Oscar Wilde once said, "A cynic is someone who knows the price of everything and the value of nothing."
If he was right, the supermarket aisles of America are probably crowded with coffee-drinking "cynics" right now.
Reuters is reporting that many of America's major brands have been quietly tweaking their coffee blends. While most coffee companies consider their blends trade secrets, and are loath to disclose exactly what goes into them, both circumstantial and direct evidence suggests they're now substituting lower-grade Robusta beans for some of their pricier Arabica, and degrading the quality of our coffee.
Here's What's Brewing
Research out of agricultural bank Rabobank confirms that demand for Arabica beans among coffee buyers "has fallen 27% year-to-date, while Robusta [demand] is 25% higher." This seems to confirm a widespread alteration of the bean mix.
At least one coffee roaster has admitted it. In November, Massimo Zanetti USA, which roasts for both Chock full o'Nuts and Hills Bros., publicly confirmed upping its Robusta usage by 25% this year.
Why the switcheroo? Prepare to not be shocked. The answer is: price.
Last year, a shortage of Arabica caused prices of the premium bean to spike as high as $3 a pound -- $2 more than what a pound of Robusta would cost. This compares to a five-year historical trend of Arabica costing closer to 70 cents more than Robusta. In recent weeks, the trend has reversed, with Arabica prices falling to just a 62-cent premium over Robusta.
What's It Mean to You?
If you're a coffee purist, then this all probably sounds like dirty pool.
The Bitter Truth About Why Your Coffee Isn't Tasting as Good Lately
Organic brands Cascadian Farm and Muir Glen may make you think "small." Don't they both sound kind of pastoral, the sort of products that might come from family farms? Think again: Both brands are owned by food giant General Mills (move over, Betty).
Vans footwear calls forth images of rebellious skater youth, not to mention some musical credibility, given its frequent sponsorship of the annual Warped Tour. However, it may lose a few counterculture points given it's owned by brand giant VF Corporation (VFC), which also owns Timberland, SmartWool, 7 for All Mankind, Lee, and Wrangler, to name just a few.
In Maine circa 1970, a guy named Tom and his partner Kate dreamed up a whole slew of natural products for folks who, like them, yearned to simplify their lives. Certainly some of Tom's customers really wanted to stick it to The Man and all his chemical-laden merchandise, too. In 2006, consumer giant Colgate-Palmolive (CL) acquired Tom's of Maine. But let's face it: Tom's of Colgate-Palmolive just doesn't have the same ring.
Trader Joe's products always give a mysterious, boutique sort of feel, like some remarkable merchant named Joe has gone all over the world picking out exotic goods to stock the shelves. It's a nice thought, but in 2010 Fortune magazine revealed that some of Trader Joe's store brands are actually made by big companies like PepsiCo's (PEP) Frito-Lay. Incidentally, Trader Joe's is owned by Germany's Albrecht family, which also owns the Aldi Sud global supermarket chain. (U.S. Aldi supermarkets are owned by a different part of the same family.)
Morningstar Farms may sound like it should be just up a country road from Cascadian Farm, but the veggie-burger maker is owned by Kellogg (K). Who knows if Tony the Tiger participates in "Meatless Mondays" after a hearty breakfast of Kellogg's Frosted Flakes? Meanwhile, Kashi might make a lot of people want to don their tie-dyes and grab handfuls of granola, but it also happens to be a Kellogg subsidiary.
The fact that many brands boast counter-cultural appeal but are actually parts of huge conglomerates isn't necessarily awful. For example, Kashi says it's still run independently in La Jolla, Calif., according to its original business philosophy. In fact, it says its mission expanded in 2000 "with a little help from a friend." (Kellogg's one heck of a big friend, that's for sure.)
Likewise, Tom's of Maine still claims to be holding true to its original all-natural mission, despite Colgate-Palmolive's involvement. On the Tom's website, it claims, "Our simple, direct approach hasn't changed one bit: we listen to what our customers want (and don't want) in their products, we learn how it can be done, and we respond with effective natural (and sustainable) solutions."
Still, from the consumer viewpoint, it's always good to know a little bit more about what you're purchasing -- and putting in or on your body -- and from whom. Your dollars equal support, after all. Betty Crocker never had a choice as to which products she'd purchase (she was obviously a General Mills gal all the way!), but American shoppers do.
But really, all the coffee companies are doing is trying to match demand for their product with a price people are willing to pay. And already, mainstream coffee brands such as Kraft's (KFT) Maxwell House and J.M. Smucker's (SJM) Folgers have responded to falling coffee prices by lowering the prices they charge consumers.
When you get right down to it, if there's more Robusta in our coffee but people still find it drinkable, and the coffee's getting a bit cheaper in consequence, where's the harm?
Motley Fool contributor Rich Smith holds no position in any company mentioned. The Motley Fool owns shares of Starbucks. Motley Fool newsletter services have recommended buying shares of Starbucks. Motley Fool newsletter services have recommended writing covered calls on Starbucks.