Starbucks ditches the discounts. Plus, Brazil receives much-needed rain—although it might be too late—and another study shows coffee’s positive impact on Alzheimer’s.
‘Rains May Have Come Too Late for Brazil’s Coffee’ – via Reuters
Across Brazil, drought and wildfires have impacted coffee production, driving prices ever higher in the world’s largest coffee-producing country.
Rain has finally come to Brazil’s coffee-growing regions, but experts and farmers fear it may be too late for trees to fully recover before the next harvest. “Next crop won’t be big, we can already expect losses,” agronomist Alysson Fagundes told Marcelo Teixeira and Maytaal Angel for Reuters.
Coffee trees stressed by drought will need to expend extra energy and produce leaves instead of fruit once the rain returns. Farmers have been pruning trees to help the plants recover, but they will take at least a year to begin producing fruit. “The crops are in the intensive care unit,” farmer Osmar Junior said. “Before they start producing, they will first need to be discharged from the hospital.”
Even those with irrigation systems, arguably best equipped to handle drought conditions, struggled as rivers and streams dried up completely. “I have irrigation, but I have no water,” said Mario Alvarenga, who estimates his farms will see a 10% fall in yield next year after seeing a similar drop off in 2024.
Traders and analysts are more optimistic about future harvests following forecasts anticipating more rain. “Most people have reduced their crop forecasts for next year, but not by much,” said an anonymous European coffee trader. “By all accounts it is still going to be a pretty decent crop.”
‘Starbucks Scales Back Discounts Under New CEO’ – via The Wall Street Journal
Starbucks has long relied on discounts and promotions to lure in customers. But as sales slowed over the past year, the coffee giant began pushing them more aggressively. Discounts like buy-one-get-one-free drinks and beverage deals have caused customers to flock to stores en masse when promotions are running, leading to employee burnout and customer complaints when drinks don’t come out fast enough.
But revenue didn’t go up enough—sluggish sales were part of the reason former CEO Laxman Narasimhan was ousted in August.
His replacement, Brian Niccol, promised to make Starbucks “a welcoming coffeehouse” again. Part of his strategy includes scaling back promotions and discounts.
Heather Haddon reports for The Wall Street Journal that the move is part of Niccol’s plan “to reposition the coffee chain after a turbulent year … Starbucks is pivoting away from discounts as Niccol emphasizes the company’s hallmarks of selling handcrafted, premium coffee.”
Since becoming CEO, Niccol has made a series of leadership changes, Haddon writes, “seeking to improve the in-cafe experience for customers.” Niccol also cited reducing strain on workers as part of the reason for scaling back discounts—workers have voiced their concerns regarding drink promotions and understaffing, according to an internal company survey seen by Bloomberg.
Survey results reveal that just 33% of workers said that stores are consistently well-staffed, reports Bloomberg’s Daniela Sirtori. According to store managers interviewed by Sirtori, baristas and supervisors are regularly skipping breaks in order to keep up with demand. “We are constantly only given a skeleton staff,” one worker said in the survey comments.
Niccol responded to the survey, saying that “the team is already working on it. You are being heard.” A company spokesperson said Starbucks is “refining” its staffing allocation model and has “bolstered staffing levels” at 3,500 stores over the past year.
In a recent strategy update for store leaders, reported on by the WSJ, Starbucks North America President Sara Trilling said the discounts and promotions were being scaled back to give baristas more time to focus on making drinks and customer service. “We know the broad Starbucks rewards offers that we’ve been doing previously had been hard,” Trilling said.
Read the full story here or via MSN here.
‘Private Equity Firm Verdane Takes Majority Stake in Coffee Software Developer Cropster’ – via World Coffee Portal
Cropster, the software company used by many coffee roasters and cafes around the world, has been acquired by the private equity firm Verdane. The financial terms were not disclosed, but it adds Cropster to more than 400 investments made by the Norwegian-based company since 2003 for a total of €7.7bn ($8.3bn) in assets under management.
Cropster, through its roasting software platform, Roasting Intelligence, and Cropster Cafe management system,, has become a key tool for many coffee companies.
The acquisition will “further expand the company’s software offering, accelerate growth and consolidate Cropster’s global market-leading position as the operating system for the coffee industry,” according to a press release by Verdane.
“We are extremely happy to have found a new partner that shares our values and will join us as we take Cropster to the next level,” said Cropster CEO Andreas Idl. “We are confident of their expertise in software and their ability to work in international markets, as demonstrated by their excellent buy-and-build track record.”
Private equity has continued to pour into the coffee industry over the past year, despite some examples of problematic ownership and rising interest rates putting a damper on investments. According to World Coffee Portal, Verdane “only invests in businesses which pass its ‘2040 test’, which assesses whether companies have long-term, futureproof and sustainable business models.”
More News
‘Starbucks Expands Company-Operated Portfolio with New Acquisition’ – via Global Coffee Report
‘Go for the Gold (Mountain) in This New Sample Roasting Competition’ – via Daily Coffee News
‘In Fort Worth, The Youth Coffee Expo Offers Disadvantaged Youth A Future In Coffee’ – via Sprudge
‘Best of Yemen 2024 Auction Sets New Global Benchmark’ – via Global Coffee Report
‘US Department of Labor Sues New York Coffee Chain Over Overtime Pay’ – via Daily Coffee News
‘EUDR: EU Council Gives Green Light to Extend Application Timeline by One Year’ – via Communicafe
‘Ethiopian PM says Coffee Sector has Doubled Despite Challenges’ – via Global Coffee Report
Is Coffee Good For You?
There has been a lot of research done on the link between coffee consumption and neurodegenerative diseases like Alzheimer’s.
Like most health-related topics, results have been mixed. Science is a lot of things, but definitive it isn’t. However, new research adds another study to the “coffee is good for you” side by showing that drinking more caffeine could lower your risk of developing Alzheimer’s.
The study, published in Alzheimer’s & Dementia, found that older adults who consumed higher amounts of caffeine had a lower risk of mild cognitive impairment (MCI) or Alzheimer’s compared to those who had low or no consumption.
For the study, French researchers analyzed data from 263 participants over 70, including a baseline clinical evaluation, food and beverage survey, MRI scans, and blood and cerebrospinal fluid samples. The researchers found that lower caffeine consumption—just over 200 milligrams per day or less—correlated with a higher risk of MCI or Alzheimer’s compared with higher intake.
As with most such studies, the researchers were keen to stress the observational nature of the study and that “the associations observed did not allow us to establish with certainty a cause-and-effect relationship between caffeine consumption and the effects observed.”
Beyond the Headlines
‘The Quantitative Case Against Loyalty’ by Ashley Rodriguez
‘Morgan Eckroth on Fighting TikTok’s Algorithm and Celebrating Cafe Life’ by Lydia Stolper
