Coffee Appellation Development
With the development of roasters dealing directly with farmers, opportunities have begun to arise for farmers capable of providing coffees with unique flavor profiles that can be sold at a higher premium. These premiums tend to be less affected by vacillations in coffee prices. The key to these premiums is differentiation, usually as the result of higher quality (Lewin, Giovannucci, Varangis, Coffee Markets: New Paradigms in Global Supply and Demand PDF, 2004). One way this can take place is in development of appellation labels.
However, the majority of coffee is still sold as a commodity, a product that is not recognized as all that different from lot to lot despite its varying flavor attributes. According to John M. Krespi at Kansas State, a reasonable (though somewhat loose) definition for an appellation is “any mark or label that is used by a producer association to differentiate a product based upon region and/or regional production process”.
There are considerable differences in the flavor attributes of coffee. Most of these differences can be attributed to varietal of coffee grown, altitude at which the coffee is grown, soil type, and climactic conditions. Taken in combination, it is reasonable to assume that certain varieties of coffee planted in certain regions will have distinctive flavor profiles. This concept is referred to as “terroir” in the wine industry –flavors that emanate from the land in which the product is grown.
Creation and maintenance of an appellation system adds cost to the product and so must add value that is recognized in the market in which the product is sold. The purpose of having an appellation designation is to improve profits for the sector. There must be genuine recognition of the appellation by the consumer through (1) a unique flavor or other sensory experience that is reasonably replicable year to year, (2) credence that certain methods or protocols were adhered to in the manufacturing of the product (such as organic), and (3) credence that the product actually came from the designated origin.
Appellations differ from a brand since they are utilized by many companies within the sector producing products from the area and not owned by any one company. Recognition by the consumer can result from a combination of things, from flavor attributes to anything else that constitutes brand recognition, such as general impression of the origin, perception of the culture, etc. In coffee, some exotic locations (Hawaii, Jamaica) have helped to increase the value of the product; even exotic sounding names (“Tanzanian Peaberry”) can attract sales and add value. Currently in specialty coffee, the most important aspects are unique flavor attributes that can be consistently found in certain areas of origin countries.
Determining the Unique Flavor and the Target Market
The major issue regarding an appellation based upon taste it that it can be readily confirmed (or denied) by a consumer after purchase. If they do not find the “black currant flavor” promised by a certain coffee, it is less likely that the product will be purchased again.
Most appellation systems consequently must manage the designation and insist on certain standards, including sensory standards.
The main argument against appellation designation for coffee is that “if it were needed or profitable, it would already exist”. Again, according to Krespi, the typical logistics of commodity supply and sales do not allow for much consumer feedback. Another reason is the changes that have recently occurred in the coffee industry. While most large coffee producers have sought to address the needs of the “average” consumer through a limited selection of products, specialty roasters have recognized that there are numerous segments in the coffee market that prefer and seek certain flavor attributes. This has led to the development of differentiated and value‐based products in the specialty market.
“The literature shows that the most important feature of profitable credence labeling is an accurate, understandable, and verifiable signal.” (Krespi) From a sensory standpoint, the signal referred to is the flavor attributes of the product.
Developing an Appellation
The initial step in developing and appellation is to determine if the targeted geographic area is capable of producing the unique high quality coffee that would warrant an appellation designation. This is done through a combination of expert sensory analysis and consumer testing and feedback.
There is considerable difference in sensory analysis experts and consumers. Consumers are the ultimate arbiters of what will be sold, but they are limited in their abilities to accurately describe their preferences; their response is usually “like” or “dislike” and it can be challenging to determine exactly why their response is what it is. On the other hand, expert sensory tasters are so familiar with the product that they may assign qualities to it that the consumer will not understand or perceive. The usual process is to have experts develop the product (or numerous iterations of a product) and then submit it to consumers for feedback.
In this case, the “consumer” is made up of roasters and importers who are themselves experts in their own areas. However, since they will be the ones who purchase the coffee they are considered to be consumers in this model, though their feedback is likely to be more precise and actionable than usual consumer input.
Uniqueness
For the coffee appellation to be successful, the coffee should be unlike other coffees. If the flavor attributes of the coffee can easily be produced elsewhere, it is unlikely that the consumers will be willing to pay the premium. This is why products based solely upon a processing method are less likely to be successful; someone else could easily replicate the processing method to have the same flavor attributes. The most unique flavor attributes are the result of “terroir”, the combination of plant material (varieties), soil, and climactic factors.
Quality
“Quality” is a relative term and there are many definitions of the flavor attributes of a “high quality” coffee. Usually, it includes pleasant and distinct aroma, fruit‐like acidity, sweetness, and a pleasant mouth feel (“body”).
Procedures for Appellation Development
To determine if a coffee has high quality, a large number of representative samples from the region are evaluated using a scoring system. The highest scoring of these are selected to undergo further examination.
The highest scoring samples are likely to have some similarities but also some differences between them. There may be even coffees that have completely different (though pleasant) flavor attributes (a type of acidity or aroma, for instance). At this stage, one is seeking to find the samples that are most representative of the region and capable of being widely produced. The anomalies, though they may be unique and of high quality, are not useful at this point unless a shift in production processes could result in more coffees of that type being produced.
Once the representative samples have been selected, a process known as “descriptive” sensory analysis is used. Most standard scoring forms list flavor attributes common to all coffees, such as “acidity”, etc. With the descriptive approach, one goes into more detail about the types of acidity or the specific aromas and flavors (“floral”, “black currant”, “apple”) that make the product unique. This is the most time consuming process of appellation development since all tests must be replicated several times to be accurate, several representative samples from the area are analyzed in this way, and the tests are conducted for at least 3 years to take into account normal climactic variation. Panelists must be specially qualified and trained to effectively use these methods.
The goal of this method is to produce a profile of the specific flavor attributes and their intensities that make that particular coffee unique. One can then develop standards for training cuppers in the recognition of those flavor attributes and sensory standards for the appellation product.
Production
Once the unique characteristics are determined, the amount of this type of coffee that can be produced is quantified. Farms that share certain location characteristics, such as soil type, altitude, rainfall and other factors, are most likely to produce coffees with the desired flavor attributes. There may need to be some adjustments and further considerations, such as specific types of processing, harvesting procedures, or the planting of certain varieties.
Initially, production of coffee with the particular flavor attributes desired may be low. In this case, production can grow slowly, but quality must remain at forefront. If production of such coffee is not practical, the flavor profile may need to be adjusted to accommodate the realities of the situation. In this case, one must ensure that potential consumers are getting what honestly can be produced in reasonable quantities.
Consumer testing and Feedback
Once the parameters of the appellation are determined, representative samples are sent to roasters and importers for feedback. This can be accompanied by product descriptions (the flavor attributes found) and production estimates. There will inevitably be some different interpretations of the flavor attributes (one person’s “black currant” may be another person’s “blackberry”), but the main question is if the coffee represents a unique product and is likely to be purchased and sold as from a geographic origin. There may be some knowledgeable feedback about how to improve the product.
Anticipated Timeline
Creation of the appellation. The unique flavor attributes within an area are determined and confirmed over a period of at least 3 years. During this time, the areas, conditions, varieties, types of soils, etc. where this flavor profile is most likely to be found.
Development of appellation standards. Not all farmers in an area will be capable of producing appellation‐grade coffee and reproducing those flavor profiles with reasonable consistency is key to successful marketing. The next stage is upholding and safeguarding the standards of the appellation. This can be challenging, since it involves increased monitoring of standards, including cup quality, more precise management of harvest and postharvest labor and processing, and often adding technology and knowledge that will contribute to maintaining the standards of the appellation. Any third‐party labels, such as organic, etc. can also be incorporated. The amount of coffee that can reasonably be produced while maintaining the standards is also determined.
Marketing of the appellation. This requires getting the unique product into the hands of those who would appreciate the quality and pay the premium required, a combination of promoting the coffee and receiving feedback. During the appellation development and standards phase, samples and descriptions should be sent to targeted roasters with questionnaires to gather feedback and likelihood to buy. One of the major challenges faced by coffee producers of fine coffee is that they have little control over the final manufacture of their product. Where wine growers who develop a product have charge of how the vintners process and bottle the wine, the producer of green coffee has little control over how the coffee is roasted and the freshness at which it is sold. The roasting especially has a direct effect on the flavor profile of the coffee. This may require at the least recommendations from the seller as to how to roast the coffee and, at the extreme, contracted requirements of roasting and freshness.
Rolling out of the appellation. Once the standards of production are in place and enough coffee with the unique profile is being produced, the coffee is rolled out. There are many ways to do this, including offerings at trade shows, sampling, advertising, etc. A marketing plan should be well in place before the appellation is rolled out. Since coffee is harvested yearly, this process takes some time, but it is necessary to do it thoroughly to meet market expectations. Trying to do things too quickly may result in a flavor profile that cannot be replicated year to year, a profile that can’t be sold, or standards that are so lose that a specific flavor profile is not defined.
Summary: Development of the Appellation
When one wishes to develop an appellation, the primary considerations are (1) is the product unique?, (2) is it of high quality?, (3) can a reasonable amount of the coffee be produced?, and (4) does it meet the needs of the existing market? One utilizes expert cuppers specially trained in the descriptive methods of sensory analysis to determine the coffee’s flavor attributes and then gets feedback from potential buyers as to the desirability of the product.
By now, one can observe that this process does not occur quickly. There may some efficiencies that emerge, but taking too many shortcuts could result in the loss of reputation of the appellation. It is much more difficult to overcome a poor reputation though it is by no means easy to maintain a good reputation. One must have adequate capitalization to see the project through.
Issues of Credence
Besides the quality and uniqueness of the coffee, the buyer must be assured that the coffee actually is produced within the geographical constraints of the appellation. This means that good chain‐of‐custody of the product must be maintained as it moves from harvest to processing to final packaging. The result of such chain‐of‐custody controls is that any bag of coffee with the appellation label can be traced back to its origin (“traceability”).
The record keeping that is required will add costs to the appellation: appellation coffee will need to be kept separate from other coffee at all stages. However, this can be used as a marketing plus as well. Visitors and potential buyers can be shown that good records are kept, individual lots are labeled throughout the processing stages, and the various checks done at certain points of production (such as sensory analysis) that are done to ensure both that the coffee is of adequate quality and that it comes from the origin.
Credence is also built by demonstrating that the standards of the appellation are being followed. This could include such quality aspects as ripeness of cherry, processing parameters, and agricultural management.
The “Sizzle” or the Steak?
The basis of appellation development is the quality of the product and the fact that it comes from a unique geographic region (the “steak”) but marketing aspects (the “sizzle”) are also important. This is developing an image to be associated with the coffee.
One way to increase the perceived value of coffee is using special packaging that presents the product in a special way or increases and retains the quality for a longer period of time (the use of valve bags for roasted coffee or vacuum sealing green coffee are examples). Considering the fact that the targeted customer is a roaster of coffee, an increase in quality or longevity is the primary consideration, but one should not disregard available aesthetic qualities of the packaging.
Another way to develop a coffee’s identity is by highlighting the unique qualities of the geographic origin in some, including how the people live and cultural aspects. If the premiums received result in an increase in livelihood, this can be emphasized. A “storyline” about where the coffee came from and how it was produced can be developed.
Summary
Development of an appellation does not by itself guarantee increased profitability, but properly executed it makes profitability more likely. The primary path to being competitive in an increasingly competitive market is quality and consistency (Levin, Coffee Markets p. xiv) and this will be even more necessary with appellation coffee. The following must be in place for a successful appellation:
A flavor profile that is distinctive and will be recognized by consumers as unique (Krespi’s “signal”).
The purchaser’s confidence that the coffee was produced in the prescribed way, including specified varieties, harvesting, methods of processing, or other technical aspects.
The purchaser’s confidence that the coffee is from the particular appellation origin.
Appropriate marketing for the both the coffee and the appellation origin itself.