How World War I Led the United States to its Love of Coffee


In the early 20th Century, the coffee business was a booming industry. South American coffee growers exported all they could produce of their high quality coffee beans to a population of ardent European coffee drinkers. Just prior to World War I, the ports of Hamburg, Havre, Antwerp and Amsterdam annually received shipment of fully one-half of the world's

supply of coffee. European importers exploited their economic power over Latin American growers, and the finest beans were their reward, leaving lessor grade beans for the then small US market.

All this was to change forever with 1914's outbreak of World War I.

In South and Central America, coffee growers were faced with a double whammy. On one hand, European shipping ground to a halt, with the shipping of nonessential products, such as coffee beans, almost nonexistent (and with a British blockade preventing shipping to Germany), resulting in lower and lower prices, while on the other hand, the costs of processing equipment precipitously rose. Thus, the producers of the world's finest coffees needed new consumers for their product. US shippers, importers, coffee connoisseurs, the New York Coffee Exchange, and of course New York bankers, were all happy to oblige.

US Banks established branches in Brazil, Cuba, Argentina, Uruguay, and other Latin American countries. Ships that had never before held coffee beans as their cargo were enlisted. With declining coffee prices as the catalyst to growers seeking out new markets on a grand scale, middle and lower class American consumers were presented with new choices of premium coffees, with quality and flavors previously available, if at all, only to the wealthy. Americans ate, uh, drank, it up. It was not long before California replaced Germany as the world's number one purchaser of Guatemalan coffee.

So much coffee flowed into the US that by the later years of World War I, coffee was being extensively re-exported by US concerns to Europe. In one two-year period, the amount of yearly US coffee re-exports increased from four million pounds to one billion pounds.

The US entry into WW I also saw the need to provide troops with coffee. At first, roasted beans were shipped with other foodstuffs, and soldiers were provided a watered-down unpleasant beverage that included the frequent reuse of coffee grounds. Eventually, the
military learned that small unroasted beans could be shipped more economically, and fresh beans and roasters were later provided to troop installations, producing quality brewed coffee.

Growing US influence in many Latin American coffee producing countries took many interesting turns. It has been reported that massive US coffee bean purchases were a factor in influencing Brazil to enter the War against Germany, and in Guatemala, where German companies owned 10% of the coffee plantations, but produced 40% of the country's coffee crop, US economic clout influenced the government to consider such plantations "enemy property" and place them under the supervision of an American.

As the war neared its end, and as cotton speculators began entering the coffee market, all resulting in coffee prices rising higher and higher, the Hoover administration determined that a price freeze was in order. Leaders of the coffee trade implored the President that such an action would be the ruination of the coffee industry. The freeze was put in effect, but as we are aware, the coffee industry has prospered with the beverage in all its forms becoming more and more popular year after year.

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