Saturday, May 2, 2009

Today's coffee prices

I have been surprised to see the grocery store prices of many coffees coming down. Importing costs are incredibly high right now, and Customs and the FDA are requiring more paperwork from originators than ever before. There was a day long ago (4 years) when paperwork was simple and customs saw its job as to catalog everything that came in and watch out for specific problems. Now, customs' job seems to be to prevent all importing. Between multiple exam fees and two extra rounds of paperwork and double fees, it is obviously either a hidden tariff situation or simply a bald attempt to put small importers out of business by making the importing cost exceed 300% of where it stood 4 years ago. More on that another time...

So, with all coffee importer prices going up, why are we seeing bargains at the grocery store?

Take one example that I decided to follow through: New England Coffee placed a huge stand in all the Market Baskets in our area with 10-ounce bags of coffee selling 2 for $5.00. 2 for $5.00??? That wouldn't cover the cost of decent beans, much less packaging and marketing and the store's markup. What's up?

First, when coffee sales are down, coffee companies try to offer themselves as sacrificial lambs to the supermarkets. Coffee is one of the time-honored "loss leaders" that supermarkets use to pull customers in. That means, they sell the coffee on promotion for a small loss and hope to make it up on the grocery bill.

Second, coffee producers often target a special blend or different coffee for these promotions. Often, these blends will use inferior beans or have some other issue. To whit:

I picked up several of the sale coffees and turned them over to look at them. They looked like the usual New England Coffee product but they weren't. Nothing written about the coffee... just the flavor. Yes, they were all flavored coffees. I noted the one-way vent and squeezed the bag to sniff the aroma. Nothing happened. Thinking the bag was defective I picked up another and squeezed. Pop! The bag exploded all over me. Oops, time to hang the head and look contritely at the stocker down the aisle until her wan smile tells me that it's okay, it happens, and they will clean it up.

But now I look down at my coat. It is covered with fine brown powder that does not resemble coffee grinds. I try to brush it off with no success; it has permeated the fabric. I note that the grind of the coffee is totally uneven, much of it simply a fine powder. Other coffees brush off my clothes, this clings. What's more, it reeks of artificial caramel-vanilla fake hazelnut flavor. I smell like a bad room air freshener.

So now we see what is going on. I look closer and see that the apparent one-way-valve is a fake, it is not a valve, it is a sticker that looks like a valve. It's flat. Or else, it's a new cheap type and none of them are working. And the quality of the coffee and the overwhelming artificial scent tell me that we have cheap coffee poorly ground, loaded with artificial flavor to cover up low quality.

Now I understand the 2 for $5.00 special, it is just a specially-developed loss leader. None of the coffees on the stand are part of the company's regular line at all. It saddens me to see things like this at the market and I wish companies would not sully their names with this sort of thing. But I move on, embarrassed to be the dodo that spilled the coffee at the store, but at least secure in understanding how this special price can seem to buck the trend of coffee pricing.