Passenger

The Cup of Excellence competition was started in 1999 by George Howell and Susie Spindler. Its purpose was, and still is to this day, to find the best coffee producers in any given country of production. This is done via a rigorous process of blind analysis, first by a National Jury of roughly a dozen people (who, themselves, are rigorously vetted for the honor of being a Cup of Excellence judge), and then by an International Jury comprised of roughly 20 industry professionals from around the globe. As each lot enters the competition process it is assigned a code known only to the competition auditor. Each lot is cupped (tasted) numerous times. The further along the competition a coffee progresses the greater the number of times it will be evaluated blindly. The top ten lots (as ranked by the International Jury) will have been tasted at least 120 times by the end of the competition! For more information regarding the general rules of the competition check out this link.

After the coffees are ranked by the International Jury there is an online auction open to buyers all around the world. The auction serves two purposes. Firstly, it drives the prices of the coffees up. The lion’s share of money garnered via the auction makes its way back to the producer. Secondly, it gives coffee producers more direct market access, connecting them directly to buyers and also plugging them into a system where buyers, the world over, know to look for excellent producers/coffees. The Cup of Excellence competition has pioneered integrity and transparency in the coffee industry, ensuring the value of winning coffees. 

The Cup of Excellence (henceforth COE) auction serves one further, critical, purpose in Specialty Coffee: it normalizes high prices being paid for green (unroasted) coffee. This is, of course, a slightly controversial topic owing to the fact that there are buyers who approach the COE with a no-holds-barred approach and are, arguably, more interested in the prestige of buying the top finishing COE coffees (and spending loads of money in doing so) than they are in the coffees or producers themselves. At Passenger we are simultaneously interested in raising the bar on quality at all levels, while also making specialty coffee more accessible. One could argue that prices that sky rocket into the hundreds of dollars per pound make coffee inaccessible. We would not disagree with this sentiment, per se. That said, one could also argue that if these coffees are truly the best in class from any given country of production, then the producers deserve to be paid extremely high prices for their coffees. Not only does it acknowledge supply and demand, but it also encourages other producers to rise to that level by rewarding quality and further, it empowers producers to know that what they are producing has a market and that there is demand for it. All of that said, the topic of astronomical auction prices may be best reserved for another blog post. Instead, in this post we will focus on the more “normal,” but still quite high, auction prices that are regularly obtained at COE auctions.

As a coffee buyer I have, over the years, had the pleasure and good fortune to speak with a number of producers and communities to get their take/opinion of the Cup of Excellence program. In general I have never heard anything but positive things about the program and what it means to producers and communities. While thinking about writing this blog post one community in particular kept springing to mind: Santa Barbara, Honduras and the producers that work with the Paz family at San Vicente.

I called Benjamin Paz to get his take on the COE and what it means to his community. Benjamin’s family runs San Vicente, a dry mill and exporting company based in Peña Blanca, Honduras. San Vicente works with the majority of the Specialty Coffee producers in the Santa Barbara region of Honduras, a region known for producing some of the finest coffees in all of Honduras - including some coffees that have been on Passenger’s menu for years, such as Eulogio Martinez’s Los Yoyos, Jeovany Rivera and Mario Moreno.

Here are some highlights from my conversation with Benjamin…

David Stallings: Tell me a bit about your experience with the Cup of Excellence. Personally, but also from the perspective of the community you are working within.

Benjamin Paz: We exist because of COE. As a company, but also as a region, and even a country. In the 80’s and early 90’s our reputation for specialty coffee was really bad. People didn’t know how to dry, people didn’t know how to process properly. There is no bigger motivation for a farmer than winning first place in the Cup of Excellence.

DS: And you feel like that is still true?

BP: Definitely. I participated. And not for the recognition… It was more about the income, because I need to pay my loan. Which is the case for a lot of people. The way things changed for Miguel [Moreno] and his family, for example, it was big. They were in the U.S., working there with no documents. But, when they heard about all of the positive things that the COE was doing they decided to move back to Honduras. They started working back in the farms that they had abandoned at one point to find better ways of making money in the U.S.

And now you have producers that are connected to a buyer, because of the COE or because of the fame that the COE has brought them. You have producers who always have one eye on their buyer and one eye on the COE. I get that question all the time “Hey, Benjamin, how is my coffee cupping? If it’s good maybe next year we can try to win the COE with it?” It’s still one of the most important things in the area. We understand that not everyone is going to make it, but there is a group of people that is always looking at the COE, always planning to do it. There are producers who are always thinking about the COE. We have one producer who stopped submitting coffee for three years because he wanted to find the perfect recipe for it. He found the perfect plot of land and processing and then finally submitted his coffee. He didn’t make the top ten, but that’s his goal and that’s the way a lot of people think, “I want to make it, because I want to have recognition, I want to have also the premium.” It’s getting more trendy, as well, with the success of COE in other origins. Like what happened in El Salvador with El Manzano’s Gesha, what happened even here with Marysabel’s Gesha, with the Parainema from Daniel Ramirez who got $125 a pound… for a Paraienama. And it’s crazy, because you know Parainema is everywhere and everyone has it and now everyone is like “cool, I have Parainema, if I make it to the top I am going to make that much money” so it’s a great incentive for people because they are trying to do that.

DS: But that brings up another question I have - do you think there is ever an element of false hope? If everyone expects to get $100 a pound for their Parainema lot and they end up getting market price, is that a bad thing? Or does it give people something to aspire towards?

BP: It depends on the point of view. There is something that is different now, David… the people understand their potential [emphasis mine]. They are surrounded by people who are telling them what to do and how to do it [produce specialty coffee]. A lot of people are getting more prepared and a lot of people are trying to understand more and more and more. The methodology of the farmer is different. It is growing. I think it is just bringing the quality up. Taking the quality up there, that is exactly what is happening. The farmers are investing… not only using their pockets, but also using their heads. Because, they understand the business now, and they understand the risks and they are communicating more and more and more and more. And they come and they ask “Hey Benjamin, what’s the right thing to do?” We have seen that this year more than ever because people want to be competitive. They have seen the success. If there is someone planting Parainema, than there is a plan behind that.

This is also important: not only the first place, but also the second the third and the fourth act as a reflection [of industry trends] for the farmer. So, there is a trend, for example, for Bourbon; just because Job Neel at Nacimiento has won second place and third place like four or five times. Like Pedro Moreno did in the past, or like what Jorge Benitez did winning with a Typica. This year the second place won with a Typica. So, there is a new trend now of Typica and Bourbon. And you go and see farmers and you see a lot of diversification. You see farmers that have Pacamara - there is a lot of Pacamara here now - there is a lot of SL 28 now, there is a lot of Gesha now, so we are bringing in all of these varieties and people are trying to diversify and trying to get the best.

And, you know, we have had the bad situation in the past where farmers don’t make good decisions. They make bad decisions. So those work as an example for other people. So everyone is being very conservative, very smart, lots of communication… before investing, before putting coffees in the ground and producing.

DS: That’s really great to hear. And, do you feel like COE is still a motivating factor in this, or at this point is it just the specialty market in general? I mean, obviously you have plenty of clients [roasters, importers] connected to these producers at this point… is COE still relevant?

BP: I think both. If you had to put things in an order, COE would come first. Because of COE the buyers came. And the buyers brought a different model that demanded quality, sustainability - but, all that is a result of the COE. And now we have a different feedback loop. Now the buyers are suggesting different processing methods: anaerobic fermentation, naturals, honeys, etc. The buyers then buy these coffees, but this will bring another thing… if these have good results, the producers are going to use these same procedures to make COE lots in the future. Which you saw this year… honey Parainema, you saw 48 hour anaerobic fermentation in cherry… methods we didn’t know until the buyers brought the knowledge. We sell them first back to the buyers to make sure they work, but then we try them in COE. So, it’s a mix of influences.

There is obviously a lot to unpack in Benjamin's responses, and I will attempt to do so in my next blog post. In that post I will dig into Los Yoyos, the Parainema variety, fads spurred by the Cup of Excellence, and also explain/expand upon some things that Benjamin said above. For now, thanks for making it all the way to the end of this blog post!

One final note... just today (July 24th, 2018), Passenger was part of a buyer group that went in together on, and won, a lot in the 2018 Mexican COE. Earlier this year we also were part of a buyer group that went in together on a lot from the 2018 Nicaraguan COE. Earlier this week we released a lot that was auctioned off at the end of 2017 in the first ever Peru COE. We believe that the Cup of Excellence was a truly critical development in Specialty Coffee and are honored to take part in auctions and present these winning lots to our customers.