In a 1958 essay, a pencil says to us, “Pick me up and look me over. What do you see? Not much meets the eye–there’s some wood, lacquer, the printed labeling, a graphite lead, a bit of metal, and an eraser…”
Continuing, though, we learn a pencil is not as simple as it first appears. Made from trees in California and Oregon, it requires trucks, saws, rope, logging camps. Some millwork is next where the logs are cut into “pencil-length slats” and tinted. In a pencil factory, the slats receive graphite “lead” from Ceylon (now Sri Lanka) that was mixed with clay from Mississippi, some brass made of zinc and copper and rubber-like erasers from Malaysia.
What are we really talking about? Global supply chain links.
The Coffee Supply Chain
Like a pencil, making a cup of coffee is not as simple as it might seem.
Let’s start with where the coffee grows. One likely possibility is a small farm in a warm wet place. For the best beans, we also need some elevation. (I’ve labeled Yirgachette because we later look at its coffee.)From: Businesscasestudies.com
And where does it end up? Looking for the world’s biggest coffee drinkers, we would go to Scandinavia. Finland, Sweden, Norway and Denmark are in the top six. The U.S. is #11.
Top Coffee Drinkers: Annual Per Capita Consumption
And this is what can happen in the middle…
Let’s assume that our coffee was grown in the Sidamo region of Ethiopia in the village of Yirgacheffe and winds up in California. In Door to Door, journalist David Humes selected Yirgacheffe because legend places the first coffee plant there. On the farm, the coffee cherries have to be quickly processed and then dried to retain their flavor and quality. Then, from the village, the beans travel 250 miles to Addis Ababa for final processing and packing and then another 536 miles to the Republic of Djibouti where they board a ship that crosses the Suez Canal to the Mediterranean, the Straits of Gibraltar to the Atlantic, and then through the Panama Canal to a roaster and a retailer in California.
As the beans move through their 11,000 mile journey, the transactions can multiply. The farmer could sell his beans to a local business that does the processing and then sells them to a broker. From the broker, the beans go to a local city and then a port. Meanwhile the beans have to be graded and their destination–specialty coffee makers or commercial buyers–determined. The chain would have many fewer links if the coffee retailer in the U.S. has a direct relationship wth a farmer.
Our Bottom Line: the Price System
Why do hundreds of people cooperate to grow, ship, store, process, and sell coffee?
And they are the reason that we have pencils and freshly roasted cups of coffee.