Season 1 : Episode 4 & 5
Air Date: August 7, 2019
Coffee : Part 1 : Ethiopia, Export, and Trading
Featured Guest: Heleanna Georgalis, CEO, Moplaco Trading
The Sourceresses go inside the journey of coffee in Ethiopia and speak with Heleanna Georgalis, CEO of Moplaco Trading, an exporter on the front lines in Addis Ababa.
Coffee : Part 2 : Consumption in the United States
Nick Kirby, Partnerships, Enveritas
Mike Nelson, Co-Owner, Junior's Roasted Coffee
Featuring interviews with Nick Kirby of Enveritas and Mike Nelson of Junior's Roasted Coffee, the Sourceresses discuss coffee consumption in the United States, transparency, customer education, and activism tools.
Transcript : Part 1
[Carolyn Kissick] Coffee. It's an indulgence, a fuel, and a $100 billion industry. As a product, coffee is one of the first traded globally to undergo a collective tackling of the supply chain. You can think of this as an ethical audit that sparked lots of conversations and a whole lot of marketing material, but while photos of farmers are showing up on large chain menu boards, the impact isn't felt on the farms at origin.
Overall, farmers in the coffee trade are worse off than they were 30 years ago. Our guest today, Heleanna Gerogialis of Moplaco Trading, lives this reality daily in Ethiopia.
[Heleanna Georgalis] Unless buyers move from their comfortable position and decide to pay the price they should, they will not have coffee very soon, and very soon doesn't mean tomorrow, it will be in five or six years and eventually they're going to have to pay very high prices for coffee, which is not good.
[Carolyn Kissick] I'm Carolyn Kissick.
[Colleen King] And I'm Colleen King.
[Carolyn Kissick] Thanks for joining us today on Sourceress where we're talking about coffee, the most affordable luxury in the world.
[Colleen King] Welcome to Sourceress!
[Carolyn Kissick] Welcome to Sourceress. We're on our coffee episode.
This is really exciting.
[Colleen King] The industry I have done the most work in.
[Carolyn Kissick] So much work, so much work. I'm so proud of you.
[Colleen King] Thank you.
[Carolyn Kissick] So coffee's there for everything. I feel like it's, it always has a presence in your life. There's coffee shops on every corner. I mean like I use it in finals in college.
[Colleen King] When you have a new child. I mean I remember being behind the bar and just noticing how many different people were coming in desperately wanting coffee and sometimes it's your escape so that you can just get out of the house, especially now with work from home culture. But I think no matter what point you are in your life, especially at the most vulnerable, we use it because it's, it's truly a fuel.
[Carolyn Kissick] Yeah, absolutely. Fuel is such a good, a good word for it, but the reason that we're doing this episode is there are some things going on with coffee right now where those relationships that we just mentioned are about to change significantly. And you've been in the coffee industry for what, like 17 years now. Really quickly tell us how many of the roles in the coffee world you've really like held.
[Colleen King] Well, there's not many-- I always knew that I wanted to work in green coffee. I knew I wanted to be able to work with farmers and travel, but it's pretty rare in terms of women getting that role. So I pretty much took every single role that I could find to get me to this point. So I've been a Barista, a trainer, a wholesale manager, a cafe manager. Um, I've done green sales.
[Carolyn Kissick] I was a Barista one time. It was really fun. I was good at Latte art.
[Colleen King] Hahaha Were you?
[Carolyn Kissick] Yeah I was!
[Colleen King] Okay, Instagram battle. Carolyn and I are going to do a latte pour off.
[Carolyn Kissick] It's been really interesting to be working on this project with you over the last nine months because I've learned so much. But the funny thing about coffee is it messes me up.
[Colleen King] It seriously fucks her up. It's like a pixie stick. She just goes up and then she crashes.
[Carolyn Kissick] I don't want to give too much away, but in your interview with Heleanna you bring up, or she brings up a gentleman named Geoff Watts. I know he was important to the beginning of your coffee career. We should probably just tell people who he is.
[Colleen King] Yeah, so my first job in specialty coffee was at Intelligentsia. I lived down the street, I was going to school in Chicago, and I went in and I applied and I didn't really know how big of a deal this cafe and roastery was. So Goeff, it was the director of sourcing and he set up something called direct trade. And at the time this was sort of at the height of Intelligentsia. Yeah. They were doing a ton of investing in their staff. They were codifying all this knowledge. I was required to do two hours of training a week and that could be just reading about how coffee is traded all the way to brewing tea and learning about things that we were serving. I mean they were really investing, and Goeff was someone that sort of made me understand that it was a hundred percent possible to trade coffee ethically and to do things outside of the norm and still be like profitable and cool and create this environment where education and talking about the product itself was really important.
In the interview, Heleanna mentions that he was one of the only people that truly knew how to do it. And I think that's why it was so interesting is he gave me this model and I thought it was so much easier than what it actually is when you try to do it yourself in a small company. He was uniquely positioned to be able to execute this, you know, working directly with farmers and marketing at a specific way. And it sort of set the industry into this strange trajectory where people wanted to model what he was doing but weren't actually able to execute for many reasons.
[Carolyn Kissick] I like this guy. It sounds like he really started a lot of this movement and still works, you know, with people like Heleanna on a, on a regular basis. And that's awesome. Well, we will get right into the episode. Now remember this is episode one of a two part series in coffee, so make sure you tune into part two after this episode. They both dropped today so you should be able to find them in your queue wherever you are, listening to us out in podcast land.
Coffee Part 1 (3) (Completed 08/02/19) Transcript by Rev.com
Page 2 of 15
This transcript was exported on Aug 05, 2019 - view latest version here.
[Colleen King] Ethiopia is the birthplace of coffee. It's also arguably the most challenging country to work in for green coffee buyer. Coffee is not only an important export. Ethiopian locals are also high consumers of coffee, an uncommon cultural difference from most producing countries making for a dynamic and competitive local marketplace. There are protective trade laws and policies sometimes changing overnight without warning. With arguably the most unique taste profiles, Ethiopia has been coined the queen of coffee origins. Coffees from this part of the world are known to change the perceptions of coffee drinkers about what coffee can taste like. This is in no doubt due to the amazing genetic variety, the birthplace of coffee boasts. The vast majority of coffee varieties there have yet to be categorized. This is perhaps why Ethiopia's coffee sector is so protective. This protective nature is understandable, considering Ethiopia is the only major coffee producing country that has not been colonized.
Coffee is a colonial product. Everywhere coffee grows in the world, with the exception of Ethiopia and arguably Yemen, had coffee brought there by force. There were many battles and wars in an attempt to control the region. Not always unified, but consistently fending off other powers, from the Ottomans to the British and the Italians twice. They are a very proud country and people, and their resilience is something to be admired. With 83 different languages, and up to 200 dialects spoken, the fabric of Ethiopia is woven with dynamic culture, food, music, and tradition. It's understandable that the country has a lot to preserve and protect from outside interests. I want to note here that in every other country I've visited for sourcing, the relationship of trade is rooted in a legacy of violence, extraction of goods, and systemic poverty where the consuming country is more protected and more profitable than that of the coffee producing partners.
In Ethiopia, this dynamic is very different. Ethiopia sets its own rules. Everything from the way coffee is priced, purchased, traded, finance and exported is dictated by Ethiopia. So in part one, I wanted to explore the way trade works there, ever evolving and never perfect, but a look into a country trying to protect and preserve in the complicated coffee trade of this era. Let's take a step back by looking at the coffee plant itself. Most people don't know that coffee is a seed of a tropical fruit. To explain how the coffee tree produces and moves through the supply chain and Ethiopia until it gets to our guest, Heleanna, here's my partner on the podcast, Carolyn.
[Carolyn Kissick] Hey girl!
[Colleen King] She's going to take your coffee knowledge up a notch.
[Carolyn Kissick] Coffee starts as a flower on a small tree. That flower turns into a cherry. The seed of that cherry is what we know as coffee. The cherries are hand picked by families and farmers. Cherries don't ripen at the same rate, so it takes many passes to harvest a full tree. Coffee grows wild in Ethiopia, and while some countries sort the ripe cherries based on the type of coffee tree or variety, Ethiopian farmers typically mix them all together. This is in part because Ethiopian coffee is considered heirloom or the original coffee plant.
The coffee cherries are collected by the surrounding pickers and sold to washing stations, which are regionally located. Washing stations pay the farmers directly for the cherries, taking ownership of the agricultural product that's yet to be processed. Pickers and farmers receive the lowest compensation for coffee in the supply chain, making between 50 cents and a dollar a day. Many times when you're purchasing roasts of Ethiopian coffee at a cafe or grocery, the name that you see on that label is actually the name of the washing station and not of the individual farmer. Internally though, there's a high demand for farmers specific lots and if you find one at a cafe, it's very rare and we highly suggest you buy it. Now the cherries begin to be processed. There are many ways to process coffee, but generally it starts by putting the cherries in tanks of water and removing the ones that float. Floating is an indicator of unripe cherries that will lack the sweetness that's needed for an outstanding cup of joe.
From here, the cherries are fermented in big tanks for anywhere from 12 to 48 hours. After that, it's put through a machine that removes the cherry and mucilage. What we're left with is just the seed. The seed is washed and laid out the dry on a raised bed. There's also a process where the cherry is dried in the sun with the cherry fruit still intact. With the improvement of processing methods and concerns of depleting water resources, there's a larger presence of those kinds of coffees showing up on specialty shelves. Once the coffee is dried, it's called parchment. The parchment still at the washing station has three avenues it can reach in order to meet the export market. Still with me? Let's review.
Coffee is the seed of a tropical fruit. It's handpicked, sold to a washing station, and it's processed by washing and drying the seed in the sun.
There are three what we call windows for buying coffee in Ethiopia. One is directly from a private estate that can export their own coffee. Two, from a cooperative that's represented by a union that acts as the exporter. Or three, from a private exporter that has a license to buy coffee from the Ethiopia commodities exchange, or the ECX. The ECX was established in 2008 and is a private company made up of both private parties and the Ethiopian government. Our guest today is an exporter who falls in that third category. We'll hear Heleanna referred to the exchange several times in the interview.
[Colleen King] One thing that sets people apart, that source outside of C market, which we'll cover in the next episode, is in-person buying to really know how your supply chain works. It's really important to have someone on the ground visiting your partners and for you to check in. I went to Ethiopia this January for a buying trip for the North American market with my team. I was told specifically don't take the blue taxis. Sometimes you just gotta go with the flow
12:18 [taxi noise].
Once we got to our hotel at about three in the morning, you laid down to rest. We were meeting the rest of the buyers the next morning. Sometimes on these trips you get to go to a lot of farms. In this one we were just doing a bunch of tasting.
Each day we taste between 50 and a hundred coffees. Everyone at the table has a different problem to solve. Some people need the highest quality coffee possible and they're willing to pay whatever it takes. Other people want some of that coffee, but they also need some lower grade coffee to put into their cold brew, their blenders, and their espresso. It's great to use an Ethiopian, because it lasts a really long time without starting to fade or show that it's aging. On this trip we met up with roasters from all over the world: Russia, Czech Republic, Taiwan, the United Arab Emirates, Norway, the US and Canada, and we’re all tasting these coffees trying to figure out which one we like best, and everyone has a different perspective.
How are they going to roast it? What is it meant for on their menu? What does sweet mean to them? What kind of fruits are they using to describe the coffee? Having a global cupping is my absolute favorite way to taste.
Navigating Ethiopia's labyrinth and ever-changing coffee politics make finding trustworthy partners absolutely vital. That brings me to today's guest. Heleanna Georgalis was born in east Harar, a small walled city in Ethiopia, and as a young girl was forced to flee her home in the face of civil war. She neither imagined nor planned to return to Ethiopia, or follow in the footsteps of her father, but after his sudden passing in 2008, Heleanna was at a crossroad. Continue the legacy her father had meticulously built, with almost no knowledge of the coffee business, or continue on the path she had created for herself within the world of finance. Heleanna returned to Addis and has done an admirable job of continuing her father's legacy at Moplaco Trading. We met with Heleanna at her mill. The milling happens after it's been auctioned and when it's ready to be exported. I spoke with Heleanna inside her cafe. At one point we had to move locations; also of note, when purchasing coffee from her, buyers must commit at the table the same day or it will likely be sold by sundown. It's just that competitive.
[Colleen King] So tell me a little bit, a bit about how you got into coffee. Your father had this before you. Yes?
[Heleanna Georgalis] Yeah. My father had this before me. I had no desire to enter into coffee, honestly speaking. And it's because he passed away very suddenly. So I had to come back and take over the business. But that was pure destiny, let's say. Nothing, um, nothing premeditated.
[Colleen King] Right. And then you were born here but then spent some time in Greece.
[Heleanna Georgalis] Yeah, I was born in Shia, but then the communist time started. So there was no education or anything that was, let's say, sustainable for us. So my father sent us to Greece. Yeah.
[Colleen King] And then you were- lived outside of Greece for a while. You lived in Germany.
[Heleanna Georgalis] Yeah, I lived in Germany, in Spain, in France, in the UK. Almost everywhere. Eh, Belgium. But, um, my, my dream was to go back home, let's say, but it was never materialized. So my last destination was Spain. I was working there for a pharmaceutical company, and then when my father died, I left everything and I came here.
[Colleen King] Yeah. And you took over the business.
[Heleanna Georgalis] Yeah.
[Colleen King] So can you tell me a little bit about what has changed since when your father had the business until now, as far as the way coffee has worked? One reason I'm interested in Ethiopia specifically is because it's the only country that hasn't been colonized. So Ethiopia specifically is very different of how everything is treated.
[Heleanna Georgalis] Yeah, Ethiopia is unique in every aspect. Okay. And everything is almost like an oxymoron or a paradox here. And only when you live here, you will understand what I say. So since my father's was working and until now, almost everything is different, it, the world came upside down, for me.
[Heleanna Georgalis] So coffee had the system before that was designed for almost 70 years. It worked perfectly in the sense it worked perfectly logistically. But like everything, everything that involves humans, it had corruption points, which in my opinion were easily correctable, but they decided for reasons that were not really related to coffee, but much more political, donors that came from USAID, or from Oxfam or from Defeat. You know, all these NGOs that do-gooer, or they do-gooders that I'm saying, which have nothing to do with the country but somehow want to spend some money here. And they almost directed Ethiopia to this exchange system that was a disaster for the country because the moment the world media traceability, at that very moment Ethiopia fully lost it. So before everything was fully traceable and there were lots of direct relationships that were always happening.
[Heleanna Georgalis] So Ethiopia was one of the few countries that these relationships were well- established, so the coffee would come to an auction and um, every single lot was given the opportunity to be beat by every exporter. There was a much more fair system to price discovery, and you had every information about every lottery bot. And the coffee would come immediately to your store within two, three hours. So logistically, it was very efficient and after one week or two weeks it could be shipped to Djibouti.
[Colleen King] Wow. And Djibouti is the shipping point.
[Heleanna Georgalis] Yes. So ECX came and he said, nonsense, all these things are nonsense. So we will establish trading points everywhere in Ethiopia that there is coffee, so they opened seven warehouses and coffee no longer comes to add this, but we buy coffee, not this blindly. So for almost nine years we didn't know anything about the coffee other than a generic name.
18:02 And we had a lot of issues of delays. Coffee was not being picked on time. There was a lot of corruption. So if there was corruption before, now it was multiplied by seven. Okay. And then seven stores, we had absolutely no knowledge about the coffee. So they wanted to create, or the founder was insisting that we should be trading coffee, like supreme or an excel, so like Columbia. So there was a lady that had very little understanding about the coffee industry and she called every specialty buyers crafty. Crafty and insignificant. So, yeah, when Geoff Watts came here and started to talk to her and to convince her, she told us that these crafty little buyers and make a lot of noise. Wow. That was nine years ago. Then when she understood the pressure was mounting and Ethiopia was losing foreign exchange, she tried to establish a kind of a direct trade system, which was a complete flop because it was not way thoughts like ECX itself was not way thought.
[Colleen King] Yeah. That’s Ethiopia Coffee Exchange.
[Heleanna Georgalis] Exactly. Yeah. So the direct trade window collapsed that it was never used again. Eventually nine years down the line, they understood that direct trade and traceability are very important for the survival itself of Ethiopian coffee. So now we still buy coffee from the ECX, but it's fully traceable. So we get all the information that we need. But again, we don't cup or see the coffee before we buy it.
[Colleen King] So how do you make a decision of what to buy?
[Heleanna Georgalis] We only see the name and the points that they give now, which is a big change. Before, we didn't know if the point was 90 or 85 we just knew the coffee was a Q1. But between an 85 and a 90 the difference is huge. So you can imagine price discovery was not fair because you will not pay the same for an 85 coffee as a 90 right?
Traceability was not existent. And coffee started to become a commodity, really became a commodity, as the name suggests, if Ethiopian Commodity Exchange.
Okay, so now at least we know the grade and we know the points. We know the emotional content, we know the washing station, we know the specific area. So we still buy blindly, but based on more accurate information.
[Colleen King] So how early do you get that information in order to make a decision?
[Heleanna Georgalis] Just the same day before we start buying.
[Colleen King] And do you purchase, do you go physically to an auction?
[Heleanna Georgalis] Me, no, but I have a buyer who is there all the time and he trades online. So they created a kind of an electronic system. So people don't trade like before on an open floor, but they trade on a computer. It's much better than before on an open outcry system because there the corruption was even stronger. But the problem now is the system is not always working. So in a, in a country where internet services are not as accurate and electronic services are not as reliable, this is not an efficient system for the country until now.
[Colleen King] No. So now it's getting better.
[Heleanna Georgalis] Definitely it's getting better, but still he has a long way to go.
[Colleen King] This is where we had to change locations. You're going to also notice a change in microphone quality. My first question to Heleanna, when we got settled again, was about how Ethiopia differs from other countries in Africa that export coffee.
[Heleanna Georgalis] ...only contains is, I'm really am happy for Ethiopian system is quite closed. Like China. Because if it was open, for example in Nigeria, very few things in the hands of Nigerians. Everything is in the hands on multinationals. Kenyan coffee, where is it, in the hands of multinationals. Okay, so Ethiopia gave the opportunity with this closed system for local traders to grab part of the market. The drawback of this is that the competition is not high enough for them to be pushed to make quality.
21:43 You know, you need a balance. So for example, before the hotels look dead, but now you have Radisson Blue, Sheraton and Hyatt regency. So you cannot afford to have a terrible hotel anymore. Okay. So that's the only drawback by having such a closed economy is that the competition doesn't push them to become better. They become a bit complacent. The other good, the good thing though on the other hand, is that you don't have multinationals absorbing all the resources of the country.
[Colleen King] So the future is really at the hands of the Ethiopians.
[Heleanna Georgalis] I hope so. I hope they don't decide that they want to be so liberal like Americans and open everything. No, I really hope.
[Colleen King] Is there anything else that you think is sort of important to cover that you want people to know? Anything that you think is maybe misunderstood in the marketplace?
[Heleanna Georgalis] No. Me, I will tell you what pisses me off. The word sustainability. What does sustainability mean? Nobody knows that sustainability means paying a better price. Really. Sustainability means I want to have coffee for the long term. So you can not have coffee for the long term if the farmer doesn't get what he deserves for the work he does. Okay. But they, I don't know what they mean by sustainability. So they advertise, I will not tell you which company, but there was checking the website of a company and says, we are a sustainable company, trading directly, paying a higher price. I can tell you that none of these three words match what they do. Okay? So it's like I hate these buzzwords that they always come in the industry. So ten years ago the buzzword: direct trade. Okay. So the only person that understood direct trade at that time was Geoff.
Okay. And he's the only one that really means what he says. He wanted to go down to the farmer to make sure the farmer gets a better price for a better quality product, which he wanted. And he understood that the only way it can happen is if he can work with a farmer in the long term and pay them this better price. The marketing was so amazing that everyone started to say, I want to do direct trade. I want to be like Geoff. But you cannot be like Geoff. First, you don't have the philosophy. And second you don't really understand what direct trade means. So it's like the buzzwords that come in there in the market, now the buzzword is sustainability. So eh, two or three years ago in Ethiopia we had the ICO conference and there was a very big company that spoke and said that from now on we are going to be buying coffee from the cooperatives.
Okay? And we want to have, because we want to have sustainable coffee. Now this company I'm telling you is one of the biggest in the coffee-- in the world. Okay? So I raised my hand and I asked them, so you want sustainable coffee, which is traceable, but are you going to pay for it? And he said no.
[Colleen King] He said, no, in front of everyone?
[Heleanna Georgalis] He said no. In front of everyone. And the way he justified it is that we are not going to pay much higher prices, although we want sustainable and traceable coffee, because our market doesn't take this higher prices. What he meant is he's not willing to reduce his margins. Because the market does take higher prices, but the margins will not be the same for them anymore. So it's these kinds of buzzwords and nobody understand, but everybody wants to use in the media that are driving me crazy, Honestly. Colleen, it's like I wish people were really true to what they meant.
[Colleen King] No. And there's no enforcement body either.
[Heleanna Georgalis] Yeah, and also because for example, I had some guests before and they wanted, they told me, they were asking me, I want to do Direct Trade. So I told them, what do you mean? What do you want to do with direct trade? He said I want to use it in my marketing. So at least he was honest. I was surprised with his honesty. Okay. Because he, in his mind, he couldn't understand. Okay. They're very young in coffee and they don't know really coffee before but, he doesn't understand what direct trade really means. And I'm telling you from all the people that I met. Okay. The person that really understood and did it was Geoff, 10 11 years ago. Everybody else that followed did his own thing. Right. Okay.
[Colleen King] Do you think, what is the best way in your opinion, to be able to fully have people understand and maybe create, should it be a new enforcement system? You know, should there be a new certification that would be able to be verified or how do we make sure that these buzzwords, how can we get them to go away?
[Heleanna Georgalis] I don't think you can. People will use marketing in any way they can for their own purpose. Okay. Some, and again, I think the reality will strike them very hard when in a, in a period of five, six years, they won't be able to pay for the price they're paying right now. Already look, Ethiopia, it was very common to pay for Sidamo grade 2, eh. Plus it was the standard plus eighty New York. So if New York is 110 it would be 190 cents a pound.
[Colleen King] And you’re referring to the C-market right there.
[Heleanna Georgalis] Yes. And that was happening until five years ago. Suddenly the market, because of the specialty movement, woke up and now you cannot find Sidamo for anything less than two-sixty so the people that used to buy 30 containers of Sidamo grade two at class eighty New York have to change their model or have to change the coffee. Most of them choose to change the coffee. So they say, I will buy Vietnam from now on. I don't care about Ethiopia anymore. Okay. And they do. But what automatically happens is the quality goes so much lower because it's not the same as having an Ethiopian grade to wants to have a Vietnam.
Okay. Which they start losing market share. So in, in countries like Germany and France who already see the impact of that. You know? So it's, it's, it's happening for them, but they have so much cash that they can withstand the pain or they can change the model, you know. So, and you can see why, why is everyone into coffee right now? Why coffee is such a big thing. Why all private equity funds invest in coffee? Because they know it will be one day a very exclusive product.
[Colleen King] So you're expecting there to be a very high end market that's very expensive?
And then otherwise, the quality very low, very cheap, right?
[Heleanna Georgalis] Yes. Yeah. That's, that's my expectations the way I see it. Unless something changes now.
[Colleen King] That change would have to be just increasing prices so that people can have-- so real sustainability is investing in farm gate prices.
[Heleanna Georgalis] Exactly. Unless buyers move from their comfortable position and decide to pay the price they should, they will not have coffee very soon. And very strong doesn't mean tomorrow, but it will be in five or six years, and eventually they're going to have to pay very high prices for coffee, which is not so good. So the cheap price of change, you know.
[Colleen King] What do you think is, um, a real price that would make sense for a benchmark to start at? If they were, everyone was being properly compensated in the supply chain.
[Heleanna Georgalis] Starting from the farmer, I think $1 minimum per cherry. Okay. Okay. Which already makes the coffee costs $6 per kilo to $7 per kilo at the washing station living. So at the expert level, I would say at least $12 per kilo. Okay. Okay. Yeah. So is this feasible for a roaster? I don't have the answer. Maybe these guys can explain it to us. Okay. But roasters that, so for many years they are making 40 to 20% margin is the only product that gives you 40%-20% margin. Yeah. Okay.
That and beauty products. So, and the beauty products are sold at a very different price to what coffee is being sold. So the margins made in coffee from really big multinationals never justify either the quality or what the farmer is getting. So to be honest, the fair price right now to sustain coffee will be already $1 at farm gate. Is that sustainable? At the other end, I don't have this experience to tell you.
[Colleen King] Yeah. I’ve spoken with a lot of people about the sustainability of trying to increase prices and how that has worked. I lived in Chicago, for Intellegensia we charge $2.50 for a small cup of coffee. I moved to Los Angeles, it was $5; you didn't get to choose your coffee. It was just what it was. And it was just the way that they approached it and possibly also expendable income. But even that really isn't enough. And I see them sort of starting to increase. But do you think you think it's because it's a daily habit…
[Heleanna Georgalis] Are they increasing their cup of coffee or they increasing the price for the farmer?
[Colleen King] They say that it's the farmer.
[Heleanna Georgalis] Will I really doubt it. Yeah. Because I saw all these people that got so excited about doing direct trade in Ethiopia with washing stations and they are paying much less price than they were paying before. So the whole idea of trading directly with washing stations was they wanted to bypass what they consider margins done by other people. So the price paid to the washing station is still lower than before. So I paid to the washing station at the auction because there is this competition and much higher price. But let's say if Will comes and negotiates with the washing station he will not want to pay the same price he pays to me, because in his mind psychologically, he's cutting off the middle man. Right. You know, and this what's happening, and like right now I can tell you prices of coffee this year in Ethiopia were much lower than last year. So in Guji they represented about what? 60 cents a pound? Because the volume was so much bigger. So the volume justified lower prices to the farmer. But the price of Guji right now at the auction, okay, if I want to sell and make money today, I have to sell it at um, what they calculate six-- no. No, I calculated it. That's 6.78 per pound, to make money. Yeah. Okay. For me to make money. Right. And why? Because they're washing station is charging money. What they do is they hold coffee back. So exporters need to buy Guji in their selection or they have already resolved it. I don't know. So, um, so they are paying the price that there is and if there is no coffee because they don't bring it, the moment they do bring it, the price is very high. So yesterday for a good, but not a 94 for coffee, but a very good coffee, a 90 coffee, somebody paid... $5.70 is X price
[Colleen King] Per pound.
[Heleanna Georgalis] Per pound.
[Colleen King] Wow. And that's still needs to be exported.
[Heleanna Georgalis] Exported. That's why I told you if I want to export this coffee and make some margin out of it, I have to sell it $6.78 and nobody's willing to buy $6.78.
[Colleen King] Yeah, it's very hard. So we basically need to restructure. Yeah. And also reeducate.
[Heleanna Georgalis] Yeah. So making direct trade with the washing station did not make the farmer richer. Okay. So it's again, who gets the part of the pie. Okay. And Ethiopia, it's most of the time the washing station, most of the time, I'm not saying always there are many years that washing stations lose a lot of money because they cannot control them, the market. Especially when the market was a commodity markets now would you became famous for example. And because it became famous, they have the luxury to charge much more. And what I'm saying is the farmer is not getting any part of it. He already sold his cherry at a low price. The last forest in Ethiopia that you have never seen anywhere else, okay. It's very different. I can tell you maybe 70% of what the forest, I know in the last 11 years is gone.
[Colleen King] Where did it go?
[Heleanna Georgalis] Finished. The farmers just entering and cutting it.
[Colleen King] So are they taking it over to plant something else?
[Heleanna Georgalis] To plant chat.
[Colleen King] To plant what?
[Heleanna Georgalis] Drugs.
[Colleen King] Oh, drugs. What kind of drugs are prevalent?
[Heleann Georgalis] Chat chat, cat. Do you know? Do you call it chat? Yeah. It's something that has destroyed Yemen and basically, you know, but it's like I was so shocked because if you told me the farmer is cutting the forest because he wants to plant tomatoes, I would say, okay, at least he's planting food. No, but they are not planting food. They are planting a cash club, which is 10 times more profitable than coffee, even a hundred times actually. So for a kilo of coffee, they sell it. As I told you now 15 Birr, one kilo of chat is 180.
[Colleen King] And where did they sell it? Is it for domestic consumption?
[Heleanna Georgalis] One domestic, two export to Somalia to Djibouti. And before it used to be exported a lot in the UK, but it stopped because it was classified as a drug A. A-type, which is cocaine and heroin and crack, let's saying. Okay. So they, they make so much more money from crack and these people don't care about tomorrow. You know, farmers don't have a long time span in their mind. Their mind is tomorrow. Today, today I have eight kids that need to go to school. Most, probably not all of them, but at least two out of the eight, and I need to feed the eight, plus me and my wife and the cow. So he's like his timespan in his mind is today. He doesn't have a long term plan like we do because our basic needs are, are met. So when, when I saw the destruction in Bangar I was overwhelmed, because it's a year or two, I haven't been because of all the troubles. So we go out to Jima but we don't venture outside. And the natural destruction I saw really left me amazed and very sad.
[Colleen King] Yeah, because that's not, I mean a lot of those, from what I understand, those plants, drugs, are like predatory for the soil completely destroys it. And so, it'snot, it takes a long time to recover if you decide to...
[Heleanna Georgalis] Diradara, for example, they used to be the biggest exporter of coffee before, of Harar coffee. Now, coffee comes under only one of these ficus trees. They have maybe 50 plants. The remaining is chat, it's plantations of chat. Now chat is very water demanding. So all the underground water of Harar is depleted. Okay. So there is heavy drought in Harar. People cannot plant any other vegetables because there is no water and somehow that doesn't get to them.
[Colleen King] Sure. I mean desperation. You just do what you think makes sense for the moment.
[Heleanna Georgalis] Yes. Yes. And there was a huge lake in Harar called Adhamiya Lake. It dried out completely because they planted so much chat around it that it, it's completely dry. It will never recover this lake, never. So now it's a kind of a grazing land for cows. But when it dried out, it happened. When did this big tsunami happen? The huge tsunami in Indonesia. 2007 or, yeah, so in 2007 the lake dried down. That's it. Finished. So imagine if the chat managed to dry a lake over a period of 15 years. What it has done to the underground water when there is no reservoirs. Okay. And still you see only plantations of chat in Harar and nobody thinks, I want to feed my family. They just want money. And why they want money because the changes in Ethiopia are so big. So they want to also have a car and they want to have a house, they don't want to sit in a mud house anymore and they want to have what we have and they want to do it fast. They don't wait anymore in poverty. Okay. And we are not offering them an alternative. We are not saying, hey guys, plant coffee or plant spices or plant aromatics plants because that is going to give you the same income. Nobody's giving them this alternative. Instead everybody abandoned Harar. They said, Harar coffee is not good. It's not good. It's true anymore. And they buy something different and even the something different is not good enough. So people again, plant chat instead of coffee.
[Colleen King] If you could be in any other industry tomorrow, just wake up and be an expert in something else. What would you do?
[Heleanna Georgalis] A bakery.
[Colleen King] Why Bakery?
[Heleanna Georgalis] You know, it's very funny. Let's say 30 years ago if you said, I'm a baker, you were considered a low skilled worker that opened the bakery in the neighborhood to celebrate. And what happened in Greece is like all these Albanian immigrants started to come and they were the only ones with a necessity to work very hard. So the, the Greeks started to become very comfortable in the life, you know, having a coffee, sitting around and enjoying the sea. So nobody wanted to wake up at 4:00 AM in the morning to work in a bakery. So who was doing that? The Albanian immigrants. They all, some of the biggest bakeries in Greece right now. And the richest people right now in Greece that survive any economic crisis are bakers. So they ran multimillion dollar businesses with bakery. Really. And now bakeries are entering into coffee. So the biggest challenge to any coffee chain, including Korea, for example, are bakeries. In Germany it’s the bakeries.
[Colleen King] So are you answering bakery because you would prefer to be a baker by day or because you know that that's a strategic move.
[Heleanna Georgalis] Okay, both. Yeah, both. Definitely. It's a strategic move because bread is bread. You know, we, we cannot forego bread. We can forego coffee but not bread. So, and also because I think this is such a cultural products. You know, my parents and my mother, my grandmother, my grand-grandmother always baked bread at home. My lady that takes care of me now let's see the Ethiopian mothers at a harvest, baking bread at home. So it's a product that I have a lot of connection with, but I know strategically it makes sense, much more than coffee actually.
[Heleanna Georgalis] Okay. We have to go. They all came. [speaking Amharic]. Hmm.
[Colleen King] Okay. Um, I'm trying to think if there's anything else. Uh, what is your hope for the future of Ethiopian coffee?
[Heleanna Georgalis] I just hope people start paying the right price for coffee overall. Not only for Ethiopian, otherwise very soon coffee will become by default a very expensive product to have because no farmer would want to cultivate it. You know, it's like a, people say, oh coffee is expensive. No, it's not expensive. When a farmer is still barefoot whilst you are driving a BMW. Okay. So it means you are making a lot of money whilst he's not. So we have to come somewhere in the middle. And if your pick of it deserves a better price. I know the limitations of roses may have okay, and expenses and salaries and and then but still they make 20 to 40% margin whilst the farmer makes no margin and this is something that has to be corrected not only in Ethiopia, all over the world and I hope that both only Ethiopia will start protecting what it has. Yes.
[Heleanna Georgalis] Thank you also.
[Colleen King] Thanks again to Heleanna for taking the time to chat. If you're interested in finding coffee that Heleanna has had a part in, go ahead and find us online @Sourceress__. We'll let you know where to go. Stay tuned for our music segment where a music curator discusses the cultural and musical history of the region and product discussed in the episode. And if you haven't yet, please leave us a review wherever you found this podcast. We are a small group of radical women trying to make it happen and your support means so much.
[Danielle Maggio] Hello. Hello, this is Danielle Maggio delivering you the sonic sauce of Sourceress.
I'm really excited about this playlist because I've been pretty into Ethiopian music for the last couple of years, so let's get into it. Ethiopia has an extremely rich traditional music history. There are ancient religious practices that date all the way back to each three of the Abrahamic religions as well as ritual music, which structures nomadic tribal life and folk music that uses indigenous instruments such as the five string heart-shaped plucked lyre known as a crar. But today I'm going to be talking about popular music from Ethiopia from 1960s to 1970s. The history of popular music in Ethiopia is directly linked to government politics, so we have to begin with a defining figure in contemporary Ethiopian history. Haile Selassie, Emperor of Ethiopia from 1930 to 1974. Haile Selassie was a world respected and complicated leader. Oddly enough, beginning in the 1930s Rostafaras in Jamaica looked at Salassie as a real life returned messiah.
In fact, the lyrics of the Bob Marley Song War is comprised totally of Haile Selassie's speech to the UN General Assembly in 1963. The urban music scene in Adis Ababa peaked in the early 1970s during Selassie's rule. Musicians who were previously only employed by the imperial government were now composing the very first Ethiopian pop music records ever. These records were a mix of Ethiopian Orthodox singing with jazz and Afro Cuban Clavio rhythms, and a lot of James Brown inspired soul and funk. The combination of these musical elements created a truly unique sound. Ethiopian nightlife was full of discotheques. People were going out nearly every night to dance and live their best lives. All of that would change, however, after the 1974 military coup that deposed and imprisoned and Emperor Salassie, ushering in a brutal Soviet backed regime, known as the Derg that lasted until 1991. the Durer crackdown on any type of western influence and only permitted musicians to perform sponsored music.
Many musicians were jailed, beaten, or killed. The actual physical records that were recorded and sold in music stores and Ethiopia were almost completely destroyed by the Derg regime. Casting them off as obscure rare artifacts to be lost in history. The world knew nothing of Ethiopian pop music until a French record collector and music promoter named Francis falsetto heard a record by Muhkmood Ahmed at a party in France in 1984 falsetto was so viscerally affected by that one record that he traveled to Ethiopia to try and find the artists and invite him to perform in France. However, when falsetto arrived, he realized many of the musicians and producers were an exile in America. He then traveled to the u s and met, I'm hot, I shed Tay who produced the majority of Ethiopian records and the to began plotting essentially how they could reissue this unknown music.
The project had to wait until the juror version fell in 1991 and after that the two work together to create the now world famous series called Ethiopia. The first volume of Ethiopique came out in 1997 and was followed by 29 more volumes. This is how myself and the rest of the Non Ethiopian world got turned on to what is now known as Ethio Jazz. The story of Ethio Jazz makes me think about mobility and mediation. How and why music travels to distant parts of the world. What forces are behind that travel? How does Ethiopian popular music get curated and remembered by those who are not originally a part of it? While I was in Amsterdam in 2017 I got to see 80 plus year old Girma BNA singer and composer for the Wallia has performed the music he composed over 40 years ago. That singular performance was more than any reissued record could ever deliver me by hearing Ethiopian music performed by the Ethiopian musician who wrote it. I was getting the sonic ingredient straight from its original source. Guillermo was not repackaged with extensive liner notes or enhanced with audio remastering. He was simply present testifying to his survival and exile and a 40 year absence from music. In this sense, the musicians of Ethio jazz are living testaments to the ways in which music enables present day audiences to access the past and in the process. Reconstruct meaning and value in the present.
[Danielle Maggio] To listen to this week's playlist as well as access playlist from past episodes, go to Spotify or apple music and search for sorceress. That's S. O. U. R. C. E. R. E. S. S. The playlists are public, but we hope you'll consider subscribing to our podcast so you can get fabulous fresh updates each week and easily access the playlist. Thank you all so much for your support and we hope you enjoy the sonic sauce of sorceress.
[Carolyn Kissick] Sorceress is written, directed, and produced by Carolyn Kissick and Colleen King. Our music curator is Danielle Maggio, theme music by Flat Broke Robot. Special thanks to our donors who all helped make this possible. Megan King, Ray King, Christopher Kissick, Deb Maggio, Gus and Maryanne bonder hide the Saint Posadas, Courtney Minick, Jen Apodaca, Vanessa Brown, Jonathan Joseph, and Max Kelly. We couldn't have done it without you. Thanks for joining us on Sourceress. Till next time, stay curious.