Opinion

Lessons from The North Face

I have been attending a marketing conference in Banff the past couple of years. I know, the hardships I endure in business. Seriously Banff is such a spectacular venue to hold a conference. The marketing conference is dubbed “The Gathering” which honours and features brands that have achieved cult like followers. One of the sessions this year was hosted by Tom Herbst, Head of Global Marketing for The North Face. I was struck today by what he started the session with, a simple black slide which had the following statement written on it.

It is a very dramatic way to start a presentation. He then talked about taking the job at The North Face, looking forward to working on a brand that was about more than getting people simply to buy more stuff. He talked about promoting a brand that he thought could make a difference by how it engaged with the world. He talked about The North Face’s recent “Walls are meant for Climbing” campaign which stands in contrast to the rhetoric of Donald Trump and his attempt to build his wall on the border to Mexico. He also recognized that he was moving to a company that was by all accounts, a giant of a company, with ubiquitous products, scattered all around the market place. He posed the question how do you deal with a company this big, how do you differentiate it in the market place, then answering, you “make it a friendly giant”. I must admit, up until that point, I had never really considered The North Face to be about quality. I didn’t pay much attention to it. I had occasionally purchased products in the past, if they had been on sale, but I was definitely not a fan. I had no idea of the companies history, the birth of a clothing company grown from the climbing culture centred around Yosemite National Park. I had no idea that the curves beside the copy were there to represent the mountain Half Dome, on which climbers made the trek up its wall, the north face of Half Dome. It never ceases to fascinate me how much knowing the back story of someone or some company changes one’s perspective. You can think someone is aloof, a jerk, self-centred and then when you get to know them, all of those preconceptions fall away and you are left with something completely different.

I started writing this post back in February, and then let it sit in the draft folder until now. Maybe it was destined to be finished now, in the aftermath of Alberta’s recent election. We have, apparently joined the trend of ultra polarized politics in our neck of the woods, now too. Respectful Human Discourse be Damned! I was astounded this past couple of weeks at the ramped up rhetoric and fear mongering that we devolved into. Regardless of one’s political views, right, left, or centre, we are all fucking humans, and as such, deserve to dole out and receive mutual respect.

The North Face has adopted “never stop exploring” as their tag line. When you visit their homepage you are confronted with the following statement under a blur of slides exploring us to unplug, log off, turn off…

Exploration is a spirit within all of us.It's time to unplug from our always-on lives, turn on Explore Mode and connect in real life to the world, each other and ourselves. Never stop exploring.

I must admit that I have engaged with this brand in a new way. Watching the Oscar wining movie Free Solo didn’t hurt either. However I look at it, I am now a fan of the brand, and what they stand for. Of course they still want to sell me stuff, that much is clear, but they also want me to be a better fucking human, and that in and of itself is a bold corporate stance.

Having turned fifty this week, I think that The North Face has had an influence on me, along with the persistence of my fifteen year old son, who continues to treat me like a much younger version of myself. I have declared this next ten years of my life to be the decade of adventure, and I am going to do things I never thought I would do. Don’t panic, I am not going to be reckless, and start jumping out of airplanes or skiing down shear faces, but I am going to hike, climb, play, engage, unplug, and revel in the beauty all around me. I want to know more people for who they truly are, and see more of this amazing place I call home. Take deep breaths of Alberta, British Colombia, CANADA and find diverse and complex sojourners along the way. I want to be a better Fucking Human.

Frickin Coffee!!

 

I have been in coffee now for over twelve years. What is maddening to me, is that the price of coffee (c market) is virtually the same today as it was when I first started. I know all of the excuses that are flung about within the market; supply, demand, drought, speculation, too much rain, overproduction, etc. etc. And while all of these might explain in part the insane volatility in coffee, it does not excuse it.  

What the market volatility does not convey, is the devastation the broken coffee pricing model has on the people growing coffee all over the globe. What it doesn't convey is the greed and profits made by big coffee companies when the market does what it does.

I won't make this a long rant, but it needs to be said. The human toll that the ongoing volatility in the coffee market has is a travesty. I can sleep at night because Transcend does not participate in the c market pricing madness, but far too many companies do, and it simply needs to end. Producers are due, at a minimum, an ability to cover their costs of production and more than that, they are due a standard of living that reflects the amount of work that goes into growing coffee. Alas, I know that I am dreaming of an alternate universe where fairness and decency triumphs over profit and greed, but one can always dream.

If you want to be part of the solution, stop supporting coffee companies that perpetuate the existence of this global crisis. Start asking questions about transparency. Where does the coffee come from, how much did the farmers get paid, what was the FOB (free on board) price for the coffee you are selling? If your coffee provider can't answer these questions, it might be time to start shopping elsewhere. 

 

Books I think you should read

I read a tonne, but realistically, most of my reading is online, threads, short reads. Having spent eleven years in university, where all I did was read books (most of which I didn't want to read) I don't read books very often any more. And to be transparent, these two books that I am recommending I have consumed via Audible which is my new favourite way to "read".

Trevor Noah's book Born A Crime was an excellent read. Not only did I learn a lot about the man and what makes him tick, I learned a lot about the history of South Africa, which was most shocking. I am a big fan of Trevor, and his book made me even a bigger one.

The other book I am currently in the middle of is Brené Brown's book The Power of Vulnerability which I am finding quite challenging. Brown is a great communicator and seems to have a knack for poking me in the areas of my life which probably need poking.

Extreme Coffee Prices are not good for the industry

There has been a growing trend of late for unique one-off coffees to sell for extreme prices via online coffee auctions. For example, recently, at the Best of Panama 2018 online auction, coffees sold for as much as US$803 per pound. To put that price in perspective, using that coffee in the cafe, we would likely have to charge $150 per latte to justify the cost of goods for that green coffee. Most of these outrageous prices are being paid by Asian coffee companies, where one can presume that there is a market for these ridiculously expensive coffees. Even with the assumption that is indeed the case, that in Japan customers are prepared to pay those amounts for coffee, I still have a huge problem with the trend of outrageous prices for exotic coffees when the bulk of the coffee sold in the world, sell below the producers cost of production, and keep most coffee producers around the world in perpetual poverty.  

I think there has always been a fascination in the marketplac with high priced goods. I too have participated at times in this marketplace, albeit a wine market, where high prices are assumed to correlate to increasing quality. While this relationship between price and quality are often true, it cannot be said to be a universal truth, and expectations around price will definitely skew the consumer's perception of quality. Many experiments have been done in the wine world, where consumers were presented with the same wine, at different price points, and without exception those who were given a more expensive price point rate the wine a better quality than those who are told the wine is cheaper. So it is not the objective quality of the wine that is at play, but the consumer's perception of the quality based on the price they are told it costs.

Much like fad coffees such as Koppi Luak (the Indonesian coffee consumed by Civets) which achieve crazy prices, these extreme coffee prices only serve to skew the market towards the fadish and the fantastic and diminish the value of coffees that are excellent but still are priced far below their true value.

What I want to see in the marketplace is a consumer base that understands the value of great quality coffee and is willing to pay a fair market price for that coffee, so that vast majority of coffee producers on this planet can live sustainable lives. I would argue that almost every quality coffee shop in North America discounts and subsidizes the cost of coffee to the consumer out of fear that the consumer will not pay the price that the coffee should be sold for.

Unlike cafes in North America, I point to the prices charged for coffee in countries like Norway and Denmark as positive examples, not simply because the cost of living is high in these countries, but because coffee companies are not afraid to charge their customers for the true value of the product that they sell, and their consumers are willing to pay higher prices for better quality. 

Even at Transcend, we are guilty of this tendency to undervalue and sell our coffee at prices below what we ought to. If you factor in the quality and prices we pay for our green coffee, the cost of roasting it, the fixed costs of our staff, our cafes, our labour, etc., our prices should be at least thirty percent more than what we currently charge. And yet, largely because of fear, we maintain a pricing structure similar to that of our main competitor Starbucks, which is a company that has efficiencies and economies of scale that we could only dream of, not to mention comparatively lesser quality when it comes to the coffee that they source and roast.

While it is true that the producers who are paid US$800 per pound for coffee are being handsomely rewarded, we are talking about the sale of 200 lbs of coffee. This is but a thimble in the vast ocean of global coffee production and is not helping in any way to alleviate the chronic poverty model upon which the global coffee industry is built. What is needed is for all producers, globally, to receive truly sustainable prices for their produce, which not only cover their true costs of production but also allow for surplus, so that their families can thrive. This is the ideal for the world of coffee.

Tiger is Back!

As someone who watched Tiger Woods at his very best, win and win, slaughtering every field he was part of, I never thought I would see him play like he did today again! You may not know that I am a serious golf fan, wish I could play as well as I can watch. Tiger Woods is kind of like Apple for me, in that I have an unexplainable affinity to cheer for both, no matter what. It was amazing fun to watch the fans at the PGA Championship roar for Tiger like they did (feel kind of bad for Brooks who experienced first hand the Tiger effect today). If Mr Woods can just get the driver straightened out and start hitting fairways, he definitely has the game to dominate the golf again.  

Chateau Musar 2000 / Canadian politeness BS

OK, Let me acknowledge that this blog post is being composed at 12:35 AM after imbibing a little 2000 Chateau Musar in honour of my dear friend Sara's birthday. Actually, the disclaimer in and of itself is ultimately too Canadian.

We are far too much a product of our colonialist roots. "Stiff upper lip, and all that British shit", show no emotions, keep it all in... Recently a good friend of mine gave me a hug at the end of a time together and said "love you" which at first blush sounded out of place. But as "a guy" who is white, Anglo-Saxon, and has a Christian heritage, it should come as no surprise that the word love in English is too confined, too narrow. I remember well my 1989 English 1900 essay, written for Prof. Upton, about love which compared Shakespear's 116 Sonnet to the various Greek meanings of the word love, Eros, Agape, and Philia. The latter being the subject of this post, brotherly or sisterly love, the root of Philadelphia. For the most part as good Canadians, we are too bashful or prudish to say to our friends that we love them, but that is the emotion that we feel. Not an erotic love, but an affectionate love that is borne of friendship and companionship, where we acknowledge that our relationship is more than something casual. Those words uttered by a friend,  "love you"  have stuck with me, knawed at me, because I have been too cowardly to use them in return.

A conversation around a fire, wine shared in the heat of summer nights, debate, stories, flawed recollections, are all part of a community that I want to be part of. Even a good couple of bottles of Chateau Musar weren't lubricant enough to allow me to communicate honestly this evening. I want to tell my friends that I love them. I want to communicate to my colleagues that they are dear to me, that I value them more than words can express (a lame excuse) because I could simply just say how much I value them and quit being so Canadian or proper. Why does emotion have to reside within the confines of intimate relationships? I think that we should be able to say "I love you" to our friends. Maybe I am the exception to this, maybe the world around me already communicates with this level of openness, but within my sphere, we are still to stiff. I for one want this to change, I want to take a page out of my friend Candie's book and start to tell my fellow sojourners that I love them, and I value their companionship and conversation, their debate, their disagreement, their perspective (that are often different than mine) I love them for who they are, because they make up my community, and more importantly contribute to making me who I am.

CBC Summer Coffee Column

This summer I have the privilege of being a columnist on the CBC Edmonton AM morning show. In addition of being sleep deprived out of fear of not being downtown on time, I am afforded the opportunity to talk with Mark Connolly about some timely topics facing the coffee industry. 

You can listen to the column here

This morning we chatted about the fact that the commodity price of coffee has essentially not changed in the last thirty years. If you look at the New York Stock Exchange price for coffee on July 27, 1999 (this was as far back as I could online), coffee was trading at $0.97 per pound. The price for coffee on the NYSE today is currently at $1.10 as I write this post. It doesn't take a rocket scientist to figure out that there is something shockingly wrong with this picture. How is it possible that the price of green coffee has only appreciated by thirteen cents when the cost of everything else has gone up significantly more - for example, the price of gas in Edmonton was $.51 per litre in 1999 and today is $1.25 per litre. Not only has the price of green coffee not kept pace with general inflation rates, the amount of money flowing back to the vast majority of coffee producers has not changed significantly. A troubling reality is that most coffee farmers globally do not get paid enough at farm gate to cover their cost of production. 

There is much debate around what the true cost of production is for coffee producers, and given the global nature of the industry, and the changing economics from one country to another, this is fair. With that said, it is estimated that an average cost of production is roughly US$2 per pound. The c market price referenced above is not referring to high quality coffee, and most companies do pay price differentials for better quality coffee. However, what is clear is that despite price differentials, fair-trade, and countless other certification programs, a vast majority of coffee growers around the world live in perpetual poverty.

This reality has perpetuated during my entire tenure within this industry. What can we do about it? What can be done? As a consumer, you can begin to ask questions of your favourite coffee provider, you can start to inform yourself about the issues facing the coffee industry globally.

Ask your coffee provider if they know who grows their coffee, how much the farmer gets paid, what percentage of the price they pay goes back to the farmer. You could ask if they know what the FOB (Free on Board) price is for their coffee. If your favourite coffee purveyor can't answer these questions, you may want to start shopping around for one that can. Transparency in the coffee industry is really the best mechanism to ensure that coffee producers start to receive their fair share of the money derived from this global industry.

For more information the World Coffee Research site is a great start.

A link to the WCR Annual Report is located here for your easy access.