STiR coffee and tea magazine

12 STiR coffee and tea | 2022 Issue 5 (October/November) AI Learns to Sort Coffee Beans Sorting out specialty coffee beans takes time and human effort, but a new approach could enable real-time sorting during the production process. Brazilian researchers published a study on applying multispectral imaging (MSI) and machine learning to classify green coffee beans as specialty or traditional commercial. Specialty coffee is typically defined according to technical specifications outlined by the Specialty Coffee Association. A coffee must score at least 80 points on the SCA's 100-point scale to earn the specialty designation. Cuppers trained to use SCA standards inspect, roast and taste samples of coffee to generate a quality score. Using technology for this process would mean bean samples do not need to be sent for testing or roasted. The study, published in July in Computers and Electronics in Agriculture, describes how researchers used MSI and machine learning, a subtype of artificial intelligence, to identify the difference between specialty and traditional coffee beans. Using MSI, researchers took images of the coffee beans at different wavelengths of light. Four different machine-learning algorithms analyzed the images. The researchers found that microscopic molecules known as fluorophores, including caffeine, catechin, and chlorogenic acids among others, are key to differentiating between traditional and specialty beans. The process is non-destructive and takes place in real time. While this research does show promise for applications in the coffee industry, it has its limitations. "Specialty coffee must score between 80 and 100, but our model can't tell whether beans are 80 or 90. That would require machine learning with samples for each score in order to specify these categories in the mathematical model," study author Winston Pinheiro Claro Gomes said in a news release. He intends to do more work using coffee beans Courtesy of Winston Pinheiro Claro Gomes. Brazilian researchers used AI and multi-spectral imaging technology to sort coffee beans into two categories: specialty and standard. Logistics Operator Delta Corp. Swallows Coffee Holding Co. Coffee roaster and green bean wholesaler Coffee Holding Co., Inc. (Nasdaq: JVA) will be bought by Delta Corp Holdings Limited, a fast-growing logistics company, in a merger creating a public company with a pro forma value of $655 million. Coffee Holding, based in Staten Island, New York, was founded in 1972 and has been publicly listed since 2005. It sells wholesale green coffee, private label coffee, and branded coffee. The company is led by president and CEO Andrew Gordon. With a market capitalization of about $14 million as of October, Coffee Holding reported approximately $63.92 million in net sales and $16 million in gross profit for fiscal year 2021. In the third quarter of 2022, Gordon pointed to logistics and transportation costs as headwinds affecting the company's profitability Delta, based in London, is a much younger company with a broader business model. It was founded in 2019 as a global logistics provider. The private company operates as a supply chain services platform that provides bulk logistics, energy logistics, and asset management. The company had $532 million in revenue and $45 million in net income for fiscal year 2021. Mudit Paliwal serves as CEO. The transaction will create a new holding company, Pubco, under which Delta and Coffee Holding will operate as wholly owned subsidiaries. The new company will operate under Paliwal, while Gordon will continue to lead the Coffee Holding subsidiary. "The Delta team has a successful track record building global business, offering our shareholders a unique opportunity and potential for additional returns. I am confident that Coffee Holding's employees, customers, and shareholders will enjoy the many potential benefits of this partnership," that correspond with each SCA score. This study isn't the only one to leverage MSI for the classifica- tion of coffee beans. In a recent study published in Food Chemistry: X, researchers used MSI to discriminate between arabica and robusta beans. MSI has other potential applications in coffee, which researchers have been exploring. "The use of MSI in the coffee industry is very recent. It's mostly used to map nitrogen in coffee groves, detect necrosis in beans, and detect pests and diseases in plants, as can be seen from the literature on the subject," Gomes explained in the news release. — Carrie Pallardy Gordon said in the press release announcing the merger. Under the terms of the transaction, Coffee Holdings shareholders will receive one share of Pubco for each of their current shares. Delta shareholders will receive $625 million in Pubco shares in exchange for their current shares of Delta, subject to adjustments. Although Delta saw triple-digit spikes in revenues and profits in 2021, this year might pose challenges. The shipping market is entering a slowdown in demand, oversupply of containers, and pandemic-related supply chain disruptions, according to the American Journal of Transportation. A writer for stock investment website Seeking Alpha recently predicted that Delta might see a decline in net income this year compared to 2021. Delta operates under an asset-light business model, which the company claims reduces risk and differentiates it from competitors. Its acquisition of Coffee Holding is meant to diversify its operations and provide synergies with its existing core businesses. "This includes a broadening of our energy transition, sustainabil- ity, and environmental stewardship-related service offerings," Paliwal explained in the press release. The transaction is expected to close in the first quarter of 2023. The combined entity will trade on Nasdaq under the ticker symbol "DLOG." — Carrie Pallardy Coffee Report

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