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ASIC 2014

Coffee and Tea Reports from the Front Lines

Rainforest Alliance Certifies First Coffee Farms in Africa

Africa - Farmers in Ethiopia have recently announced the birth of a sustainable coffee movement. A group of 678 farms in the Djimmah region are the first in Africa to win a Rainforest Alliance certification. The Ethiopian farmers were certified under the administration of ASK International Trading, PLC, and Jihad Mohammed, owner of a washing and buying station in Haro, Manna. Auditors from The Rainforest Alliance and Fundación Natura, its partner conservation group in Colombia, performed the certification audit.

The news marks The Rainforest Alliance’s first coffee partnership outside Latin America, where more than 3,400 farms in 10 countries already promote socially responsible and environmentally sustainable agriculture. “We are proud to be recognized as the first holder of Rainforest Alliance certification in Africa,” said Suffian Mahdi, managing director of private exporter ASK International Trading and the project leader in Ethiopia. “The support for sustainable coffee farmers is an honorable step and an encouragement for the people of our country. Rainforest Alliance certification is a means for the farmers to generate a better price and helps our company to remain competitive.”

The farmers began preparing for certification a year ago. In order to obain The Rainforest Alliance certification, farms had to meet a set of ecosystem, wildlife conservation, and agrochemical standards. The standards verify that workers have access to healthcare, education, and dignified housing. Farms that meet the standards are awarded The Rainforest Alliance Certified seal.

“This achievement means the empowerment of a local African community in one of the poorest countries in the world,” noted Patrick F. Installé, managing director of EFICO. “Rainforest Alliance certification enables the farmers to sell their coffee as a specialty product. “The Rainforest Alliance started its work in Ethiopia at the request of coffee buyers, suppliers and farmers. We are involving local stakeholders to make sure that our certification standards are properly adapted to the local realities. We will also start training auditors because we believe that local professionals are the best experts in environmental and social issues.”

Today, Ethiopia is an important producer of high-quality coffee. Shade-grown Arabica beans are cultivated throughout the country. Small farms produce some 95% of the Ethiopian coffee production - around five million 60-kg bags.

FDA Rejects Health Claim of Green Tea

U.S.-The Food and Drug Administration (FDA) denied a petition that would have granted a qualified health claim for the relationship between green tea consumption and reduced risk for cardiovascular disease. While the petition, filed last year by AAC Consulting Group for Ito En (North America), cited 105 publications for substantiation, FDA only used 11 studies that it considered appropriate to the health claim process. In its letter denying the petition, Barbara O. Schneeman, Ph.D., concluded: “Based on FDA’s consideration of the scientific evidence and other information submitted with your petition, and other pertinent scientific evidence and information, FDA concludes that there is no credible evidence to support qualified health claims for green tea or green tea extract and a reduction of a number of risk factors associated with cardiovascular disease.”

FDA noted health claims are designed to characterize the relationship between a particular substance and a reduction in risk of contracting a particular disease. In examining scientific evidence, the agency focuses its review on human intervention and observational studies; other types of data such as animal and in vitro work cannot by themselves support a health claim relationship. As such, after winnowing down the submitted references and then assessing the conclusions of the appropriate studies, FDA concluded there is no credible evidence supporting a relationship between green tea consumption and a reduced risk of CVD. In its letter, FDA also noted it rejected the use of a qualifying disclaimer that could have run with the health claim, as it determined it would not rectify the “unsubstantiated” claim.

Ito En (North America) released a statement in response to FDA’s decision; Rona Tison, vice president of corporate relations, stated: “Although Ito En considers it unfortunate that the green tea health claim petition has been rejected by the FDA, the company will continue its research on green tea. Ito En looks forward to working with FDA to identify research supporting green tea and a specific benefit to human health.”

The National Coffee Trend Study

U.S. - The National Coffee Association (NCA), recently published a study that found coffee is tied with soft drinks in daily market penetration for the first time since 1990. The report found daily coffee consumption among American adults was up for a second year up to 56% from 53% in 2005 and 49% in 2004. “Americans are taking a more expansive view of coffee, and turning new attitudes into consistent behaviors that are expanding the category,” said NCA president and c.e.o Robert F. Nelson. “With vigorous acceptance of new market options and a growing cafe culture, we may be on the brink of a new renaissance for coffee.”

This nationwide report found that overall coffee consumption reached 82% among American adults. Those who drink coffee at least once a week jumped to 68% from 64% in 2005 and 2004. The increase was due to an overall rise in daily coffee consumption driven by consumers 25-39 years of age. At the same time, daily consumption of gourmet coffee beverages remained steady at about 16% over the same three-year period. While these numbers suggest an increase of traditional coffee consumption, how Americans define “gourmet” - given the wider variety of coffee options available in the marketplace - may impact the responses behind the numbers. A revised line of consumers definition of “gourmet” as most strongly associate it with taste, flavor, aroma, out-of-home purchase, premium packaging, and pricing.

The study also found that there is a positive correlation between coffee and health that showed a dramatic upswing from 2005 to 2006. Consumers who agreed that “coffee is good for my health” jumped to 40% in 2006 from 26% in 2005. Those who concurred that “In the past year, I have heard information about health benefits of coffee” soared to 53% from 37% last year.

This year’s study also introduced the National Coffee Drinking Trends (NCDT) system in the way the data was collected and analyzed. Among them are revamped age brackets and isolating narrower bands of age specific behaviors for all data points. The new age brackets also align with generational categories becoming popular benchmarks with market research professionals. For the first time, the 2006 survey also explored the attitudes of those who no longer drink coffee. Specially designed questions quizzed these “coffee rejectors” about prior consumption patterns and why they changed.

Among other new findings from the study are questions exploring consumer attitudes toward origins and flavor preferences. Demographic information were adjusted to focus on actionable variables such as consumers’ household income, ethnicity, and consumption among younger household members.

Indian Tea Exporters to Cash in on Drought in Kenya

India-According to a report in the Daily Express, India is hoping that a drought in Kenya will help boost its slumping sales. As the world’s biggest tea producer, India’s 1.5-billion U.S.-dollar industry is slowly recovering from a crisis that caused prices to fall since 1998 and exports to drop as well, but now prices are firming, officials say. In addition, countries that historically bought tea from Kenya are looking to India for supplies. “A massive crop failure in Kenya due to drought has led to a gap of 30 million-kgs (66 million-lbs.) of tea in world markets,” said Dhiraj Kakati, secretary of the Assam state chapter of the Indian Tea Association. “The drop in Kenyan tea output apart, overseas buyers are showing interest in Indian tea as we’ve been producing very high quality beverage,” Kakati said. Iran, Iraq, and Russia have shown interest and a Pakistani tea trader’s delegation visited India last month and showed interest in a new Assam tea blend.

Pakistan is a key player in the market, importing 80% of its total domestic consumption of 140 million-kgs (308 million-lbs) of tea- the bulk of imports coming from Kenya. “We’re doing some aggressive marketing,” Kakati said in Guwahati, the main city in the northeastern city of Assam, which accounts for 55% of tea production. “India’s tea industry is on a revival trend now and all indicators are very positive,” said A. Sharma, a major planter in Assam.Tea production has been booming in India, rising 13.2% to a record 928 million-kgs (2.04 billion-lbs) in 2005, according to the Indian Tea Board.

Starbucks Expands in Japan

Japan - According to a report published in The Nihon Keizai Shimbun, Starbucks Coffee Japan, Ltd., and other leading coffee and fast food chains are opening in universities, offices, and hospitals amid escalating land prices. Starbucks has begun launching stores at Okayama University Hospital, Dokkyo Medical University in Tochigi Prefecture, and the headquarters of financial insituations and electrical machinery manufacturers. Starbucks has opened seven locations with plans to increase the tally to 17 by March. The investment cost associated with these locations is nearly half that required for new stores in the downtown area. “There is no competition from other stores and we expect stable sales,” said a Starbucks representative.

Many companies in Japan are looking for well-known restaurant chains to set up shop on their premises because they believe that they will be able to lure more customers.



Tea & Coffee - July/August, 2006
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