1850km in a 1 litre Fiat Uno; Brazil is nothing if not huge. Starting in Sao Paulo, this trip took me to Pedregulho on the Sao Paulo/Minas Gerais border, then Pocos de Caldas, Santo Antonio do Amparo, Areado in Minas Gerais, then back to Pocos and finally Sao Paulo.
Two weeks, dozens of farms, cupping along the way.
What do I take away from the trip, besides the usual warm hospitality and genuine friendship of the Brazilian specialty coffee community?
I think the main point will be that Brazil is and will continue to be the biggest producer and (soon to be) biggest consumer of coffee in the world. Everything about Brazil is on a giant scale. There are large and small coffee farms, yet the vast distances and bountiful nature of the land really stand out in a trip of this nature.
What will change is where coffee is grown in Brazil, not how much. Brazil’s ‘’mountainous’’ coffee regions will eventually become farmed only by smaller scale family businesses and smaller coop members, or those farms whose production and sales are virtually all in the premium specialty sector.
Larger managed farms are going 100% mechanised. Contrary to outdated and less informed comment, mechanised harvesting is very efficient and quality conscious – in fact, more so than human picking. Cost of labour and even availability of labour during harvest time is such an issue that farms are becoming fully mechanised and movement toward coffee growing on alto plano (high plains) like the Cerrado region will continue
Mechanised picking is 25% – 30% less costly than manual picking. As the commodity market price once again swings lower, this cost and efficiency saving is crucial. From most conversations, I believe the cost of production in Brazil on mechanised farms to be around $1.20/lb while with manual picking it is over $1.50/lb (these numbers reflect professional managed farms. Small family holdings do not tend to consider cost of financing and labour in their calculations).
So, simply put, in today’s $1.50/lb coffee market mechanical harvesting is the only option for Brazilian managed farms to be profitable and sustainable
Another interesting feature of the trip is that virtually all of the Brazil Specialty Coffee Association suppliers that we buy from are also local roasters. Many of these are a very similar size (20-250mt/year) to our own typical specialty roaster customers. Brazil’s internal coffee consumption is already at something like 17-18m bags and overall quality is not that good (though coffee is cheap). Many BSCA exporting members who are also roasters are filling the cafezinho (fairly rough street quality)/Illycafe gap with excellent local specialty products far superior to the 100% robusta products on the shelves, while being priced much more competitively than a well known brand like Illycafe (which is likely as much as 40-50% fine estate Brazil anyway!)
Then we arrive at the old conundrum that gets wheeled out all the time, mostly by people who have not visited origin and/or those who do not understand the price/production logarithm. This worn out theory asks ‘’Where the additional coffee production will come from as demand grows on a steady upwards curve?’’ Generally the dream of coffee producing nations, this Not Enough Coffee in Future model fails to take account of three key facts.
Firstly, high prices, even temporary, in commodity markets attract significant production increases. Witness Peru and Honduras to name but two.
Secondly, yield. Without planting a single hectare of more coffee area, improving the world’s coffee yield per hectare to anything close to Brazil’s 25-30 bags / hectare would add millions of bags of new production from the same planted area. Vast areas of existing global coffee production are very inefficient and underproductive. Simple improvements could lead to substantial production gains
Thirdly, barring climatic disaster in the form of frost (or more likely drought) coffee appears doomed to forever live in a boom / bust cycle. The wealth created by the once in twenty year boom fuels overplanting and overproduction. Very rarely (last year is an exception) has coffee price booms been fuelled by demand. Coffee is and will likely continue to be a supply lead commodity with prices dictated by where coffee can be very cheaply produced. Even if the specialty coffee world scorns the rough quality of robusta, fully 25% or more of the world’s production is this low grade species. Someone must be drinking it.
Moving to the specialty arena after this top down overview…
Brazil suffered inclement weather conditions during the harvest in May/June/July – frequent and constant rainfall damaging the picking itself, coffee drying on patios, the whole harvest process was disrupted
This simply means less quality coffee, NOT less coffee. I cupped at dozens of places during my trip and I maintain that the specialty coffee roaster need not be concerned with supplies of fine coffees from Brazil as long as you have a very reliable supplier. Those roasters buying on description, buying Santos, not paying attention to cupping or buying vague description coffees will receive a very poor standard, reflecting the difficulties of the harvest. Specialty Brazils, correctly cupped and sorted, will continue to be excellent – as many of the coffees that I cupped on the trip were.
However, to give an example of a large professional farm like Monte Alegre… Typically, Jose Francisco may expect a total harvest outturn of say 80,000 bags, of which perhaps 25-30% is specialty grade 80+ differentiated, selected grades. This season the factor, the ratio, of specialty grade coffees is less – say 15%. So, that does not mean Monte Alegre has no specialty coffee, just less specialty coffee than a typical season
My advice to specialty roasters? Take care. There will be a lot of people roasting phenol and rio coffees in the common Brazil ‘’Santos’’ description business. I hope that this gives an advantage to specialty roasters who cup and buy excellent Brazils. I believe the difference in cup quality this season is very wide between the cheap commercial grades and genuine specialty Brazils. This can provide an advantage – the difference to the coffee consumer drinker may be that much more apparent this season.
Coffee production in Brazil continues at the forefront of professionalism. The free market with little government interference, has allowed Brazil coffee growers and exporters to select where they want to be in the value chain. Common commercial grades, local consumption robusta, specialty and Cup of Excellence. Growers and participants in Brazil are free to choose their category and the country remains an excellent example of availability of differentiated coffee products.
Mercanta can now identify and buy as many as 20 single varietal coffees from our Brazil grower partners, and many intriguing and innovative new developments are under way. Each region in Brazil has it’s own ‘’best varietal’’ that can also be influenced by the climate. This season, I found Mondo Novo standing out on the blind cupping table. Many Naturals could be found ready to ship, scoring excellent 82-84 and higher, despite the early stage of the season. The harvest itself is finished – that took place in April to September. The warehouses and mills are now a hive of activity as the crop is sorted, selected, graded and exported.
Trips such as this just undertaken help to fortify and strengthen existing relationships and foster new ones. Mercanta aims to continue at the forefront of discovery of fine coffees, via existing channels of well established specialty coffee producers and likewise always seeking new sources of fine coffees – many of which I cupped on this trip.
We started to receive the new season of fine estate Brazils in the UK warehouse in October, USA warehouse in November and our Australian partners, Melbourne Coffee Merchants, receive their first new crop Brazil arrival in December – with more new coffees arriving every week.
The proof, as always, is on the arrival cupping table. Mercanta will use our resources and network to bear the risk of the arrival and always be in a position to offer specialty roaster customers an extraordinary array of pulped natural, natural and washed Brazils and a wide range of different varietals.
We hope that specialty roaster customers will soon be seeing the fruits of our labours as this new season of fine Brazils starts to arrive at our customers’ roasteries.
Thanks here also to the excellent hospitality and professionalism, not to mention genuine friendship, that I experienced along the way of this latest Coffeehunter sourcing mission.
SLH Brazil November 2012
Check out lots more photos from Stephen’s trip on our facebook page: www.facebook.com/Mercanta
