Deft. Coffee Roasters.

I posted this on the Roaster’s Guild Public forums as well as here… I am just looking for insight as to why there is such a large gap—one that seems to be widening—between the winning auction lot of high scoring coffees and the #2. Even when the cup scores are quite close. I say in in the cross post below, but I’ll mention it again. My questions are based on the cup scores, the auction price and a little on the cupping notes. I didn’t sample any of the coffees, and so I wanted to steer clear of commenting about the actual quality of the coffees.

The full post after the more>:

UPDATE: a link to a discussion of this on coffeed.com, including several of the purchasers and at least one of the judges. And another thread where Tom Owens (of sweetmarias) posted a letter from the Cup of Excellence board that addresses the main concern I have (that the gap between 1rst and 2nd auction prices is huge) by changing the price structure of the next CoE auction in Nicaragua.

UPDATE 2: I am searching for a list of the international judges in the Best of Panama 2007 auction.. cause I just noticed that at least one was part of the winning group (?).. A point that I’m not sure what it means—though it probably just meant that those that knew what they were purchasing bid for it… Willoughby’s states on their website although I don’t know who it was. (Note that they have the cupping score for Mama Cata (MCGC), the #2 coffee, different from the official auction results—I don’t know which one is correct, but assume the auction results are the correct score).

Hi everyone.

So. Esmeralda’s lot sold for $130/lb. Mama Cata’s (MCGC) (#2) sold for $11.80/lb. Katowa (#4) was $11.55. And Elida’s #3 sold for $7.50.

I’ve been curious about the outcome of the Panama auction from a few days ago. It goes to more than just this auction. It’s questions more about the direction in which coffee is headed, and how…

Part of this is that I’m trying to understand the large gap between the winning auction price and the next down.. It’s not so much the price, or the steady rise in the winning bids—if coffee isn’t going to behave like a commodity, but like a quality food, then I think a general ramp up in price should be expected and welcome. I am not an economist, though, and don’t know if this is a fair curve or not…

What is itching me is that it in the last few auctions with historically high winning bids (Brazil ‘05, Panama ‘06, 07) ended with the rest of the competing lots’ prices significantly lower than the winner, even with relatively close scores.

To put it in perspective. In the Panama Auction, the average price per pound is skewed by more than $3 if you compare the (simple) average prices with and without Hacienda La Esmeralda’s lot. The average for the entire Panama auction is $7.31/lb. But only 4 lots got above that. Excluding La Esmeralda’s lot, the average price is $4.24/lb. And the bulk of the coffees (19 of the 25 lots) sold between $1.95 and 4.45/lb. Not bad prices given the average price for specialty grade coffee, and especially commodity coffee.

I’m really wondering - and hoping for better insight from some people who were closer to both the auction and the auction system than I was able to be - why (or what theories) is it that there is such a discrepancy between the highest bidding coffee and the rest? There was similar distribution in last years Panama Auction. And in the Brazil CoE too. (The two other auction that come closest to this one.)

I should preface my questions by stating that (primarily) the only things I have right now to base any questions on is the cup scores, cupping notes, and the auction prices. I didn’t cup any of the samples, but in a way, I think what I am asking is more a question about the whole system than whether La Esmeralda’s lot is really so good that $130/lb is justified. Or if Mama Cata’s MCGC lot is worth $11.80. I did look at other auctions from this and the past couple years (Ecafe, CoE) where scores for the top coffees were above 90, and the distribution is not exact, but it is similar.

Anyway, three coffees scored above 90. Two above 95. I would expect those two at least to sell significantly higher than the others but that didn’t happen. Mama Cata (MCGC) was much closer to the #4 coffee (Katawa Organico). I feel, intuitively (expectantly) that the bid prices for coffees scoring 95+ (well, even 92+) should be spread out over that gap. Is that simply unrealistic and wishful right now?

I know that as scores get higher, the relative distance between each score is more logarithmic than linear, but on the other hand, anything over 95 is pretty phenomenal. So is a difference between 96.4 (Esmeralda) and 95.26 (Mama Cata) really a difference of $120? Or does it demonstrate something else.

Is it that there is still such a limited number of people interested in and capable of biding on these lots that only the single best coffee is fought over? Are there simply not enough quality coffees being entered into these auctions? Not enough farms producing this level quality coffee? Is it that the real or perceived market is too small to support that amount of coffee at these prices? Or is the point of entry such that consumers respond more to gold/silver/bronze medals? (i.e. listing Hacienda La Esmeralda (lot #xxxx) is meaningless to a lot of customers without also mentioning that this won 1rst place four years running….) Is it that 100% Geisha (along with prep quality) is worth $120/lb more than Geisha mixed with Criollo?

Thoughts? opinions? experiences?

best

dave