The Tea & Coffee Trade Journal: September 1998
By Larry Luxner
HELSINKI -- In the world of trivia, Finland is known for three things: 43 of every 100 Finns have mobile phones, giving their sparsely inhabited Nordic country the highest cellular penetration rate in the world. Secondly, the sauna -- itself a Finnish word -- is such an integral part of life here that there's one sauna for every 4.5 people.
Finally, the Finns are the world's most voracious coffee-drinkers. Per-capita consumption here stands at an astonishing 10.5 kilograms (23.1 lbs.) of roasted coffee and 13 kilos (28.6 lbs.) of green coffee a year -- putting the country well ahead of Sweden, Norway, Denmark, Holland, Austria, Germany and the United States.
"We are very heavy coffee drinkers," confirms Raimo Varsa, purchasing manager at Meira Oy, one of Finland's leading roasters. "Some people say it's the cold climate. I don't know. We have had very strict alcohol policies. In older days, people didn't have wine or whiskey at home, so when you had a visitor, coffee and cake were served. One reason may be the high quality. Coffee is very good here, not like in the States, where coffee quality went down and consumption dropped."
Bertel Paulig, chief executive of the Paulig Group, couldn't agree more.
"There are a number of reasons why coffee consumption is so high here," he tells The Tea & Coffee Trade Journal. "Clearly, one is quality. It's a very light roast, with a high acidity. Traditionally, roasters in Finland buy the best-quality arabica. Secondly, coffee has become the national social drink wherever you go, whether to visit friends, or for a drink or after church on Sundays."
Adds Robert Paulig, president of Robert's Coffee and a distant cousin of Bertel's: "It's due to the Finnish nature. Coffee is a social drink, and coffee and liquor go well together. Finns are not talkative, and coffee helps."
Whatever the reason, everyone agrees that coffee is firmly rooted in Finnish tradition. Historians say Finns began drinking coffee during Europe's wars against the Turks, when Finland's mounted infantry assisted the Swedish monarch's forces in Southern Europe during the Thirty Years' War and brought their acquired coffee tastes back home.
Ironically, coffee was prohibited twice during the 18th century, because it was considered a drain on the local economy. But the beverage's lure proved too strong, and the edicts never lasted for more than 20 years at a time.
Anders Byström, mayor of Helsinki from 1789 to 1794, is considered one of Finland's coffee pioneers. He ran a coffee house at Fort Sveaborg, mainly for officers. In 1876, businessman Gustav Paulig -- originally from Lubeck, Germany -- established his own importing company. The two coffee families, Byström and Paulig, went into business together, and in 1904, Paulig opened Scandinavia's first roastery in Helsinki.
Bertel Paulig says that from 1919 to 1931, alcoholic beverages were strictly prohibited, further encouraging the consumption of coffee. Today, Finland imports over one million 60-kilo bags a year, most of it transshipped via Hamburg to the port of Helsinki, on the Baltic Sea.
According to Jon Thorn's The Coffee Companion, Finnish roasters import only washed arabica beans. The supply comes from Colombia (40%), Brazil (20%), Costa Rica, Guatemala, Nicaragua and Mexico (20-25%) and Kenya (10-15%).
Finland's biggest roaster by far is the Paulig Group, which has a 45% share of the country's $400 million retail coffee market. The second-biggest is Meira Oy, which has a 27% share, followed by Kesko's Viking Coffee AB, with an estimated 26%.
The remaining 2% of the pie is split by smaller companies such as Peter's Coffee Roastery, which offers its own Helsinki Blend. An employee at a Peter's Coffee Roastery stall in the city's famous waterfront market claims that this blend -- consisting of Guatemalan, Colombian and Ethiopian beans -- was served at the 1996 Helsinki Summit between President Clinton and Russian leader Boris Yeltsin. A 250-gram sack of the exotic beans costs FIM 34, nearly $12 a pound at exchange rates.
Regular blended coffee, of course, is a lot more affordable -- even in outrageously expensive Finland.
"In the retail market, coffee is the single most important loss leader," says Paulig, whose company employs 500 people at a kahvipaahtimo, or coffee roastery, on the industrial outskirts of Helsinki. Adds Meira's Varsa: "Coffee is very cheap in Finland, especially if you take into consideration the high quality. For many years, the price for roasting coffee was cheaper in Finland than other Western European countries."
Meira is a subsidiary of the Inex Group, which in turn is half-owned by SOK, one of Finland's largest grocery chains, and half by Tradeka Group, which established a coffee plant in 1926. Last year, Meira reported coffee sales of FIM 415 million ($79.8 million); total roasted and ground coffee production came to 13 million kilos.
The company, which is also Finland's largest herb and spice importer, employs 80 people, including 45 factory workers. It offers three major coffee products, Kulta Katrina (58% of total production), Saludo (18%), Aromi Mokka (13%), Café Arome (10%) and Café Nova (1%). Retail prices at local shops are around FIM 36 per kilo ($3.15 a pound).
In addition to local consumption, Finland also exports about four million kilos of roasted coffee a year to Sweden, and about two million kilos to Estonia. Smaller exports go to Russia, Norway, Latvia and Canada.
"All coffees in Scandinavia are blends," says Paulig. "Therefore we have to make our quality assessments by continuous cupping, making blends every day."
The coffee boom is no doubt fueled by Helsinki's burgeoning café scene. During the Cold War, Finland -- forced by geography to walk a delicate tightrope between the Eastern and Western blocs -- was one of the world's biggest spy dens. A reminder of this mistrustful period can be found at Helsinki's downtown Hotel Torni, where a plaque in the lobby notes that this tall building once served as the headquarters of the notorious Soviet control commissioner, Andrey Zhdanov. Nearby is the famous Fazer Café, also a Cold War relic. In fact, many espionage movies, from Gorky Park to White Nights, were filmed in Helsinki because of that city's preponderance of Russian architecture.
Today, the KGB men are gone. Instead, hordes of Russian-speaking tourists now flock to Helsinki's department stores and hotels for a weekend of shopping and relaxation. Other factors include Finland's 1994 decision to join the European Union -- sparking interest in all things European -- and the loosening of once-strict liquor laws that now allow tourists and locals alike to imbibe coffee and vodka under the same roof.
According to Helsinki Happens, a local tourist-oriented magazine, Finland's capital city now has at least 35 cafés, ranging from lavish café-bistros like the two-story Café Strindberg, which features both a full-service café and a gourmet restaurants, to more traditional places like the grand Café Ekberg, on Bulevardi, and Café Engel, a popular student hangout on Senate Square.
Helsinki -- whose 515,000 inhabitants pride themselves on having one of the safest and cleanest capital cities of Europe -- now boasts theme-based establishments as well, such as the Café Camera on Tunturikatu, for photography buffs.
"As anyone who has recently tried to find a table at the half-dozen cafés which now line Esplanadi, Helsinki's answer to the Champs Elysé, can attest, they are all busy," says the magazine. "After years of hanging in, Helsinkians are hanging out with a vengeance."
But all is not well in the industry, warns Robert Paulig. As people go out for coffee more and more, they're drinking less of it at home.
"This is the second year with a declining coffee market in Finland and Sweden," he said during an interview at his roastery-café-restaurant outlet on Kanavakatu, a quaint little street along the Helsinki waterfront. "The fact is, like in Germany, they're competing so hard against each other that quality is going down. You spoil the image of coffee when prices come down. In the long run, there's no free lunch. I'm very concerned that this will reduce consumption even more."
Paulig adds: "The market for drinking at home is declining, while the market for drinking outside is rising. These new blends and varitieis aren't available at home. We see it in Germany, in the United States and in Scandinavia that fighting over prices is very dangerous for the industry. Nobody's making money in the industry right now."
Varsa agrees, though he blames demographics rather than a drop in quality. "Heavy coffee drinkers are mainly older people. The younger people have so many other choices."
At Robert's Coffee Garden, it's hard not to notice Robert Paulig's picture on everything -- from promotional literature to a large colorful mural on the wall. Among the dozens of exotically packaged brands are Café Brutal, Café Oriental Cardamom and, of course, Espresso Roberto. Paulig even has a site on the Internet dedicated to himself and his company, established in 1989.
"Before I started, there was a poor assortment here," says the publicity-conscious owner, who claims to sell 40 varieties of coffee and 60 varieties of tea in his shops. "You could buy only very similar coffees. If you went into a shop and said you wanted Guatemalan, Colombian and Hawaiian coffee, they'd just look at you. I wanted to show people that coffees taste differently by roasting and preparing."
Today, Robert's Coffee has 30 outlets in Finland and Sweden, and an estimated 300 points of sale. "We are the Starbucks of Scandinavia. We sell coffee at the best places in town," he brags. "Nobody else has this range of products."
The 51-year-old entrepreneur adds that "in Finland, ordinary coffee is light-roasted. But in my opinion, it's too acid. I roast all my coffees a little darker. If you go to Stockholm, 90% of the coffees served are espresso, while in the countryside, it's 100% ordinary coffee. Espresso is getting more and more popular throughout Scandinavia. I think this is the way to get people into coffee."