History Part 5 - Coffee trading in the modern worrld

Belated in history; expansive on charm and mystery; the romantic tale of the humble coffee bean eventually succumbed with the advent of the 19th century Industrial age and the birth of modern commercialization. In the history of world-wide commercial enterprise the United States of America has certainly  played an immense role in making markets and reshaping social attitudes and cultures as products undertake a transformation from the old to a repackaged modern and popular look.

John Arbuckle, an entrepreneur and roaster of coffee beans, from  the USA, that filed for the first coffee brand - 'Ariosa'  in 1865 . Before this time coffee beans were sold over the counter in drug stores as "green" or unroasted beans. The coffee beans had to be gently roasted over a wood stove or

campfire in a skillet before they could even be ground by hand and brewed into a drinkable beverage. The uneven process of roasting over a naked flame was very difficult and often burned the coffee beans beans which consequently ruined the overall flavor of the coffee brew, Arbuckle, being the perfectionist that he was, experimented widely with glazing the coffee beanwith several combinations of water, egg, gelatin and sugar. This was because of the fact that once you grind the coffee the coffee powder will quickly lose it's flavor within 24 hrs. So Arbuckle had to invent a solution to prolong the life of the coffee powder inorder to package it and then sell it nationwide. In fact his production methods became so based upon sugar glazing that Arbuckle himself decided to go into the sugar business also to secure his own supply routes rather than to surrender any profit to sugar traders who would hold his coffee production to ransom.

By the late 19th and early 20th centuries there were 2 distinct types of coffee genus that became standardized as the basis for mass coffee production in the 20th century for large commercial companies like Maxwells, Nestlé and other commercial sellers of packaged instant coffee powder products that changed the entire culture of coffee drinking with the introduction of packaged coffee. Robusta and Arabica coffees became the 2 distinct coffee standards and both are produced by two botanically different trees. The Robusta trees have a higher caffeine content and a much distinctly stronger taste than the Arabica. The Arabica produces a much milder and much more aromatic coffee flavor than the renown caffeine powered Robusta.

Instant commercial coffee really owed its success to the birth of television and the power of advertising through this new medium. In 1938, the Swiss company Nestlé, was asked by the government of Brazil to try find a solution all their coffee surpluses since Brazil was by now the largest producer of

coffee. Nestlé took a long hard look and then ingeniously came up with the solution of freeze-dried coffee. from this discovery Nescafe was developed as a brand and then first introduced to domestic consumers in Switzerland to test the appeal of the new freeze-dried coffee. but it was not until the age of television that coffee sensationally became the world's most actively traded consumable product.  Instant coffee, although invented in 1909, really became an instant hit in 1956 when the commercial television was introduced and went hand in hand with the powerful advertising industry.  Programers knew that commercial breaks were such a short a time in which a cup of tea or coffee can be brewed. But companies like Nestlé in Europe and General Foods in USA suddenly realized that here was a golden opportunity  to market the instant coffee brand where families can take a quick break, grab a coffee and then huddle round the television to watch their favorite shows resume. As a result of the instant coffee development in the late 1950's tea companies also jumped on the advertising band wagon to launch their own response with the ever popular tea bag.

Culturally speaking, coffee has come to play a major role in society in all cultures around the world. Particularly in the Western world coffee has come to redefine social habits of congregation and consumption. For example the very word coffee-break itself originates from 19th century Wisconsin where Norwegian immigrants from the city of Stoughton held an annual coffee break festival. Indeed in 20th century with the rise of modern corporations, hard work ethics have been associated with the popular consumption of coffee as a driving force to stimulate productivity. The Pan-American Coffee Bureau in an advertising campaign in 1952 encouraged American consumers to just -"Give yourself a Coffee-Break — and Get What Coffee Gives to You."

Today the trading of coffee beans has become so sophisticated now that ever popular cafes have sprung up in every city from massive multi-national chains like Starbucks and Seattle Coffee Company to the local cafe book their deliveries in advance as much as even a year ahead or more. The 2 prominent centers of global coffee trading are New York firstly and then London.

As Chicago became the home for the trading of futures contracts for grains because of the Midwest and the 'Grain Belt' it was New York that became the center of trading futures contracts for coffee quite simply because coffee was

largely an imported product compared to home grown grains. Coffee futures have traded in New York since 1882. First of all they were traded on the New

York Coffee Exchange which then merged with the Sugar Exchange in 1917 and the Cocoa Exchange in 1970 to become known as the Coffee, Cocoa and Sugar Exchange, and then renamed the New York Board of Trade which today is now part of ICE Futures. U.S. Coffee futures contracts are traded via the ICE under ticker symbol KC and quoted in dollars per pound.  One Coffee futures contract is 37,500 pounds. The Exchange uses a basket of coffees to establish the “basis.” Coffees are judged better at a premium; those that are judged inferior are sold at a discount. Basis: Mexico, Salvador, Guatemala, Costa Rica, Nicaragua, Kenya, New Guinea, Panama, Tanzania, Uganda, Honduras and Peru; Plus 200 pts: Colombia; Minus 100 pts: Venezuela, Burundi and India; Minus 300 pts: Rwanda; Minus 400 pts. trading hours are - Intercontinental Exchange (ICE): Monday-Friday 1:30am-3:15pm EST. In London, futures trading for Coffee grew relatively late. It was not until the 1970's when the first British futures contract for coffee began to be traded on the London commodity exchange (LCE), which then was later reorganized
as the London international financial futures exchange.

The leading producers of coffee in the world today are - Brazil, Vietnam, Indonesia and Colombia.

Reflections upon the modern world of coffee consumption - Pieter Bergli, cafe enthusiast