Big Spender: Crap-tastic $350 Coffee

Kopi Luwak is among the most expensive -- and bizarrely produced -- coffees in the world.
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BOSTON (TheStreet) -- On the first Tuesday of each month, curious gourmands crowd into Coffee and Chocolate, a small coffee shop in Knoxville, Tenn., where they pay $25 for the opportunity to sample a piece of artisanal chocolate and a cup of joe known as Kopi Luwak. The coffee is revered for its sweetness and smoothness, but better known for its derivation: the fannies of Indonesian civet cats.

Every coffee bean in the world comes from the middle of a coffee berry fruit. And in most coffee production, a person or a machine skins the berry from the bean. Not so in the production of Kopi Luwak, in which an Asian Palm Civet chooses and eats the reddest and ripest berries, which travel through its digestive tract, stripping the fruit from the bean. What comes out the other end of the civet is a clump of undigested coffee beans.

The beans are collected by local workers and eventually sold at retailers such as Coffeeforless.com, which sells the stuff for $350 a pound -- although it has been known to sell for up to $600 per pound. Production reports vary, but generally fewer than 1,000 pounds of luwak beans are collected annually, and their relative rarity helps account for the expense.

Kopi Luwak is made from beans that have been digested by civet cats in Asia.

"Luwak" is the local name for the Asian Palm Civet, according to Animalcoffee.com, an Australian company that gives customers the option of buying the beans roasted ($40 for a two-ounce Arabica pouch) or raw ($60 for a half-pound clump, along with a souvenir Kopi Luwak Lucite key ring). The raw looks disturbingly like a

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PayDay bar.

Coffee and Chocolate sells 2-ounce bags of Kopi Luwak for $60 a pop, compared with the $12.99 per pound it charges for most of the other coffees in the store.

"It does pretty well, but we sell it only when people come in looking for it," says Sarah Bargatze, a barista at the Knoxville store, whose regular coffee sells for $12.99 a pound. "There's not really a person who wants to buy $60 coffee on a whim."

Kopi Luwak received some buzz a couple of years ago because it was the drink of choice for Jack Nicholson's character in the film

The Bucket List

. But there is more to the coffee than novelty and rarity.

"It was definitely worth the price for the experience of trying one of the most rare coffees in the world," says Jon Emmons, an

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database administrator from Concord, N.H., who bought a Kopi Luwak gift set on Animalcoffee.com and then documented the experience on his blog, Lifeaftercoffee.com. "I would rate it amongst the best coffees I've ever had."

According to a study by The University of Guelph in Ontario, the Kopi Luwak beans have a lower protein content than other coffee beans, because the civet cat's digestive tract breaks down some of the proteins during the beans' curvy journey. Proteins are largely responsible for a bean's bitterness. And to that, uh, end, Kopi Luwak coffee is especially sweet. But that's not necessarily a good thing, especially for coffee connoisseurs who value complexity and notes of acidity in their coffee.

"The digestive system eliminates any possibility of floral or any delicate flavors that might be produced by the coffee bean itself," says George Howell, CEO of Terroir Coffee Co. in Acton, Mass., who has been involved in the specialty coffee business since 1974. "It's sad because it's the most expensive coffee in the world, as far as I know. It really represents an upside-down quality triangle."

Corby Kummer, a senior editor at

The Atlantic

and author of

The Joy of Coffee

, agrees with Howell. "I have tasted the Kopi Luwak, and it was oddly smooth and sweet in a way I didn't like," he says. "It was very mild, but the sweetness was kind of suspicious. It wasn't something I welcomed in coffee." And while he agrees that Kopi Luwak is especially smooth, "you don't want complete smoothness in a coffee or it fades to blandness," Kummer says.

Of course, there are plenty of options for those who want to pay an arm and a leg for specialty coffee that didn't come out of a cat's butt, and plenty of demand.

Retail sales of specialty coffee in the U.S. totaled $13.6 billion in 2008, according to the Specialty Coffee Association of America in Long Beach, Calif. Financial figures for 2009 remain to be seen, of course, but the association reports that the share of Americans who drink specialty coffee on a weekly basis has dropped slightly from 34% in 2007 to 29% so far in 2009. (Incidentally, Ric Rhinehart, executive director of the SCAA, says that if Kopi Luwak were graded according to SCAA standards, it wouldn't pass as specialty coffee.)

Serious coffee aficionados give special attention to the Cup of Excellence, a 10-year-old program co-founded by Howell. The program is twofold: first, a jury of specialty coffee buyers taste hundreds of coffees more seriously than most oenophiles taste wine, choosing the best single-origin coffees from each of several coffee-producing countries. The winning coffee beans are auctioned off on the Web, with the vast majority of the bid prices going directly to the coffee farmers.

Ritual Coffee Roasters in San Francisco boasts that the COE-winning

Fazenda Kaquend

, hand-harvested on a relatively small 30-hectare farm in Brazil, includes "flavors of lemon lime, sugar cane, maple, chocolate candy, cherry and bergamot." The company sells the coffee for $39.99 per pound.

The Panamanian coffee farm Hacienda La Esmeralda has set multiple online coffee auction records of its own with its award-winning

Esmeralda Special

. Stumptown Coffee Roasters in Portland, Ore., paid $105.25 per pound for hundreds of bags of the Esmeralda Special in 2008. Saza Coffee Co. of Hitachinaka, Japan, paid $117.50 per pound in 2009.

"The Esmeralda is a very high-quality coffee with really distinctive notes," Howell says. "The flavor profile is intense -- sweet lemons, apricots and ginger."

But anyone who has his heart set on Kopi Luwak can rest assured of its relative safety, at least according to the University of Guelph.

"As a food scientist, I'm skeptical that anything being in contact with feces is safe," Massimo Marcone asserted in a press statement announcing his 2002 study. "But tests revealed that the Kopi Luwak beans had negligible amounts of enteric (pathogenic) organisms associated with feces."

Phew.

-- Reported by Carmen Nobel in Boston. Feedback can be sent to carmen.nobel@thestreet.com.