The Coffee Revolution : Just a Cup Named Joe : . . . How It Got This Way

In the 18th Century, we were a nation of tea-drinkers. Then came the Boston Tea Party and a patriotic fashion for coffee, which wasn’t subject to the Stamp Tax. We’ve been coffee-holics ever since. Coffee drinking in the U.S. has declined for the last 30 years, but the United States remains the world’s largest coffee consumer.

In the 19th Century, local roasting companies sold coffee often by country (or region: “Yemen” has always tended to include Ethiopia), just as coffee specialty shops do today. The classic mixture of Mocha and Java was a national favorite, as reflected in slang terms such as “jamoke” and “a cup of joe.” Eventually, however, local roasters lost the market to nationwide marketers of canned coffee such as Folger’s (now part of Procter & Gamble), Hills Bros. (now Nestle-Hills Bros.) and Branston (best known for the brand Taster’s Choice).

These three companies were founded in San Francisco in the 19th Century, actually within a few blocks of each other. There had been a sort of coffee vacuum on the West Coast, because coffee shipped from the East (largely African and Brazilian beans) tended to be stale by the time it arrived. The San Francisco roasters, conveniently situated in the busiest port on the West Coast, were able to import Central American coffees and provide their customers with fresher beans.

They were innovators. The original Hills brothers, for instance, were the first to vacuum-pack coffee: During the Alaska gold rush, they made a killing because they were the only ones able to provide fresh-tasting coffee to the sourdoughs. The Hills brothers also defined the procedures of formal coffee tasting (known as “cupping”).

Because their canned products were more consistent than those of the local roasters, the big San Francisco companies were better able to establish brand identity. Canned, ready-ground coffee epitomized convenience and modernity to the public. Inevitably, most small roasters failed.

Then, in the 1940s, the large roasting companies started cutting their raw material costs to the detriment of coffee flavor. They began adding cheap, caffeine-laden robusta beans to premium arabica coffee.

The peak use of robusta was in 1961. “That was the year before American coffee consumption began its long-term decline,” points out coffee broker Tim Castle. Even 10 years ago our annual coffee consumption was 35.7 gallons per capita; now it’s under 30.

These days, if you ask people about why they don’t drink coffee, the reason they give is likely to be worry about the health effects of caffeine. But the fact that the decline began long before there was a big fear suggests that by cutting the quality of their coffee with robusta beans, the big coffee companies have been ruining their own market.

Another factor that lowered the quality of coffee was the International Trade Agreement of 1962, which was the first of a series of five-year agreements among the coffee-producing and coffee-consuming countries. The plan was to raise coffee prices in order to improve the income of the producing countries--a sort of foreign aid, to be paid for by coffee drinkers.

“The major producing and consuming countries got together in this clubhouse in London, the International Coffee Organization, and agreed on limiting the coffee trade,” says Castle. “It was a backward sort of cartel. The consuming countries agreed to allow only coffees with import labels on them; the exporting countries were allowed to issue stamps according to a quota based on historical crop levels and market share. The power in the organization was with the biggest consumers and producers. Brazil got a huge quota, for instance.

“Stamps were issued to exporters by the producing company governments on a totally corrupt basis. There was a lot of bribery and smuggling. It became a total crap-shoot for the small producer--it was pointless to produce a decent crop when he didn’t know whether he could sell it as his own. A country’s initiative was also stifled; there was no motivation to improve.”

Colombia, which has always marketed itself aggressively in this country, won a special grade for itself under the agreement (and for Kenya, which may have benefited as a former British colony). All coffee was imported either as Colombian (which included Kenya), Other Milds (essentially, Central American coffees), Brazils and Other Arabicas (everything else) or Robustas. “But Colombian coffee,” says Castle, “though it’s a good coffee for drinking unblended, is not a real specialty coffee. There are only two grades, Excelso and Supremo, based exclusively on the size of the bean--all regions and elevations are lumped together.”

Meanwhile, a reaction to the coffee situation was developing. The specialty coffee market had practically disappeared in the ‘60s when two important companies--Zabar’s in New York and Peet’s in Berkeley--reintroduced the sale of whole-bean coffee. Today specialty coffees are 10% of the coffee market by weight, 20% by dollar, and marketing experts see the figures rising to 20% by weight (but perhaps only 30% by dollar, as competition lowers prices) in the next few years.

In the end, the International Coffee Agreement failed. Small producer countries, with the approval of the anti-protectionist Reagan Administration, refused to join it, and the Agreement fell apart July 3, 1989.

“I lost over half a million dollars that day,” says Castle, “half a million I couldn’t afford to. But it was for the good. Now the smaller producers feel they can stand out if they make a good coffee. They can make more money because they can sell 100% of a crop, rather than whatever the quota was. And the market is more oriented toward specialty coffees today.”