the owner over from bussing a table to have the following conversation: "I notice you are serving xxxxxx and am wondering if you'd like us to look over your contract while we're here. We are supplying one of your competitors with an amazing deal and can help you get great value too". The lady owner politely refused and ent back to her duties. Upon paying for our meals/coffees I brazenly said to her that if she was serving their coffee I wouldn't be a paying customer and clearly they don't want to drink the stuff either!!

FreshCoffee2 · February 2016

on 1454315943:

Brilliant! Read it twice... Loved (hated) it! I've told this story before but.... There's a cafe in Townsville selling a well known specialty coffee... Two commodity coffee reps...enter...then call the owner over...

Forget commodity coffee brands Brett, this IS in so called "specialty coffee" land...actual bean quality has nothing to do with it. Its straight out sales and marketing, smoke and mirrors.

admin · February 2016

on 1453590449:

Playing devil's advocate A, what does it matter if one more player starts into the BS when everyone else has already been there? Professional coffee industry has been taken over by entrepeuneurs. What they dont have in professional, coffee and coffee industry expertise, has been replaced by aircraft carriers full of either bald faced gall, or investor money. Career coffee roasters are being squeezed out by BS mongers to the left and to the right. Sales tactics are dirty, unprofessional practices are rife, and the industry on its knees through fragmentation from too much competition leading selling prices south. Costs increase they dont reduce, and as a result of the level of fragmentation and overburdened competition, profitability is at the lowest point ever. And ever, the boolle sheeters sink lower and lower in the vicious circle to try and gain market share. Of greater concern, is that the piece in the age has been passed off as a bona fide article instead of the advertorial manipulation that it really is...

yes, it's not the BS I object to [as you say, it's a bit of a 'free-for-all'], it's the fact that a supposedly reputable newspaper like the Age allows a journalist to reprint a press release and call it an [independent] article :'(

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