Coffee News Club: Week of June 17th

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Lights, camera, Starbucks—the coffee giant is launching a production studio. Plus, new ideas for the coffee supply chain and surprise! Rudy Giuliani’s coffee supplier is also bankrupt.

‘ICO and UNIDO Propose New Global Coffee Fund’ – via Global Coffee Report

Coffee consumption is increasing, according to recent reports from the National Coffee Association. However, growing enough coffee to meet demand is becoming more challenging, especially with the threat climate change poses to coffee farms. 

Figuring out how to support the world’s millions of farmers—many of whom live in poverty—is essential. But the industry is multi-faceted and endlessly complex, making it hard to find a one-size-fits-all solution. 

The International Coffee Organization (ICO) and the United Nations Industrial Development Organization (UNIDO) might have a solution: a proposed new fund to support the coffee sector, particularly smallholder farmers.

The two organizations released a report called ‘Sustainability & resilience of the coffee global value chain: towards a coffee investment vehicle,’ which examines the structural challenges faced by coffee producers, from price volatility to income gaps to climate change. The report proposes the creation of a fund to lead “new concrete efforts to strengthen climate adaptation measures and foster sustainability in the Coffee Global Value Chain (C-GVC),” according to a press release.

The investment fund would be financed by pre-competitive private sector contributions and other relevant donors such as governments. This would pay for initiatives such as farm renovations, which the report highlights as a critical area to address.

“Generally speaking, coffee plantations are aged and have low productivity in many origins, a situation exacerbated by climate change,” the report states. Many farms “require significant investment in plant renovation and improvement of agricultural practices through circular and regenerative practices, and more efficient marketing systems.”

While assigning an exact dollar amount is difficult, the report estimates that the overall investment needed for the fund would be between $256.2 million and $1.04 billion annually.

“The report is an important resource for navigating the requirements and options for mobilizing public and private funding to support all stakeholders across the C-GVC: from farmers to consumers,” said ICO Executive Director Vanúsia Nogueira. “It also provides invaluable and timely inputs to the G7 leaders to catalyze investment and commitment to ensure the resilience and sustainability of the coffee industry.”

Read the full story here.

‘Starbucks Launches Its Own Production House, Starbucks Studios’ – via Adweek

Two tickets for The Frappuccino Movie? Starbucks is launching its own production studio, which it says will “produce original entertainment and tell stories that deepen connections and spark conversations.”

Starbucks Studios is a collaboration between the coffee colossus and Sugar23, a media company that “specializes in connecting brands with filmmakers and producing premium branded entertainment,” according to Adweek. The Starbucks announcement is light on details but contains plenty of grandiose claims, including that Starbucks is “a long-time supporter of the arts” and “believes in the power of creativity and storytelling to foster human connection and joy.”

The studio will “shine a light on the stories and people who inspire us, from young, emerging artists to innovators, changemakers and others who are making a positive impact on the world,” said Christy Cain, Starbucks’ vice president of brand and partnerships.

This isn’t the first time Starbucks has dipped its toe in the world of filmmaking: the press release notes its “history of supporting original works that reflect its values” and spotlights various examples. These include a “content series” called Upstanders and documentaries about the Rwandan genocide and the world of soccer. Going further back in time, the now-defunct Starbucks Entertainment produced the 2006 feature film Akeelah and the Bee.

While it’s unclear what Starbucks Studios will actually produce, Inc. Magazine reckons that it’s a reaction to the popularity of TikTok and the need for big companies to reach younger consumers. “This is another reminder that in the 21st century, video is vital, and that to be truly successful, a company’s PR and branding campaigns may have to move beyond static ads or even traditional video ad breaks.”

But maybe there’ll be space for some original movie production, too. We look forward to seeing The Howard Schultz Story premiering at Sundance in 2028.

Read the full story here.

‘Rudy’s Coffee Roastery Also Just Went Bankrupt’ – via the Daily Beast

It’s time to check in on the absurdity that is Rudy Giuliani’s coffee venture. 

In May, the erstwhile mayor of New York City launched Rudy Coffee in what most took to be a desperate attempt to raise some money as he faced bankruptcy and a multi-million-dollar defamation judgment.

Facing a $148 million bill for spreading lies against two Georgia election workers regarding the 2020 US election, Giuliani declared bankruptcy in December 2023. His creditors have since subpoenaed Burke Brands LLC, the Miami-based coffee company supplying Rudy Coffee. The subpoenas allege that “the former mayor’s deal with the roaster funnels money into a corporate account linked to Giuliani, a means to divert income away from his debts,” according to the Independent.

Now, it turns out that Burke Brands is also bankrupt. They first filed for Chapter 11 bankruptcy protection in 2022, citing “a temporary cash crunch” caused by the COVID-19 pandemic. In March, the company said it had emerged from that bankruptcy, according to the South Florida Business Journal, but in May, it requested a change in how it repaid its debts.

A lawyer for Burke Brands told the Daily Beast that it was “completely coincidental” that both his client and Giuliani were in Chapter 11 bankruptcy and that Rudy Coffee launched at the same time as the debt repayment request. Despite all this, a spokesperson for Giuliani said that bags of Rudy Coffee are “flying off the shelves,” while Giuliani recently gave a tour of the “pristine… I call it a laboratory” space producing his coffee. 

Read the full story here.

More News

Foxtrot Market Coffee To Reopen Shops in Dallas‘ – via the Dallas Express

Coming in July: The First Detroit Coffee Week‘ – via Daily Coffee News

Coffee Prices Heading Up as Folgers’ Owner Faces Higher Costs‘ – via Bloomberg

The Stunning Carbon Costs Of Competitive Coffee‘ – via Sprudge

Coffee Giant Switzerland Launches the Swiss Sustainable Coffee Platform‘ – via Daily Coffee News

Starbucks Just Joined McDonald’s on the $5 Meal Deal Bandwagon‘ – via Quartz

Howard Schultz Wishes He’d Trademarked The Latte’ – via Sprudge

Report: 45% of US Adults Said They Drank Specialty Coffee Yesterday’ – via Daily Coffee News

The Week in Coffee Unionizing

A week after workers announced their intent to unionize, Philadelphia-based OCF Coffee House abruptly and permanently closed all three locations. 

The company’s owner, Ori Feibush, informed the 45 staff members of the closure via email, citing rising costs, reduced sales, and impending lease expirations as reasons for closing.

He also blamed the expense of responding to the unionization. “The administrative and legal costs associated with your desire to organize has regrettably moved us beyond any cost that we could sustain,” Feibush wrote. The costs “were staggering beyond anything — tens of thousands of dollars in just the [last] week and a half,” Feibush told the Philadelphia Inquirer. He also said the business had never been profitable over its 13 years.

OCF workers had announced their plan to unionize with Local 80, the Philadelphia-wide barista union, hoping to get better wages and create a more democratic workplace. Local 80 has started a GoFundMe to support the fired workers. 

“This does feel like retaliation,” barista and assistant manager Ava Alabiso told the Inquirer. “It’s all just so incredibly sudden. We’re all just in the lurch trying to figure out what to do.”

Feibush also runs OCF Realty, one of Philadelphia’s biggest real estate developers, which he said had been subsidizing the coffee company. OCF Coffee House had already closed three locations before the unionization drive began. According to ProPublica, between the coffee shops and the real estate business, Feibush received over $1.5 million in PPP loans during the pandemic, all of which were forgiven.

“I really don’t know what the next steps are, I know that our next step is that we’re not going to stop fighting this,” Alabiso told the Philly Voice. “I don’t think he should be allowed to just rip the rug out from so many people for, in my head, with no cause.”

In other union news, Blank Street Coffee workers in New York City ratified their first contract. At the same time, baristas at Sweetwaters Coffee and Tea in Ann Arbor, Michigan, had their union recognized by the National Labor Relations Board almost a year after they began organizing.

Beyond the Headlines

‘In Nicaragua, Women Coffee Pickers Balance Work, Children, and Life’ by Malena Kruger

‘Everything You Need to Know About the EU’s Deforestation Legislation’ by Fionn Pooler

‘Cupping is a Game of Chance’ by Christopher Feran

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Fionn Pooler

Fionn Pooler is a coffee roaster and freelance writer currently based in the Scottish Highlands who has worked in the specialty coffee industry for over a decade. Since 2016 he has written the Pourover, a newsletter and blog that uses interviews and critical analysis to explore coffee’s place in the wider, changing world (and also yell at corporations).

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