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What’s in Your Cup?

Coffea Arabica vs. Coffea Canephora Not Just Another Flavor — A Different Species

A visit to a coffee bar, whether a link in a large chain (the usual suspects) or a local one espresso machine cafe, generally reveals coffee from a variety of sources – some familiar, some not. If you care about the contents of your cup, read on.

Most “specialty,” a.k.a. expensive, coffee is the fruit of the tree, coffea arabica, generally called Arabica. Even mass-market sludge such as Nescafe touts that its Nescafé Clásico Colombian instant is 100% Arabica. Some of its other blends, such as Brazil, simply label themselves as 100% coffee, without further specification. If, as is likely, they use Robusta, they don’t specify it. Among some coffee aficionados and not a few coffee snobs. Robusta is Arabica’s poorer step-sister.

A behemoth like Starbucks dismissed the entire category. “It comes down to flavor. And that less refined flavor is absolutely the reason we don’t even touch it (Robusta).”

Even mid-market players like McDonald’s and Dunkin’ Donuts promote their coffees as “100% Arabica.”

Robusta’s inferior status can be a self-fulfilling prophecy — cheaper coffee handled cheaply and marketed to less demanding or price sensitive customers.

According to some coffee experts, this may be changing. I recently encountered a potential herald of this change while on assignment in the Ecuadorian Amazon.

Case in point, Witoca, , a cooperative of coffee and cocoa growers is making the case for high end Robusta. Why do they bother? Their founders believe that properly bred, grown, and processed, Robusta has unique advantages for both its producers and customers.

Coffee as a crop faces a number of challenges and these are made worse by a warming climate. Coffee leaf rust —  a fungal disease, which stunts and shrivels the leaves is increasing. Robusta is

Coffee Leaf Rust

relative resistant to this blight. Arabica needs higher altitude and shade to prosper. Robusta can do well at warmer lower altitude with less shade.

Witoca farmers grow both Robusta and Arabica. A trek through a coffee plantation reveals sickly Arabica trees but vigorous Robusta. Robusta is living up to its name and being a hardier species. It is better adapted to Ecuador’s weather and ecosystem and yields substantially more per unit of land cultivated.

But standard Robusta lacks both the reputation to command the higher price to improve the

A Productive Plant

lives of the growers. Rather than falling into a commodity mindset and just maximize yield, Witoca has been selectively breeding Robusta to enhance its smoothness and aroma, while maintaining its hardiness.

Robusta is generally thought to have a more earthy and bitter taste than Ababica. Witoca believes that its selective breeding program has and can continue to improve its taste. Robusta is naturally higher in antioxidants and nearly twice as high in caffeine as Arabica. For some

A Happy Robusta Tree

niche brands based on Robusta, such as Death Wish and Biohazard, the caffeine kick is touted front and center. Interestingly, high caffeine concentration may be one factor in its disease resistance. Whether it’s a benefit to the drinker depends on personal preference. In my travels, “Decafe” as a category barely exists in Central or South America.

Witoca also operates a comfortable rustic café on a back road, serving its coffee in a full range of coffee drinks from espresso to cappuccino, all made from Robusta. I particularly liked their Americano.

What is apparent is visiting a farm of one of Witoca’s member growers, is the pride they take in the care and production of their crop.

As with other beverages, consumers know what they like rather more than why. Robusta itself is not a top of mind category nor is it differentiator. Its Amazonian heritage may just be…

What Would You Do With $ 250?

Cali, Colombia 7:00 AM on the last Saturday in July. For a change, it’s not raining as we head west. In about two hours, we drive up a narrow uneven road, which occasionally scrapes the bottom of our muddy Kia. I’m here on a field visit to a prospective borrower of UNI2 – a Colombian microfinance lender.

The tiny farm has been cobbled together from bamboo, scrap wood, corrugated plastic panels, tarpaulins, and assorted found materials. Canvas curtains serve for doors. It gives the impression of of being improvised yet organic. The pig sty melds into the chicken coop, into the flower and vegetable gardens, all of which surround the residence. In front is a roofed porch. This is the site of an informal cafe from which the farm’s owner, a woman of middle years, supplements her income by serving drinks and snacks to neighboring farmers and workers. The need to have supplemental income as well as the resourcefulness to earn it, were common among UNI2’s borrowers.

I was in Colombia, assisting microlender Finamiga UNI2 with content development, marketing, and strategy. UNI2 is a provider of really small loans. It lends for farming, retail, manufacturing, and motorbike or light cargo vehicle purchase. The two hundred and fifty dollars of the title, corresponds to about a million Colombian Pesos ($COP). About the average Colombian monthly wage and the smallest loan UNI2 makes.

Depending on your location and tastes, a few hundred dollars could buy you a new golf club, a pair of balcony seats to a production of Tom Stoppard’s latest play, Leopoldstadt, when it opens in New York later this month, or a single ticket to see the New England Patriots vs. the Detroit Lions. In effect not something, which will make a significant difference in your style of living. If you were a peasant farmer in Colombia, your answer would be different.

A million or so pesos buys fertilizer, seeds and seedlings, power tools, chicks, which will become laying hens. Larger loans of a few million pesos, are used purchase piglets, calves, or leases for additional workable land. A “big” microloan of three to six million (still less than $1,500), might be used to buy a low end motorcycle. The prospective borrower in this case, hoped to be able to buy a motorbike to more easily get into town and keep her small farm supplied.

These are not loans, which a standard commercial bank, in Colombia or elsewhere, would typically make. Borrowers seldom have assets or credit history, which would qualify them for any loan. In a sense, microlenders are bankers to the unbanked and “unbankable” by conventional banks. Still these are loans, not grants. Borrowers undergo due diligence vetting. Those who are approved are charged interest, though at a below market rates. UNI2’s customers pay an interest rate averaging less than four per cent, not a full risk adjusted rate, let alone the usurious rates charged by Informal networks, gangs, and loan sharks.

UNI2 is not a charity. Its business model seems to be working. Loan default rates are lower than in Colombia’s commercial banking experience. Borrowers often take out succeeding loans after they pay off the current one. With focus on a few key market segments, lower expenses, including very Spartan offices, UNI2 can sustain itself and grow while remaining a low price lender.

UNI2 tries and generally does provide more than “dumb money.” Their due diligence and field visits focus the borrower’s plans and priorities and sometimes include advice and perspective.

UNI2 both services and retains the loans on its books. Nonetheless, it can effectively resell them to third party lenders. In doing so, it acquires resources to fund further loans. One of these lenders, Kiva, has an intriguing way of supporting development. In essence, it crowdsources loans.

Kiva members are invited to contribute capital in increments of $25 US. Kiva lenders, can browse the sites prospective borrowers and allocate their funding to any project, they find compelling. Some of the loans are completely funded and managed by Kiva, others have been originated by UNI2 or other organizations like it.

Capsule summary of UNI2 loan on Kiva

Capsule summary of UNI2 loan on Kiva

The kiva loan is just that. If the borrower repays the loan by the end of its term, the Kiva member can choose to lend the principal to another project or get it back. Any interest derived from the loan, is kept by Kiva to fund its own activities. For $25, you too could become a microlender.

This Blog Post has a Carbon-Footprint of ___ *

Marketers such as Unilever may soon have to find space on the packages of their 70,000+ SKUs to indicate the “carbon footprint” of each product. What such a logo or label would denote remains to be determined. It would be an attempt to associate a product with a favorable concept a la “natural,” “organic,” or, “socially beneficial.” Potentially it could augment the brand’s positioning – rather than an occasional nagging worry about impending climate disaster, a consumer could perform a pantry check for the reassuring logo.

Some consumer brands are talking in their Marcom and social media as if they take climate change seriously. Public announcements by The likes of mega carbon-emitters Ford and General Motors have announced that they will stop producing gasoline or diesel powered passenger cars by 2030 and 2035 respectively. Apple, which could probably afford the transition costs of carbon neutrality, has pledged to do so by 2030. Amazon recently asserted that it had become the largest buyer of renewable energy in the US Others without a clear alternative to business as usual, such as ExxonMobil, seem to view carbon foot-print as marketing exercise.

Will the consumer notice? Will she be convinced and if so will she care enough to reward the low carbon-footprint brands? Or will this branding effort be viewed as just an attempt at green-washing.

Just Show Them The Money:

BlackRock, the world’s largest investor, recently launched a U.S. Carbon Transition Readiness ETF to invest in companies, which will outperform in a low-carbon environment.

Investors seem to have noticed. Morningstar reports that in the US attracted a record $21.5 billion of net new investment in Q1 2021. This was more than double the inflows in Q1 2020 and five times the investment in Q1 2019

Is this really low carbon investing? Rationally, carbon-footprint should include all the expenditures from the inception, extraction, creation, distribution, marketing, and disposal of the a product. Capturing all those impacts may be as difficult as capturing carbon in the real world.

Absent generally recognized metrics, low carbon footprint will be as easy to claim as it will be difficult to achieve. Even an iconic low carbon product such as Tesla may not be all that low depending on the impacts of the lithium mining to produce its batteries and the source of electricity to charge them. Still, Tesla clearly owns the position as a low-carbon brand. Its branding is greatly enhanced by the marketing prowess of its mercurial chairman, Elon Musk.

Like many of Musk’s pronouncements, Tesla gained significant notice, when it announced it would not accept bitcoin in payment after all because of the high carbon footprint of Bitcoin mining.

Tesla is to some extend a projection of its mercurial chairman Elon Musk. It garnered some attention and enhanced its technology with it position, when it recently made a 1.5 billion “investment” in Bitcoin and announced that it would accept bitcoin as payment for its cars. Musk then rapidly reversed course, declaring that the climate impact of cryptocurrencies was too great and thus Tesla would not accept Bitcoin as payment after all.

* “What number did you have in mind.”

Choking the Goose*

You may have noticed that the 2020 US presidential contest has been plodding along for more than a year (for some it’s been three years) and has another year to go. At last guestimate there were 16 Democrats, three Republicans, and some as yet obscure number of third party and none of the above candidates. Many potential voters have been so far been able to ignore the pre-electoral noise and save their attention for later in 2020. These political abstainers may even surpass the 45% of eligible voters, who, according to CNN, didn’t vote in 2016.

From its extensive database of media spending, Politico estimates that 2020 will be the most expensive election in US history. $2.8 billion for the presidency alone. (Yet another case where paying more doesn’t mean getting more.)

To acquire close to $3 billion, the candidates and their parties are spending more time and effort than ever on an escalating treadmill of fundraising. They have a marketing problem. They are trapped in an ever tightening spiral of fund raising. Few are doing it well and at least five have already dropped out, citing financial challenges. This is a classic marketing problem.

For small donations, fundraising is a mix of direct selling: store fronts to street corners and doorbell ringers mass media: print and broadcast targeted media: email, direct mail, social platforms, interactive media, and SEO.

In any of these, the marketers face a challenges of optimizing yield. How much should they spend to reach out how frequently should they accost prospective donors?

Too Many Knocks on the Door

Consider the following experiment: donate a nominal amount to ten mid-tier candidates. In practice this meant Democrats. Had this been 2016, I’d have chosen Republicans. This was not an experiment about parties or the respective merits of particular candidates. I excluded leading candidates of any party, because they had established brands, substantial resources, and large experienced fundraising organizations. This is not to say that they do not also have fundraising challenges.

Within seconds of the donation, I received an acknowledgement message contained a request for an additional donation. As one completed the online contribution, the collection website (all of the Democratic candidates used the same site, asked for an additional donation in the form of a “tip.” The romancing continues with an almost daily email solicitation. Sometimes the message’s subject is a direct request and sometimes it’s deferred until the second or third paragraph. Regardless it’s incessant.

In their zeal for funds, these candidates, apparently failed to test for the optimal interval between requests. Looking at the lackluster boilerplate email copy, They also often fail to brand their candidacy or confirm why they, among a crowd of at times up to 22 contestants, are the best use of voters largesse.

A few somewhat more enlightened supplicants, give the recipient the option of indicating that they would prefer to be contacted less frequently, such as only weekly.

Fundraising, like virtually any marketing, requires experimentation. The availability of cheap or free data analysis tools, means that those campaigns which don’t continually test are guilty of fundraising malpractice.

Whether the goose, i.e., donor, is laying gold, silver, bronze, or chocolate eggs, by carpet bombing the inbox, many candidates are chocking, if not killing the goose. Their campaigns will cease prematurely as they run out of funds.

  • With apologies to Aesop

Your Free Event Is Too Expensive

Product presentations are like a long horned steer. A point here, a point there with a lot of bull in between. (Attributed to Alfred E. Neuman)

Time is the least thing we have of – Ernest Hemingway

If you’re like me, your inbox is seldom empty of invitations to events. “Opportunities” to learn about industry trends, hear from “leaders,” network, and, by the way, see, try, or experience the hosts products. Throw in some tchotchkes and a free meal – what have you got to lose?

Plenty, it would seem – either as a host or attendee – especially if you value your time.

Against my better judgement, I allow hope to prevail over experience and go to some of these events. You can occasionally learn a few things and meet some interesting folks. There is that little voice in your head intoning “you never know/unless you go.” Even without an explicit charge, the cost of these benefits can include:

  • Travel time
  • Parking and tolls
  • Extra waiting time – Starting “a few minutes” late waiting for stragglers. I. e., let’s hope a few more attendees show up, so the forum won’t look so lonely.
  • The gratuitous irritation of overly long, dumbed-down sales pitches pretending to be knowledge and insight
  • Adding injury to insult, the events are often prolonged by adding
    coffee breaks. Opening coffee is fine; but why should the event require another caffeine boost? In any event, the coffee is seldom drinkable
  • Lunch – cold pizza, stale sandwiches, grim buffets – yet another reminder that there is no such thing as a free lunch
  • Drawings for “Prizes” such as the tsatskes they couldn’t give away at your last trade show
  • An “inspiring” lecture from an “industry guru” a.k.a. an executive at the host firm with time to kill before his next flight
  • The assumption that as long as you’re there, they can add just one more demo or product pitch

As a result, both you and the host spend too much time for too little benefit. From the the piles of undisturbed collateral and untouched pastry and sandwiches, one might gather that the opportunity cost in time was too high and people bailed. As an added bonus, you may also alienate prospects, who are actually interested in and would benefit from your offering.

This is not that difficult to improve if not solve.

  • Keep it short
  • Increase the ratio of signal to noise or content to fluff
  • Leave the audience wanting to comeback for more rather than raring to get out the door
  • When tempted to add more slides to your presentation deck (while you’re at it) – don’t
  • Archive and publish the events online promptly

Your attendees may be so grateful four your respecting their time, that some become customers.