FVH is completely sold out except for 16 lonely bags.

June 14, 2007

And the Cup of Excellence Guatemala 2007 is 3 hours from now and I had to get up as I just couldn’t sleep.

I’m in Bellingham, Washington for 3 more days before returning to Guatemala where there was a 6.8 earthquake today, 40 miles off the coast. I hear it’s been a gloomy day in Guatemala with some very dark clouds and thunder that preceded the scare of this earthquake that could have been a disaster had it been closer to the surface of the earth and or closer to the coast or inland.

My father was doing some work in Mexico and he has been on a bus all day making his way to Guatemala City in order to join other family at Anacafe at 7:00 a.m. this morning Guatemala time for the big party. I will be there next Monday, but unfortunately will miss out on the fun of kazoos and noise makers made of paper that roll out into a long air filled tubes that make… well – noise. Ten seconds before the screen refreshes the cheering begins and becomes a roar right up until the updated screen comes on. Then you hear growers yell and cheer that see their coffee bid up higher than before. And at the same time I can imagine specific individuals who are staring at a computer in different parts of the world in their home at odd hours or in that back office crammed behind the roasting room… clicking away the mouse and picking up the phone to discuss a change in plans with their buyer or buying group because someone out bid them or to communicate an interest in agressively securing their second choice. And at the end of the day, what do you get? Bragging rights.

I’ve concluded that for a grower to be in the Cup of Excellence, or for a roaster to be the winning bidder on a lot does not define success by any means, rather it’s being a part of something excellent. Often participation on either end is a fruit of sucess or at least the fruit of being purposefull =). I don’t see many roasters going out of business, but it seems to me most roasters buying CoE coffees recognize the marketing value and have no problem paying rediculous prices for coffee. And I think it’s great. It’s like real estate…. worth whatever someone is willing to pay. Sure it’s not for everyone, but it is a great tool that has a use. Especially in countries where it has developed. As far as intrinsic value, it’s all in the cup and determined blind of course. Sure one can expect that the overall quality of coffees in countries participating in CoE the first year might be like buying a new model of a car the first year the model comes out before all the kinks are worked out.

Now I’m left wondering with anticipation…. I know there are some that will bid on our coffee. But how high will it go? It’s been a funny realization for me to arrive at where we have customers that want to bid on our coffee and as opposed to a strategy of trying to secure a great coffee at the best price (lowest) possible… it’s a hope that it’s high for the sake of marketing… but not too high so they can still buy it. However not everyone has an extra hundred grand to drop on a pallet of coffee. I actually had a dream last night that I walked into the stumptown cupping room.. and there was an extra door (that isn’t really there) that lead to a huge attached warehouse containing over 10 Million lbs of CoE coffee (which would have to be the entire existance of CoE coffees and then some) on one side and tons of syrups on the other…. and that’s when it turned to a nightmare and I woke up. Something was really wrong. Congradulations Duane. Way to go strong!

It seems there is a time for everything. A time to go all out and a time to be modest and discerning.

Many have asked what it’s like to be on the other side of this event economically. Simply put this creates more exposure. The less exposure one has to begin with, the more it is worth in the end. And if one gets the top rank, it’s not priceless but seemingly close to it. But for the rest, consider this…..

You’re a grower and say the C market is at around $1.15/lb and you are used to getting spot at farmgate .15-.40 premium and your coffee is auctioned at double the C price. This now amounts to $2.30/lb green.
If you’re not willing to risk more than the bare minimum you submit 40 bags containing 100lbs of parchment. You are required to do this with out knowing if you are in the final auction so you may be required to pick up the coffee you submit also at your own expense if you do not make it past both the national and international jurys. Say you make it, if you’re far away you and you’re not a large grower you might spend almost $1000 getting your 40 bag lot (which is really only about 20 bags of green at 152lbs each) to the warehouse where you will also pay storage fees. 4 full bags dissappear as samples around the world… and then you end up with that magic number of 16 BAGS!!! And you then pay out 15% or more for auction expenses. So this leaves you with $1.95 price on 16 of 20 bags you submitted and after you back out around $1000 of misc expenses, you’re clearing a whopping $1.23/lb which you still need to pay tax on, and you’ve waited a few more months to get the funds you could have received spot at the farmgate.

All this to say, I’m pleased with progress. Auctions don’t make much sense if coffees are going in the low $2 range in the short run. They seem to be on the rise. High prices will infact attract more submissions of samples and make the competition much more competitive. So bid strong and enjoy great coffees!

That being said – I believe the real challenge and defining factor that separates the good from the great is nailing exceptional quality CONSISTENTLY OVER TIME. Here in lies what I believe is also the biggest challenge for coffee retailers accross north america. It seems we’ve placed such a high value on convenience that we’re willing to give up the demand or even the appreciation of something great.

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**************** POST AUCTION SUMMARY **************
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Well this was a first for us and exciting beyond belief. Thank you to those of you who bid on our coffee. It’s a strange thing to watch this unfold with only half the story. There were 3 bidders that bumped each other around consistently and started off VERY strong hitting $4-$5 with seemimgly with in minutes while many remained at the $1.5 starting point for while. It then creeped up consistently until hitting $8 where is sat for a while controlled by the same bidder #9227 who won first place at $19.50!
And then whole new bidder # 7087 swooped in and snatched it at $8.05! the last minute. I may be mistaken, but I’m pretty sure I never saw this number bid on our coffee before the entire time… and I don’t know that I even saw it anywhere else on the board. And boy is the curiosity killing me.

Thank you much 9227, 7621, and 1793 for bidding strong.

Congradulations to all bidders, and to the winners…. take good care of these coffees!

If you’re reading this 7087… please reveal yourself!

5 Responses to “FVH is completely sold out except for 16 lonely bags.”

  1. Peter Dupont Says:

    Hey Edwin and family,

    Great to read your perspective on the CoE auction!

    And congratulations! right now you above $7/lb in the CoE!

    see you!

  2. gabe Says:

    great post Edwin. Thank you for your insight… and the props on the photos!

  3. edwin Says:

    peter – thank you. you’ve got to come out next harvest to place your danish flag on your microlot.

    gabe – I get lots of great feedback from other photographers on how well you photograph people and objects… like coffee. =) Maybe you can come to Anacafe next year during the CoE auction day and document the chaos.


  4. Great post well done on the COE award and well done on the price

  5. t o n x Says:

    $8.05! congratulations. It looks like this was a _very_ healthy auction.


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