You're listening to Bloomberg BusinessWeek with Carol Messer and Tim Stenebek on Bloomberg Radio. You the cream in my coffee?
You saw it in little talking about coffee. A little bit of news. First, Arabica coffee futures jumping to the highest June traders looking closely at the issue of declining exchange inventories to him, which were at the lowest since nineteen ninety nine. Basically kind of supplied ament.
What were you going to say, I was going to say Arabica or what's the other being? Robusto Robusta.
We have an expert in the house.
Yeah, that voice you're hearing Elie Cafe chairman Andrea e Lee, the grandson of Eli founder Francesco Ely, who started the coffee company ninety years ago in Italy. By the way, if you had any sort of espresso drink today, you can thank Andrea's grandfather because he invented the steam driven coffee maker that we now know as espresso machines. Andrea joins us here in the Bloomberg Interactive Brokers studio.
How are you very well pleased to be here?
What was it like growing up with that history?
Oh? I felt it was coffee was at the center of the universe because my father, as I am, was a chemist, always thinking and talking about coffee, and he started drinking coffee, sipping, let's say, coffee, when I was two and a half years old, and since then all this coffee, coffee, coffee, cofee, coffeeffee.
So there's no it's not two is not too young to drink coffee.
No, it was just sipping, you know, admiring my mother, you know, trying to prepare express with these little, tiny express machines at home at the time, no capsules that were still existing, because we started the very first capsule portionate fifteen years later than that, in order to you know, make it easier to produce coffee everywhere in the restaurants or offices or home. But before that it was quite difficult.
You needed to be a trained barrista. But in this case you need to have a cumbersome a big machine at home. Was very difficult. So and my father I nicknamed her the Engineer of Coffee, you know, was a precursor to this, you know, expertise in home express of brewing.
So Andrea, how comes is there's so many bad cups of coffee out there, Like, what is the difference? Like we were talking, we talk about it of it sometimes, don't.
Go there, You're going to get fired. I'm going to get fired.
But why is it that you can have what makes a great cup of coffee?
Well, you need good beans, first of all, and it's difficult to access them, just to tell you. In order to access to good beans with this pioneered the direct source thing in nineteen ninety one. So we did organize ourselves to go direct, working hand in hand with coffee growers. And the second major step has been creating the University of Coffee in order to transfer knowledge to them how
to elevate their agronomical practices for better sustainable quality. And this is the reason why we had this award that we are giving tomorrow to the best growers of the nine let's say origins where we use coffee from. But producing high quality coffee is not an easy job. So direct Trading, University of Coffee Electronics sorting out every single bean. This has been one of our patents, sorting every single bean, because one defective being can spoil up to one keil
of coffee. You know, this is an amazing let's say science behind and this is the reason why I'm second generation scientist chemist coffee for coffee.
How often do you find a bad being that could spoil an entire kilo of coffee? Like, how what is the rate of a bad being within a badge?
So at the time we started sorting, it was maybe two three percent. Now is less than half a percent. Also because in the meantime we did improve substantially agronomical practices. But you know, some of these defective beans could be invisible because maybe they have some off flavors that you cannot that you cannot find, So it can still happen. But if everything is well processed consistently, then you can
prevent that. But this is not the standard in the industry because the coffee growers produced for us are specifically produced for us. We buy coffee upon our own standards. Coffee growers like to joke about that ELI coffee doesn't exist because it doesn't course to any official market standard.
And this is the reason why we also pay a substantial premium for that, because on average we pay thirty percent premium on top of the best highest coffee prices in order to motivate them and reward them for the extra effort for producing superior quality.
Is it harder to grow better coffee beans?
It is harder. You need the right people. This is why direct sourcing because we need to really get access to the people who are, let's say, philosophically seeking the best in life. No matter how rich or how educated they are, there are some people like that. You need to find the perfect ecosystem, you know, weather, soil, like the turd war. They time exactly exactly the same. You need to find the right cultivar, so the right plant.
Not all coffee varieties are as good. And finally, you need those people to process coffee in a way which is perfect. So yes, it takes. It takes quite an.
Effort and increasingly sustainable, which when you talk about standards. I want to talk a little bit about this award that is being given at the United Nations, the unesto ELI International Coffee Award. It is to the individual, the farmer that produce the most sustainable coffee. And what's interesting is that we're having this conversation. I've talked with the folks over at ab and BEV like they understand the importance of water, like their business will not continue unless
they have great access to water and other things. Obviously crops that go into beverages. Same thing for you guys, right in terms of the impact on the environment, Yes, your businesses, you need to make sure it's done in a sustainable way.
So yes, the award is for the best sustainable quality in the company was born ninety years ago upon my grandfather dreamed to offer the greatest coffee, and so as a strategy we decided to have only one, because the greatest can be only one, right, and of course the greatest need only need must only not only be the best in taste, but also the best in how it is produced. Actually, as a matter of facts, sustainability and quality are two phases of the same coin. You don't
have the one without the others. So it's not difficult for us to kind of, let's say, find find a way. And this award, this blend that we produce is made of nine origins because each origin has a different aroma profile. It's like having a nice orchestra, and the more instruments
you have, the richest the orchestra. Okay, so nine and the three best growers of each of the nine origins are awarded tomorrow at the United Nations, so they would know who's the first, second, and third and go back home with an extreme satisfaction and being completely boosted motivation wise, etc. Which is also helping them to sell the rest of the coffee. They don't sell too early to the rest
of the market at premiums. So the company Eli Cafe has been a knowledge in many countries for having contributed to transform the coffee industry in a let's say, more sustainable way, and this is we are very proud of.
We're here with Eli Cafe Chairman Andrea Ely, of course, the grandson of the founder of the company started some ninety years ago in Italy. Here in Urbenberg Interactive Brokers Studio. I want to pull John Tucker in because he's normally in the wee hours of the morning drinking a lot of coffee and you're listening to our conversation and I wonder if you have a.
You know, the beans that we get, there's a whole lineup and it's fantastic they do this for us. Among them Jamaican Gourmet, there's the Rwandan high altitude coffee bean. And just from your perspective, what do you suppose is the best coffee bean that is out there.
And there is no such thing as the best what's your favorite? Ruanda that you mentioned has been an award winning coffee at our nesto Ili Coffee Award. And amazingly, because there are two awards, one is the let's say, best of the best, which is chosen by an independent jur of very sophisticated you know, coffee tasters, and the other is the so called coffee over choice, let's say, selected by coffee people in the street, you know, in
the coffee shops. And the Wanda coffee was a lady who started a little cooperative won both awards at the same time. Quite unique, it's quite amazing. You can't want one that's similar to Ethiopian coffee. This is the plateau in Echiopy where coffee was born. Is still considered to be one of the refined, most refined coffee, but not the only one.
Can you train us how to make a good cup of No, I'm serious. You can't have a YouTube video or something like that out there. How to make it depends if.
You if the preparation, if you want to be an expert in expresso preparation, or.
American simple American American coffee.
Well, I typically use a V sixty or a brewer or chemics with the special filters. Then you look like, don't don't boil the water. Make it one seventy five or something like that, not too hot, because otherwise you burn the coffee. And then rinse the filter before and in order to get remove this flavor of the filter. And then you do you gently, you gently pour your water on top of the coffee, and you will get a nice coffee. Don't worry.
I have a Camex, I have a Harriov sixty. Come on over my place. I'll make you a great cup.
Of cor Bring it all.
It's fine, I'll bring it all in. It's also the grind of the beans matters a lot.
It matters, but less so for filter coffee, very much so for expresso coffee, because espresso is critical. It's the same time a solution, a little colloidal suspension of these tiny oil droplets which makes the coffee so flavory and so smooth. And then it's also an emulsion with a cream at topping the coffee. This is more critical to get and you need a really perfection. Also in the grind.
Can you talk a little bit about transporting the coffee after it's roasted to its final destination, because my understanding is you need to have fresh beans. How do you keep beans fresh if they're roasted in Italy in santainis This.
Is an interesting question for us because yes, you either have a coffee freshly roasted, or like we do, you have aged coffee. Because our technology is to pressurize coffee, which not only preserves under pressure and no air, so no oxygen which could oxidize the aroma. You preserve the fragrance, but then you enhance the aroma of coffee because you could ate it like it would be a precious wine.
So that means that our age coffee is more complex, richer and elegant in terms of aroma profile compared to a freshly roasted wine. But this is unique to Illy, okay, and we can make it only thanks to these tins, which are basically a kind of a flavor lock, you know, a kind of a locker of flavors instead of just a container. Otherwise you could use a simple bag.
All right, now, I want a cup of coffee. I want to get to climate change and the impact it has had on farmers who grow coffee beers.
Yeah, coffee growing coffee agriculture is very, very sensitive to climate conditions. Do you have narrow conditions to grow coffee in terms of temperature and rain? And as a consequence of climate change, up to fifty percent of the currently suitable land will be gone by twenty fifty. Already there are some countries which are gradually exiting the market. There's a consequence of climate change, so we have to adapt as quickly as possible. And in order to adapt, there
are three sequential actions to be done. First, improving the agronomical practices transitioning regenerative agriculture seems to be the most promising one, and then we can talk about reginative agriculture. Second most important move is rejuvenating the plantation themselves with younger plants, but also plants made of new varieties which are more resist resistant to the adverse conditions caused by
climate change. And only if these two first initiatives are not enough, then you can consider moving migrating the plantation to higher latitudes or higher altitudes where you can meet milder climates. But start with the regenerative agriculture and We.
Only have about a minute left. Just a real quick question, Now, where are most of your beans coming from.
Most of the beans come from Brazil because they are better for expresso coffice, high body and rich, but also because Brazil is such a large producing country. Regenerative agriculture is important because it's based on enriching the soil, nourishing the soil with a organic carbon. So not only it's a quested carbon in the soil, but it nourishes the soil microbiolta, which is good for fertility, which is good for protecting against pathogens which might let's say damage the crop.
And it makes the coffee production reed get rid of most of the agrochemicals that you use, So that means that you also have a benefit not only regenerative for the environment, but also benefit for health because you have less residues from ago chemicals.
We only have thirty seconds left. But earlier this year, the CEO of the company said that there's going to be an IPO in twenty twenty six, And you're still thinking about that.
Yes, I think I know that this is the trajectory, let's say the road map. Okay, so twenty six is still far away they find that decision needs to be made. Of course, as you know better than me, will depend on the market condition at that time, so we shall be flexible about the timing. But this is the goal, this is the.
Goal, just real quickly. Do you ever drink tea?
Sometimes? Absolutely? Sometimes, but there's the occasionally put.
Some Bailey's in the coffee, Bailey's Irish scream at natty irishman. You ever have that?
Andrea, what a pleasure, thank you, so I appreciate it. Andrea Ely, of course, chairman of Eli Cafe here in studio,