STiR coffee and tea magazine

34 STiR coffee and tea / Issue 6, 2017 (December / January) I n 2000 industry leaders organized the Greater Houston Coffee Association with the goal of establishing warehousing capacity sufficient to qualify for a New York Board of Trade (NYBOT) license to store exchange-traded coffee. Why warehousing? As Al Hernandez, vice president of Dupuy Storage explains, thousands of ports globally offload coffee but only eight are certified to handle volumes that make possi- ble a global coffee hub. The NYBOT "C" coffee market designation requires sanitary, food-safe operations and financial stability in structures that in Houston in October collectively stored 944,956 60-kilo bags worth $150-$500 million. Five of the world's "C" ports are located in the US In 1995 there were only two. New York/New Jersey was the original futures exchange port for the Atlantic sea- board, concentrating roasters that dominated East coast coffee manufacturing. Twenty years ago New Orleans landed most of the coffee transiting the Gulf of Mexico for brands including Kraft-owned Maxwell House, founded in 1892 and, until the late 1980s, the nation's best-selling brand. When the Port of Miami qualified for a NYBOT license in 1996 coffee logistics changed. The amount of coffee warehoused in Miami soared from 82,000 60-kilo bags in 1997 to 1.2 million bags in 2001. Warehouse space expanded to 1.5 million sq. ft. (exchange warehouses today hold about 300,000 bags based on an estimated 1.25 bags per sq. ft.). Docking fees, broker commissions, ancillary support services and profits from locally-based specialty roasters surged with exchange certification which man- dated warehouse, drayage, and sampler services. Texas imported fewer than 100,000 bags of coffee in 2000. There were only two dedicated coffee warehouses in Houston. NYBOT recommended five food-grade, state-of-the-art warehouses totaling 1 million square feet. To attract premium warehouses and obtain the coveted designation, Houston first had to repeal an ad valorem tax embedded in the state constitution. The tax, which brought in $300,000 per year, made storage costs prohibitive. The legislature approved an initiative exempting unprocessed coffee and in 2001 it passed with strong public support. In 2003 NYBOT certified Houston (Harris County) as an exchange port and by 2007 when the Intercontinental Commodity Exchange (ICE) acquired NYBOT, Houston had surpassed New Orleans as the most important coffee port on the Gulf. Director of operations Jeff Hernandez monitors a dynamic coffee blending system schematic at Dupuy Storage Houston serves national coffee roasters like Farmer Bros. near Fort Worth. The roaster just opened a new facility with a capacity of 28 million pounds a year Photos by Dan Bolton/STiR coffee and tea ICE Coffee By Dan Bolton Director of operations Jeff Hernandez and Dupuy Group v.p. Al Hernandez at the company's 512,00 sq.ft. Houston warehouse

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