During the Civil Rights movement it was tough for African-Americans to sit down in a bus station and enjoy a cup of coffee. Today anybody can walk into a Starbucks but they can't buy a cup of the world's top espresso roast. Not even here in Brazil, the world's coffee capital, where I'm blogging from.
Call it free markets, call it fair trade, call it Starbucks excellence in marketing. The bottom line is that less expensive Robusta doesn't fit Starbucks image or that of its customers. But Robusta is the world's favorite espresso coffee, containing twice as much of what people really want from an espresso than more expensive Arabica roasts ... caffeine buzz.
Coffee is the latest test of the globalist model that favors selling goods and services based on value perception rather than on price. And in a tight money US economy Starbucks gambled, putting its brand loyalty on the line by making customers pay more. Starbucks fans weren't happy in January when the coffee giant initiated surprise price increases on many drinks.
But the now more expensive 1 oz Arabica shot contains just half the caffeine buzz one gets in a 6 oz cup of drip Arabica coffee. Price hikes might mean little to the soccer mom driving her Range Rover with four cup holders and two cell phone chargers who frequents the store on Wilshire in Beverly Hills. But it means a lot to senior citizens living on fixed incomes who gather at the Lake Avenue Starbucks in Lake Worth, Florida.
When double caramel macchiato fans are smothering the expensive Arabica coffee taste with syrups and sugar and artificial sweeteners why pay more for an expensive Arabica shot when Starbucks can open the door to Robusta espresso, offer the big buzz that coffee lovers want for less and pass the savings on to their valued customers.
After all, in the Latin Quarter in Paris, on the Via Veneto in Rome and along the Prado in Madrid, when it comes to espresso, Robusta is the people's choice.
Arabica espresso lovers will definitely wake up and smell the coffee now that
the International Coffee Organization (ICO) has blamed global warming for lower production and higher prices. At a recent meeting in Guatemala City Nestor Osorio, head of the ICO, reported that Colombia Arabica production has dropped 33 percent. Osorio claimed that coffee growers and energy companies are now competing for control of the cooler highlands in Colombia and other nations where expensive Arabica grows best. Forget fair trade and socially responsible growers. The best beans go to the highest bidder and consumers get sticker shock.
Starbucks big value proposition is the fabled Arabica espresso taste, never mind that many coffee lovers smother it with other flavors. Starbucks media collateral indicates that its Arabica-based espresso products are created for taste preferences in particular markets. But unlike the beer industry, which openly uses flavor enhancers like hops oils to add taste and value, Starbucks doesn't reveal whether they employ any flavor modification processes to satisfy market taste preferences in their Arabica expresso.
Because it is a social beverage, coffee is one of the most discussed topics on the internet. But the conversational nature of online coffee chat actually undermines the ability of consumers to develop a strong voice to employ what economist John Kenneth Galbraith called "countervailing power" by organizing to win price rollbacks. Using online resources proactively, globalism has helped create a docile consumer base that protects its first mover advantage.
Connoisseurs of champagne watched quietly when the French government expanded the Champagne region of France to accommodate growing demand for the bubbly. Nobody questioned brand dilution when France expanded the borders of the Cognac district to meet demand. Mexico has a government organization that restricts tequila production to agave plants grown in the state of Jalisco. But you can ask any bi-lingual vendor at a liquor store in border cities like Ciudad Juarez or Nogales what media chafa tequila is, and they will tell you.
When he was working on his Nobel Prize for bringing "peace with honor" to Vietnam, godfather of Globalism Henry Kissinger ordered the bombing and defoliation of large sectors of Southeast Asia. The coffee producing regions of Vietnam were turned into an economic basket case. Today, Vietnam is the #2 producer of coffee in world according to the ICO, having surpassed Colombia. Most of the production is Robusta, used in espresso roasts, and in freeze-dried instant coffees.
Whether its Arabica versus Robusta, expensive hybrid cars versus the $3000 Tatas and Nissans that are ready for market in India and Australia, or costly name brand software versus inexpensive Linux based products, the globalist paradigm for "democracy" favors high price bundled with the essence of value, rewarding those in the eye of the triangle, reinforcing the top down ordering of societies and the pathology of underdevelopment that keeps poor nations poor.
With coffee prices trending upward maybe its time for the great Arabica versus Robusta espresso taste test ... retweet that.