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ASIC 2014

Brazil: Potential vs. Power

By Rosanna Mazzei

Sitting atop its mighty throne, Brazil contemplates its position in the coffee world. Its production potential alone commands this leader a respect not warranted by any other producing country. Yet, what does the country have to show for it? For decades this giant’s reigning strategy has been to set aside quality for the sake of quantity. And while the sheer size of its territory makes it a powerful player, being ostracized from the shelves of gourmet stores and absent from the vocabulary of specialty roasters is too high a price to pay to continue down the road toward volume.

Brazil's economy is in a delicate stage of development. The country is moving forward in the Digital Revolution while fighting back a recession. Meanwhile, its coffee business faces one of its most difficult years in a long time. Quite a difference from its former days, when coffee lured inhabitants toward the interior of the country and transformed a mostly agrarian society into a modern nation. From the beginning of the century until the 1960s, this commodity was essential to the survival of the country. The market became so big that a branch of the government, the Instituto Brazileiro do Café (IBC), was set up to administer it. Under IBC policy, the price differential between a high quality coffee and a low grade bean was minimal. While the plan was initiated in the best interest of the economy, the bottom line was that, without incentive to produce quality, most of Brazil’s farmers focused their energies on producing volume instead of taste.

Eventually, however, bureaucratic red tape and favoritism reared their heads into the IBC plan. In 1991, the IBC dissolved and Brazil’s coffee industry was left to pick up the pieces. While the scientific community mourned the loss of its center, Brazil’s coffee industry mourned the loss of direction. After a long period of uncertainty, a somewhat divided and significantly unarmed Brazil set out to begin the arduous task of restrategizing. Fazendas redefined their business goals and went to work to implement change. Progress was underway and in a few years, results were starting to show. Then came the frost of 1994, crippling Brazil yet again.

New Beginnings
It would seem to have been one step back for every step forward for Brazil. Yet, even though its farmers have taken a few hard blows, they have been determined to come out ahead. In the past six years, the country has poured much of its energy into a targeted plan of restructuring. Farming and export efforts have been proving relatively lucrative and Brazil now has the chance to show the world what it is made of.

Technology
The first logical investment to make would be in machinery. Depulping machinery had been around for a while, but the ‘90s had given it new capabilities, which, for Brazil, meant the ability to provide pulped natural beans, also known as semi-washed. Mechanical harvesters were also improving and becoming more affordable, helping to get the most out of the picking season. Even dryers have found ways to advance their techniques by incorporating a new conical motion. And let’s not forget the internet, which has been a big help in gathering and exchanging pricing and business information.

The most interesting piece of equipment I encountered on my trip was not a piece of coffee machinery, but a piece of equipment from the grape industry. From afar, this big machine looked like some sort of clumsy amusement ride, white and blue with plastic pieces coming out of it. Upon closer examination, however, it revealed itself to be a sturdy modern plucking mechanism. One of the executives of the Daterra corporation was attending a conference in Chile where he was introduced to the technology. He immediately proposed the idea of making the vineyard item into a coffee tool. The manufacturing company agreed to take on the request and went to work. What resulted was the latest in cherry picking.

“We haven’t had this harvester for very long, but so far it works very well,” commented Daterra Corporation director Osvaldo Pizano. “What I liked about the machines in the wine industry was that the bottom of the trucks where the grapes fell was lined plastic tabs, not the hard ones we find in coffee. The cherries can now hit the shovels and bounce off undamaged, allowing for a healthier crop. Also, the machine can be fitted with sprayers, so it can be used 12 months out of the year, not only during the harvest.” Looking to other industries can prove to be helpful when researching ways to advance--elsewhere in Brazil, a similar machine is being used which incorporates technology from the olive industry.

New harvesters have made their way to farms of all sizes and crop yields. The savings have big significant, and in most cases, are being applied toward improving quality at all levels. Eduardo Junqueira, co-owner of the farm CorCampo Coffee, shares, “One piece of equipment-the right one, of course-could make such a significant difference. Our farm’s philosophy has always been to cultivate high quality standards, and in all our years here we never really gave way to the push to mass-produce.

“Our crop yield is higher now that we use the harvester,” adds co-owner Beatriz Junqueira, “and we can concentrate a little more on our bourbons and higher grade crops that need more attention. So now any new machine that comes out is of interest to us.”

“To stay ahead-or maybe just because they didn’t care-some farms were overloading their lands with trees to the point where the plants suffered because their roots didn’t have enough room to grow properly,” she adds. “With the new technological advances coming out, those farmers can then save in one area and invest in better practices. Unfortunately, in Brazil, the big exporters have the added advantage of having the government’s support, but the rest of us don’t really see that funding. So it’s all up to us.”

Environment
Another smart move by producers was the incorporation of ecologically-friendly practices. In being forced to redefine farming techniques, Brazil was able to adopt modern ecological practices that other countries could not afford to invest in at the time. At the center of this change has been the treatment of water, includng newer methods of irrigation and filtration.

Jose Carlos Grossi, owner of Alto Cafezal explains: “In the Cerrado region, we don’t have to worry about frosts. The only real threat is drought. But technological advances are making that less of a threat. With water being such an important part of growing good coffee, we’ve invested in the drip method of irrigation. It helps the trees get the water they need on a steady basis.

Grossi and many producers in the region have are also using what is known as the “fertirrigation” process in which fertilizer and nutrients essential to healthy growth of the plant are mixed in with the watering. It has been found that the plant absorbs the nutrients more readily. The time spent is cut down significantly and costs are reduced by combining two separate applications.

“Right now we are using organic matter from pigs and bulls as fertilizer--about 20% worth.” continues Grossi. “In the next five years we hope to get that figure up to at least 50%. It is a bit of a challenge, but in the long run, it will be in the best interest of the coffee and the land.”

Throughout Brazil there has been a move to lessen the use of chemical fertilizers and use more organic matter. It is cheaper and more convenient, since most farmers use livestock as alternative sources of revenue, and it is also healthier for the plant and for the environment.

Paulo Veloso, Jr., director of Veloso Exporters, has rethought his company’s direction to place emphasis on developing ecologically- friendly practices: “Brazil has undergone many beneficial changes. We’ve learned how to deliver not only a quality product, but an environmentally-friendly one. We have been using organic fertilizers for a while, but are now creating a whole system for it. We are incorporating the use of phosphates in the fertilizer, which makes our crops stronger and the overall product better. We’re also building housing for more animals to increase the amount of organic matter.

“Additionally, we are placing a great deal of energy into recycling. The dried pulps of the cherries are reused and mixed into fertilizer. And any chemicals that need to be used are put in recyclable bags and a specific truck comes to pick them up.”

Another concentration has been on understanding the relationship between agriculture and biodiversity. Pruning has been redefined-farmers now limit this practice, keeping in mind that 5% of a crop will need to be completely cut or removed yearly. More workers are being taught how to check the health of different areas of the trees and are being sent out on a regular basis. This is part of an effort to redirect focus from treatment measures to preventative measures, helping to limit the use of chemicals. Also, when a crop is no longer useful, a common practice has been to burn the whole area and start anew. It has only been recently that the coffee community has learned just how negatively this process affects them, since it destroys the natural lifeforms which may not return. Those plants and insects are necessary to the healthy growth of the crop, helping to regulate disease and balance the ecosystem.

Brazil is rich in natural resources and farms stretch out over a great part of its land. It is not unlikely, then, that some of the country’s many natural wonders are part of a large plantation. An image of the evil corporate monster over-running the precious earth often comes to mind. However, the reality is much different. The growers value and respect these gifts of the earth.

On Fazenda Monte Alegre, the maze of coffee and sugar cane led through a rain forest. Earlier in the year, its director, Jose Francisco Pereira had the luck of spotting a jaguar on his walk from his house to his office. At Daterra’s Fazenda Boa Vista, Osvaldo Pizano led us through miles of fenced-in fields, only to stumble onto not one, but two waterfalls; a bird watcher in ourgroup excitedly took a picture of a rare species perched on a tree. Paul Veloso pointed out the nature reservation situated on the outskirts of his fields as we moved through the farm.

In each case, the owner has actively taken steps to preserve and coexist with the natural surroundings of their farms. Throughout the trip, it was common that producers, both big and small, mention such a prized piece of their farm with enthusiasm, as well as with care and respect.

Sociological Effects
A critical part of Brazil’s development has been the proliferation and distribution of farming techniques. The best way to provide this is often through the development of a cooperative (coop). The term coop is used worldwide to refer to a business network made up of separate owner-affliates-in this case, the term refers to the structured sale of producers’ coffee crops. As a group, the organization is able to provide clients with an extensive range of products varying in type and grade. This is a popular route for small farmers who can’t afford to market themselves-or don’t know how to-because it offers the security of being aligned with a powerful entity.

The coop represents the interests of some of the larger producers. Because of their size, the interests of these larger producers tend to carry more weight regarding the direction of the organization. Yet, for the most part, decisions are made for the betterment of the cooperative community as a whole.

“The most important element of an agricultural business vision is to act based on the needs of its providers,”states Joaquim Leite, export director for Cooperativa Guaxupe. “To be competitive means to act as a regular player would, keeping in mind the best interests of farmers, rather than acting as a corporate entity…. For example, a large fruit corporation, which is generally based on distribution, isn’t necessarily invested in the industrial side. In the past, the strategy had been to work off of that model, to manage big companies like coops based on the final consumer. Many didn’t realize this wasn’t the right answer to achieving a better price and product. We, as coops, have taken a different approach, basing our system on our network of our farmers. In many cases these are farmers who are carrying on the legacy of years of family coffee farming and still working to make a living at it-this holds especially true of the Minas area.”

Another coop representative resonates this philosophy: “Everyone’s coffee is important here,” states Caio Junqueira, export manager for Coopertiva Poços do Caldos. “I think that people see Brazil as a few big cooperatives--and that’s it. However, it is important to note that, while the face that tends to greet the world is one of a large exporter, in reality it is small farmers-whose harvests yield less than 100 bags-that actually produce most of Brazil’s coffee. They are really the backbone of the industry.” Coops make up about 80% of Brazil’s coffee export market, leaving the other 20% of the market supported by independent exporters and their affiliates.

In addition to having fortified business systems in place, Brazil has focused on training its coffee growers at all levels in an effort to refine farming techniques. Looked upon as an essential part of a farm’s infrastructure, workers are given opportunities to benefit from learning new skill sets and are personally empowered by the trust instilled and the knowledge gained. Companies such as Daterra have built learning centers where classes are held. “Education is central to the plantation,” says Pizano. “It’s equally as important for the workers to understand the process so that they can do their work better. It’s a simple concept, really. They are given the tools to do a good job and are taught that their ideas and input are a lifeline to the farm.”

Daterra also takes its commitment a step further and is addressing the physical demands of field labor. “Another aspect of the farm we’ve put in place is the use of physiotherapy to treat staff members. For example, a worker many tend to stay in one position for an extended period of time and a few basic exercises a day can ensure that problems don’t arise as a result.”

The coffee farm is a business, and as such, must run like one. Yet, it is also a central part of the lives of many families; in some cases, a plantation actually supports the livelihood of an entire town. In other instances, workers from rural regions of Brazil, where jobs are far more scarce, are transported to the farms for the harvesting seasons; these workers tend to earn most of their yearly earnings during the picking season.

It is crucial, then, to find a balance between corporation and community. Francisco Pereira comments: “Brazil is a country of beautiful natural resources-and coffee is one of them. Most of the country lives off the land. I have made it a point to develop good working relationships with workers so as to ensure they return each year.

“The plight of the field laborer is often one of sacrifice with little expected reward. But I think most producers here value their employees and let them know their worth to the degree that they can. I provide housing and meals at about 10% of actual cost-in addition to salary comfortably above minimum wage. I look for potential in people and offer training for them to better their skills.

“There is a lot of poverty in Brazil, this is true, but it is part of a bigger picture in which there are many people facing a slowing economy. It is important that consumers know that, relative to worldwide standards, Brazil’s laborers are offered a supportive working community and fare wages which we hope will not only continue, but will improve as the market improves-this cannot be said for other parts of the world.”

On the grounds of Lambari Exportador & Comercio, a weaving shop has been built to provide workers, mostly women, with an additional means of income. Pressed recyclables are transformed into woven fabrics and resold.

“It really gives them a sense of accomplishment,” explains director Raymond Rebetez. “I believe strongly in the value of producing an item from a socially conscious process, whether it be a scarf or a bean. It would seem to be a given, but that’s not the case. Producers around the world have been taking steps toward creating these environments.

“It’s good to hear that many of Brazil’s farms are adopting such practices, but there is still a lot more room to grow in this direction. This is a worldwide matter in every industry and in every country. Issues regarding sustainability are just beginning to surface here. And Brazil has many small farmers, many more than other producing countries, waiting to benefit from this methodology.”

CAFES DO BRASIL
The concept “one country-many flavors” made its way around the world this past year, appearing at the Specialty Coffee Association of America conference in April and making presentations throughout the world. A multi-million-dollar budget-coordinated by the Cafés do Brasil program of the Ministry of Agriculture-backs the campaign currently feeding Brazil’s coffee momentum. Its purpose? To highlight Brazil’s ability to be the one-stop source for most buying needs.

Carlos Brando, consultant for the Cafés do Brasil campaign, elaborates: “We’ve been very pleased, not say amazed, with the reactions we’ve been getting. The [cupping sessions] at the SCAA show in San Francisco were full. Most were amazed at the quality of cup….We were worried that, although we promote the diversity of the coffees, there would still be a risk in that the distinctions wouldn’t stand out in the cuppings.”

“But they did--and we served almost 20,000 cups. Espresso had the biggest following, but you know what came in a close second? The cafezinho. Ted Lingle, [executive director of the SCAA], was right when he said that the cafezinho was like a stepping stone between the drip and the espresso. This proved true at the show.”

“Another important point we’re addressing,” adds Brando, “is proving that you can make quality with mechanization. It isn’t just based on what you have, it’s also in large part what you do to cultivate the quality. And Brazil has it all-from the small farmer to the high-tech plantation. The really good news was the interest in the lesser known origins and varieties that were present at the stand; it helped to validate point of ‘one country, many flavors.’ “

Brazil’s crop lands spans extensively-from 5º S to 25º S latitude. Along the way there are savannahs, hills, and valleys, which range in climate patterns from 100º Fahrenheit and very hot and dry, to 55º Fahrenheit and cool and damp. Hence, each producing state has its own agronomists working on development projects specific to their needs.

The Brazilian Specialty Coffee Association (BSCA) has also played a big role in gaining credibility for Brazil’s quality efforts. Since its creation in 1991, it has been present at the annual Specialty Coffee Association of America conferences and has concurrently been involved with the international growth of the coffee industry. BSCA meetings are held to discuss ways to improve harvest, coffee processing and the overall product. There is a quality control structure in place which evaluates practices and monitors quality. The organization also promotes the exchange of experiences, information and technology among its member companies. The most important asset to the BSCA is that it has an independent company certify the lots that are shipped to ensure product quality and to preserve BSCA’s gourmet classification.

Processes
Brazilian beans generally undergo the natural wash process, in which the cherry is plucked and laid intact in the sun to lower humidity. This process, unique to Brazil and a few other countries, delivers a distinct result because the bean is dried with its natural sugars. The result is a sweet, fruity, full-bodied cup, with low acidity. A sommelier, whose own preference may be for a Napa Valley, still recognizes the value of a Bordeaux; likewise, the appeal of this cup characteristic will depend on personal taste.

Veloso Exporters is one of the few producer-exporters to have taken the creative initiative to further distinguish coffees as “natural cherry” and “natural dry.” The difference is that Veloso Natural Cherry coffees pluck and lay to dry the ripe cherries, while Veloso Natural Dry coffees pluck and process the cherries which have already dried on the plant, before being picked. The idea is that because the cherry had dried naturally and for a significantly longer period with its own layer of sugar, it produces an even sweeter cup. Veloso comments: “Brazil is just starting to take advantage of all its possibilities. We are providing a selective product unique to our country and unique to our company.”

The most significant effect of the adoption of new machinery has been that Brazil can increase its use of the semi-washed process, an application that hadn’t been readily available in the past. Due to these advances, new areas have become conducive to producing good coffees. Brazil continues to invest in improvements on the production side and subsequently, every year the amount of Brazil’s semi- washed beans increases-as does the demand for them.

Origin
While Brazil’s size acts as a strength, it also acts as a weakness. Looking at it from a marketing perspective, it is more difficult to form a solid association on what a Brazil origin coffee is because there are so many different coffees to choose from, many more than in other producing countries. And within those coffees are Robustas. While this type has its place in the market, its recent production increase doesn’t help Brazil’s struggle to prove its place as a purveyor of quality. Yet, if Brazil was smaller, it might get away with growing only Arabica. However, with a country so large, it’s not a realistic expectation.

“It has been challenging to teach consumers the diversity of Brazil’s climates and the varieties of coffees that it can produce,” explains Grossi. “Keep in mind that Brazil is the fifth largest country in the whole world, many times larger than Colombia and the whole of Central America. It is as if we are many countries of coffee in one.

“In an effort to educate,” Grossi continues, “we find it important to inform the consumer of the region the coffee purchased is from. In this regard, the concept of estate coffee becomes important. We need to work with the roasters to ensure that once our coffee is used, it remains pure. If it is later blended with other beans, but our estate label remains, it is misleading to the consumer and not fair to us.”

The current solution lies in regional branding and a group of growers from the Cerrado area are doing just that. Located in southwestern Minas Gerais, this region has a steady rainy season and only one blooming period, which helps bring on a more even ripening and makes harvesting easier. Brazil owes a lot to Cerrado producers, a group who has been cultivating an attention to detail for its crops and is pioneering the country’s specialty movement. Most important still, they are making a name for themselves internationally and getting people to talk about Brazil once again.

The soil in Cerrado was less than ideal for growing coffee. The Brazilian saying was that the soil was good for holding the tree and that’s about all it was good for. The farmers had a real challenge on their hands. “I remember when we started farming here,” remarks Ismael Andrade of Andrade Brothers, “people told us we were crazy, that nothing good would ever come from this land. But I’m happy to say that here we are, years later, producing some of Brazil’s finest coffees. We are moving toward an even greater understanding of what it means to be a gourmet provider by creating a network of producers interested in all the ways to cultivate beans for a superior tasting cup.”

The land has, indeed, been nurtured and treated thoroughly so as to be able to produce coffee. However, it would have to bide its time before actually being able to give birth to quality. “My family has been investing in this area for many, many years,” states Pedro Humberto Veloso of Golden Coffees. “Mechanization has played a big role in us being able to create a good product. And now, producers like me who believe in quality, can take advantage of marketing efforts because the Cerrado name is out there. Our region produces very special coffees, plus we can deliver a more consistent product. We are working on developing a system in which to exchange and take full advantage of information unique to our area. The more we work together, the better our products become.”

Another vehicle directing attention toward Brazil is its bourbon cultivar. Generally referred to as Bourbon Santos, it’s the highest grade coffee Brazil produces. This coffee is now being listed on the selective menus of five-star luxury hotels around the world alongside the ranks of Jamaican Blue Mountain and Hawaiian Kona. Even the quality-pusher, Starbucks, has lended its trust to this bean, carrying on its shelves “Ipanema Bourbon” by the Alfenas company Ipanema Agricola. That’s quite an achievement for a country whose name until recently made roasters cringe.

“More and more people are becoming interested in carrying bourbon,” shared Cristiano Ottoni, director of the company Bourbon Exports. “Exports keep increasing and I think the word is spreading quickly. It is delicate, so it takes extra care and tools to grow it. But that extra time and money invested is rewarded in the premium. It is a very select grade and deserves its place among the best coffees.”


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