STiR coffee and tea magazine

10 STiR coffee and tea / Issue 6, 2018 (December / January 2019) NEWS Prop 65 Penalties Delayed on Cancer Warnings Coffee retailers were granted a last-minute stay Oct. 15 prior to a California court imposing penalties for failing to post Prop 65 warnings in stores and on coffee packaging. In March a Los Angeles California Superior Court found coffee roasters and retailers in violation of cancer- warning requirements due to the presence of acrylamide in roasted beans. Starbucks is among 50 companies facing stiff penalties. In its latest ruling the court ordered a written status update to be delivered by Jan. 15, 2019. National Coffee Association (NCA) president William (Bill) Murray called the stay "an important step forward, towards common-sense and resolving this outrageous lawsuit that has dragged through the courts since 2011." It was then the Council for Education and Research on Toxics filed suit alleging failure to warn consumers of the presence of acrylamide, a known carcinogen. NCA points out that there is no scientific link proving the trace amounts of acrylamide in coffee lead to cancer. In June the California Office of Environmental Health Hazard Assessment (OEHHA), which enforces Prop 65, announced it would seek to amend legislation to exempt coffee from bearing a warning label due to coffee's overall health benefits. Two months later the Food and Drug Administration (FDA) formally intervened, supporting the exemption and citing World Health Organization research. FDA commissioner Stuart Gottlieb wrote that "strong and consistent evidence shows that in healthy adults moder- ate coffee consumption is not associated with an increased risk of major chronic diseases, such as cancer, or premature death, and some evidence suggests that coffee consumption may decrease the risk of certain cancers." "Consumers deserve accurate information about the food they eat and how it can affect their health and nutrition. That's why Congress entrusted FDA to serve as and to craft predictable, uniform federal requirements on matters within our jurisdiction," according to FDA. The federal government, not California, is the nation's expert on food safety and labeling, wrote Gottlieb. The delay enables OEHHA time to complete the amendment. An exemption would render the assessment of penalties moot. US Coffee Retail Growth The US continues to lead global coffee shop innovation across quality and product development, with Allegra World Coffee Portal recording healthy annual outlet growth of 3.8% in a fiercely competitive market. An influx of international investment is pushing once niche artisan principles into the mainstream across the US coffee sector, with premiumization a key marketing strategy to sustain growth. Allegra valued the US market at $45.4 billion. Allegra anticipates a burgeoning 5th Wave sector will continue to shape the premium market, propelled by growing consumer sophistication and investment from large multinationals. Despite flattening comparable sales growth among leading branded chains, nearly 60% of US consumers surveyed by Allegra visited a branded coffee shop chain at least once a month 2018. This indicates there is still plenty of opportunity for operators who can enhance their value to customers in this competitive market. Brazil Elections Add Politics to Volatile Mix The surprise October election of far-right presidential candidate Jair Bolsonaro to lead Brazil initially bode well for the Brazilian real. The currency is the benchmark for trade in coffee and sugar, making a steep rise against the US dollar welcome relief for growers. Arabica prices are closely tied to the real. To some extent as coffee prices begin to rise, a similar rise can be seen in the exchange rate. Immediately following the election traders closed out their short positions. This led to a short-lived spike, reversing a rally. Since then the real has fallen 12% for the year, an indication of political uncertainty and slow growth. A stronger currency encourages farmers to withhold or warehouse lower-priced product awaiting rising prices. December arabica futures were trading at $1.20 at press time as speculators gave way to producer selling. January robusta was $1,625 per metric ton, down from a $1,719 October high. Two fundamentals remain: Brazil is now sitting on its largest coffee harvest in history - up one-third over last year to an estimated 60 million 60-kilo bags and Vietnamese coffee exports are up 21.5% making supply bountiful in a year when demand is expected to fall about 2.58 million bags short of supply. European Union Bans Throwaway Plastics The European Parliament in October banned all single-use plastic straws, coffee stirrers, cutlery, polystyrene plates, and even cotton swabs made with plastic, effective 2021. The legislation received overwhelming support with proponents outvoting those who opposed the ban by 10 to 1. The directive requires that 90% of plastic bottles be recycled by 2025. The legislation requires a 25% reduction in food wrap and culinary products where no recyclable alternative currently exists. Cigarette makers must reduce plastic used in filters by 50% in five years and by 89% by 2030. Frédérique Ries, the member of parliament who authored the legislation said it was "a victory for our oceans, for the environment and for future generations." The ban targets the 10 most plentiful single-use products. Less than a third of these products are currently recycled and many are hazardous to marine life. The European Commission will now negotiate imple- mentation with member countries with final adoption by the European Council before European elections next May.

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