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Costa Rica's Coffee Revolution

Posted: 02/04/2014 11:14 am

On a recent trip to Costa Rica, I witnessed a "revolution," though thankfully not the kind that culminates in a coup d'état. What I saw was the so-called "micro-mill revolution" -- a new way in which coffee is processed and sold, that could help transform the way specialty coffee is traded, to the betterment of all involved.

But before we get to the method some Costa Rican farmers are employing, it's probably important to explain a bit about how most coffee is traded. The majority of coffee in the world is grown by small farmers, with plots of land generally no bigger than a couple hectares. Those farmers are usually a part of a co-op or producer group (in which case their coffee is bought by the organization, blended together, and sold as large lots), or independent, in which case they would typically sell their coffee cherries to collectors for processing, blending, and selling to market.

While this can be an efficient means of getting coffee to market for buyers, it also represents a large gap in the value chain for many farmers -- if their product has been homogenized with the coffee of many others, and bought as an "incomplete" product, the collectors and processors (or mills) are able to cash in on that missed value. The coffee also loses a great deal of its traceability, and additionally, the quality of blends are inherently middling, as is anything when different calibers of a product are mixed.

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This is the way small producer-grown coffee has worked for decades, and it is advantageous, for buyers particularly, when used in conjunction with the current commodity-based way of coffee trading. But in this day and age of a culture obsessed with high-quality products purchased with sustainability in mind, the new generation of coffee roasters are actively working to adapt their business models to meet their customers' expectations.

Now, back to Costa Rica. On my first visit to the country, eight years ago, I saw what was then the common way of doing business: coffee was grown by estates, or by farmers who sold their cherry to mills for processing. Fast forward to 2014 and the aforementioned micro-mill revolution seems to have taken the country by storm.

There are now far more farms milling (taking the coffee from cherry to "green" coffee, which is the product roasters buy from origin) their own coffee. You may ask, why would farmers choose to add capital expenses and more processes to their lives? Simply put, because it earns them more money and the pride in knowing that the full potential of their harvest can result in some of the best coffees in the world.

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To do this, dozens and dozens of farmers have invested in themselves by purchasing small versions of the large milling equipment that you would typically find on large farms or mills. The typical investment, of anywhere between $10,000-$20,000, comes from local banks. With the farmers' land as collateral and a letter of intent to purchase from an exporter, Costa Rican banks are seemingly at peace with the idea of investing in coffee farms, which is not the case in many countries.

With their loans, farmers invest in the equipment necessary to process their own coffee, allowing for them to realize the full potential of quality in their coffee by controlling the process throughout, and not allowing their beans to be lumped in with inferior qualities at the large mills. But this is only one factor in the equation. Each farmer then needs access to the market to sell their coffee, or all is for naught. And this is where the exporters come in. I recently spent time with one such exporter, Francisco Mena of Exclusive Coffees (an important advocate of the micro-mill revolution) who works with over 80 micro-mills, helping find buyers for their coffee. The farmers are also given technical assistance with growing and processing their coffee, and are blessed with some of the world's best growing conditions (altitude, soil, weather, etc), all of which compounds to create a truly unique situation.

Costa Rica is now shipping some of the most traceable and quality coffee in the world, with arguably the highest margins I've ever seen farmers get -- even more impressive when you look at their share of the final price roasters are paying. Farmers who micro-mill their own coffee are able to make 30-50 per cent more money than they would if they were simply selling their cherry. At those rates, the initial investment farmers must make to join the revolution become highly recoupable.

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What is most interesting is that the prices are based on the cost of production and quality of the final product -- two things that are tragically not considered and undervalued, respectively, on the coffee commodity market.

And this is perhaps the most "revolutionary" part of this revolution -- the de-commodification of coffee. It's shameful that the idea of paying a fair price for coffee, based on quality, cost of production, and a direct relationship with the farmer, persists as an overall rarity in our world. But Costa Rica provides a truly successful example of how we can stem this tide.

After visiting farms in four regions and cupping over 85 lots in my recent trip, I can honestly say that the level of quality and character I tasted in the coffees was truly remarkable. While there, I was with highly-regarded roasters from around the world -- American, Canadian, Australian, Russian -- all of us tasting countless coffees and visiting the farms/mills to try to find the micro-lots we deemed to be the best of the year. And for what it's worth, we all seemed convinced that our unique choices were the best available, and none of us balked at the price. Now, if we can replicate this around the world, then we'll really have a revolution on our hands.

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  • How Many Beans Made That Cup?

    No drink is more connected to the modern human experience than a cup of coffee! A powerful statement for the <a href="http://www.stockmarketdigital.com/top_ten/top-10-business/top-10-most-traded-commodities-in-the-world" target="_blank">world's second largest traded commodity</a> (second only to oil) -- 2.25 billion cups of coffee being consumed each and every day! One plant's beans literally fuel the human experience. <br> <a href="http://www.oxforddictionaries.com/us/definition/american_english/coffee" target="_blank">Coffee</a>: "a drink made from the roasted and ground bean like seeds of a tropical shrub, served hot or iced." -- 25 beans make a cup!

  • The Production of Coffee

    Coffee cultivation for export takes place in 51 nations in tropical and subtropical regions worldwide; ranging from The United States (Hawaiian and Puerto Rican Coffees) to Brazil (the <a href="http://www.ncausa.org/i4a/pages/index.cfm?pageid=75" target="_blank">world's largest producer of coffee</a>: over 2.5 million tons annually) to Uganda (coffee is Uganda's <a href="http://www.agriskmanagementforum.org/sites/agriskmanagementforum.org/files/Documents/UgandaCoffeeSupply10-final-web.pdf" target="_blank">number one cash crop</a>). <br> Coffee is overwhelmingly grown, processed, and exported from developing nations. According to the International Monetary Fund the only "developed" country producing coffee is the United States (only Hawaii and Puerto Rico fall within latitudes which allow the coffee plant to survive). <br> <em>IMAGE: Coffee processing in Juayua, El Salvador at Larin E Hijos Y Cia</em>

  • Up the Mountainside

    Growing Coffee is nothing like growing other major cash crops (rice, corn, wheat, sugar, or cotton). Coffee's environmental requirements (water, climate, shade, soil, and pest control) mean you can find coffee plantations in some pretty interesting places. In this image you see a volcanic hillside in El Salvador covered in coffee plots (each polygon of larger trees is a bounding box containing coffee trees/bushes). <br> I personally feel that the best coffees I've sampled around the world have all been grown clinging to volcanic hillsides or directly at the base of volcanoes (active or dormant).

  • In the Shadow of Mt. Meru

    Coffee plants (<em>Coffea arabic</em> and <em>Coffea canephora</em>) produce their downstream product (coffee) via a multitude of different factors; analogous to how grape vines (<em>Vitis vinifera</em>) with identical DNA can produce vastly different wines when planted in different regions of the world. The quality of the soil; the amount of shade on the plants; the timing of watering; the differing climates of growing locations; all of these factors can influence the taste and structure of the beans which ultimately make your coffee. <br> Coffee plants in Tanzania (pictured here at Burka Coffee Estate) produce different flavors from those on the other side of the world in Panama.

  • The Coffee Bush...

    … or is it a tree? The Coffee plant is often referred to as both, and scientific classifications label it a "shrub." It has a central stem (trunk) off which shoots contain the leaves, flowers, and fruit. The "shrub" can be grown to a height of 10-12 feet in cultivation, however in the wild is reported to grow much taller (hence the idea of a "tree").

  • Juvenile Coffee

    It takes a newly "cut" (or seedling) juvenile coffee plant between two and four years to begin reproducing; producing the flowers which ultimately produce the coffee cherries. Full scale harvesting can begin at between four and five years of age.

  • Coffee Flower

    A large coffee plantation in full bloom is an incredible site. Once a year the plants cover themselves with diminutive white flowers; the precursors to coffee beans. The flowers are short lived, fading upon fertilization, being replaced by more flowers over a period of a few days. In a strange twist of Mother Nature the plant can sometimes flower, grow a green berry, and present a ripe cherry all at the exact same time (commercial growers keep this to a minimum for continuity). <br> Running through a flowering plantation, you can be overcome by a smell likened to jasmine.

  • Coffee Cherry

    Ripening of the coffee berry into a cherry (pictured above), takes approximately 8-9 months. A productive plant can literally be covered 'head to toe' with thousands of cherries, turning the plant into an archetypal Christmas colored display. <br> There are unique varieties of <em>Coffea Arabica</em> (Catuai-Amarillo for example) which grow bright yellow cherries instead of the usual deep red color. <em>FUN FACT: Botanists call the cherry a "drupe."</em>

  • Inside the Coffee Cherry

    The secret to coffee is contained inside the cherry. After discarding the red pulp (flesh of the cherry) you are left with two coffee beans, from which processing begins… <br> <em>FUN FACT: In 5-10 percent of 'drupes' there is a singular bean which is ovoid instead of flat on one side. These are called "peaberries" and can be separated during processing to create their own Peaberry Coffee. </em>

  • Hand Picking

    In a majority of coffee producing countries the coffee cherries are picked by hand. Brazil is the notable exception where a significant amount of coffee is picked by modern machines. <br> The two major reasons the best coffees are picked by hand is the human eye distinguishing between ripe and unripe berries (red vs. green); and the terrain on which many coffee plantations are planted (the side of a volcano for example). Generally, the coffee plant does not mature its fruit all at the same time and often perfectly ripe red cherries can share the same plant with juvenile unripe green berries. Machines cannot yet tell the difference.

  • Hand Sorting

    A secondary hand sorting can increase the quality of the final product by removing over-ripe or under-ripe cherries. This image was taken during a harvest at Portezuelo Park in El Salvador, where coffee tourism is encouraged, including getting your hands on the cherries.

  • Drying in the Sun

    Processing of the coffee beans must begin immediately upon picking to prevent spoilage, and involves several "drying" steps. The removal of the cherry pulp can be accomplished through various methods (often depending on water resources), but the end result of a drying bean is essentially the same. Sun dried beans are turned multiple times a day (pictured above) to ensure uniform drying. In large industrial operations beans can be dried in large tumblers.

  • Bean Sorting

    After processing, coffee is sorted for size, weight, and grading. At this stage the beans can be bagged and shipped by suppliers to the "destination" country; however the process of making coffee is not yet complete.

  • Green Beans

    "Green Coffee" is the name given to processed beans which have not yet been roasted. 7million to 8 million tons of green coffee is exported around the world annually. The green coffee is ultimately roasted at internal temperatures of ~400 degrees Fahrenheit to produce the aromatic brown bean ultimately ground into coffee. <br> <em>FUN FACT: The scientific process of expressing oils/aromas/flavors through roasting is knowns as "pyrolysis."</em>

  • Coffee Compost

    In the "circle of life" that is coffee production, the cherry skins/pulp removed from the beans during processing are often composted to return essential elements/nutrients to the soil from which the coffee is grown.

  • How Old is Too Old?

    The lifespan of a wild coffee shrub can exceed 100 years. In plantations the cycle of aging is carefully monitored to produce the best possible harvests. The above sign indicates a field of coffee at Burka Coffee Estate, Tanzania, first planted in 1950. At Burka the plants are allowed to go through 10 growing cycles at seven years per cycle, meaning a coffee shrub planted in 1950 will be retired permanently from service (removed from the ground) in 2020, having lived a life of 70 years.

  • An Old Soldier

    The base of this coffee shrub represents 63 years of growth and coffee production. Every seven years the plant is cut down to the base, from which a new stem (trunk) is produced on which new growth (and new coffee) grows. <br> This image shows a coffee plant towards the end of its lifetime having grown somewhere in the neighborhood of 10,000 cups of coffee.

  • Transported All Over the World

    Coffee consumption is mind-boggling. In the United States alone, there are 130 million to 150 million coffee consumers. <br> This truck in El Salvador represents an infinitesimal fraction of the world's coffee; a small yield of one of the most important plants on Earth.

  • Coffee Tourism

    Coffee Tourism is an incredible side effect of coffee production. In almost every country where coffee is grown there is at least one estate which opens its doors to travelers who want to experience first hand the wonders of growing and drinking coffee.

  • The Joy of Caffeinated Tourism

    After my tour of <em>Larin E Hijos Y Cia</em> in El Salvador the greatest joy came from the tasting. There is no better coffee in the world, than that which is acquired at the source!

 

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