Coffee News Club: Week of March 20th

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Young doctors being pitted against coffee pros was probably not on your 2023 news forecast. Plus, Keurig Dr Pepper finances a study on coffee farmer income, and the Heine Brothers union ratifies a contract.

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‘Keurig and Coffee Science Foundation Backing Farmer Income Research’ – via Daily Coffee News

Keurig Dr Pepper (KDP), one of the largest beverage companies in the world, is partnering with the Coffee Science Foundation (CSF) on a project to evaluate the effectiveness of interventions aimed at increasing producer wages and productivity.

The research, underwritten by KDP and led by teams from the University of Naples Parthenope and the London School of Economics, aims to “illuminate learnings about the most effective ways to improve coffee farmer prosperity,” according to Whitney Kakos, director of supply chain sustainability at KDP.

Keurig Dr Pepper, a publicly-traded company whose major shareholders include JAB Holdings and Mondelez International, had sales of more than $14 billion in 2022. CSF is a support organization to the Specialty Coffee Association and serves as its research arm.

Normally, I’d put this news down further in the ‘The Week in Corporate Coffeewashing’ section. Most people in the specialty coffee industry agree the best way to help producers and make the coffee industry more sustainable is to pay more for the green coffee we buy—we don’t need a study to tell us this. Looking at multinational corporations that report staggering profits, perhaps we could focus on solutions that distribute profits more evenly across the supply chain—this would improve coffee producers’ lives (most of whom live in poverty) and increase coffee quality.

The answer seems simple: pay farmers more for coffee. Do we need a study paid for by a $49 billion company to tell us that?

Read the full story here.

‘Junior Doctors Could Earn More Serving Coffee at Pret, Says Union’ – via the Independent

A newly-qualified doctor working for the United Kingdom’s National Health Service (NHS) could earn less than a barista at Pret a Manger. This is the message from the British Medical Association (BMA), the trade union for doctors in the UK, in an advertising campaign launched to coincide with strike action from junior doctors.

Pret recently announced its third pay rise in a year, bringing the potential wage for baristas up to £14.10 per hour at the top end, depending on experience and location. On the very low end, a junior doctor in England (roughly equivalent to a US intern) makes £14.09 per hour. “Thanks to this government you can make more serving coffee than saving patients,” the BMA said in a press release. “This week junior doctors will take strike action so they are paid what they are worth.”

The NHS has been suffering from a compounding list of ailments for decades: massive underinvestment, a lack of beds, staff shortages, and more. Nurses and ambulance workers have taken industrial action over the past year to demand better pay and working conditions. Negotiators recently agreed on a tentative pay rise deal for some NHS workers. As of this writing, junior doctors are not included in the deal, although negotiations are expected to begin soon.

Pret and Costa Coffee have announced multiple pay rises for staff over the past year as inflation in the UK hovers at 10%. While it’s odd that the BMA felt the need to pit young medical professionals against coffee workers, they did clarify on Twitter that they support the pay raises for Pret workers: “We are just asking for the same treatment for doctors.”

Unsurprisingly, comparing junior doctors’ pay with baristas has been controversial in the UK. The government pointed out that more experienced junior doctors (similar to a US resident) can make much more, depending on their circumstances, while various fact-checking articles also note the need for wider context, such as working hours and experience.

Social media criticism has focused less on the semantics and more on the lack of solidarity between workers. “While everyone has expressed solidarity with the doctors demanding [a] pay increase,” an article in HuffPost UK wrote, “many people have voiced the fact that the BMA should not have attacked hospitality and service industry workers in order to get their point across.”

Read the full story here.

‘Silicon Valley Bank Collapse Hits Companies Such As Camp, Compass Coffee’ – via MSN.com

The collapse of tech-focused Silicon Valley Bank (SVB) is the biggest US bank failure since the 2008 financial crisis. The bank, popular with startups and the broader tech community, disintegrated rapidly in a matter of days thanks to a bank run that ended with California regulators closing the institution and putting its assets under government control.

It wasn’t just tech companies and science startups that lost money: Washington, D.C.-based specialty mini-chain Compass Coffee’s payroll provider was “severely impacted” by SVB’s collapse, according to an email from CEO Michael Haft that was obtained by FOX Business. This meant the company’s payroll “was not processed by the bank as planned.”

Haft said employees would be paid over the weekend and that Compass had changed payroll providers. US regulators offered assurances that they would guarantee all SVB customers’ deposits, a move designed to stop further bank runs and help companies continue paying their staff.

Read the full story here.

More News

‘SCA Announces Finalists For The 2023 Sustainability Awards’ – via Sprudge

‘Peet’s Coffee Worker Killed in Oakland Roof Collapse Was a 17-year Employee’ – via LA Times

‘Governor Rejects Folgers Coffee Co.’s Tax Exemptions in State’s Final Decision’ – via Louisiana Illuminator

‘Class Action Suit Alleges Coffee Chain Dutch Bros Misled Investors’ – via Daily Coffee News

‘Pedro Pascal’s Coffee Order Is A Cry For Help’ – via Sprudge

‘Middle East Coffee Marketplace and App Cofe Raises $15 Million’ – via Daily Coffee News

‘Oatly Seeks Profitability in 2024 Following Supply Chain Restructure’ – via World Coffee Portal

The Week in Coffee Unionizing

  • Unionized workers at Kentucky-based Heine Brothers’ Coffee reached a tentative agreement with the company, just 11 months after announcing their intent to organize. The deal includes guidelines for wage increases, reclassifying the schedule to give full-time workers access to more hours, and the ability to use paid time off as sick leave. Union members will now vote on the contract. Heine Brothers is the second-largest unionized coffee chain in the country, behind Colectivo Coffee (Starbucks has more unionized workers, but they are represented on a shop-by-shop basis).
  • Starbucks Workers United asked investors to support a shareholder proposal for an independent review of the company’s labor practices. “We believe Starbucks’ anti-union campaign against us violates the company’s own commitment to respect its employees’ rights,” the union’s letter says. The assessment proposal is supported by two top proxy advisory firms and the German asset management and financial services giant Allianz.
  • A federal court in Denver is hearing arguments and testimony alleging that Starbucks broke the law in its dealings with the union in Colorado. The National Labor Relations Board hopes to win the reinstatement of three workers and back pay and damages for other unfairly targeted employees. “Starbucks’ unlawful tactics go against unionization and our country’s laws,” NLRB attorney Isabel Saveland said during opening remarks. Attorneys from Littler Mendelson, representing Starbucks, described the allegations as overblown while defending the company’s actions, saying, “The real world has consequences and people are held accountable.” 

Is Coffee Good For You?

New research from the UK and Sweden has found that high blood caffeine levels might help lower your risk of type 2 diabetes.

The study, published in BMJ Medicine, builds on previous studies that have found coffee to lower the risk of diabetes and cardiovascular disease (although some have found the opposite). While many such studies are observational, this new research used a statistical technique called Mendelian randomization, wherein genetic variants are used to assess the causal relationship between a trait and an outcome.

Researchers investigated the role of two gene variants that are associated with the speed of caffeine metabolism and used them to determine “genetically predicted” blood caffeine levels among roughly 10,000 participants in six long-term studies.

Those who carry the gene variants associated with slower caffeine metabolism consume less coffee on average than those who metabolize it quickly—but have higher levels of caffeine in their blood. The researchers found that higher blood caffeine levels were associated with a reduced risk of type 2 diabetes.

However, “individuals should not alter their dietary preferences or lifestyle based on the findings from this study alone,” senior study author Dipender Gill said, “because as well as having potential beneficial effects, caffeine can also have harmful effects if consumed excessively.”

It’s also worth pointing out the limitations of this study: participants were of predominantly European ancestry, while the researchers looked at caffeine specifically rather than coffee more generally. One professor interviewed by the Guardian also pointed out that while the study “represents good hypothesis-forming or idea-forming science,” it does not prove cause and effect. “We therefore need to be cautious not to rush to over-interpret it.”

Beyond the Headlines

‘Vietnam’s Coffee Culture Survives 10 years of Starbucks’ by Lien Hoang
‘How Modest Coffee Lost $250K On A Distributor Order, Then Made It All Back Again’ by Garrett Oden
‘”No Billionaires Were Enriched Through The Sale Of This Coffee”: An Interview With Author John Green’ by Fionn Pooler

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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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