PART FOUR.

ROMANCING THE BEAN.

The late twentieth century witnessed a coffee revival. Much of Frasier Frasier, a popular television show, took place in the mythical Cafe Nervosa, where the neurotic brother psychiatrists sipped their lattes and cappuccinos.

15.

A Scattered Band of Fanatics The person who roasts coffee should continue his development not only with skill and judgment but with a measure of love and devotion. . . . The coffee roaster turns alchemist when he transforms an unappetizing seed into the makings of a delicious, invigorating drink. His magic is genuine; he must interpret the beans' secrets and reveal them to our senses.

-Joel, David, and Karl Schapira, 1975

Henry Peet set up a business roasting coffee in the Dutch village of Alkmaar in the early twentieth century. Peet considered the coffee business a trade, not a calling. He hoped for better things for his middle child, Alfred, but the boy disappointed him. Suffering from an undiagnosed learning disability, young Alfred did not do well in school-but he loved the smell and taste of his father's coffee.

After apprenticing with a large Amsterdam importer, eighteen-year-old Alfred Peet went to work for his father in 1938. During the early years of the war, Alfred helped his father eke out a living with a faux coffee made from chicory, roasted peas, and rye, since the Germans confiscated their coffee beans. Alfred then was forced into a German labor camp, and after the war he returned to the family business. In 1948, eager to escape his domineering father, Alfred Peet went to Java and Sumatra, where he learned to love full-bodied arabica beans. In 1950 Peet left for New Zealand, then eventually wound up in San Francisco in 1955.

He worked at E. A. Johnson & Company, a coffee importer for big roasters such as Hills Brothers and Folger's. Peet was appalled by what he had to sell. "Folgers bought lots of Brazils, Central American standards, and robustas. I couldn't understand why in the richest country in the world they were drinking such poor quality coffee." The public didn't seem to care. "People drank ten cups of that stuff a day. You knew it had to be weak. If you drank ten cups of strong coffee, you'd be floating against the ceiling."

In 1965 Peet was laid off. He decided to roast his own coffee-good coffee-and to sell it in his own store, using money he had inherited when his father died. coffee-and to sell it in his own store, using money he had inherited when his father died.98 With a used twenty-five-pound roaster and ten bags of Colombian beans, he opened Peet's Coffee & Tea on April 1, 1966, on the corner of Vine and Walnut streets in Berkeley. Intent on selling whole-bean coffee for home consumption, he offered a small coffee bar to introduce his customers to good coffee. "If you are used to drinking Hills Brothers coffee and then try Peet's, roasted darker and brewed twice as strong, you wouldn't say it was terrific," he admitted. "It was written all over their faces. 'My G.o.d, is he trying to poison me?'" Expatriate Europeans, on the other hand, thought they had found nirvana, a taste of home. With a used twenty-five-pound roaster and ten bags of Colombian beans, he opened Peet's Coffee & Tea on April 1, 1966, on the corner of Vine and Walnut streets in Berkeley. Intent on selling whole-bean coffee for home consumption, he offered a small coffee bar to introduce his customers to good coffee. "If you are used to drinking Hills Brothers coffee and then try Peet's, roasted darker and brewed twice as strong, you wouldn't say it was terrific," he admitted. "It was written all over their faces. 'My G.o.d, is he trying to poison me?'" Expatriate Europeans, on the other hand, thought they had found nirvana, a taste of home.

Because Peet sold his coffee with pa.s.sionate authority, his female customers began to take it home and bring their husbands back the next weekend. Peet hired two young women and taught them to cup (smell, taste, and evaluate) coffees. "It takes a long time to understand the language the bean uses to talk to you," he told them. It would take years, he said, before they could hear that secret language. Still, they could at least convey something of this knowledge to customers. Swept up in the excitement of their newfound expertise, they sniffed, sipped, swooned, and sold.

Within a year and a half, lines stretched around the corner. Peet's was hip. Peet's was groovy. Peet's was the place for hippies to hang out. Alfred Peet despised them. "I wanted an orderly business, and some of those guys were smelly."

Only the owner worried about the odor of his unwashed customers. Everyone else inhaled deeply, high on the smell of the wickedly dark fresh-roasted coffee. Burlap sacks full of green beans lined the back wall. In the middle of a sentence, Peet would announce, "I have a roast!" and rush over to let the rich brown beans tumble out. At this dramatic moment, all conversation stopped. For Peet and his customers, coffee was a religion. Peet could be a difficult guru, however. He would yell at customers who told him they planned to brew in a percolator. "Why spend all this money for good coffee and then boil the h.e.l.l out of it?"

Zabar's Beans In New York City Saul Zabar discovered the wonders of fresh-roasted beans. Zabar's father, Louis, had immigrated from Russia in 1925 and started a small smoked fish department in a local store. After Louis Zabar died in 1950, Saul gradually expanded the store at the corner of Broadway and Eightieth Street to serve the upscale Upper West Side community, with an emphasis on fresh produce. Around 1966 he decided to supply whole-bean coffee. He found the White Coffee Corporation in Long Island City, which supplied the inst.i.tutional trade-primarily restaurants and hotels-with a high-quality all-arabica blend. Every day for a year Saul Zabar showed up for two hours of roasting and cupping sessions. Gradually, the pupil turned into the expert. Zabar got White to order Kenya AA, Tanzanian peaberry, Jamaican Blue Mountain, Hawaiian Kona, Guatemalan Antigua.

Zabar prided himself on producing a much lighter roast than Alfred Peet. "I think beans should be roasted just enough to bring out their unique flavor elements of body and acidity." Apparently, his customers agreed. Zabar's fame spread beyond New York City, up and down the East Coast, where his mail-order business flourished.99 Mentors, Fathers, and Sons Throughout the country a scattered, disparate band rediscovered or maintained the tradition of fresh-roasted, quality coffees. Many had roots in the old-style coffee business. Trained by Leon Cheek at General Foods, Peter Condaxis quit in disgust at the desecration of the Maxwell House blend. In 1959 he opened a small retail shop in Jacksonville, Florida, where customers could buy fresh whole-bean coffees from Costa Rica, Guatemala, and Colombia.

Donald Schoenholt grew up with the smells of Mocha and Java. His father, David, ran the New York-based Gillies Coffee Company, founded in 1840. In 1964 David Schoenholt had a ma.s.sive heart attack, and Don, just shy of nineteen years old, took over the business. Throughout the rest of the 1960s, the young Schoenholt struggled to maintain quality and keep the business going. "I developed this ideal that I was a lone craftsman, turning out fine coffee."

Schoenholt's friend Joel Schapira also carried on a family coffee tradition begun by his grandfather, Morris Schapira, at the Flavor Cup on Tenth Street in Greenwich Village in 1903. At the same location, Joel worked with his brother, Karl, and father, David, inviting favored customers to join them at the back room cupping table.

As one regional roaster put it, "We are the fungus that grows in the cracks between the big fellows." In Long Beach, California, young Ted Lingle, fresh from the war in Vietnam, joined Lingle Brothers, started by his grandfather and great-uncles in 1920. Lingle grew up listening to his father worry about the state of the business. "The whole trade was lamenting the trend away from quality, but no one seemed to know what to do about it."

Tourist Coffee and Other Problems Pa.s.sed in 1962, the International Coffee Agreement was not fully implemented until 1965 and was due to be renegotiated in 1968. To encourage increased consumption in countries such as the Soviet Union and j.a.pan ("new markets" or Annex B nations), the quota system did not apply to coffee sold there, nor did it restrict sales to nonmember countries. As a result, a two-tier pricing system developed in which beans were sold for less money to Annex B or nonmember countries. Unscrupulous dealers then turned around and resold the cheaper beans in West Germany, the United States, or other major consuming countries. In Germany trade experts estimated that "tourist coffee"-named for its circuitous travels- accounted for 20 percent of the country's imports in 1966. The same year, one expert estimated that $10 million worth of coffee was smuggled out of Colombia.

Overproduction was another unresolved issue, with 87 million surplus bags in 1966. Of those, Brazil held 65 million, while robustas clogged government stabilization boards in Africa. Scientists had made it possible to grow even more more coffee. In a Brazilian lab, Jerry Harrington and Colin McClung, Rockefeller's IBEC researchers, figured out that zinc and boron were essential micronutrients for coffee cultivation, and with the ma.s.sive addition of lime and fertilizer, the barren Brazilian coffee. In a Brazilian lab, Jerry Harrington and Colin McClung, Rockefeller's IBEC researchers, figured out that zinc and boron were essential micronutrients for coffee cultivation, and with the ma.s.sive addition of lime and fertilizer, the barren Brazilian cerrado cerrado lands could support plantations. Agronomists made the situation even worse with new heavily producing hybrids. Their beans did not taste quite as good, but few noticed or cared. Capable of withstanding full sunlight, the new trees didn't require shade trees, but they did demand fertilizer to grow so prolifically without mulch. lands could support plantations. Agronomists made the situation even worse with new heavily producing hybrids. Their beans did not taste quite as good, but few noticed or cared. Capable of withstanding full sunlight, the new trees didn't require shade trees, but they did demand fertilizer to grow so prolifically without mulch.100 In 1968 the Brazilians inst.i.tuted a drastic project to bulldoze or burn billions of older trees, and the International Coffee Organization (ICO) created a Diversification Fund to encourage coffee farmers to switch to other crops. Yet it was much easier for Brazil, with its gigantic fazendas fazendas, to cut back than it was for African countries, where smallholders relied on their few trees for a livelihood. In Kenya, for instance, 250,000 tiny farms grew coffee. As Uganda's Roger Mukasa, chair of the ICO Council, asked, "Cut down whose trees and diversify to what?"

Other troubles plagued the agreement as well. Although India and Indonesia increased production, for instance, their quotas were not readjusted. "Even justifiable claims of small exporting countries are apt to be ignored and decisions forced upon them by powerful groups with overwhelming voting strength," wrote an anonymous Indian coffee grower.

Since votes to change quota levels were so strife-ridden, the agreement was revised to specify a target price range. If the price fell below the base level, it would automatically trigger a proportional quota decrease; if the price rose above the ceiling, quotas would increase. In addition, the selectivity selectivity principle was introduced, so that different price targets were set for robusta (primarily Africa and Indonesia), unwashed arabica (mostly Brazil), Colombian milds (including Kenya), and other milds (primarily Central America). Despite the required certificates of origin, many countries found ways to flout the quotas, while smuggling and mislabeling increased. principle was introduced, so that different price targets were set for robusta (primarily Africa and Indonesia), unwashed arabica (mostly Brazil), Colombian milds (including Kenya), and other milds (primarily Central America). Despite the required certificates of origin, many countries found ways to flout the quotas, while smuggling and mislabeling increased.

Another crisis soon surfaced. In a 1967 speech, President Johnson encouraged Latin American countries to industrialize so that they could export processed agricultural products rather than selling raw produce. However, when Brazil began to produce substantial quant.i.ties of soluble coffee for export to the United States, many in the U.S. coffee trade protested. "Brazilian powder," as the trade called it informally, produced a superior taste to the robusta-laden U.S. products. Because the Brazilian government did not tax soluble exports as it did green beans, domestic manufacturers could sell for a substantial discount to solubles produced in U.S. factories. In 1965 Brazilian powder accounted for only 1 percent of the U.S. market; by the end of 1967 it had snagged a 14 percent share.

The Brazilian powder crisis nearly derailed the new 1968 International Coffee Agreement, with Wilbur Mills, the powerful chairman of the House Ways and Means Committee, telling the press that he would not support the new ICA unless the "discriminatory" Brazilian practices ceased. With a temporary compromise, the ICA was renewed, but the issue wasn't resolved until 1971, when Brazil agreed to allow 560,000 bags of cheap green beans-destined for soluble production in the United States-to be exported duty-free, thereby leveling the playing field somewhat.

The Brazilian soluble controversy left Latin American growers bitter. "Throughout the Hemisphere today there is a feeling of disappointment and frustration over the protectionist tendencies of the United States," wrote a Costa Rican coffee man. Nevertheless, the ICA limped along. The agreement had been created to prevent average green coffee bean prices from declining below the 1962 level of 34 cents a pound, as well as to keep prices from climbing too high too quickly. By 1968, with the price hovering below 40 cents, it appeared that the system was working.

Under the ICA, however, producing countries were hardly thriving. The glaring gap between the wealthy industrialized and poverty-stricken developing countries was widening. In 1950 the average income in consuming countries was three times that of coffee-growing nations. By the late 1960s it was five times greater. A U.S. laborer could earn more in four days than the average annual wage in Guatemala or Ivory Coast. "Malnutrition and gastroenteritis are endemic in these protein-starved regions, where one out of six children dies before the age of five," observed Penny Lernoux in The Nation The Nation. "Coffee has no nutritional value. For these peasants it is worth only as much as it can buy in food and clothing. And because it buys so little, it is a bitter brew, the taste of poverty and human suffering."

The Think Drink Thunks Per-capita coffee consumption in the United States continued its gradual decline in the mid-1960s. The International Coffee Organization responded by voting a meager 15 cents-per-bag promotion allowance, which provided a 1966 worldwide advertising kitty of only $7 million, $3.5 million of which was allocated annually to the United States. The ICO hired McCann-Erickson, c.o.ke's ad agency, to create a campaign to seduce seventeen- to twenty-five-year-olds to drink coffee. The admen came up with the "Think Drink" slogan. Whenever a young adult had a difficult decision to make or serious studying to do, coffee would lubricate the brain cells.

The campaign's appeal to rationality was directed to a generation in open revolt against logic and reason. These young rebels looked for spontaneous enlightenment through LSD or marijuana. A Think Drink did not appeal. A Thrill Pill did.

The National Coffee a.s.sociation, with an even smaller budget, promoted youth-oriented coffeehouses on college campuses and in churches and civic organizations. The Pan American Coffee Bureau proudly noted that it was connecting with the "all-important youth sector" by serving coffee to the freshly scrubbed conservative teens in the Up With People program. These efforts to induce young adults to drink more coffee lasted for a couple of years but failed to produce any significant results.

During the 1968 presidential elections, the National Coffee a.s.sociation distributed 58,000 pamphlets, "Twelve Ways Coffee Can Help You Win Elections." Instead of clinking cups at polite coffee parties, however, young Vietnam War protestors disrupted the Democratic National Convention in Chicago, and the police retaliated with a brutality that shocked the nation. In this era of the widely hailed generation gap, another brand of coffeehouse sprang up-not the sort that the NCA or the Pan American Coffee Bureau ever envisioned.

The GI Coffeehouses While in the military at Fort Polk in 1963, Fred Gardner occasionally patronized bars serving watered-down, overpriced drinks in nearby Leesville, Louisiana. A few years later, in San Francisco, he had the idea to set up coffeehouses in army towns "for the hippies who couldn't avoid military service." In the fall of 1967, with Deborah Rossman and Donna Mickleson, Gardner opened the first GI coffeehouse in Columbia, South Carolina, near Fort Jackson. They named it the UFO-a play on USO, the United Servicemen's Organization. On the walls they tacked up big black-and-white portraits of counterculture heroes such as Ca.s.sius Clay, Bob Dylan, and Stokely Carmichael-as well as one of Lyndon Johnson holding up a hound dog by the ears. The founders purchased a commercial espresso machine and a Chemex drip brewer, and arranged for a supply of high-quality beans. Soon after the UFO opened its doors, the coffeehouse was a magnet for antimilitary GIs. Agents from Military Intelligence began interrogating soldiers who hung out at the UFO. "They invariably asked what we were putting in the coffee," Gardner recalled.

Gardner relinquished leadership in 1968, but over the next few years, with the support of Tom Hayden, Rennie Davis, and Jane Fonda, over two dozen GI coffeehouses sprang up outside army bases across the country. Drugs were banned. Fonda organized shows of "political vaudeville" and music-featuring Donald Sutherland, Country Joe MacDonald, and d.i.c.k Gregory-as a kind of mirror image of Bob Hope's patriotic GI programs.

By October 1971 the coffeehouses had attracted the attention of Congressman Richard Ichord, chairman of the House Committee on Internal Security, who told his colleagues, "At many major military bases . . . , GI coffeehouses and underground newspapers, reportedly financed and staffed by New Left activists, have become commonplace. The coffeehouses serve as centers for radical organizing among servicemen." A retired Marine Corps officer complained that "off-base antiwar coffeehouses ply GIs with rock music, lukewarm coffee, antiwar literature, how-to-do-it tips on desertion, and similar disruptive counsels."

Without consciously doing so, the GI coffeehouses replayed history. Ever since 1511, when Khair-Beg tried to close the coffeehouses of Mecca, these caffeinated meeting places had served as brood chambers for seditious literature and revolt against authority. Now the antiwar coffeehouses served as hotbeds for resistance to LBJ, and after the 1968 elections, Richard Nixon. As in the past, the authorities tried to shut them down. In several cases, arsonists burned the coffeehouses. The Ku Klux Klan targeted one, while others were riddled with gunfire. The surviving establishments eventually disbanded, but not before leaving their mark on American history.

"Caution: Coffee May Be Hazardous to Health"

A 1963 survey of nearly 2,000 factory workers seemed to implicate coffee in heart disease. Such epidemiological studies, which survey sample population groups, are difficult to evaluate, since they often don't (or can't) factor in other variables that may contribute to outcomes.101 The next year D. R. Huene, a Naval Reserve flight surgeon, a.s.serted that navy pilots who drank too much coffee "complained of frequent heart flip-flops while in the air." Such anecdotal reports weren't scientific, but they made headlines. The next year D. R. Huene, a Naval Reserve flight surgeon, a.s.serted that navy pilots who drank too much coffee "complained of frequent heart flip-flops while in the air." Such anecdotal reports weren't scientific, but they made headlines.

In 1966 Irwin Ross penned an attack on the drink in Science Digest Science Digest. "Caffeine, the essential ingredient in coffee, is a poison. A drop injected into an animal's skin will kill it within a few minutes. An infinitesimal amount applied directly to your brain would send your body into uncontrollable convulsions." These observations, while true, are unfair, since coffee drinkers do not inject it or apply it directly through their skulls. Ross blamed coffee for stomach ulcers, coronary thrombosis, throat and stomach cancer, and nervous irritability, though he granted that the drink could help those suffering from migraines or asthma.

"A new problem for the coffee industry is rearing its ugly head," wrote Samuel Lee, the technical editor of the Tea & Coffee Trade Journal Tea & Coffee Trade Journal in 1966. "Serious scientific workers are trying to demonstrate that prolonged, continued or excessive consumption of beverage coffee may be deleterious, or even a serious health hazard." Two years later he worried that research into coffee's supposed ill effects could lead to a warning label similar to that forced on cigarettes: "Caution: Coffee May Be Hazardous to Health." in 1966. "Serious scientific workers are trying to demonstrate that prolonged, continued or excessive consumption of beverage coffee may be deleterious, or even a serious health hazard." Two years later he worried that research into coffee's supposed ill effects could lead to a warning label similar to that forced on cigarettes: "Caution: Coffee May Be Hazardous to Health."

In 1969 the National Coffee a.s.sociation created its Scientific Advisory Group (SAG), composed of scientists employed by the major roasters such as General Foods, Nestle, and Procter & Gamble. They also hired the Arthur D. Little Company to conduct experiments they hoped would counter the negative information on coffee. Over the next fifteen years, the NCA would fund over twenty studies at a cost of $3 million.

Yet the alarms over health continued. In 1971 Philip Cole, a Harvard researcher, reported that coffee might be linked to cancer of the bladder, particularly in women. In 1972 and 1973 Boston University's Hershel Jick and colleagues reported patient surveys reinforcing the link between heavy coffee intake and heart disease. Studies in which pregnant rats were injected with or fed caffeine conducted in j.a.pan, Germany, France, and England showed that with heavy dosages, the offspring of the caffeinated rats had more birth defects than control groups.

Coffee soon was cleared on nearly all counts, as new studies failed to replicate earlier findings or conclusions were revised. Like most scare stories, however, initial claims linking coffee to diseases made headlines and a huge impact on the public consciousness, whereas later qualifications slipped quietly to the back pages. In response to health concerns, sales of decaffeinated coffee surged, increasing 70 percent from 1970 to 1975, when it accounted for 13 percent of coffee consumed in U.S. homes.

General Foods triumphed with Sanka, whose dominant market share allowed larger profit margins than for regular coffee. In a stroke of genius, General Foods hired actor Robert Young to shill for Sanka in 1976, just as he was leaving a long stint as the kindly television doctor Marcus Welby, M.D. Now, in TV spots, Young explained that "many doctors tell millions of Americans to drink Sanka brand" if caffeine made them irritable. In one commercial, dinner guest Young witnesses young husband Phil explode angrily at his wife over something trivial, so he suggests Sanka, which "tastes just as good as regular coffee." In 1971 Nestle came out with a freeze-dried Taster's Choice Decaffeinated, while General Foods created Freeze-Dried Sanka and Brim, virtually identical products. Because the Sanka brand already was firmly established with a medicinal image, Brim spots strove to attract the kind of health-conscious youth who shopped at natural foods stores. Tenco, owned by Coca-Cola, was delighted to provide decaffeinated coffee, putting the extracted caffeine into c.o.ke. American capacity was overwhelmed, and many roasters sent their beans to Germany, where high-tech decaffeination plants worked around the clock.

Even decaffeinated coffee was plagued by health concerns. A 1975 National Cancer Inst.i.tute study indicated that, in ma.s.sive doses, the solvent trichloroethylene (TCE) caused cancer in rats. Though TCE was used to decaffeinate green coffee beans, very little of the solvent remained in the beans, and that small amount was nearly all burned off during the roast. A frustrated General Foods executive pointed out that a human would have to consume 50 million daily cups of decaffeinated coffee for an entire lifetime to approximate the doses given the rats. Nonetheless, General Foods and other roasters abandoned TCE, switching to another chemical solvent, methylene chloride.

Gold Floats, Coffee Sinks As world coffee prices drifted down to 35 cents in spring 1969, representatives of nine major Latin American and African coffee-producing countries-Brazil, Colombia, El Salvador, Ethiopia, Guatemala, Ivory Coast, Mexico, Portugal (Angola), and Uganda-gathered in Geneva to plot strategy and to demand a "realistic quota level" for the ICA. This "Geneva Group" was encouraged in July when another frost, followed by a drought, hit Parana, damaging 10 percent of the current crop and about 30 percent of the following year's production. Prices rose 10 cents a pound by November, triggering the ICA's automatic quota increase. Even with larger quotas, prices climbed over 50 cents a pound for Santos #4 by the beginning of 1970. Brazil, which had been bulldozing trees, now reversed itself, preparing a three-year plan to plant plant 200 million new trees. Though Brazil still held 37 million surplus bags, its reserves were being drawn down year by year. With the U.S. Congress about to vote on implementing legislation again, the producing countries agreed to raise quotas in August. 200 million new trees. Though Brazil still held 37 million surplus bags, its reserves were being drawn down year by year. With the U.S. Congress about to vote on implementing legislation again, the producing countries agreed to raise quotas in August.

In 1970 the leaf rust hemeleia vastatrix hemeleia vastatrix was discovered in Bahia, Brazil. Somehow-most likely on the clothing of African visitors-the spores had reached Latin America. A quick search revealed that the rust already had spread to parts of So Paulo and Parana. Seeking to quarantine it, the Brazilians burned a scorched earth belt forty miles wide and five hundred miles long, but the disease jumped it. Throughout the decade was discovered in Bahia, Brazil. Somehow-most likely on the clothing of African visitors-the spores had reached Latin America. A quick search revealed that the rust already had spread to parts of So Paulo and Parana. Seeking to quarantine it, the Brazilians burned a scorched earth belt forty miles wide and five hundred miles long, but the disease jumped it. Throughout the decade hemeleia vastatrix hemeleia vastatrix would creep northward toward Central America. Brazil already had begun growing a small amount of disease-resistant robusta; now it increased acreage devoted to the inferior bean. would creep northward toward Central America. Brazil already had begun growing a small amount of disease-resistant robusta; now it increased acreage devoted to the inferior bean.

On August 15, 1971, Nixon shook the world economy by cutting the dollar loose from gold, while temporarily freezing wages and prices. To pay for huge defense budgets and growing welfare expenses, Nixon devalued the dollar on December 20 by about 8 percent. This lowered effective coffee prices, and the producing countries asked for a reasonable adjustment. Led by the United States, the consuming countries refused. The producers reactivated the Geneva Group, announcing plans to undership ICA quotas in order to jack the price up, in imitation of OPEC, the oil cartel.

Such a move raised "doubts about the continuing viability of the International Coffee Agreement," according to the National Coffee a.s.sociation and the State Department. When prices did did rise some 25 percent over the summer of 1972, the consuming countries blamed the Geneva Group. The ICA Council met to renegotiate the agreement, but neither side would compromise, and the quota agreement lapsed on December 11, 1972. rise some 25 percent over the summer of 1972, the consuming countries blamed the Geneva Group. The ICA Council met to renegotiate the agreement, but neither side would compromise, and the quota agreement lapsed on December 11, 1972.

One result of the agreement's suspension was the resurrection of the New York Coffee and Sugar Exchange. On August 24, 1972, as it became clear that the agreement would probably founder, the first real activity in months occurred in coffee futures contracts. Five lots-each signifying 250 bags of coffee-due for delivery in March 1973 sold at 53 cents a pound. By the end of 1972 they were worth 61 cents a pound. The coffee commodities market sprang to life, with enough open interest-several thousand contracts-to offer some liquidity to traders.

Coffee Inroads in j.a.pan and Europe As a "new market" under ICA regulations, j.a.pan received relatively inexpensive beans. Without the quota system j.a.pan now would pay the same as everyone else. Before 1973 j.a.panese coffee imports had grown dramatically, with General Foods and Nestle each opening j.a.panese plants to produce instant coffee. Determined to westernize, many j.a.panese embraced coffee-and Coca-Cola-as symbolic American beverages. The j.a.panese kissaten kissaten (coffeehouses) proliferated at the rate of 20 percent annually. By the mid-1970s there were 21,000 in Tokyo alone. The drinks were pricey by American standards, but the j.a.panese were willing to pay for a status symbol. (coffeehouses) proliferated at the rate of 20 percent annually. By the mid-1970s there were 21,000 in Tokyo alone. The drinks were pricey by American standards, but the j.a.panese were willing to pay for a status symbol.

In 1969 Ueshima Coffee Company introduced the first ready-to-serve canned coffee to j.a.pan. Five years later Coca-Cola introduced Georgia Coffee, a canned sweetened coffee drink, with a commercial spoof on Gone With the Wind Gone With the Wind in which the Rhett Butler character chose the drink over Scarlett O'Hara. The canned beverages, dispensed hot or cold from vending machines, established a popular new coffee category in j.a.pan. By 1975 the j.a.panese were consuming 20 million cases a year, and total j.a.panese coffee sales swelled to more than $100 million annually. in which the Rhett Butler character chose the drink over Scarlett O'Hara. The canned beverages, dispensed hot or cold from vending machines, established a popular new coffee category in j.a.pan. By 1975 the j.a.panese were consuming 20 million cases a year, and total j.a.panese coffee sales swelled to more than $100 million annually.

In Europe instant coffee sales grew to 18 percent of the market, though its popularity varied by country. Between them Britain and West Germany consumed two-thirds of Europe's instant coffee. The Scandinavians preferred higher quality regular coffee, while the Italians stuck with espresso and Neapolitan stovetop brewers. In France an instant-chicory mixture was popular, while this mix represented half of coffee consumption in Switzerland, home to Nestle, the world's largest soluble manufacturer.

The large European roasters-Douwe Egberts, Jacobs, Eduscho, Tchibo, Lavazza, and Gevalia (purchased by General Foods in 1970)-expanded as the continent became more industrialized and urbanized, while smaller roasters failed. Both Tchibo and Eduscho opened thousands of small retail outlets, where they sold whole arabica blends along with gift items. Completely recovered from World War II, the European coffee industry reached a plateau in the 1970s, as per-capita growth stagnated. Since 1950, however, the consumption patterns of America and Europe had reversed. By the 1970s Europe consumed approximately half of the world's coffee, with the United States taking less than 40 percent.

The King of the Robustas and the Burundi Ma.s.sacres In the early 1970s many coffee-growing African nations were still suffering from postindependence tribal friction and political corruption. In Zaire, under dictator Mobutu Sese Seko, coffee was sold through a centralized coffee board from which Mobutu and his cronies took most of the profits. In 1970 Claude Saks, a New York green coffee importer, visited the country. The Kinshasa bureaucrats conveyed a "hate-the-white-man" att.i.tude, and Saks was nearly shot by a soldier, but he smelled cash. "Whenever there is chaos and disorganization," Saks observed, "that is the time to make money." With his father, founder of G. M. Saks Inc., he pushed the firm to become "king of the robustas, the low grades."

The younger Saks chafed under the conservatism of his father and broke from him in 1972 to start Saks International with a partner, later merging with Mult.i.trade, a Dutch commodities house. "The coffee trade people knew manners, wines, art, music, and politics," he noted. "They behaved as refined gentlemen, yet would not hesitate to cut your gizzard out or squeeze your b.a.l.l.s if they could get the slightest advantage."

In fall 1972 Claude Saks flew into Burundi, where the minority Tutsi ruled the Hutu majority. In April of that year, young Hutu intellectuals led an insurrection in which a small number of Tutsi were killed. In reprisal, the Tutsi engaged in a virtual Hutu genocide, lasting for four months. Saks learned that the government planned to nationalize all exporters, so he met with the minister of agriculture, a Tutsi, and cemented the relationship with an envelope stuffed with local currency. "I considered this practice no different than giving a tip to a maitre d' to obtain a good table," he observed.

Over 100,000 Hutus were slaughtered in 1972, with some estimates ranging as high as 250,000. Other African states failed to intervene, since they had their own tribal tensions to worry about. Nor did the United Nations act, hesitant to interfere in a black-ruled country. The U.S. State Department did nothing, other than to suspend cultural exchanges.

The most effective action the United States could have taken would have been to boycott Burundi's coffee, since American importers bought 80 percent of the country's exported beans, on which the economy relied. The State Department's Herman Cohen told a congressional committee in 1973-when killings began anew-that a coffee boycott had been considered, but that it would have punished both Hutus and Tutsis, preventing them from purchasing bread, medicine, clothing, and other necessities. "In short, a coffee boycott would have been an inhuman response."

Roger Morris, who represented the Carnegie Endowment for International Peace, vehemently disagreed. "Most of the ruling trade goes to the Tutsi," Morris said. "It is a main underpinning of the regime financially. About one-seventh get through to the Hutu family farmers." Because the United States had no strategic interest in Burundi and could easily do without its coffee, the situation provided the perfect opportunity, Morris a.s.serted, "for the United States to exercise its international morality, idealism, and commitment to human rights-that is what makes the case so tragic."

Just before Thanksgiving in 1973, Claude Saks lunched at the fancy St. Regis Hotel in New York City with the chairman and vice chairman of the Burundi National Bank. "As you know," the well-dressed Tutsi chairman began over drinks, "there have been certain disturbances in our country." Christ Christ, Saks thought, 100,000 dead and 100,000 fled, and he calls it "disturbances 100,000 dead and 100,000 fled, and he calls it "disturbances." The banker explained that Hutu laborers had departed before picking all of the coffee, but the bank still held some 160,000 bags. Saks purchased 100,000 of them.

Starbucks: The Romantic Period While wheeler-dealers like Claude Saks made their fortunes and General Foods, Procter & Gamble, Nestle, and Jacobs fought for world supremacy in ma.s.s-marketed canned coffee, a renewed quest for quality was spear-headed by disaffected baby boomers. Many of them had hitchhiked through Europe or had been stationed there while serving in the military, and they had discovered the joys of espresso, specialty coffee shops, and the cafe. With heightened international tastes, they were also searching for community, for gra.s.sroots verities. They found them in aromatic fresh-roasted whole beans, tumbling from small roasters. Many had been directly inspired by a pilgrimage to Berkeley to inhale the atmosphere at Peet's.

Jerry Baldwin, Gordon Bowker, and Zev Siegl, three Seattle college students, had traveled through Europe together. By 1970, now in their late twenties, they all landed back in Seattle. Bowker wrote for a regional magazine and started an advertising company. Baldwin and Siegl were teachers.

In search of good coffee, Bowker periodically drove to Vancouver, British Columbia, to buy beans at Murchie's, a small gourmet outlet. On one such 1970 trip, "it hit me. Open a coffee store in Seattle!" Around the same time, a friend offered Baldwin a cup of coffee made from beans he had ordered from Peet's in Berkeley, and he experienced a similar revelation. They would start a small, quality roasting business in Seattle.

Zev Siegl went down to the Bay Area to talk with Alfred Peet and other roasters such as Jim Hardcastle and Graffeo and Freed, Teller & Freed. Peet agreed to supply them with his roasted coffee beans. "Alfred was very generous," Baldwin remembered. "We copied his store design, with his blessing." Over Christmas they took turns working in Berkeley at Peet's, learning the ropes. In Seattle, they ripped apart and refurbished an old secondhand store on Western Avenue where the rent was $137 a month. Baldwin took an accounting course. Each of the friends put up $1,500 and borrowed $5,000 from a bank. With Peet's help, they found suppliers for coffee grinders, brewers, other accessories, and bulk teas.

Nearly ready to open, they lacked a name. "Bowker, Siegl, & Baldwin sounded too much like a law firm," Baldwin said, "but we wanted a family surname, so it would sound like it belonged to someone, and 'S' seemed like a good first initial. We came up with a bunch of names, including Steamers and Starbo. From Starbo, Gordon blurted out 'Starbuck.'" The name appealed to the literary trio, since characters in Moby-d.i.c.k Moby-d.i.c.k and and The Rainmaker The Rainmaker shared it. Besides, shared it. Besides, Starbucks Starbucks had a strong ring to it. All the letters rested above the line, with tall letters framing either end. had a strong ring to it. All the letters rested above the line, with tall letters framing either end.

With a bare-breasted, twin-tailed mermaid as a logo, Starbucks opened on March 30, 1971, and was an immediate hit, selling primarily whole beans and supplies. In the first nine months, the store grossed $49,000-not enough to live on, but encouraging. The partners opened another store the following year, and Alfred Peet told them they needed to buy their own roaster. "You're getting too big."

They added a third store in 1973. "I was happy," Baldwin reminisced. "I had employees making more money than I did, but it was an adventure. In retrospect, I would call this the Romantic Period, when so many young people caught the coffee bug."

G.o.d's Gift to Coffee In 1969 thirty-one-year-old former social worker Paul Katzeff dropped a tab of acid and then decided to move. "I realized I had to get out of New York City to find my spot, like Carlos Castaneda wrote in The Teachings of Don Juan The Teachings of Don Juan." Katzeff bought an old Mack truck, put a wood-burning stove and waterbed in the back, and headed west. He wound up in Aspen, Colorado, where he decided to open the resort town's first coffeehouse.

In the Thanksgiving Cafe, he served coffee in little individual Melitta drip pots. "Customers could see it brewed before their eyes." He soon supplied three grocery stores with packaged beans from what he named the Thanksgiving Coffee Company. The coffeehouse was a hit, but he could never turn a profit. "I gave my hippy friends jobs, and it turns out they were stealing from me."

In 1972 Katzeff cleared out, throwing his roaster and grinder on the back of the Mack truck and heading west to California, where he eventually wholesaled his beans to local bed-and-breakfasts, hotels, and businesses. In 1975 he convinced a few local supermarkets to sell bulk Thanksgiving Coffee. Over time Katzeff developed a mail-order business as well. "I had no baggage, no preconceived notions," Katzeff recalled. "When I came to coffee, the business consisted of a bunch of old people without much creativity. I was perhaps G.o.d's gift to coffee."

A Coffee Love Affair Erna Knutsen, who had arrived in New York City from Norway when she was five years old, took awhile to find her calling in life, working her way through three husbands and across the continent to California.

In 1968, already in her early forties, Knutsen (going by her married name, Erna Guerrieri) took a job as a private secretary to Bert Fullmer at B. C. Ireland, a long-established San Francisco coffee and spice importer. In the early 1970s, with her boss's encouragement, Knutsen developed a little niche for herself, selling broken lots (less than a container of coffee, which holds 250 bags) of higher quality arabica beans to the "small trade," tiny roasting outfits that were beginning to pop up along the California coast. Eager to develop her palate, she told her boss that she wanted to learn the arcane art of cupping. If she really wanted to serve her clients, she needed to be able to speak from direct personal experience about the acidity, body, aroma, and flavor of a particular sample of beans. The men at B. C. Ireland objected. "If that c.u.n.t comes in here, we're quitting," Knutsen overheard one of them say.

Yet she persisted, and in 1973 she finally got into the cupping room. "They laughed at me and told me I didn't cup properly. I was too dainty at first." In time, however, she learned to slurp the coffee samples explosively, mixing the spray with oxygen in flavor blasts to her taste buds. "I have a very good palate and sense memory." She had commenced "the greatest love affair of my life," what she termed her "grand pa.s.sion" for coffee.

Her enthusiastic expertise charmed roasters and earned her a reputation throughout the country as the doyenne of better beans, or "green jewels," as she called them. Knutsen developed exclusive relationships with buyers in Africa, Hawaii, Central America, Jamaica. At a time when most U.S. green importers were pinching every penny in the low-quality price wars, Knutsen paid what seemed like exorbitant prices for the best beans that had been going only to Europe and j.a.pan. In turn, her grateful customers willingly purchased them.

In 1974 the Tea & Coffee Trade Journal Tea & Coffee Trade Journal featured an interview with Knutsen in which she coined the term featured an interview with Knutsen in which she coined the term specialty coffees specialty coffees to refer to the Celebes Kalossi, Ethiopian Yrgacheffe, and Yemen Mocha she sold. This term would come to define the nascent gourmet coffee movement. Knutsen predicted a bright future for specialty coffee. "There is an emerging group, largely young people . . . who value good coffee, and I am certain that our end of the business will grow." Like those interested in fine wines, the coffee connoisseur would seek "those modest luxuries that most can still afford." to refer to the Celebes Kalossi, Ethiopian Yrgacheffe, and Yemen Mocha she sold. This term would come to define the nascent gourmet coffee movement. Knutsen predicted a bright future for specialty coffee. "There is an emerging group, largely young people . . . who value good coffee, and I am certain that our end of the business will grow." Like those interested in fine wines, the coffee connoisseur would seek "those modest luxuries that most can still afford."

The Ultimate Aesthete When George Howell moved from California to Boston in March 1974, he went through withdrawal. Having lived in the San Francis...o...b..y Area from 1968 to 1974, Howell was used to specialty coffees. In Boston, "I couldn't get good coffee to save my life," he recalled. He tried the yellow pages. Nothing. He sought out expensive cheese shops that had bulk whole beans, but they had been sitting in bins so long that they were hopelessly stale. In desperation, he decided to start his own coffeehouse, buying his beans from Erna Knutsen.

Howell came at coffee as an aesthetic experience. He had studied art history and literature at Yale before opening an art gallery in California. "I saw the coffeehouse as a natural for me. It provided a place to exhibit art, and then there was the pleasure of the drink itself."

With the help of his wife, Laurie, and partner, Michael Da Silva, Howell opened the Coffee Connection in Harvard Square in April 1975. They sold whole beans but also added a coffee bar with tiny press pots. "We were an overnight success," Howell recalled. He set up a small Probat roaster ten miles away in Burlington, Ma.s.sachusetts, and stayed up every night, learning to roast. "Customer enthusiasm covered us. They were like parched people coming out of a desert and finding an oasis."

Specialty Proliferates In the early 1970s specialty coffee roasters and coffeehouses began to appear with increasing frequency in the United States and Canada. In Juneau, Alaska, Grady Saunders opened Quaffs, later changing the name to Heritage Coffee Company. Paul and Kathy Leighton commenced business as the Coffee Corner in Eugene, Oregon, while Bob Sinclair served coffee in Pannikin Coffee & Tea in San Diego. Bill Boyer started Boyer Coffee Company in Denver, and Marty Elkin ran Superior Coffee (later renamed Elkin's) in New Hampshire. In Canada, there was Murchie's in Vancouver. In Toronto, Timothy Snellgrove founded Timothy's Coffees of the World, while Frank O'Dea and Tom Culligan opened the Second Cup in a Toronto mall.

Enthusiastic young men branched off from family coffee businesses when they caught the specialty bug. In tidewater Virginia, third-generation Gill Brockenbrough founded First Colony, while Alan Rossman started Van Courtland Coffee, a specialty branch of Wechsler's, a longtime New York inst.i.tutional roaster. With partner Hy Chabott, Donald Schoenholt opened several Gillies specialty retail stores in Manhattan. In Pittsburgh, Nick Nicholas transformed Nicholas Coffee into a regional specialty company. Peter Longo carried on Porto Rico Importing, the family retail outlet in Greenwich Village. Mark and Mike Mountanos, brothers from a San Francisco coffee family, opened separate businesses as green coffee dealers and roasters, respectively, while Pete McLaughlin at Royal vied with Erna Knutsen to supply the specialty trade with the finest beans. Luciano Repetto followed the family tradition at Graffeo, roasting an arabica blend for fine local restaurants.

Several authoritative books about coffee appeared around this time, testifying to the renewed public interest in fine coffee. For a year, English professor Kenneth Davids owned a coffeehouse in Berkeley, then wrote Coffee: A Guide to Buying, Brewing & Enjoying Coffee: A Guide to Buying, Brewing & Enjoying, where readers could learn the fundamentals, including a country-by-country taste a.s.sessment, advice on grinders, and brewing instructions. Joel Schapira, with father David and brother Karl, wrote The Book of Coffee & Tea The Book of Coffee & Tea.

Another hopeful sign for coffee appeared in October 1972, with the introduction of the Mr. Coffee automatic electric drip brewer. Bunn-O-Matic and Cory had been making commercial versions for restaurants for nearly two decades, but Mr. Coffee marked the first venture into the home brewing market. Compet.i.tors such as Braun, General Electric, Melitta, Norelco, Proctor-Silex, Sunbeam, and West Bend quickly jumped into the fray. By 1974 half of the 10 million coffeemakers sold in the United States were electric drip. Although the new home brewers had their faults-insufficiently hot water, wrong brew times, hot plates that ruined coffee left too long-they were a huge advance over pumping percolators, and they encouraged the rise of better quality coffee.102 A few popular magazines discovered specialty coffees in the early 1970s. Sunset Sunset offered a simple explanation of acidity, body, roasts, and blends in a 1972 article. "Special coffee stores are worth searching out. One big reason is that there you can talk to someone whose business is coffee." Yet the offered a simple explanation of acidity, body, roasts, and blends in a 1972 article. "Special coffee stores are worth searching out. One big reason is that there you can talk to someone whose business is coffee." Yet the Tea & Coffee Trade Journal Tea & Coffee Trade Journal largely ignored the nascent specialty coffee movement. Nor did the big roasters pay much attention. "They thought it was a fad, like blue Jell-O, and that it would go away," Donald Schoenholt recalled. largely ignored the nascent specialty coffee movement. Nor did the big roasters pay much attention. "They thought it was a fad, like blue Jell-O, and that it would go away," Donald Schoenholt recalled.

In 1972 General Foods came out with flavored instants. The pricey "International" line, containing soluble coffee, nondairy creamer, sugar, and flavorings, claimed to possess "the same great coffee flavor you'd find abroad." Hills Brothers and Carnation followed with their own versions. Though these parodies of high-quality coffee, advertised as indulgences, garnered some market share, they were about as far from Peet's beans as they could get.

Mrs. Olson Slugs It Out with Aunt Cora In the early seventies, General Foods products accounted for over a third of all U.S. coffee sales. Its flagship brand, regular Maxwell House, held a 24 percent market share of roast-ground regular, while its instant coffees accounted for over half of that category's sales. Procter & Gamble offered no serious soluble compet.i.tion, but its regular Folgers, with a 20 percent share, was creeping up on Maxwell House. Hills Brothers had slipped below 8 percent, while Standard Brands' Chase & Sanborn held only 4.3 percent, just above Coca-Cola's coffee share with Maryland Club and b.u.t.ternut. Under inept management, A & P had dropped behind Kroger's in chain store coffee sales. None of the supermarket private label coffees fared well against the well-advertised, low-prices giants such as Maxwell House and Folgers.

With per-capita coffee consumption continuing its steady decline-from 3.1 cups a day in 1962 to 2.2 cups in 1974-the major roasters fought for ever-smaller pieces of an ever-shrinking pie. The roasters essentially had given up on the youth market, as their choice of middle-age or older celebrity endorsers indicated.

General Foods and Nestle spent the last years of the sixties vying for the freeze-dried instant market. It took General Foods nearly four years to roll out its Maxim brand nationally. The $18 million annual research expense represented the largest single capital investment the company had ever made for a new product. Nestle countered with Taster's Choice. Both companies spent some $10 million a year marketing their new brands. About half of all American households received a freeze-dried sample in the mail.

According to its ads, Taster's Choice offered "all the deep, rich flavor and hearty coffee aroma you used to have to perk up a pot for." Of course, such boasts were more than a little exaggerated. These ads attempted to position Maxim and Taster's Choice against regular coffee to avoid cannibalizing their old instants' sales. Nestle distanced Taster's Choice from Nescafe by choosing a completely different name. In contrast, the Maxim name clearly referenced Maxwell House. As a result, Maxim cut substantially into Instant Maxwell House sales, and Taster's Choice came out on top of the category.

Unwilling to match the huge capital expenditure required for freeze-dried coffee, Folgers and other instants responded by gluing their instant powder together in clumps, making it look more like regular coffee without changing the taste. Folgers advertised the product as "newer than freeze-dried." Rather than improving quality, all the major roasters pursued a strategy of technological innovation, gimmickry, and market segmentation during the early 1970s. General Foods created the Max-Pax, rings of premeasured ground coffee in a filter. Coca-Cola offered a frozen coffee concentrate. Others sold coffee syrups in aerosol cans or freeze-dried coffee packaged in one-cup servings on a spoon, ready for stirring.

The real battle for U.S. coffee supremacy shaped up in the 1970s between consumer foods conglomerates Procter & Gamble and General Foods. Folgers's strength still lay primarily in the West, but Maxwell House strategists knew that Folgers would try to invade the East. In 1971 Maxwell House executives formed a "Folgers Defense Team," asking Ogilvy & Mather, their advertising firm, for advice.103 They came up with a two-p.r.o.nged response. General Foods created Horizon, in a red can similar to Folgers. While Folgers was "mountain grown," Horizon's beans were "hand picked." Heavily couponed, Horizon would act, they hoped, as a diversionary tactic, allowing Maxwell House to sail on undisturbed. They came up with a two-p.r.o.nged response. General Foods created Horizon, in a red can similar to Folgers. While Folgers was "mountain grown," Horizon's beans were "hand picked." Heavily couponed, Horizon would act, they hoped, as a diversionary tactic, allowing Maxwell House to sail on undisturbed.

General Foods' other tactic was the introduction of Aunt Cora, a plain-spoken country storekeeper who extolled the old-fashioned virtues of Maxwell House-a direct counter to Folgers's Mrs. Olson. Veteran actress Margaret Hamilton seemed an odd choice for Aunt Cora, since she continued to terrify new generations of children in her 1939 role as the Wicked Witch of the West in The Wizard of Oz The Wizard of Oz. As the kindly, bespectacled Aunt Cora, Hamilton proved to be a good coffee promoter. She appeared on television just in time to go head-to-head with Mrs. Olson in Cleveland, where Folgers struck in fall 1971, before continuing a methodical drive into Philadelphia and Pittsburgh in 1973, then Syracuse in 1974. The "Battle of the Old Bags," as one a.n.a.lyst named it, had begun.

The Horizon brand flopped, but the Aunt Cora strategy worked just as Ogilvy & Mather executive Dave Maddox predicted. If Maxwell House could establish Cora as a familiar presence before Folgers launched locally, "Mrs. Olson could look like a second-rate imitation," Maddox advised. In Syracuse, where Aunt Cora had been praising Maxwell House for over two years before the Folgers onslaught, Procter & Gamble was forced to offer its coffee at a loss for 87 cents a can, well below the lowest normal retail price of $1.20. As one a.n.a.lyst observed, Folgers was "running like the devil just to stay in place." The real losers in the t.i.tanic battle between Folgers and Maxwell House were regional roasters, forced to match the deep discounts of the two major brands. Some were pushed into bankruptcy. As a result, the Federal Trade Commission sued General Foods (but not Procter & Gamble, inexplicably) for predatory pricing practices.104 Despite its success at stymieing the Folgers onslaught, the defense team at Maxwell House remained ill at ease. It was only a matter of time before Procter & Gamble made the big move into New York City, the coffee capital of the East. The Folgers men were preparing their battle plans when nature once more intervened in Brazil.

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