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Consumers in Japan have for years paid some of the world's highest premiums to get top quality coffees they can trust have been authenticated all the way across the coffee value chain from seed to cup. (By Maja Wallengren)
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Consumers in Indonesia, which is home to one of the fastest growing coffee cultures among emerging markets, can chose between hundreds of different brands in most bigger super markets but without authentication how do they know what they really buy and if it's even coffee? (By Maja Wallengren)
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Story telling is one of the core tools used when documenting traceability and authentication for intellectual property registrations in order to establish who has grown it and where the coffee comes from (By Maja Wallengren)
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Cupping and knowing exactly how good the quality is of any given coffee is a vital part of identifying the scale of the value-added premium used when seeking intellectual property protection, here at the Cup of Excellence internet auction. (By Alliance For Coffee Excellence)
Growing use of intellectual property (IP) in the coffee industry holds the potential to become one of the most efficient ways to protect coffee as a product and ad brand value, from the source of origin in growing communities across the value chain to the manufacturing, retail sector and the final consumer, participants told a recent conference by the World Intellectual Property Organization (WIPO).
Participants at the event held virtually Nov 10-11 by WIPO, a United Nations agency based in Geneva said the coffee industry has not yet taken the full advantage of the many opportunities that IP offers business when it comes to brand protection as well as the promotion of coffee as a product traded on multiple levels.
With a keen eye to the booming global demand for coffee with world consumption growing at an average 1.9% per year for most of the past 20 years, WIPO is, “constantly looking for areas where we can engage stakeholders in intensified conversations on how IP can add value,” said Andrew M. Ong, director for WIPO’s division for Asia and Pacific.
“Coffee is especially interesting because there is a huge uptake of coffee production and consumption in the Asia Pacific region in the last decades, especially among developing and least developed countries,” Ong told STiR Coffee and Tea in an interview, adding the coffee industries in developing countries have a wealth of unexploited resources available to take advantage of the boom in coffee culture.
The conference was organized by the Asia-Pacific office of WIPO, the region is home to three of the word’s coffee producing countries with fastest growing domestic industries. Studies show that in Indonesia, Philippines, and Vietnam coffee consumption surged in the last decade with the expansion of the middle class and increase in overall household income.
“The world runs on coffee and worldwide consumption is expected to keep growing,” said Ong. “With millions of regional smallholder producers at a disadvantage in direct competition with large coffee agribusiness exporters IP can be used to support business differentiation.” He added that smaller and upcoming origins like Cambodia, Laos, and Nepal can use IP trademark tools to get a head-start on the marketing of what is still emerging new coffee sectors in the world.
Trademarks are already well represented in the coffee manufacturing industry in Southeast Asia where a good example is the popular categories for soluble and ready-to-drink products. This includes Vietnam’s Vinacafe’s 3-in-1 coffee mix, which comes in a long list of differentiated products from individual sticks to bags, all protected by IP tools dating back to the original registration of the trademark in 1968.
The soluble sector, in particular, has long been ahead of many other segments in the coffee industry both when it comes to registering for brand name protection or using patents. The science behind a particular processing technique - such as freeze-dried compared to granular - can seek brand IP protection as a “trade secret” and patents based on the science used in the research and development process as well. And science is becoming a hot IP topic in coffee.
“At a time when we are starting to see lab-produced coffee, authentication is becoming extremely valuable because consumers want to understand what they are buying, they want to know their product is authentic like we see with wine appellation,” said Andrew Hetzel, a coffee market and value chain specialist based in Hawaii who works as an adviser to WIPO. “If the word ‘coffee’ is used on a label most consumers will think there is some actual coffee in the product that can be sourced back to the Coffea species, but if it’s lab-produced coffee it’s a substitute which is actually produced by something else, like vanilla extract which is produced by wood pulp,” Hetzel said.
WIPO was initially formed in Geneva in 1967 and became a specialized agency of the United Nations in 1974, but intellectual property rights actually date all the way back to 1883 where a group of countries adopted the Paris Convention for the Protection of Industrial Property as one of the world’s first intellectual property treaties, historic research show.
“Right now patents - for processing, genetic varieties, brands - are what we have seen as the main vehicle used for retail producers and wholesale roasters for individual brand recognition, but once we move into the more detailed pieces of IP legislation it’s a whole different level because it provides a legal framework which is enforceable on a global level," said Hetzel, speaking to STiR Coffee and Tea by telephone.
From Mexican tequila to Greek feta cheese, any act that provides value-added pricing benefits every single step of the coffee value chain; from the coffee farmer selling his crop to the manufacturer, including sectors as diverse such as importers and roasters to the packaging industry which has seen growing demand in specially designed bags to fit specific brands based on both IP-protected design as well as the source of material, an industry official said.
Surprising to many, one of the key elements used toward obtaining one of the coveted IP tools used for trademark registration is story telling because this relates back to documenting the all-important IP topic of authentication of a product and helps establish traceability, said Sara Morrocchi of Vuna Origin Consulting.
“At the end of the day, what is important in the coffee trade is traceability, where the coffee comes from and by whom it is produced,” Morrocchi told the WIPO conference. “There are a lot of private initiatives that work towards that traceability objective and I think the private sector has come to an understanding that it would be better if national governments took up this initiative themselves and work on a traceability system and embed geographic indication in a larger framework,” she said.
Geographic indication (GI) and denomination of origin are two of the most popular and better-known IP tools that producing countries have started using over the last two decades as preferred branding strategy.
The GI seal is based on a particular regional cupping profile identified in a specific geographical origin which is then authenticated according to WIPO norms like the GI approved seal for coffees from Costa Rica as a whole. A denomination of origin is mostly found on a smaller scale, like a region within the region, where for example a particular coffee community or region can prove a particular cup flavor unique to this region, such as Jamaica Blue Mountain. These two IP-tools are typically undertaken by the government or a regional authority.
“It is very hard for a company, no matter how big, to undertake something that has such a big scope,” said Morocchi. “Until we have the governments stepping in, we will run into that problem, this is when we fall back on certification and private traceability systems as the only way that is scalable with investments that are available in the private sector.”
While more common names of trademark protections are brand names like Colombia’s Juan Valdez or Starbucks, stakeholders across the coffee industry have taken advantage of trademark tools for years and when coffee companies, like for example importers or roasters, develop a new brand, they often seek protection of not only the name but also the design of the logo and how the name appear on a coffee bag. This can go into specific details such as the colors used in the logo and text, which not only boost the business activity itself but also all the inter-related, off-spring in activities developed from the core brand, from processing techniques with specific equipment to a new line of specially designed packaging material.
Business interest groups – including companies, communities, and promotion agencies – can chose from a long list of IP branding tools to support the specific needs of interest to support its business differentiation strategy, said Ong, adding all tools can be used individually or combined, although certain aspects vary depending on country-based IP legislation.
And regardless of where in the coffee industry a stakeholder wants to develop a higher business value, the intellectual property framework provides an incentive for that and not just businesses in traditional markets in industrial nations but also emerging markets in developing countries stand to be able to reap such benefits.
“For some countries, a geographical indication is sufficient while in others, a trademark works better or could strengthen or compliment the geographical indication," said Ong, adding that now is the perfect timing for the coffee sector to take a closer look at intellectual property. "Coffee consumption has matured in recent decades, creating niche segments, and offering price premiums for uniquely desirable characteristics.”