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Coffee in Ethiopia: Direct from the source
The Economist print edition
April 17, 2008 | ADDIS ABABA
The increasing sophistication of coffee drinkers is good for producers
COFFEE prices are the highest they have been for a decade. As consumers in India and China develop a
taste for the drink, prices are likely to keep rising. Meanwhile something new is happening in developed
markets. Europeans, Americans and Japanese are switching to higher-quality coffee. Discerning consumers
now demand authenticity: they want stories about where their coffee beans come from. So the best coffees will
increasingly be differentiated, like fine wines and spirits, and sold at previously unthinkable prices.
The move from instant-coffee powder to luxury beans is in some ways reminiscent of what happened when
the Scotch-whisky industry shifted from cheap blends to expensive single malts, each with its own story. But
where the whisky revolution was masterminded by distillers, the coffee revolution is a messier insurgency.
Gourmets and specialist roasters have pushed up expectations. Governments, activists and “ethical” coffee
suppliers have worked to get higher prices.
All this is good news for coffee farmers in east Africa. Altitude, climate, soil and genetic diversity give the
region an inherent advantage in quality. With lower-grade Latin American coffee dominating the market, there
is scope for the best coffees from Ethiopia, Kenya, Tanzania and Rwanda to establish themselves.
Ethiopia is the largest African producer. Its coffee sales last year were $425m, representing 36% of export
earnings. It has a story to tell: an Ethiopian goatherd, Kaldi, is said to have discovered coffee's stimulating
properties in the 9th century. Already, 40% of its production is premium coffee. Until recently, however, that did
not yield higher prices for farmers. When the commodity price was low, villages starved.
An agreement signed last year between Starbucks, the world's biggest coffee chain, and the Ethiopian
government has been touted as a big step forward. Starbucks had objected to the government's plan to
trademark the names of three local coffee varieties. The firm worried that having to license these trademarks
would introduce legal complexities that might deter it and others from buying trademarked beans, thereby
hurting farmers. Critics think the numbers used by activists to shame Starbucks were shaky. Others argue that
farmers would gain a lot more if African governments were bullied into cutting bureaucracy and building
infrastructure.
What is beyond doubt is that the three varieties in question—Harar, Yegarcheffe, and Sidamo—are among the
finest beans in the world. The hope is that trademarking these regional varieties will establish them as brand
names and enable farmers to demand higher prices. Might geographical indicators, like the appellation
contrôlée system in French wine, have been a better option? The head of the Ethiopian Intellectual Property
Office, Getachew Mengistie, thinks not. The coffee varieties were not strictly regional, he explains, so a wine-
style designation would have made no sense. Nor was the money or time available to pursue a complicated
certification process. Instead, Ethiopia has quickly licensed its brands to 70 suppliers worldwide, including
Starbucks.
Licensees agree to use the brand names and to educate consumers about the characteristics of the different
varieties. By allowing licensees to use the trademarks without paying royalties, Ethiopia is, in effect, trading
their use for free marketing. (Colombia, for example, runs advertisements in rich countries to promote its
coffees, which Ethiopia cannot afford.)
Rick Peyser of Green Mountain Coffee Roasters, an American supplier which counts Yegarcheffe among its
premium coffees, thinks it will be only a matter of time before the trademarks start to improve the lives of
farmers. Ethiopia is now planning to extend the trademark approach into new areas, such as traditional
medicines and certain types of teff, the country's usefully gluten-free staple cereal crop. But coffee, an
unparalleled genetic resource, with over 5,000 varieties, will remain the biggest earner.
The Economist print edition
April 17, 2008 | ADDIS ABABA
The increasing sophistication of coffee drinkers is good for producers
COFFEE prices are the highest they have been for a decade. As consumers in India and China develop a
taste for the drink, prices are likely to keep rising. Meanwhile something new is happening in developed
markets. Europeans, Americans and Japanese are switching to higher-quality coffee. Discerning consumers
now demand authenticity: they want stories about where their coffee beans come from. So the best coffees will
increasingly be differentiated, like fine wines and spirits, and sold at previously unthinkable prices.
The move from instant-coffee powder to luxury beans is in some ways reminiscent of what happened when
the Scotch-whisky industry shifted from cheap blends to expensive single malts, each with its own story. But
where the whisky revolution was masterminded by distillers, the coffee revolution is a messier insurgency.
Gourmets and specialist roasters have pushed up expectations. Governments, activists and “ethical” coffee
suppliers have worked to get higher prices.
All this is good news for coffee farmers in east Africa. Altitude, climate, soil and genetic diversity give the
region an inherent advantage in quality. With lower-grade Latin American coffee dominating the market, there
is scope for the best coffees from Ethiopia, Kenya, Tanzania and Rwanda to establish themselves.
Ethiopia is the largest African producer. Its coffee sales last year were $425m, representing 36% of export
earnings. It has a story to tell: an Ethiopian goatherd, Kaldi, is said to have discovered coffee's stimulating
properties in the 9th century. Already, 40% of its production is premium coffee. Until recently, however, that did
not yield higher prices for farmers. When the commodity price was low, villages starved.
An agreement signed last year between Starbucks, the world's biggest coffee chain, and the Ethiopian
government has been touted as a big step forward. Starbucks had objected to the government's plan to
trademark the names of three local coffee varieties. The firm worried that having to license these trademarks
would introduce legal complexities that might deter it and others from buying trademarked beans, thereby
hurting farmers. Critics think the numbers used by activists to shame Starbucks were shaky. Others argue that
farmers would gain a lot more if African governments were bullied into cutting bureaucracy and building
infrastructure.
What is beyond doubt is that the three varieties in question—Harar, Yegarcheffe, and Sidamo—are among the
finest beans in the world. The hope is that trademarking these regional varieties will establish them as brand
names and enable farmers to demand higher prices. Might geographical indicators, like the appellation
contrôlée system in French wine, have been a better option? The head of the Ethiopian Intellectual Property
Office, Getachew Mengistie, thinks not. The coffee varieties were not strictly regional, he explains, so a wine-
style designation would have made no sense. Nor was the money or time available to pursue a complicated
certification process. Instead, Ethiopia has quickly licensed its brands to 70 suppliers worldwide, including
Starbucks.
Licensees agree to use the brand names and to educate consumers about the characteristics of the different
varieties. By allowing licensees to use the trademarks without paying royalties, Ethiopia is, in effect, trading
their use for free marketing. (Colombia, for example, runs advertisements in rich countries to promote its
coffees, which Ethiopia cannot afford.)
Rick Peyser of Green Mountain Coffee Roasters, an American supplier which counts Yegarcheffe among its
premium coffees, thinks it will be only a matter of time before the trademarks start to improve the lives of
farmers. Ethiopia is now planning to extend the trademark approach into new areas, such as traditional
medicines and certain types of teff, the country's usefully gluten-free staple cereal crop. But coffee, an
unparalleled genetic resource, with over 5,000 varieties, will remain the biggest earner.