Specialty coffee market expands in and out of Brazil
Growing and producing specialty coffees may expand the market and add value to one of the most traditional products cultivated in Brazil. The expansion will take place if the country sells more manufactured coffee and manages to reverse the commoditization trend of exports.
As per official figures, Brazil exported 34.1 million of coffee sacks (60kg each) last year. Nine of every ten sacks sold were green (unroasted) coffee. Roasted and soluble coffee sales amount to slightly more than ten percent of the total.
Ivan Oliveira, director for International Economic and Political Relations with the country’s Ministry of Agriculture, said the country lost ground in manufactured coffee sales. In the 90s, he said, 51 percent of exports were soluble (ready for consumption) coffee.
“We have lagged behind in processed coffee around the world,” he noted. “We hopped off the train of manufactured and gourmet coffee, not least because of how closed the Brazilian coffee beans market is,” he pointed out.
Closing the Brazilian market to beans produced elsewhere is a phytosanitary precaution against having Brazilian harvests contaminated with plagues from imported beans. A study conducted by the Agriculture Ministry found, however, that the measure generates a non-tariff barrier increasing the cost of imported beans by 13.61 percent.
In Oliveira’s view, the move hinders efforts to increase the production of soluble coffee, which has more added value than coffee sold in beans, and creates more jobs. “By closing the market, by not allowing the entry of coffee beans in Brazil, [we] are keeping investors who seek to open up a coffee processing plant away from the raw material necessary for the activity,” he argued.
If Brazil had not taken such a protectionist stance, the specialist said, the country could dedicate more to the creation of coffee blends, as is the case in Germany, France, the Netherlands, Belgium, and Spain. Instead, Brazil serves as niche market for these countries, for instance, by purchasing coffee capsules with blends from a number of sources (Asia, Africa, Central America, and South America).
“This is the kind of difficulty that keeps big companies away. They need a special kind of coffee to produce a blend, and Brazil bans bans the imports,” said Antônio Guerra, head of Embrapa Café, the coffee division of the Brazilian Agricultural Research Corporation.
Nathan Herszkowicz, executive director at the Brazilian Coffee Industry Association (Abic), said the success of green coffee exports discouraged the sales of more processed coffee. “This value has always been so significant that Brazilians have lost their vision for the opportunity the market could unveil.” He admits, however, that “exporting unroasted beans means not profiting from a considerable portion of the sack.”
Sílvio Farnese, director for Trade and Supply with the Agriculture Minister, acknowledges that soluble coffee is among Brazil’s door-openers in markets where drinking coffee is not a habit, as in Asia, “because it is prepared just as tea is.”
He went on to describe added value as “healthy,” but argued it has to be rethought in the economic context. “The globalized market has a hard time accepting all production from a single country. If the country decides to sell what’s best in added value, it would be taking the opportunity from the purchaser of making part of the product and profit from it,” he said.
“In a globalized economy, we have to split up the process. Producers get a portion, and manufacturers get another,” Farnese stated. Brazil, he said, is seeking added value for coffee in the improvement of its beans and in specialization. “In coffee production, you can change flavor, scent, and taste depending on the beans.”
According to the specialists heard by Agência Brasil, Brazil’s coffee market grows at an average of two percent a year. In the case of specialty coffees, the yearly growth stands at seven percent. The expansion in specialty coffee production is reflected on exports, which total twice as many sacks sold by Brazil overseas.
The Brazilian Specialty Coffee Association (BSCA) credited 14 exporting companies in the states of Minas Gerais, Paraná, and São Paulo, and describes 45 types of specialty coffee.
Roast Master Nathalia Rodrigues, who works at a micro coffee roasting business in Brasília, complains about the infrastructure for transporting production and exports, which also affects other sectors of agribusiness. “Selling specialty coffee to the foreign market demands a logistics that Brazil isn’t yet prepared for,” she warns.
Logistics is crucial for the timely delivery of specialty coffee—a requirement for a high-quality beverage. “After the coffee is roasted, there’s a sensory loss, with oxidation of the fruit and reduction of carbon dioxide,” she explained.
Knowledge about the topic, Rodrigues said, is widely shared today. “There’s knowledge all across the country about how we can go for a much larger scale than we currently are. The landscape for specialty coffee has just started to take shape.”
