We have two coffee drinkers in the office. Tim, and myself. Simon is a tea drinker. Our coffee selection reflects our individual tastes with coffee from every corner of the known world including Brazil, India, Columbia, Kenya, Guatemala, and more. (For the record, Simon’s happy with English Breakfast Tea.)
There’s the old joke of what does Brazil produce more of than any other country? Coffee? No, Brazilians! Actually, Brazil is responsible for 37.5% of current global coffee production, but who knew Ethiopia was the original source of coffee plants (before Yemen took over), planting coffee bushes in the 1600’s. Here are some surprising facts around what has become one of the most popular ways of spending time, and some would argue lots of money as well! Drinking coffee.
‘Coffeeconomics’ (or bean counting, as the Americans would say).
- Coffee has become big business today with coffee shops dominating high streets and shopping malls, not to mention garden centres, sports centres, the list goes on.
- Global coffee consumption is an incredible 2.3 million cups every minute.
- Coffee is the fourth most-consumed beverage in the world – measured by total volume sales.
- When it comes to national coffee appetites, the largest global consumers by tonnage are the U.S. and Brazil, but per capita consumption is significantly higher in European countries such as Norway and Switzerland.
The Specialty Coffee Association’s (SCA) Benchmarking Report and Coffee Price Report estimated a set price of $2.80 for a brewed cup of coffee at a specialty coffee store. Each country and retailer and will see a different price, but this figure lets us start backtracking and breaking down the total cost of a cup of coffee:
Cost of a Cup of Coffee Broken Down:
Let’s start with growers, how much do they make on green coffee beans? Not much it seems. Constantly shifting prices make it difficult for the estimated 125m people whose livelihoods depend on it to earn a living.
Coffee’s estimated $200billion supply chain (according to the SCA) is a lot of money in anyone’s language, but it requires lots of people doing different chores along the way. There’s the growing, harvesting, packaging, exporting, and roasting… But then also the essentials of every good coffee shop: the branded cups, stirrers, sugar and sweetener sachets, and in most establishments’ toppings such as chocolate, cinnamon, hazelnut, and almond, not to mention the assorted milk offerings. All these little add-ons form part of the price you pay when you purchase a cup of coffee.
There are many similarities when it comes to creating a financial plan. There’s a lot of similar stages, layers of planning, product selection, investment strategy, implementation, administration, and review wrapped up in the delivery of a personalised planning solution.
Some people know exactly what they want when they go into Starbucks (other coffee establishments are available…) and confidently order their, “Grande Caramel Macciatto with almond milk and an extra shot”, while others stare at the menu silently muttering, “I just want a cup of coffee, how difficult can that be?!”.
For those clients who know exactly what they want, there is still the issue of time. These are the people who walk right up to the front of the queue and pick up a drink that’s already waiting for them. At some point they have discovered their drink of choice and don’t have time to wait, so order online, pay online and simply go in and pick it up.
These clients have no time or inclination to be involved in what goes into making sure their experience is what they expect. The fact we take all the administrative responsibilities and paperwork off their desks and onto ours, suits these clients well. They want to log in, check things are as they expect, and carry on with life. If they have anything they want to change, they simply drop us a line and we respond. If we are changing the ‘blend’ or content of their plan, we provide a ‘taster session’ which lets them ‘try before they buy’. In effect, we create an updated cash-flow model, which allows them to measure the impact of any changes and, if everything is to their liking, we can implement straight away.
Many of our clients have some idea of what they want when you ask about future plans. The tricky bit is putting numbers into the plan. Essentially, how much money is needed to fund the lifestyle they’ve worked so hard for. Knowing this number is a key part in building their plan, but it’s not easy. The plan is not up there on the set menu, it’s a very specific blend we create together, and it has to suit your individual taste perfectly. If it doesn’t, we promise to remake it until it does!
Our investment philosophy is also reflected in the process of producing the perfect brew. Just as coffee principally comes from two types of beans (Arabica and Robusta), we blend our investment portfolios from two key components; Growth – which is principally shares or equities, and Defensives – namely highly secure short-term fixed interest holdings. Your personal preferences are blended into the portfolio solutions we use within your overall plan. Stronger, darker brews can have more share content, while smoother silkier tastes can be accommodated by adding a wider range of assets from all the major global producers. As many of you will know, we prefer a diverse, robust global blend, which has served our clients very well.
Speaking personally, I really miss the coffee (and tea) chats in the office. There is something far more authentic going on in a meeting when you are in the same room, not sharing a screen, but sharing coffee and, if you are quick enough, maybe even some biscuits!
As always if there are any questions we can help with, or friends or colleagues who may have their own questions, we would be happy to listen and try to provide some answers.