For many, a morning doesn’t start until they’ve had a cup of coffee. The hot beverage has become a ritual, in homes and businesses, across the continent. But not just in Africa; the global coffee market is worth an estimated $100 billion and is projected to grow at 4.7% per year up to 2019.
In South Africa, hidden in the hills of the KwaZulu-Natal province, overlooking Port Edward is Beaver Creek Coffee Estate. This is where 10 to 15 tons of coffee is produced annually, on 14 hectares of land. The farm imports a further 35 to 40 tons, with a large portion of that coming from Africa.
“There is a growing demand for the high-end, specialty coffee. People are looking for coffee that is distinct in its character and that they know exactly where it is grown. This region is one of the best to grow coffee in the world, a combination of latitude, altitude, and ocean currents create ideal climatic conditions to produce world-class coffee,” says Dylan Cumming, a farmer, roaster, barista and Managing Director of the Arabica coffee producing family business, Beaver Creek.
Established in 1984 with just four trees, Beaver Creek has gone through three generations. The founders Ed Cumming and Doug Tupper planted the first crop in 1986 and three years later they harvested the first few kilograms of Arabica coffee. Now the farm boasts more than 60,000 trees, and brews R12 million ($915,000) annually.
“People are looking to try coffee from a specific origin which is of high quality in terms of its taste. We grow and harvest from three cultivars – SL28, Catuai and Catimor F6 – with each day’s harvest and cultivar being tracked from field to roast with our lot tracking system,” says Cumming.
Producing coffee is a lengthy process, says Cumming. They collect the fruit from February to October and start selling once the coffee completes the curing process, which includes fermentation, drying, hulling and grading.
Beaver Creek keeps it old school.
“A lot of the equipment that we use is over 50 years old. The technology that was used then is still very efficient. We continue to develop our processes and methods around these machines to maintain the quality that our trees produce,” says Cumming.
The farm supplies retailers and coffee shops around South Africa, as well as exports to countries, such as Japan, the United Kingdom (UK), the United States (US), Denmark and Germany.
Around 800 kilometers down the east coast of South Africa, in Port Elizabeth, is another family business, Masterton’s Coffee and Tea Specialists. The founder of Masterton’s, Ronald John, known as Jock Masterton, was an immigrant from Scotland who came to South Africa in the 1920s. He served as an officer in the Black Watch regiment during the First World War.
According to his grandson, and director of the roastery, Ryler Masterton, a fellow officer from South Africa was the reason for Ronald’s immigration.
“He then worked as assistant manager on the farm Three Rivers in Vereeniging, where he met his wife Marjorie, who at the time was visiting her uncle, the farm manager,” he says.
The couple relocated to his wife’s hometown, Port Elizabeth. In pursuit of being an entrepreneur Ronald went to Sri Lanka [formerly Ceylon] to study tea tasting. When he returned to Port Elizabeth, he opened the first tea and coffee house in the city center. Months later, the roastery moved to where they have been for the last 93 years.
“Both the global and South African coffee industry has grown and developed in leaps and bounds, since we first opened our doors. We like to think of coffee as not just a product, but an experience. Global trends and developing coffee cultures, as people want to know more about coffee, experience greater varieties and enjoy the different experiences, have really been the driving factors in this rapidly growing industry,” says Masterton.
Finding the right blend can make all the difference in these tough economic times.
“Someone once jokingly told me that there are only three consumer items that are recession-proof: alcohol, tobacco and coffee. Although not entirely accurate, we have fortunately found the coffee market to be quite resilient in times of economic hardship. In most cases the consumer is prepared to continue to buy their preferred brand of coffee during these tough times. It seems that the value associated with a good coffee experience can outweigh the financial cost,” he says.
Technology has been the catalyst for change in the industry.
“Aided by the advance in technology and greatly improved supply chains, more people want a good coffee experience, and now have access to it. This has all seen many new entrants to the market in its various sectors, further accelerating the industry’s growth, value and reach, especially over the last 10 years,” he says.
Despite the new technology, Masterton’s continues to roast Arabica coffee using the same process his grandfather used almost 100 years ago.
“We use sight, sound and smell to bring out the best characteristics of every coffee bean, for our customers’ ultimate enjoyment. However, sourcing superior quality green beans is a big part of it. But it’s the roasting process itself that has the biggest impact on the end product, and where experience really comes into play,” says Masterton.
They import green coffee beans using brokers. Currently, Masterton’s has two stores in Port Elizabeth – a roastery and a coffee equipment store, which they also use as a barista training center. Masterton’s has 38 employees and they plan to expand.
Masterton believes the quality of African coffee has improved as the market has increased.
“There most definitely is significant growth potential on the African continent for the many sectors of the coffee industry. We’ve seen an increase in the volumes of green coffee being grown and exported from many African countries, but most importantly here, we’ve also noted an increase in the quality of this coffee,” he says.
“The global development of a coffee culture, with a greater demand for higher quality coffees, has trickled down to the source, with farmers, co-operations and others involved in the supply chain realizing that a quality focused approach can only be beneficial, both financially and reputational, while also boosting their respective countries’ coffee industries, Growth Domestic Production (GDP) and foreign investments received.”
In Africa, there is a growing appetite for good quality coffee.
“This is especially evident in the younger generations and the upwardly mobile, who are viewing a quality coffee experience, high-end coffee shops and boutique retailers as points of interest and social hubs respectively. Organizations, such as the Specialty Coffee Association of Southern Africa, the African Fine Coffees Association, and the East African Fine Coffees Association, are all playing their part in developing the industry, making it more accessible to new entrants and the consumer alike, while inspiring passion within those already involved in the industry. Although there may be the occasional wobble in the market, the trend is positive and Africa has much to look forward to when it comes to great coffee,” he says.
Africa’s coffee exports increased 1.5%, to 22.3 million 60-kilogram bags in 2016 from 22 million bags in 2015, according to Gilberto Biacuana, Research Analyst: Commodities at the Land & Agricultural Development Bank of South Africa.
In 2016, the major African exporters by volume were Uganda (15.9%), Ethiopia (13.5%), Ivory Coast (6.7%), Tanzania (4.1%) and Kenya (3.3%). Uganda exported $371.7 million in roasted or decaffeinated coffee husks and skins, and coffee substitutes. Ethiopia exported $725.4 million.
“The global production of coffee comprises of Arabica and Robusta coffees, which include Colombian milds, Brazilian naturals and other milds. Global coffee production is dominated by Arabica, which accounts for 63% of total global coffee production in 2016/17,” says Biacuana.
Brazil, with 28.8% of volume, and Vietnam, with 23% of volume, were the major global exporters last year. Coffee prices are expected to remain under pressure due to increased output from the two countries.
“Global coffee prices have seen a sustained downward trend since November 2016, influenced by abundant global supplies. With the exception of Robusta coffee, global coffee prices were generally lower compared to a year ago,” says Biacuana.
Coffee production is sensitive to weather patterns, such as drought and frost, which affects the amount and quality of beans produced.
“The 2104 drought in Brazil led to a global shortage 6.4 million 60kg bags, which caused the Arabica futures in the New York Stock Exchange to increase by approximately 50%,” he says.
Consumption however has been rising in countries such as India, China, Latin America and Africa due to the rapid growth of the middle class and the high pace of urbanization.
The International Coffee Organization estimates that the global demand for coffee will increase by 175 million 60kg bags of coffee by 2020.
The next time you are enjoying a cup of coffee, remember that it is a commodity driving growth in Africa.
The Rage And Tears That Tore A Nation
Snapshots of the outrage against foreign nationals and protests against sexual offenders in South Africa in recent weeks, captured by FORBES AFRICA photojournalist Motlabana Monnakgotla.
As the continent’s second-biggest economy, South Africa attracts migrants from the rest of Africa. But mired in its own problems of unemployment and political instability, September saw a serious outbreak of attacks by South Africans on foreign nationals and foreign-owned businesses. And they have been ugly.
The spark that fueled the raging fire was in Pretoria, the country’s capital, when a taxi driver was shot dead by a foreign national who was selling drugs to a youngster in the central business district (CBD).
The altercation caused a riot and the taxi industry brought the CBD to a standstill, blocking intersections. It did not stop there; a week later, about 60 kilometers from the capital in Malvern, a suburb east of the Johannesburg CBD, a hijacked building caught fire, leaving three dead. As emergency services were putting out the fire, the residents took advantage and looted foreign-owned shops and burned car dealerships overnight on Jules Street.
The lootings extended to the CBD and other parts of Johannesburg.
To capture this embarrassing moment in South African history, I visited Katlehong, a township 35 kilometers east of Johannesburg, where the residents blocked roads leading to Sontonga Mall on a mission to loot the mall and the foreign-owned shops therein overnight.
Shop-owners and workers were shocked to wake up to no business.
Mfundo Maljingolo, a worker at Fish And Chips, was among the distressed.
“This thing started last night, people started looting and broke into the mall and did what they wanted to do. I couldn’t go to work today because there’s nothing to do; now, we are not going to get paid. The shop will be losing close to R10,000 ($677) today. It’s messed up,” said Maljingolo.
But South African businesses were affected too.
Among the shops at the mall is Webbers, a clothing and footwear store. Looters could not enter the shop and it was one of the few that escaped the vandalism.
Dineo Nyembe, the store’s manager, said she was in disbelief when she saw people could not enter the mall.
“We got here this morning and the ceiling was wrecked but there was no sign that the shop was entered, everything was just as we left it. Now, we are packing stock back to the warehouse, because we don’t know if they are coming back tonight,” lamented Nyembe, unsure if they would make their daily target or if they would be trading again.
Across the now-wrecked mall are small businesses that were not as fortunate as Webbers, and it was not only the shop-owners that were affected.
Emmanuel Nhlane’s home was robbed even as attackers were looting the shop outside.
“They broke into my house, I was threatened with a petrol bomb and I had to stand outside to give them a chance; they took my fridge, bed, cash and my VHS,” said Nhlane.
Nhlane had rented out his yard to foreign nationals to operate a shop. He does not comprehend why his belongings were taken because he doesn’t own a shop. Now, it means that the unemployed Nhlane will not be getting his monthly rental fee of R3,700 ($250).
Far away, the coastal KwaZulu-Natal province of South Africa, was also affected as trucks burned and a driver was killed because of his nationality. This was part of a logistics and transport industry national strike.
Back in Johannesburg, I visited the car dealerships that were a part of the burning spree on Jules Street.
The streets were still ashy and the air still smoky, two days after the unfortunate turn of events.
Muhamed Haffejee, one of the distraught businessmen there, said: “Currently, we are still not trading.”
Cape Town, in the Western Cape province of South Africa, which hosted the World Economic Forum (WEF) on Africa from September 4 to 6, was also witness to protests by women and girls from all walks of life outside the Cape Town International Convention Centre, demanding that the leadership take action to end the spate of gender-based violence (GBV) in the country.
There were protests also outside Parliament. What set off the nationwide outcry was the shocking rape and murder of Uyinene Mrwetyana, a 19-year-old film and media student at the University of Cape Town, inside a post office by a 42-year-old employee at the post office.
There was anger against the ghastly crimes and wave of GBV in the country that continues unabated. According to Stats SA, there has been a drastic increase of women-based violence in South Africa; sexual offences are up by 4.6%, from 50,108 in 2018 to 52,420 in 2019.
A week later, on a Friday, Sandton, Africa’s richest square mile and one of the biggest economic hubs, was shut down by hundreds of angry women and members of advocacy groups from across Johannesburg. They congregated by the Johannesburg Stock Exchange (JSE), the cynosure of business, singing and chanting, to demand “a 2% levy on profits of all listed entities to help fund the fight against GBV and femicide”.
Among the protesters was Cebi Ngqinanbi, holding a placard that read: “I’m not your punching bag.”
“We came here to disrupt Sandton as the heart of Johannesburg’s economic hub. We want to make everyone aware that women and children are being killed every day in South Africa and they [Sandton] continue with business as usual, sitting in their offices with air-conditioners and the stock exchange whilst people on the ground making them rich are dying. That is why we are here, to speak to those that have economic power,” said Ngqinanbi.
She added that if women can be given economic power, they will be able to fend for themselves and won’t fall prey to abusive men, since most women stay in abusive relationships because men are more financially stable.
Amid the chanting and singing of struggle songs, Nobuhle Ajiti addressed the crowd and shared her own haunting experience as a migrant in South Africa and survivor of GBV. She spoke in isiZulu, a South African language.
“I survived a gang rape; I was thrown out of a moving car and stabbed several times. I survived it, but am I going to survive xenophobia that is looming around in South Africa? Will I able to share my xenophobia story like I can share my GBV story?” questioned Ajiti.
She said as migrants, they did not wake up in the morning and decide to come to South Africa, but because of the hardships faced in their home countries, they were forced to come to what they perceived as the city of opportunities. And as a foreign national, she had to deal with both xenophobia and GBV.
“We experience institutionalized xenophobia in hospitals; we are forced to pay huge amounts for consultation. I am raped and I need medical attention and I am told I need to pay R5,000 ($250).
“As a mere migrant, where am I going to get R5,000? I get abused at home and the police officer would ask me where I’m from because of my accent, I sound Zimbabwean. What does my nationality have to do with my husband beating me at home or with the man that just raped me?” she asked.
Addressing the resolute women outside was the JSE CEO Nicky Newton-King who received the memorandum demanding business take their plight seriously, from a civil society group representing over 70 civil society organizations and individuals.
The list of demands include that at all JSE-listed companies contribute to a fund to resource the National Strategy Plan on GBV and femicide, to be launched in November; transport for employees who work night shifts or work after hours; establish workplace mechanisms to provide support to GBV survivors as part of employee wellness, and prevention programs that help make workplaces safe spaces for all women.
Newton-King assured the protestors she would address their demands in seven days. But a lot can happen in seven days. Will there be more crimes in the meantime? How many more will be raped and killed in South Africa by then?
How LinkedIn Is Looking To Help Close The Ever-Growing Skills Gap
As the job market has evolved, so too have the skills required of seekers. But when 75% of human resources professionals say a skills shortage has made recruiting particularly challenging in recent months, it would appear as though the workforce hasn’t quite kept pace. Now LinkedIn is stepping in to help close the gap.
On Tuesday, the professional social network announced the launch of a “Skills Assessments” tool, through which users can put their knowledge to the test. Those who pass are given the opportunity to display a badge that reads “passed” next to the skill on their profile pages, a validation of sorts that LinkedIn hopes will encourage skills development among its users and help better match potential employees with the right employers.
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“We see an evolving labor market and much more sophistication in how recruiters and hiring managers look for skills. … We also see a changing learning market,” says Hari Srinivasan, senior director of product management at LinkedIn Learning. “The combination of those two made us excited about changing our opportunity marketplace to make the hiring side and the learning side work better together.”
So how exactly does it work? Let’s say a user wants to showcase her proficiency in Microsoft Excel. Rather than simply listing “Excel” in the skills section of her profile, she can take a multiple-choice test to demonstrate the extent to which she is an expert.
If she aces the test, not only will a badge verifying her aptitude will appear on her profile, but she will be more likely to surface in searches by recruiters, who can search for candidates by skill in the same way they might do so by college or employer. If she fails, she can take the test again, but she’ll have to wait a few months—plenty of time to develop her skillset.
The tool has been in beta mode since March, and while just 2 million people have used it—a mere fraction of LinkedIn’s 630 million members—early results seem promising. According to LinkedIn, members who’ve completed skills assessments have been nearly 30% more likely to land jobs than their counterparts who did not take the tests.
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“This has been a really good way for members to represent what they know, what they are good at,” says Emrecan Dogan, LinkedIn group product manager.
While new to LinkedIn, the practice of assessing candidates’ skills has been a standard among hiring managers for decades. But when research commissioned by LinkedIn revealed that 69% of employees feel that skills have become more important to recruiters than education, LinkedIn felt as though this was the time to give job seekers the opportunity to prove themselves from the get-go.
As important as the hard skills that members can put to the test through LinkedIn’s new tool may be, Dawn Fay, senior district president at recruiting firm Robert Half, encourages those on both side of the job search not to forget the importance of soft skills. “You wouldn’t want to rule somebody in or out just based on how they did on one particular skill assessment,” she says.
“Have another data point that you can use, question people about how they did on something and see if it’s something that can feed into the puzzle to find out if somebody is going to be a good fit.”
-Samantha Todd; Forbes
Why The High Number Of Employees Quitting Reveals A Strong Job Market
While recession fears may be looming in the minds of some, new data from the Bureau of Labor Statistics shows that the economy and job market may actually be strengthening.
The quits rate—or the percentage of all employees who quit during a given month—rose to 2.4% in July, according to the BLS’s Jobs Openings and Labor Turnover report, released Tuesday. That translates to 3.6 million people who voluntarily left their jobs in July.
This is the highest the quits rate has been since April 2001, just five months after the Labor Department began tracking it. According to Nick Bunker, an economist at the Indeed Hiring Lab, the quits rate tends to be a reflection of the state of the economy.
“The level of the quits rate really is a sign of how strong the labor market is,” he says. “If you look at the quits rate over time, it really drops quite a bit when the labor market gets weak. During the recession it was quite low, and now it’s picked up.”
The monthly jobs report, released last week, revealed that the economy gained 130,000 jobs in August, which is 20,000 less than expected, and just a few weeks earlier, the BLS issued a correction stating that it had overestimated by 501,000 how many jobs had been added to the market in 2018 and the first quarter of 2019. Yet despite all that, employees still seem to have confidence in the job market.Today In: Leadership
The quits level, according to the BLS, increased in the private sector by 127,000 for July but was little changed in government. Healthcare and social assistance saw an uptick in departures to the tune of 54,000 workers, while the federal government saw a rise of 3,000.
The July quits rate in construction was 2.4%, while the number in trade, professional and business services, and leisure and hospitality were 2.6%, 3.1% and 4.8%, respectively. Bunker of Indeed says that the industries that tend to see the highest rate of departuresare those where pay is relatively low, such as leisure and hospitality. An unknown is whether employees are quitting these jobs to go to a new industry or whether they’re leaving for another job in the same industry. Either could be the case, says Bunker.
In a recently published article on the industries seeing the most worker departures, Bunker attributes the uptick to two factors—the strong labor market and faster wage growth in the industries concerned: “A stronger labor market means employers must fill more openings from the ranks of the already employed, who have to quit their jobs, instead of hiring jobless workers. Similarly, faster wage growth in an industry signals workers that opportunities abound and they might get higher pay by taking a new job.”
Even so, recession fears still dominate headlines. According to Bunker, the data shows that when a recession hits, employers pull back on hiring and workers don’t have the opportunity to find new jobs. Thus, workers feel less confident and are less likely to quit.
“As the labor market gets stronger, there’s more opportunities for workers who already have jobs. So they quit to go to new jobs or they quit in the hopes of getting new jobs again,” Bunker says. He also notes that recession fears may have little to do with the job market, instead stemming from what is happening in the financial markets, international relations or Washington, D.C.
So what does the BLS report say about the job market? “Taking this report as a whole, it’s indicating that the labor market is still quite strong, but then we lost momentum,” Bunker says. While workers are quitting their jobs, he says that employers are pulling back on the pace at which they’re adding jobs. “While things are quite good right now and workers are taking advantage of that,” he notes, “those opportunities moving forward might be fewer and fewer if the trend keeps up.”
-Samantha Todd; Forbes
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