Improving Coffee. Changing Lives. Annual Report 2006

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1 Improving Coffee. Changing Lives. Annual Report 2006

Our Mission The Coffee Quality Institute (CQI) is a non-profit organization working internationally to improve the quality of coffee and the lives of the

2 Our Mission The Coffee Quality Institute (CQI) is a non-profit organization working internationally to improve the quality of coffee and the lives of the people who produce it. Photo Cover: Geoff Watts of Intelligentsia Coffee on a Coffee Corps assignment in Ethiopia Photo Right: Rwandan Coffee Farmer Sorting Cherries

3 Talking about the maturing market in Japan, it is important to create new values in coffee in terms of consumer preferences; to convey such values to consumers in convincing ways; and to connect acquired understanding with consumption. UCC is happy to support CQI as it is a non-profit organization focusing on quality and the value, and it assumes the role of the driver to build the specialty coffee market on a global scale, and together with the producers on the one side and the consumers on the other, share understanding of problems in order to build a system for the market in question. Tatsushi Ueshima, CEO UCC Ueshima Coffee Co.,Ltd.

4 Ric Rhinehart of Groundwork Coffee on assignment in Kenya Executive Address

5 Behind our mission is a vision for a market-based approach to sustainability. We believe that only quality is sustainable. We also believe that quality can improve the lives of coffee producers and their families. We continue to face real challenges in our industry. There are an estimated 125 million people who rely on coffee production for their livelihoods and we believe they deserve to earn a livable wage. If the social argument isn t enough, then we should be compelled by the prospect of supply shortages because current growth trends indicate there will be a point in the near future where demand for quality coffee outpaces the supply. Sustainability is a business issue we all must face. Only quality is sustainable A large part of our work in 2006 was training and educating farmers in making quality improvements and building the infrastructure that will make it easier for them to access markets willing to reward their quality efforts through higher remuneration. Looking forward, we will continue to expand our work in these areas because this is where we believe the greatest impact on sustainability can be made. Stable and prosperous coffee communities translate into a stable and prosperous coffee industry. We invite you to join our efforts in improving coffee and changing lives. Ted R. Lingle Executive Director

6 Board of Trustees A highly experienced and diverse group of coffee experts, the CQI Board of Trustees have more than 450 years of combined experience and are committed to collaborating with the industry to address the issues facing it. Chairperson Vice Chair Vice Chair Secretary / Treasurer Ellen Jordan Reidy, America s Food Technologies, Inc., President and Founder Herbert de Sola, Unex Guatemala S.A., President Harry Kangis, Millstone Coffee, Inc., President (retired) David Boyd, Boyd Coffee Company, Co-CEO and President Colman Cuff, Starbucks Coffee Trading Company, Director of Trading and Operations Roy Davis, Jr., S & D Coffee, Inc., Chairman-Emeritus Eduardo Esteve, Agroindustrias Unidas de Mexico, S.A., President Paul Fisher, Eight O Clock Coffee, Green Coffee Consultant, and NYBOT/ICE Member Salim Janna, Exportadora de Café Condor S.A., Partner and President Juan Esteban Orduz, Colombian Coffee Federation, Inc., President Ellen Rogers, Dunkin Brands, Research & Development Coffee Excellence Manager John Stiles, Integrated Coffee Technologies, Inc., Chief Scientific Officer George Vukasin Sr., Peerless Coffee Co., President and Owner

8 The Q Grader Certification tests are very rigorous and will seriously challenge even the most self professed cuppers. I think the difficulty lends to the credibility of the program and as such, I believe this is an infrastructure that can provide a lot of value to the industry. Paul Thornton, Roastmaster and Green Coffee Buyer for Coffee Bean International and Chair of The Roasters Guild Photo Right: Ethiopian Coffee Workers

9 Our Programs Coffee Corps A program that matches coffee experts, who volunteer their time, with producers seeking technical assistance. Q Grading System Defines standards for quality, both cup and grade. The result is a grading certificate that offers potential buyers a picture or tangible measure of the individual flavor profile for a specific lot of coffee. Licensed Q Graders The backbone of the Q Grading System, this is the first comprehensive professional accreditation for coffee cuppers, recognizing the deepest talent at work in our industry. Women in Coffee Leadership Program Develops the diverse skills and talents of women in the industry, creating a network of leaders committed to quality and sustainability.

Our Impact We very much follow the adage about if you teach a man to fish... By focusing on training and education, CQI programs often have a multiplying effect.

10 Our Impact We very much follow the adage about if you teach a man to fish... By focusing on training and education, CQI programs often have a multiplying effect. In addition, solutions are rooted with science and standards, which serves to create infrastructure, best practices, and models that can easily be replicated. With this approach, we are able to leave a lasting imprint. Photo Above: Sunalini Menon of Coffeelab and Craig Holt of Atlas Coffee Importers assisting with a cupping competition during the EAFCA conference Photo Right: Panamanian Coffee Farmer

11 : In 2006, we signed 7 new agreements expanding our reach deeper into Colombia, Ethiopia, Kenya, Malawi, Mexico, and regional Eastern Africa. : An additional 40 Coffee Corps Volunteer trips were completed, bringing the total to 170 since May : More than 1000 cuppers have been trained worldwide and 41 have earned the distinction of Licensed Q Grader, the industry s only professional accreditation for cuppers. : Q Grading Services were launched in Central America with the first Q Coffee Lot earning a premium of more than 50% above the C-market. : Twenty-five women completed the Women in Coffee Leadership Program. Graduates of this program went on to develop the Women in Coffee Leadership Program in Guatemala where an additional 55 women have received training and support. : We have once again exceeded industry standards for efficiency, with more than 95% of revenue going directly into programs.

12 Examples of Work Photo Above Left: Cupping Training in Kenya Photo Above Right: Geoff Watts Building Relationships in Ethiopia

13 : Collaborating with the Eastern African Fine Coffees Association (EAFCA), CQI designed an extensive cupping training program that has benefited hundreds of cupping professionals among the eleven countries represented by EAFCA. This work has helped to increase the institutional capacity of the region and is paving the way for certification exams. : In addition to cupping training in Ethiopia, Coffee Corps worked with exporters in the country to incorporate greater traceability into their trading mechanisms. The result of these efforts provided Ethiopia with a strategic advantage that translated into increased sales and higher prices, as well as became a marketable attribute utilized by leading roasters. : CQI worked with the Kenyan EAFCA chapter and other industry members to develop the Know Your Cup Road Show program. After a successful pilot, the program is being expanded with an aim of instituting quality training deeper throughout the Kenyan producing regions. : Coffee Corps played an integral part in rebuilding Rwanda s coffee industry after much of the knowledge and expertise had been literally wiped out in the genocide. With its largest group of volunteers on one assignment, Coffee Corps worked to improve processing techniques and train cuppers on quality standards. This enabled Rwanda to become more competitive in the world marketplace and served as the catalyst for a renewed industry interest in Rwandan coffees. Strengthening the Supply Chain in Eastern Africa

14 Coffee Quality Institute Financial Highlights Support and revenues In-kind and volunteers contributions Other contributions, grants & support Other income Total support and revenues Expenses Program and project expenses Administrative and general expenses Total expenses Summary of Net Assets Net assets, beginning Net assets, ending Increase in net assets Portion of every dollar in support and revenues directly supporting programs $2,916, ,471 1,047, ,258 1,231,598 2,026,441 1,769, , ,972 4,147,931 2,683,220 2,817,680 1,181,957 3,958,882 2,389,838 2,483, , , , , ,656 4,165,271 2,676,111 2,755,994 1,069, , , , , , , , ,575 (17,340) 7,109 61, ,169 $0.95 $0.89 $0.88 $0.65 The Coffee Quality Institute is a non-profit 501(c)3 organization. All contributions are tax deductible to the extent allowable by law.

15 Thank you A special thank you to our 2006 Annual Luncheon Sponsors. Gold Silver Bronze Table America s Food Technologies, Inc., Atlantic Specialty Coffee, Inc., Coffee & Cocoa Intl., Colombian Coffee Federation, F. Gavina & Sons, Fres-co System USA, Inc., Kobayashi Family Foundation, List & Beisler, Procter & Gamble, The New York Board of Trade, Starbucks Coffee Company Anacafé, Atlas Coffee Importers, LLC, Boyd Coffee Company, Coffee Enterprises, Inc., Development Alternatives, Inc., Eastern African Fine Coffees Association (EAFCA), Hencorp Coffee Group, Illy Caffè, Harry Kangis, Kerry Food & Beverage, Margaret Swallow, PBideas, Peerless Coffee & Tea Co., Probat Burns, Inc., Ronnoco Coffee Co., S&D Coffee Co., Inc., Unex Guatemala S.A.

16 330 Golden Shore, Suite 50, Long Beach, CA Phone Fax CQI thanks America s Food Technologies, Inc. (AMFOTEK ) for sponsoring this annual report. AMFOTEK specializes in coffee and tea based beverage product development and manufacturing. For more information, please call

Productivity. Farm management. Third

Productivity. Farm management. Third History of the Nespresso AAA Sustainable Quality Program The Nespresso AAA is the unique Nespresso sourcing approach, developed to secure the highest quality green coffee required to produce the Nespresso