Thursday, 26 September 2024

The phases of coffee roasting

Coffee roasting happens in several distinct phases, each marked by chemical and physical changes in the beans that shape the flavor, aroma, and color of the final coffee. 

We have two main things to control: Time & Temperature.
We also need to monitor the rates of rise (steepness of the time/temp curve) during roasting .
Each phase will have a target time, temperature and rate of rise (ROR).

It's important to note events like when the colours of the beans change,
when they start to change their smell (things like bread or sweetness) or when we reach first crack, etc.
It's helpful if you write down the temperatures (every 30 secs).

While terminology can vary slightly among roasters, here are the main phases commonly recognized:

Notice that the ROR tends to descend as we progress through the different phases.
That is the ROR gradient for the browning phase is gentler than the drying phase.

☕ 1. Drying Phase (Endothermic)

Temperature range: ~100°C–160°C (212°F–320°F)
Duration: 4–8 minutes (depending on roast profile)
Green coffee starts with about 10–12% moisture.
Heat is applied to evaporate this water without burning the beans.
Beans turn from green to a light yellow and begin to smell grassy or hay-like.
The roasting environment absorbs energy (endothermic process).

Goal: Properly remove moisture to prepare beans for chemical reactions in later stages.
Don't rush this phase or the inside of the bean may not get evenly dried 

🌾 2. Maillard Reaction Phase (Browning Phase)

Temperature range: ~160°C–190°C (320°F–375°F)
Sugars and amino acids react (the Maillard reaction), creating brown pigments and complex flavor precursors. 
The bean color deepens from yellow to light brown.
Caramelization and sweetness actually start to develop  when beans turn yellow.
Caramelization = applying heat to the natural sugars inside the coffee beans to bring out sweetness.
Amino acids are what give acidity when they are heated.
Aromas shift from grassy to toasty, nutty, and bread-like.
Internal bean pressure starts building as gases (CO₂, water vapor) form.

Goal: Develop the foundational flavors and aromas that define the coffee’s character.
Timing this phase is very important ... its must not be too fast or too slow.
Too Fast:
It is important not to rush this phase or the coffee can turn out too bitter or tart.
Or if this phase is rushed, the caramelization or acidity may not form.
Too Slow:
The chemical reactions become muted and we loose acidity ... we end with a bitter/flat/baked coffee


🌋 3. First Crack (Exothermic)

Temperature range: ~196°C–205°C (385°F–400°F)
Internal pressure causes the beans to crack open audibly.
This marks the transition from endothermic to exothermic — the beans release energy.
The coffee expands in size, and oils may begin to migrate toward the surface.

Goal: Achieve the first clear milestone of roast development — suitable for light roasts.

🌑 4. Development Phase (Roast Development Phase)

Temperature range: ~205°C–220°C (400°F–430°F)
After the first crack, the roast can be stopped or continued depending on desired profile.
Caramelization and pyrolysis intensify, creating sweetness, body, and deeper flavor.
Roasters control time here carefully to balance acidity, sweetness, and bitterness.
The longer you go into this stage, the less sweet and acidity you will get and the more bitter your coffee will be. 
The longer this stage , the more you are roasting out the sweetness & acidity.
Goal: Fine-tune the flavor — too short can taste sour/undeveloped; too long can taste bitter or smoky.
Here you can balance acidity (the fruit bomb) or sweetness

🔥 5. Second Crack (Optional – for Dark Roasts)

Temperature range: ~224°C–230°C (435°F–446°F)
Beans crack again (softer and quieter).
Cell structure breaks down, and oils appear on the surface.
Flavors become darker, more roasted, with smoky or even burnt notes if pushed too far.

Goal: Produce darker roasts such as French or Italian — bold, less acidic, more bitter.

⚙️ 6. Cooling Phase

Immediately after roasting
Beans are rapidly cooled (usually by air or water) to stop further roasting.
Proper cooling locks in the developed flavors and prevents over-roasting.
Would you like me to include a temperature/time curve diagram showing these phases visually? It’s a great way to see how roast development progresses.


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Roasting with sight and smell
Things to watch for if you are roasting without any temp probes:


Track the progression of the roast by looking at the bean colour.
We start with a dark green shade.
When it gets to the drying stage it changes to a yellow.
When the beans go "full yellow" we have reached the end of the drying phase.
When the beans are green you often smell "wet grass". 
As they dry you smell "dry grass". You will often smell "sweetness".
The next stage is the browning stage. You will smell "baked goods", like biscuits straight from the oven.
You will also see that the beans are larger in size. They swell as they dry.
So they should occupy more "height" or volume in your roaster.
The beans are also lighter, so they should be thrown higher in the roasting chamber.
We are approaching 1st crack. You might smell vinegar/ acid.
If you like fruity, citrus, floral notes drop the coffee just after 1st crack.
If you like more chocolate, caramel, sweet notes, continue roasting.
You should see the bean mass really moving as they are much lighter 

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Friday, 20 September 2024

Peru coffee growing regions

Peru's main coffee-growing regions are its northern, central, and southern highlands, each producing unique flavor profiles due to varying altitudes and climates.
Notable areas include Amazonas, Cajamarca, and San Martín in the north; Junín (Chanchamayo) in the central region; and Cusco and Puno in the south. These regions produce a range of Arabica coffees, from mild and nutty to fruity and complex, with high-altitude beans often showing brighter acidity. 

Northern Highlands
Regions: Amazonas, Cajamarca, and San Martín.
Characteristics: Situated on the eastern slopes of the Andes, this region features a mix of jungle and mountain geography.
Flavor Profile: Cajamarca is known for its bright acidity and clean cup, while the Amazon region is noted for fruity and tropical notes and a fuller body. 

Central Highlands
Regions: Junín, particularly the Chanchamayo and Satipo provinces.
Characteristics: Located in the central Andes, coffee is grown at elevations typically ranging from 900 to 1,800 meters.
Flavor Profile: Often produces balanced, smooth coffees with mild acidity and nutty or chocolatey notes. High-altitude beans can be more fruity with intense acidity and a creamy body.
 
Southern Highlands
Regions: Cusco, Ayacucho, and Puno.
Characteristics: This area is known for its specialty coffee production, benefiting from rich soils and unique microclimates.
Flavor Profile: Coffees from this region can have bold, earthy flavors and nutty tastes, often with mild acidity due to the higher altitudes. 

Wednesday, 18 September 2024

Sumatra (Indonesia)

 Coffee from Sumatra (an island in western Indonesia) is famous in the specialty coffee world for its distinctive flavor profile, unique processing methods, and rich history. 




Here are the key points:

🌱 Origin & Varieties
Grown primarily in the highlands of Aceh (Gayo), Lintong, Mandheling, and Sidikalang.
Most farms are smallholder plots (often less than a hectare per farmer).
Common varieties: Typica, Catimor, and hybrids adapted to local conditions.

☕ Flavor Profile
Sumatran coffees are often described as:
Full-bodied & syrupy – heavier mouthfeel than most other origins.
Low acidity – smooth, mellow, sometimes earthy.
Flavor notes – chocolate, tobacco, cedar, spices, herbs, sometimes tropical fruit.
Often a little "earthy" or "funky", which many coffee lovers prize.

🌀 Processing Method: Giling Basah (Wet Hulling)
A hallmark of Sumatran coffee.
After fermentation, beans are parchment-dried only to ~30–40% moisture (instead of the usual 10–12%).
Farmers then wet-hull (remove the parchment layer while still moist) and continue drying.
This process gives Sumatran coffee its deep, complex, and sometimes rustic flavors, but also contributes to its unique bluish-green raw bean color.

🌍 Cultural & Economic Importance
Coffee has been grown in Sumatra since the Dutch colonial period (1600s–1700s).
It was introduced by the Dutch East India Company.

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🌍 Main Sumatran Coffee Regions (Side-by-Side)

Region / NameLocationFlavor ProfileNotes
MandhelingNorth Sumatra, near Lake TobaHeavy body, low acidity, earthy, chocolate, herbal, sometimes tobaccoThe most famous Sumatran coffee; "Mandheling" isn’t a place but an ethnic group — the name stuck in trade.
LintongSouthwest of Lake Toba (Lintong Nihuta area)Cleaner, brighter than Mandheling, with herbal, spicy, citrus, and floral tonesConsidered a “refined” version of Sumatran coffee; often preferred in specialty circles.
Gayo (Aceh)Aceh highlands, northern tip of SumatraBalanced, complex, sweet, syrupy body with cocoa, red fruit, and spice notesGrown at higher altitudes (up to 1,700+ m), often organic; one of the most prized.
SidikalangWest of Lake Toba, near Bukit Barisan mountainsBold, full-bodied, chocolate, nutty, slight fruitinessLess well-known but increasingly recognized for quality.

 
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Aceh
Elevations are between 900 - 1500m. The highlands are cool but humid.
The region is rich in volcanic soil.
These are optimal growing conditions for Arabica varieties such as: Ateng, Gayo 1, Timtim, and Abyssinia.



Links:
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CCV - cash converters

 CCV

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Over the last five years, Cash Converters International (ASX:CCV) has recovered from pandemic-era disruptions to grow its revenue and stabilize profitability. Annual revenue has expanded from roughly $201 million up to nearly $377 million, while net profit rebounded to around $24.48 million in FY2025, supported by steady loan book growth and store acquisitions. [1, 2, 3, 4, 5]
Profit and Revenue Trends
  • Revenue Growth: Scaled from $201.3 million (FY2021) to approximately $377.4 million (Trailing Twelve Months), driven by strong personal and vehicle finance demand. [1, 2, 3]
  • Net Profit: Swung from earlier volatility and occasional losses back to consistent profitability, posting a net income of $24.48 million in FY2025 and around $22.47 million over the last 12 months. [1, 2, 3]
  • Margins: Net profit margins normalized in the mid-single digits (approx. 5.5% to 7.2%). [1]
Debt and Capital Structure
  • Total Debt: Maintained a moderate funding structure to support its lending operations, with combined short-term and long-term borrowings fluctuating around $200 million to $215 million. [1, 2]
  • Debt-to-Equity: Ranged between 0.75 and 1.02 over recent years, reflecting typical leverage used to fund consumer loan books. [1]
  • https://stockanalysis.com/quote/asx/CCV/financials/ratios/
  • Dividends: Maintained a consistent policy, rewarding shareholders with fully franked dividends (hovering around a 2-cent annual per share payout) backed by solid operating cash flows. [1, 2]
Return on Equity (ROE) & Efficiency
  • ROE Recovery: Rebounded from negative territory during pandemic lows to a healthier ~11.15% in FY2024–FY2025, sitting around 9.5% recently.
  • Return on Assets (ROA): Stabilized in the 4% to 5% range as asset turnover improved across corporate stores and franchise operations. [1, 2, 3]
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Over the last 10 years, the Price-to-Earnings (P/E) ratio for Cash Converters International Limited (ASX: CCV) has experienced high volatility, fluctuating from deeply negative values during periods of net statutory losses to peaks above 12x during periods of stable profitability. As of August 2026, CCV trades at a trailing P/E ratio of approximately 9.3x to 10.5x. [1, 2, 3]
Historical Annual P/E Ratios (2016–2025)
The table below breaks down the annual fiscal year P/E ratios for ASX:CCV over the last decade according to historical financial data compiled by Wisesheets and Investing.com: [1]
Fiscal YearP/E RatioKey Drivers & Financial Context
20257.14x to 8.54xHigher statutory NPAT (~$24.5M) compressed the multiple as earnings recovered solidly.
20246.83x to 7.55xImproved core earnings offset by minor abnormal items; low single-digit P/E relative to market.
2023-1.41xSkewed negative due to non-cash class action settlement impacts and structural statutory adjustments.
202212.78xPeaked over the 5-year medium term as share prices recovered out of COVID-19 lows faster than trailing earnings.
20216.57x to 7.40xStrong operational cash flows during pandemic-driven credit demands normalized multiples.
2020-10.29xNegative earnings reflecting impairment charges and COVID-19 transaction disruptions.
2019-59.26xHit a 10-year low due to heavy regulatory compliance costs and massive restructuring provisions.
20186.81xA period of steady operational metrics following earlier regulatory compliance updates.
20177.43xSubdued multiples following extensive class action remediation liabilities.
2016-18.91xNegative due to significant regulatory fines from ASIC regarding small-amount lending practices.
3 Key Valuation Insights
  • Macro Mean Discrepancies: Due to sporadic, heavily negative earnings years (2016, 2019, 2020, 2023), the literal 10-year arithmetic mean P/E sits at roughly -4.16x. However, the 10-year median P/E when profitable rests between 6.6x and 7.6x, indicating that the stock structurally trades as a low-multiple, deep-value asset. [1, 3]
  • Discount to Broader Market: CCV consistently trades at a significant discount to the wider Australian market. Its historical P/E relative to the ASX averages roughly 48% to 52% of the market multiple, meaning it trades at roughly a 50% discount to average ASX industrials. [1]
  • Current Yield Alignment: Because the stock maintains a compressed P/E ratio under 10x, it features a highly elevated historical dividend yield generally hovering between 6% and 9%, fully franked
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For Cash Converters International (ASX:CCV), exact year-by-year 10-year tracking of Return on Invested Capital (ROIC) versus Weighted Average Cost of Capital (WACC) is not published as a consolidated historical table by financial data providers. However, current live metrics indicate an ROIC of approximately 5.59% to 8.17% against a WACC of roughly 4.09% to 7.57%, showing that the company's recent return profile hovers near or moderately above its cost of capital. [1, 2, 3]
Understanding ROIC vs. WACC for CCV
  • Value Creation Spread: A company creates economic value when its ROIC exceeds its WACC. [1]
  • Historical Context: Over the past decade, Cash Converters has navigated major regulatory changes in Australian consumer credit, shifts away from legacy payday and vehicle financing products, and store network consolidations, causing historical returns on capital to fluctuate generally in the double-digit or high single-digit range (historical return on capital reported around 11%–12% in stable periods). [1, 2, 3, 4, 5]
  • Current Estimates: Recent tracking places ROIC at ~5.6%–8.2% and WACC at ~4.1%–7.6%, maintaining a modest positive or neutral spread as the business executes its strategic turnaround

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