The Bean That Changed the World: How Coffee Sparked Culture, Commerce, and Capitalism

 “Why, this Satan’s drink is so delicious that it would be a pity to let the infidels have exclusive use of it. We shall fool Satan by baptizing it and making it a truly Christian beverage.”

– Pope Clement VIII, papacy from 1592-1605

Alcohol played a central role in the development of ancient Greek culture and medicine.

The Greeks worshiped Dionysus as the god of wine.

The Romans called this same god Bacchus.

Yet the ancient world never knew what would become a far more popular beverage.

A beverage that, today, about 90% of the developed world drinks regularly.

What is this mystery drink?

Coffee.

As far as beverages go, coffee is a new kid on the block.

Even as recently as five centuries ago, coffee was an obscure berry from the highlands of Ethiopia.

Today over 1 billion people in the world drink coffee. That makes it the most widely used psychoactive substance in the world.

As author Michael Pollan observes, “For most of us, to be caffeinated to one degree or another has simply become baseline human consciousness.”

And it’s hard to overestimate coffee’s impact on culture and the global economy.

As Pollan puts it, coffee “ushered in a shift in the mental weather, sharpening minds… freeing people from the natural rhythms of the body and the sun.”

A Short Shot of Coffee History

Let’s begin with the name “coffee.”

The word is derived from the Arabic word qahwah, originally describing a type of wine.

Coffee began its life in the sun-drenched highlands of Ethiopia, where the ancient nomadic tribes roamed.

Among them, a shepherd named Kaldi chanced upon an astonishing sight. After nibbling on crimson cherries from a mysterious shrub, his goats frolicked with unusual exuberance.

Curiosity urged him to sample the fruit himself. Soon, an unexpected vigor coursed through his veins, sharpening his senses and lifting his spirit.

It marked the dawn of coffee's discovery.

From these humble beginnings, the ethereal secret of coffee spread its wings and soared across time and space.

The drink quickly spread from Ethiopia to Yemen. Historical accounts tell us that Sufi monks in Yemen brewed the world’s first cups of coffee. Legend whispers of the Sufi mystic named Omar, whose wisdom discerned the potent properties of these roasted beans

The Sufis believed that coffee helped them to focus and meditate. It would also help them stay awake during observances.

As the monks traveled around the world, they brought their coffee beans with them.

In the twilight of the 15th century, they introduced it to the bustling bazaars of Constantinople. The Ottoman Empire embraced the bean. It also paved the way for the world's first coffeehouses – veritable hubs of intellectual exchange. Here, thinkers, poets, and philosophers gathered to share ideas and ignite debates.

The allure of this ebony potion inevitably beckoned to the welcoming shores of Venice. The aromatic allure stirred the curiosity of Venetian traders. Soon, coffee became a prized commodity. Soaring demands generated fortunes to match.

The rise of coffeehouses in European capitals transformed these venues into vibrant epicenters of politics, art, and cultural revolutions.

Amsterdam – then a leading hub of international trade – was home to Europe’s first coffeehouses.

England’s first coffeehouse opened in Oxford in 1652, and the trend quickly spread to London. Within a few decades, London boasted one coffeehouse for every 200 Londoners.

And the growing interest in coffee awoke London from its medieval alcoholic-induced slumber.

In 1757, when Benjamin Franklin retired to London, he abstained from the low-alcohol ale that kept most Englishmen in a perpetual state of drunkenness.

As court historian James Howell wrote, morning drafts of ale rendered apprentices and clerks “unfit for business.”

In contrast, coffee – a “wakeful and civil drink” – helped them “play the good-fellows.”

Franklin quickly became a coffee convert.

As Franklin put it…

Among the numerous luxuries of the table… coffee may be considered as one of the most valuable. It excites cheerfulness without intoxication, and the pleasing flow of spirits which it occasions… is never followed by sadness, languor, or debility.

Indeed, coffee indirectly helped fuel ensuing scientific, financial, and cultural revolutions.

Ludwig van Beethoven, Johann Sebastian Bach, and Napoleon Bonaparte credited their success to coffee. French novelist Honoré de Balzac reportedly downed 50 cups a day, spurring him to write his nearly 100 novels. President Theodore Roosevelt drank a gallon of coffee a day.

The Culture of Coffee

Coffeehouses rapidly became places to exchange information and collaborate. Even in their infancy, they were a place where you paid for a coffee. But for that small investment, you also got free access to newspapers, books, magazines, and conversation. (Today, you get free Wi-Fi.)

In coffeehouses, the leading minds of the day debated science, mathematics, and politics.

Coffeehouses also became a hub of commercial activity. Dutch coffeehouses were the center of the tulip mania that peaked in early 1637.

London’s famous Exchange Alley was a network of coffeehouses where shares in the South Sea Company traded. In Paris, the Rue Quincampoix played the same role in the Mississippi Bubble.

As French historian Jules Michelet wrote, coffee became "the sober drink, the mighty nourishment of the brain." Like the microscope, the telescope, and the pen, coffee became an indispensable tool in the new age of rationality.

With its insatiable thirst for novelty, the New World soon became enchanted by coffee's charm.

The seeds of this mystical shrub are found in fertile soil in the Caribbean islands in Central and South America.

Coffee plantations emerged like emerald seas, their beans cascading into global trade and across continents.

Coffee also played a role in the American Revolution.

Colonist rebels often met in coffee houses to plan their strategy. Coffee became a symbol of liberty and independence and helped to fuel the revolution.

Coffee also played a vital role in the later economic development of the new United States.

The U.S. government abolished tariffs on coffee imports in the early 19th century. As a result, U.S. coffee imports doubled every decade between 1800 and 1850. The widespread availability of cheap coffee helped ensure the U.S. would become a nation of coffee drinkers.

During the Civil War, the average Union soldier drank five cups of coffee a day.

By the turn of the 20th century, people in America were consuming twice as much coffee per person as in France and ten times more than in Italy.

Coffee and Capitalism

Coffee draws the ire of critics of capitalism.

After all, coffee is a stimulant. As such, coffee is a means to exploit employees to work harder for longer.

In 1911, a Coca-Cola study concluded that the caffeine in the beverage acted as a mild stimulant for both motor and cognitive performance.

Samuel Prescott, a biology professor at MIT, dubbed coffee a kind of miracle. It provided instant energy not subject to appetite or digestion.

As industrial fervor took root, innovations in roasting and brewing techniques refined coffee into an art form.

Espresso machines and modern barista prowess metamorphosed coffee into a sensory symphony.

As the world's population continues to grow, so too does the demand for coffee.

To meet this demand, coffee farmers are increasingly turning to drip irrigation and shade-grown coffee.

These technologies help to increase yields and improve the quality of coffee.

Today, investors can take advantage of this coffee obsession as well.

Starbucks (Nasdaq: SBUX) has been one of the great moneymakers in the U.S. stock market over the past three decades. The nation’s largest coffee chain went public on June 26, 1992, at $17 per share.

A $10,000 investment on that day would have been worth around $4.8 million today – a compound annual growth rate of 20%.

You can also buy a coffee exchange-traded note – a close cousin of the exchange-traded fund – in the form of the iPath Bloomberg Coffee Subindex Total Return ETN (OTC: JJOFF).

Coffee is a bean that changed the world. It is a drink that has fueled revolutions, inspired artists, and connected people from all walks of life.

Coffee is more than just a beverage. It is a part of our culture and our history.

So next time you take a sip of coffee, raise a cup to “the bean that changed the world."