Starbucks earnings lowered on consumers' move to home-brewed coffee

...That's where Caffe-Amante comes in!
There was a time when getting a coffee at Starbucks Corp. – whether it’s a basic “tall bold” or a souped-up venti concoction – was considered a relatively cheap treat, though those of us with a daily Starbucks habit might think otherwise.

However, a report from RBC Capital Markets analyst Larry Miller indicates that even that daily cup of store-bought java is one of the victims of the credit crunch. Mr. Miller lowered his 2009 earnings estimates – to US90¢ from US95¢, saying the move “reflects our proprietary survey work, which suggests Starbucks sales continue to weaken as consumers are changing their habits and brewing more coffee at home.” He also lowered his target price on the stock - to US$14 from US$17 - based on a multiple of 15 times his 2009 estimates. Starbucks shares trade at about US$11.

It is Mr. Miller’s view that Starbucks will be "a mid-to-high-teen earnings grower long term, but with near term challenges.” He added there are other factors that may impede the company meeting his target price or earnings estimates – primarily rising green coffee and the difficulty in obtaining suitable sites to meet its aggressive growth targets.

Region Update: Kenya $ee$ 2008/09 coffee harve$t up 43 pct

NAIROBI, Oct 9 (Reuters) - Kenya (Our special this month: Kenay AA roasted to order: $10.95 lb Click here to buy) will produce an estimated 60,000 tonnes of coffee in 2008/09 (Oct-Sept) crop year as a result of favorable weather in key growing areas, a senior government official said on Thursday.

The east Africa nation produced 42,000 tonnes in 2007/08, said Bernard Gichovi, technical manager at the industry regulator Coffee Board of Kenya.

"If everything goes well, it will be a good harvest," he told Reuters in an interview.

Kenya is a small producer globally, contributing only about 1 percent of the coffee consumed globally, but its specialty beans are sought after to blend with those from bigger growers.

"Weather has been quite good. Rains, which usually start in April, started early in February. So flowering went on well to develop into the fruit (berry)," he said, adding that this year was not as cold as the previous one.

Flowering usually starts in March or April.

Cold weather weakens undeveloped berries, making them drop to the ground before full maturity. This season, however, coffee trees were strong enough to support high output.

"This is because we lost most of the crop last season," Gichovi said.

Growers in Nyeri and Kirinyaga districts of central Kenya, key growing areas, agreed with Gichovi's assessment.

"There is a lot of coffee this season. I can only compare the season with 1987 when we sold the most coffee ever," said farmer Mwangi Gichohi at his Thangathi farm in Nyeri.

Kenya produced a record 130,000 tonnes of clean coffee in the 1987/88 crop year.

Harvests have been on the decline since as prices plummeted globally and as Kenyan farmers accumulated debt and took less care of their bushes.

Although Kenya expects good prices this coffee year, Gichovi said turmoil in the global economy could hurt commodity prices.

But Gichovi projected that coffee prices through direct sales between farmer groups and roasters abroad will be higher this season than previously.

"It is expected that there will be more revenue from the direct sales," Gichovi said. During last season, 30,000 50-kg bags of clean coffee were sold through that system.

Prices ranged between $500 and $700 dollars per 50-kg bag and much coffee from Gikanda Cooperative Society in Nyeri district, fetched $1,138 per bag, Gichovi said.

In the previous 2006/2007 season, Gichovi said Kenya sold only 16,400 bags through the so-called "second window".

Until 2006 when Kenya allowed direct sales, all coffee went through a weekly auction. That system is still in place.

Gichovi said the board advises farmers to go for a direct sale if buyers were offering better prices than the auction would yield. "The reason for the direct sales is to spur prices," he said. (Editing by Helen Nyambura-Mwaura, Editing by Peter Blackburn)

Starbucks' wasteful ways

Forget Starbucks'... We'll roast your gourmet coffee to order: it's fresher, tastes richer, and cost's less!
For the office or for the home. We ship anywhere
visit us at
http://www.caffe-amante.com

~~~~~~~~~~~~~~~~~~~~~~
When it comes to coffee there's no better known brand than Starbucks, and with more than 10,000 stores worldwide it boasts social and environmental responsibility. But the coffee giant is being accused of wasting huge amounts of water.

An investigation by a British newspaper is asking why Starbucks has a policy of leaving a tap running while its coffee shops are open, wasting an estimated 23 million litres of water a day.

Starbucks says the running water is the best way to keep utensils clean but environmentalists say it's an unnecessary waste.

Each Starbucks has a dipper well, fed by a continuous stream of cold water. The company claims it prevents bacteria from growing but some say this is not acceptable.

"The average dipping well in a Starbucks wasted 300,000 litres of water a year and that's an incredible amount of water. And we think they could quite easily adopt new procedures or adopt new technologies that could reduce this water wastage significantly," says Victoria Higgins from Waterwise.

New Zealand has 43 stores and if each is wasting 300,000 litres of water, that's 13 million litres a year - enough water to fill 300 backyard swimming pools.

The global impact of this is huge with Starbucks wasting enough daily water for the entire two million-strong population of drought-hit Namibia in Africa.

Yet its countries like Namibia that Starbucks says it's committed to helping and on its website it boasts of preserving natural resources. It has also campaigned for safe drinking water in poorer parts of the world.

Starbucks' New Zealand manager would not comment on the situation but has emailed his staff saying keep the water flowing.

Meanwhile head office in America says it is considering other options

Region & Commodities: Kenya coffee prices fall in line with New York

NAIROBI (Reuters) - Kenyan coffee prices fell again at Tuesday's sale, pushed down by a slide on the New York market, despite better quality beans on offer, traders said.

"As the NYC crumbled further downwards, so did auction prices. Generally quality was good but the prices all fell by around $20 on last week," a report by the Ransley Coffee Company said.

The average price per bag across all grades dropped to $132.88 from $147.82 last week. Only 2,093 of the 13,743 bags on offer found buyers, said the Nairobi Coffee Exchange (NCE).

"It is a difficult time in coffee at the moment as we do not know how much further down the NYC may go, and if it does, prices will trend downwards again despite the better quality being offered," the Ransley Coffee Company report said.

The Kenya Coffee Producers' and Traders' Association (KCPTA) blamed the slump in prices on the global financial crisis.

"KCPTA would wish to plead with farmers not to panic as we wait to see what effect the $700-billion bail-out that was passed last Friday is going to have," it said in a statement.

"Be assured that marketing agents are monitoring the international markets to ensure that farmers get the highest prices possible."

Gourmet Tea: Selection of the month... RED

Winter Mint, Red Tea
One of our best-selling teas throughout the year, Winter-Mint blends Rooibos, sweet vanilla & a touch of chocolate-mint into a soothing treat & healthy alternative to dessert.

Also called Red Tea, Rooibos is rich in antioxidants & anti-aging properties. People who order this tea keep coming back for more. This tea's rich, dessert-like flavor that is often compared to a chocolate-mint dessert! (NET WT 4 oz) approx. 50 Servings

Price: $11.50 Buy it HERE

Region: Tanzanian Coffee prices firm at Moshi aution

Oct 3
Tanzanian coffee prices firmed slightly at last week's auction as buyers sought to cover their positions ahead of a Muslim holiday, traders said on Wednesday. The Tanzania Coffee Board (TCB) said 46,150 60-kg bags were on offer on Thursday last week, with 44,984 sold. In the previous week's sale, 32,623 60-kg bags were offered for sale, with 16,926 sold.

Benchmark grade AA sold at $175-$129.40 per 50-kg bag, compared with $170.00-$130.00 per bag at the last auction. Grade A was bought at $170-$133 per 50-kg bag, compared with the previous week's $152.40-$129 per bag. "The quantities on offer were quite handsome. Generally, prices were very firm. It could be mainly (due to) shippers who are short of coffee," said Kennedy Keya, a trader with Dorman Tanzania.

"The quality is good. Prices may have been firm because there's no auction in Tanzania (this week) so many people are trying to cover their short positions." Tanzania largely produces arabica coffee but also grows robusta, thriving mostly in the northern, southern and western parts of the country in areas around Mount Kilimanjaro and Lake Victoria. The auction, held in Moshi took place on last week but TCB released the results on Wednesday.

Attention Bakeries: The Potential for Hot Coffee

Quick quiz: What costs 24 cents to make but is in such high demand that you can sell it for $3 a cup? Answer: specialty coffee.

Bakeries are catching on to this fast, as more incorporate beverage programs into their business. Increasingly, bakeries are finding local roasters to supply them with unique blends or working with national suppliers that can offer optimum value.

Specialty coffee is defined as a coffee that has no defects and has a distinctive flavor, according to the Specialty Coffee Association of America (SCAA). And demand for specialty coffee continues to heat up.

From 2001 to 2006, specialty coffee sales in the United States rose from $8.3 billion to $12.3 billion, according to SCAA and Mintel Group data. That marks nearly a 50 percent jump. There are now more than 15,500 coffee cafes in America, averaging $550,000 in annual sales.

Bakery chains like Dunkin’ Donuts have become so enamored with coffee that they seem to be more about beverages than baked goods nowadays. Dunkin’ Donuts sells 2.7 million cups of coffee every day, making it the No. 1 retailer of coffee by the cup, according to the company.

And don’t just sell coffee. Market it. Retail bakeries like La Bonbonniere Bake Shops in New Jersey boost their morning sales with breakfast specials: one donut and a small cup of coffee for $1.50, or a muffin and small coffee for $2.50. Never forget the power of a meal deal. Make it simple for people to order, and they usually will trade up for something more.

According to the SCAA, specialty coffee offers a unique flavor because of the micro-climates that produce it, similar to the slight variances you will find in the flavors of fine wines. Roasting presents the next opportunity to define your coffee as truly special. Every roaster has the potential to express itself in a signature way.

Another tip is to hire a local coffee expert for advice on your beverage program. Porto’s Bakery in Los Angeles worked with an award-winning barista in Los Angeles for ways to improve the quality of their beverages. Beverages now account for 10 percent of total sales at Porto’s Burbank location.

The following are relevant statistics from the SCAA about the specialty coffee business, to help you understand the common terms and examine the opportunity to add or enhance your beverage offerings.

****Definitions****:

Barista – a person who is a master of the espresso machine and makes coffee as a profession

Cappuccino – a classic blend of coffee and steam milk, named about the brown robes of the Capuchin monks

Cupping – the process used by coffee tasting specialists to judge and evaluate coffee beans

Espresso – a dark, rich, full-bodied coffee made when finely ground Italian or dark-roasted coffee is processed with a special machine that forces a small amount of water at high pressure through a special filter

Green coffee – unroasted coffee

Organic coffee – certified by independent agencies as organically grown, processed, stored and roasted

****Statistics****:

Americans drink more than 300 million cups of coffee each day, with 75 percent of those being home-brewed.

16 percent of American adults consume specialty coffee on a daily basis, up from 13 percent in 2002.

63 percent of American adults "occasionally" consume specialty coffee.

The vast majority of the world’s coffee is the Arabica species.

It takes about 42 coffee beans to make an average serving of espresso.

Espresso contains less caffeine than a regular serving of drip coffee because the water is in contact with the grounds for only 20 to 25 seconds and extracts less caffeine.

70 percent of U.S. adults consider coffee quality and convenient location as the most important characteristic of their favorite coffeehouse.