CRITICAL NEWS (…and how to use it)

John Henshell internal communications sample: mixture of journalism and marketing strategy

THE BIG CHILL IN BRAZIL

Unusual weather in Brazil is leading to continuing green coffee price increases. Green coffee prices rose 58% in the week following sub-freezing temperatures the weekend of June 26 and 27 (Brazil briefly halted exports, then began exporting at much higher prices). Green coffee traded at a slightly lower level the following week; the market did not fluctuate significantly because of concern about continuing cold, early winter weather, and uncertainty about how much of the crop was damaged. More sub-freezing temperatures this past weekend (July 9 and 10) compounded the problem. Danny Raymond reports that up to a third of the crop was probably damaged by the first freezes, and each subsequent freeze destroys more coffee. The coffee trees don’t blossom until September, and Danny anticipates continued speculation in the market until then. He says optimistic, pessimistic, and realistic views are all prevalent among professional buyers and speculators.

Brazil has not experienced temperatures below 32° since 1975. After the 1975 freeze, many growers moved their operations further north (closer to the equator) to prevent another freeze, which shows how unusual the current conditions are. The 1994 freezes appear to be as severe as the 1975 freeze and 1985 drought.

All coffee roasters are affected by the current, uncertain market conditions. Brazil’s bad weather is compounding the already expected shortfall of good quality coffees.

Danny and Sales and Marketing managers met July 6 to review the facts and discuss options. More price increases to our customers are inevitable. The managers are currently determining how much and when we will have to increase prices.

Boyd Coffee Company may have some competitive advantages due to the market conditions in the coming months. Danny has assured that we will get the coffees we need to continue our full line at its present high qualify. Some of our competitors may alter their coffees to compensate for the coffees they can’t get. Some may raise other prices to limit their coffee price increases. Your awareness of these factors may help you retain and add business. Continue to sell Boyds coffee based on its quality. Market conditions are changing rapidly. Your customers have already read or heard the story about Brazil’s cold winter, you can demonstrate your expertise by sharing the “inside story.”