B.C. Roasteries from Bean to Brew
Why are British Columbians so obsessed with their fair trade, organic and ethical cuppa joe?
Leo Johnson, co-founder of Kicking Horse Coffee Co. Ltd., remembers pondering an entrepreneurial hunch in the mid-1990s when he and his wife Elana Rosenfeld considered carving out a place on grocery store shelves for specialty coffee alongside the MJBs and Maxwell Houses of the world. That’s when organic food was relegated to an obscure supermarket ghetto and fair trade was barely a blip on the public radar screen.
“The business is vastly different from when we started,” says Johnson, over the phone from head office in Invermere. “Back then, there were few options for organic coffee, fair trade wasn’t even in existence in Canada and in the retail grocery market there wasn’t a specialty coffee option. We saw a gap and decided to go retail.” Since then, he and Rosenfeld have amassed a string of business awards, including the Business Development Bank of Canada’s young entrepreneur and ongoing achievement awards.
Invermere, a small mountain-shrouded Columbia Valley community, hardly seemed a likely place to germinate a coffee empire when Johnson and Rosenfeld left Toronto for the Rocky Mountains shortly after graduating from university in the early 1990s. They dabbled in the smoothie and café business before launching Kicking Horse Coffee in 1996, goaded, they claim, by Rosenfeld’s mother into opening a coffee roastery.
Today specialty coffee roasting is a particularly crowded industry sector in B.C., with at least 50 businesses each roasting anywhere from 4,000 to four million pounds a year. Survival comes down to image, quality, and increasingly, being held to unusually high consumer expectations, to the point where brand tag lines overflow with positivity: fair trade, organic, shade grown, responsible, ethical, and on it goes. But it’s also about being the purveyor of a unique substance that, if not recession-proof, is at least highly resistant to economic downturns. We’ll relinquish a lot before we surrender our caffeine fix.
Nevertheless, these are challenging times in the business. The organic ghetto has become a posh neighbourhood of coffee, and more and more businesses are looking for space on the shelf. From humble beginnings when its first bag of beans appeared on the shelves at Thrifty Foods, Kicking Horse coffee is now ubiquitous, and was recently flying off the shelves at Thrifty’s for less than $10 a pound, discounted from the normal $16 a pound. (Johnson claims that all his retailers get the same wholesale price and it’s up to them to determine the markup.)
On top of the ever deepening competition at the retail end of the business, the price of raw green coffee beans at the wholesale end has doubled in the past year, hitting near historic highs of around US$2.30 a pound, driven by pressure from commodity speculators, climatic pressures on traditional growing and harvesting seasons and soaring demand from populous countries such as China, India and Brazil – annual consumption in Brazil alone has exploded from one million 60-kilogram bags three decades ago to almost 24 million bags today. Around the turn of the millennium, coffee buyers were widely criticized for exploiting farmers by paying the rock-bottom prices that fresh beans had sunk to, but today the fair trade minimum floor price of US$1.40 a pound of arabica is often exceeded.
On this unpredictable playing field, Kicking Horse is a nimble competitor. It now sells its product worldwide, employing 26 people, roasting four million pounds of coffee annually and grossing more than $10 million in annual sales from its 17 coffee varieties, all based out of a 26,000-square-foot Invermere facility. The company has resisted the temptation to open cafés, other than its sole flagship café in Invermere, and instead concentrates on what it does best: roasting and wholesaling.
“In terms of the global market, we’re a pimple on the elephant’s ass, but we’re the largest specialty coffee roaster in Canada and we keep growing,” Johnson says. “Even during the last meltdown in 2008 we were still growing.” Still, Johnson says, this past year has been the company’s most difficult in terms of sourcing fresh coffee beans. Growers in places like Nicaragua and Guatemala are often refusing to sell to their co-ops because they can fetch much more by selling on the street to “coyotes.” The upshot for B.C. coffee roasters is that certainty of supply has been interrupted and they’re spending more time on the phone with brokers, and also very reluctantly passing on these costs to customers.
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