And I said to her, yes, probably we are a huge company for the scale that you were doing. It's someone who was doing two five containers per year, I would say, compared to that, yeah, we are a larger company, but we are very far from these big industrial corporations, which I think we could come with the fingers of our two hands and that's enough, you know, and on the top of it, I think that the major five colleague green roasted are doing a high percentage of the coffee. So I think it is very important to understand that there can be small to medium companies and we are a large majority of the actors in the chain, but then the volume is ultra concentrated in fights and companies and those are corporations. Do you ever feel like you're listening to the podcast and wishing you could step behind the scenes, join the conversation and really connect with other coffee industry folks who share your values?
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I'm your host Lee Safar and this is episode four of a five-part series. If you are watching this online, you will be a little confused if you're watching all the episodes you want go. We're all wearing different clothes because we recorded this series in two different parts, so you're not dreaming or seeing this the wrong way or having like a weird moment. We do look different and that's because we record it in two different ways.
Felipe, I'm not- You could say we could change. Yeah, we changed. We got up halfway through the recording and decided to get new outfits because we're divas, but we're not. We're all far too busy for that kind of thing.
But yeah, you're not dreaming and you're not having, you're not going crazy. We do look different because it's day two of recording this series. And as is the right fashion in 2026, it's 24 hours later and a lot of things have changed. And it's sort of a good thing that we have, we are having this conversation on this day.
In this series, we are talking about coffee in 2026. And in the last series, we had a conversation about the value of specialty, in the last episode, sorry, not the last series. We talked about the value of specialty coffee versus commodity coffee in 2026. Now in this episode, we're going to be talking about the difference between the corporate coffee industry versus small business in coffee.
And guys, we can't have this conversation without talking about a lot of, first of all, we can't have it without talking about the coffee crisis and we can't have this conversation without talking about a few things that have been going on on social media on the map before to count. And we're going to talk about a lot of that stuff through this episode. One of the things that has been very apparent for me throughout the 2025 year of the coffee crisis is that we separate out the coffee industry as specialty coffee and commercial coffee. And what I have come to realize is that that is perhaps, sure, one way of looking at things, but the way that we really need to be delineating the way that we look at the coffee industry is the corporate side of the industry versus the small to medium side of the business.
Because specialty or not, the corporate side of the industry works in a very different way than the small to medium size side of the business across the entire supply chain. Technically, Starbucks buy specialty grade coffee and they are a corporate specialty coffee business and they call themselves a specialty coffee business. So I would think that we have been looking at this as though the specialty coffee industry is for small businesses and the commercial coffee industry is for the corporates. That's really not the case.
I'd like to start this conversation at that point and get both of your feedback and kind of your thoughts on that thinking on things. That's how we deal. Yeah. I would say two things on that.
Basically, we are in an ultra concentrated industry and a couple of weeks ago, I think I told you this, a receiver, a producer who used to have an exporting company and she closed the exporting company and she was referring to me, to us as Bellcos and you are a huge company. And I said to her, yes, probably we are a huge company for the scale that you were doing. It's someone who was doing two five containers per year. I would say, compared to that, yeah, we are a larger company, but we are very far from these big industrial corporations, which I think we could come with the fingers of our two hands and that's enough.
On the top of it, I think that the major five call it green or roasted are doing a high percentage of the coffee. So I think it is very important to understand that there can be small to medium companies and we are a large majority of the actors in the chain, but then the volume is ultra concentrated in fighting companies and those are corporations. So I think that is the first thing I would say like to clarify to my point of view. And the second is something very important, but you were saying, and this is something I fought for many years, because sometimes I had some roasters, some clients, specialty roasters that I was really fighting and battling to tell them, you cannot be roasting the same coffee as one of the top two or three roasting industries in the world.
Because some specialty roasters they buy and roast commercial grades and then they will just say, because we are especially because we are artists and roasters, we are these, we are that. And I was like, no, you're not an optimist, you are just roasting companies, you are roasting companies. Yeah, no, I mean, if you roast a low-quality coffee, I mean, it will be low-quality coffee. It will taste like cold coffee.
It's just that it was roasted. Exactly. It was probably roasted in an artisan machine, not in a flash roasting machine or whatever, but it's still bad coffee. So I think that is very important to clarify that because sometimes it looks like for various small companies, some micro-comporters, some, before we were talking about micro-roasteries, now we talk about nano-roasters, nano-specialty roasters, etc.
It seems like everyone is huge and they are just as small, but it's not like that. The majority of us are small to medium actors in the industry. And that seems to happen at every stakeholder across the entire supply chain, whether it's producer, exporter, importer, cafe, roastery, everyone. Yeah.
Felipe, what are your thoughts? I think that the corporate world is about scale and creating industry and systems and efficiency, whereas I think smaller business can be designed around more, I would say, relationships or innovation, flexibility. And so they both have their challenges and they both have their strengths. So it's all about people at the end.
I would say that it gets harder and harder to remain innovative as you get bigger. I think, inevitably, when you add shareholders into the business, often not they tend to be. People removed from the core of what you do. And it's just inevitable when you don't participate, you don't feel the same values, the same dedication as someone who's a founder who created all the values and all the relationships.
So you can get in a dangerous discussion of just bottom line profits and if those people aren't involved. I don't think it's impossible. I think it's harder to have a remain corporate that has really strong values. I love an example that was the photography industry.
So just blank down on the company was the biggest photography company in the world, Kodak. They had, I think it was like 70% of the industry in the 60s, 70s, and 80s cameras. And they had almost 100% of the industry of the film business and an engineer from Kodak developed the digital camera in the 60s and brought it to the shareholders and they decided that it would kill their film industry. So because of short term returns and profits and however that system is created to the people that are making the decisions, they decided it was more interesting for them to have a short mid-term profit than create a long-term strong business.
Fast forward 40-50 years Kodak is not like a fraction of what it used to be and it took 10-15 years but other companies like Sony came up with digital cameras and that's the end of that. So I think that smaller companies are actually long-term thinkers, independent companies are actually long-term thinkers and I often see innovation coming from smaller players. So the world has created a system to feed all the humans, whatever billion and created the coffee industry was created by the corporate industry but the world has changed and people are getting sick in the environment, the world, the soils and the globe is getting endangered and sick and we just can't keep going the way we're going. So it's just an interesting moment where it was going to come and do the changes that need to be done, more often than not, it's the small businesses that actually bring that innovation.
So I work with some corporate companies and sorry if you want to- No, no, go ahead. You work with some corporate companies? I work with some corporate companies over the years, some that have seen completely change who they were, their values in some cases. We didn't keep working with them and I've worked with some that have become corporate that we continue and have very strong values due to primarily the people that are in there and the strong values that the founders left.
So it all costs qualities of the supply chain, especially coffee quality scale. So I do think whenever you are in business, it's very important to always play at your strengths and be humble and keep your costs low. So I think that for bigger companies, they've got ways to access capital and logistics and whatnot. But smaller companies, you can share your space with two or three companies.
You can share your rent, you can make collabs, you can do a lot of other things. So we can both be competitive. On the industry level, I've been spending a lot of the time over the holiday era doing some research on something called in-volution. Do you guys know this business term in-volution?
No. So in-volution is when an industry is really- has turned on itself in the sense that not attacking itself but with regards to growth and innovation, right? So it's sort of reinventing the wheel. So it's no longer growing in ways that drive an industry forward.
And an example of in-volution would be where we have created so many coffee tools, we are recreating ways to pour water over ground coffee instead of trying to find new ways to drive the coffee industry forward through the things that are harder to solve, right? So people have figured out, you can make money through selling coffee tools. So let's just keep creating coffee tools that really only improve like do sideways growth, right? They don't really drive anything.
Another version of in-volution would be this idea of like what's happening with luck and, right? And other big companies that are coming in and saying, we're going to come in, we're going to set our prices lower than instead of like having a value proposition that brings customers to our business and create a concept that has a unique selling proposition. We don't need to do that because we can compete on price. So we're just going to undercut our competitors and we're going to undercut them for long enough to put them out of business.
So you don't have any real innovation or growth and the industry turns in on itself in that way because then you end up in a cycle where bigger and bigger corporates come in and continue to try and outdo each other, put the smaller businesses out of business and the industry implodes in on itself because the corporates are being led by shareholders who just want bigger, bigger profits and are no longer investing in what's happening. That's what evolution is. I see it very clearly happening in the coffee industry, but I also have a very unique kind of aerial view of what's going on in the coffee industry around the world. Do you guys think that we're experiencing in the coffee industry?
Whoever wants to take that? I'll try if I am. Go ahead. I see that we got lazy and especially coffee and we took the short route, which was winning customers by having cool coffee shops, like a hip decor and latte art and I don't think that makes a long-term customer because I think that customer can be stolen by luck and...
And ease being stolen by luck. Right. Because that person's not a coffee lover, that person likes something hept on easy convenient divide. And I don't think the business of luck in Starbucks is coffee.
I think it's a sweet drink, it's a sweet fix, it's a treat, it's an app, a gaming app system. It's turned into something else. And I think that's a dangerous place for people to play because when you have companies like Coca-Cola trying to get out of that game, that's tough, that's huge. Tell people what you mean.
Tell people about the cost of coffee situation. Do you know the details of it? Coca-Cola is trying to sell, I don't know the numbers exactly, Coca-Cola is trying to sell Costa at like half the price that they bought it. They bought it for $4 billion, they're trying to sell for $2.2 billion.
Right. And they're not the only ones. There's a few other big names trying to offload coffee companies and whatever they see that's the future of that. But I think that those people are very heavily influencing the gen Z and gen, the new generations and into not being coffee drinkers.
I don't see them as coffee drinkers. I see them as like this Instagram TikTok, like a cute little, I mean, if you go to it and it's no one's drink coffee there, it's all like sugary, you know, colorful drinks. But what I think that our business is and people that are creating customers in long-term value propositions are that sort of, you know, that sort of people call it the Godshot when you flip a switch and you're like, wow, coffee tastes like that. Those people that are doing that and converting those people into coffee lovers, well, that coffee lover, even at a cappuccino, they will have a higher standard.
Even when there's milk, they'll have a higher standard. I want to push back on something that you said, that's so important for people to understand and examine. And I don't know that we're going to find the answer to this. Maybe even this year about what you said.
You said that luck and has done a good job of converting the gen Z and those, that crowd, gen Z and younger. Have they done a good job or have we done a terrible job of giving them a reason to want to be coffee drinkers? I think, in my opinion, that they don't believe the bullshit of the specialty coffee value proposition. Maybe, but I think they've done a good job.
I think that they've got more marketing power and it's very savvy as a corporate, not just them, but I think it's just a matter of time that we invite gen Z to the party, their health oriented, they should not be drinking all that sugar and all that stuff. I just think it takes a little bit more work for people to convert. I think that I've had a lot of gen Z. We have an Airbnb on the farm and we have a lot of people come through that are not coffee people and stay and families and young people and they do a cupping on the farm or a class and we've converted lots of people into, especially coffee drinkers, I've seen independent coffee shops all over the world, experiences that you have in Japan, I'll focus on filter coffee and I think that it's just that we stopped converting people into coffee drinkers and we just started doing the cappuccino, flat white, sort of pushing that in front of people and that was when we started losing those customers to people like luck in.
I don't know if you know the metaphor of the Condor, this Andy and beer, that he wanted to make his nest really on the top of the mountain, to have it on the top of everything, the X and the Condor in one realizes that it's a long, it's completely on itself and I think it's something that happened that I was saying yesterday in the specialty industry is that we spent a lot of time and energy maybe talking and working on an ultra-heaper specialty or conception that in the moment he was not grounded, he was not related really to the to the all consumers and I think large corporations, they saw something and they say, this could work and they have massive opportunities of consumers and they say, okay, we're gonna ground it and it's incredible to everyone. And that is the difference between like what corporates are capable of doing compared to what small to medium size businesses are capable of doing and like when you say about luck and Felipe, you're in my opinion a thousand percent correct, they've done a fantastic job of bringing people over but it wasn't really that hard because I don't think that we really gave that generation or are giving that generation any reason to not go to those corporates. I don't know if we could compete with them or not as an industry, I certainly don't see the specialty coffee association doing anything to help unify us that way and if it's not, there's not going to be a unifying factor to that, I don't know how we as small to medium size businesses can compete with the luckens and with the... One thing, one thing, go ahead, please.
One thing is that the association like the specialty coffee association, they are mainly funded by the large corporation. Hold that thought because I want to go into that conversation but we're not going to do it in this episode because you touch on a very important thing there. Yes. In the next episode...
I just want to make one. No. Because you're the one with the deadline and I want to make sure that we get you out of here on time. All right.
That's okay. Folks, join us for the next episode because we don't want to take it three days to record this series. Join us for the last episode of this series in the next episode. Peace, love and peanut butter.
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