Thursday, May 05, 2011

5,000 to 5 and back to 5,000 in 100 years.

In 1900 there were about 5,000 coffee roasters in the US. By 1960 that number had shrunk to five. Now there are about 5,000 again.

Interestingly, this phenomenon has occurred in a number of industries with a number of products. In a relatively new industry there are a large number of players producing a wide variety of products. Eventually the weak die off and the strongest survive and buy up others and consolidate.

This monopoly or oligopoly can go on for years or decades as quality declines, before the quality and lack of choice becomes so bad that independents begin to spring up.

The public then recognizes that they no longer have to settle for the low quality of the mass producers as more and more small high quality producers spring up.

Everybody wins except the old oversized oligopoly who now must try to learn from the new smaller competitors. In many cases they never learn and die themselves.

In the past one hundred years this has happened not only to coffee, but beer, recorded music, the movie industry, television programming, musical instruments, to some degree automobiles, and I am sure many other products.

The bottom line: if you want to encourage quality products, buy from the independent companies; buy your music direct from the musicians; and drink locally roasted coffee and locally brewed beer.