The economics of coffee: pricing, different classifications, and middlemen.
Here in Costa Rica there are different prices for coffee compared to in America. According to my research, that is because America imports over 1200 thousand tons of coffee each year while Costa Rica imports no coffee since it is grown here. The demand is normal and the supply is high, while in America the demand is high and the supply is lower. Here, a 1 lb bag of Cafe Britt coffee is $5, but in America it is $9 plus the shipping for it to get there. At the award-winning Del Cafe... Tal, we could purchase coffee for $10/lb while in America large scale stores like Starbucks purchase it for $15/lb. This mark-up is not necessarily seen by the producer themselves but more likely by middlemen, unless significant effort has been put forth in order to eliminate them like in Daisy's case. Also, you can buy coffee directly from foreign producers and will most likely get a better deal rather than going through a large intermediary. Starbucks even sells a Costa Rican coffee called Tarrazu that is 1 lb for $13, and it is out of stock on their website. The description is full of fluff to make the coffee sound different and great. Examples of this are "single-origin coffee offers vibrant flavors and a refreshing acidity" and "vibrant and refreshing coffee is complemented by bright, fruity flavors like lemon, strawberry, peach and pineapple". I believe almost none of this superfluous marketing ploy.
Once again, the price of coffee depends on its classification. The price varies significantly if the coffee is Fair Trade, organic, organic certified, shade-grown, or sungrown. Some of these methods are healthier for the environment in general, while others are not, so it is up to a eco-friendly consumer to purchase the more expensive coffee. Since I do not drink coffee, I don't know if there would be a difference in the taste between all these classifications but I'm assuming not.
Showing posts with label coffee. Show all posts
Showing posts with label coffee. Show all posts
Monday, June 9, 2008
Coffee part 3
Coffee has some problems when it is not shade-grown. These coffee plants need direct sunlight to grow and are 3X as productive as shade grown coffee, which makes it extremely attractive to companies or plantation owners. Since there is no need for forests with this kind of coffee, often times jungles are cut down to create land in order to grow this coffee. This isn't just bad because of the deforestation, erosion of the soil due to lack of deep tree roots, and elimination of diversity of flora and fauna, but also because sungrown coffee needs pesticides which may end up draining into local rivers and polluting the groundwater. Over 2/3rds of land under pasture in Costa Rica (meaning plantations or fields) is subject to high erosion risk. When you consider how much of the economy is based on agriculture, that adds up to be a signficant amount of erroded soil that can't be helped due to the original deforestation used to clear the land for the agricultural plants. Also, as we learned at Cafe Britt, more than 70% of the coffee bean is actually discarded, including multiple layers of shells and other non-edible parts, which often ended up as waste in streams. As the bean is processed, it is soaked in water for a day to get the gelatinous coating off of the bean. Sometimes, this water was disposed of incorrectly into local streams causing pulp buildup in streams surrounding plantations and sugar to be in the water which ends up taking some oxygen out of the water, killing everything that was living. Thankfully, the Costa Rican government decided to enact a pollution control law in 1995 that makes sure that solid and liquid waste are properly disposed of.
Thursday, May 29, 2008
Coffee part 2
Cafe Britt coffee is sold everywhere we have been. I saw it at the hot springs, I saw it in gift shops around Arenal, and it was even sold in the gift shop at Monteverde. I guess it pays to be the big name in the coffee industry, especially since the coffee grown at Del Cafe... Tal is supposedly better tasting. While Del Cafe... Tal is working on having a website for international ordering and advertising, Cafe Britt already has a well developed website that makes it easy t order their coffee and stock on store shelves. Maybe in time Del Cafe... Tal can catch up with Cafe Britt or perhaps create their own niche in the coffee market by being a local high quality Fair Trade coffee plantation.
There are 5 indicators that the coffee that a consumer purchases is sustainable.
The first is a certification, but this is a vague category. Their are multiple seals, or no seal at all on the product due to the costs associated with becoming a certified sustainable coffee plantation. There is a bird friendly coffee certification, which is one of the top certifications that the coffee truly was "grown under the most stringent environmental standards of any certification system", especially because to receive this certification they must already be organic too. The Rainforest Alliance is another group that can qualify coffee as being sustainable, but not necessarily organic. This group only has the requirement that 30% of the beans are certified, so if you truly want organic/sustainable you have to look for a different mention that says the coffee is 100% Rainforest Alliance certified or certified organic. The concept of truly sustainable coffee is difficult to find out the truth about.
The second indicator is the country of origin of the coffee. Many countries that grow shade-grown coffee are more sustainable than those that don't because they leave trees and other native biodiversity alone to shade the plants. This is obviously better than a country that cuts down forests in order to grow coffee.
The third indicator is something called Botanical variety, which means which type of coffee (arabica or robusta) coffee you might be purchasing. High quality is arabica, while low quality is robusta, so make sure labels specifically mention 100% arabica coffee. Bourbon and typica are other types of arabica coffee that require shade to grow, which gives more evidence that the coffee was grown in a more sustainable way than catuai and caturra sun grown coffees.
The fourth indicator is to buy coffee from a small roaster and not from a big-time corporation that roasts coffee from multiple plantations at one time. Small roasters know their suppliers better and may have precise information about the origin of the coffee sold to you as a consumer.
The fifth indicator is price. Sustainable coffee is definitely not the cheapest coffee you can find, because in order to be sustainable, plantations are less productive per acre and it costs more in general to produce. Small distinct coffees that are sustainable are both better for the environment and better tasting than large corporation coffee productions.
Thursday, May 22, 2008
Coffee (Cafe)
(Sorry beforehand for the crazy layout of this post with this pictures. Also, you can click on each picture for a huge version of it)
Coffee is a major crop that is exported from Costa Rica, along with bananas. There are different types of plantations here, some in the mountains at high elevations and some are lower down. Yesterday we went to Del Cafe... Tal, a small plantation located North of San Jose in Alejuela, owned by Daisy Rodriguez. She is an entreprenurial woman who started her venture into the coffee business 10 years ago. She first started off with normal coffee (not organic), then she made the switch to organic which wastes about 2 years trying to get certified for that. She grew organic coffee for 3 or 4 years and
then switched back to regular non-organic because of the low profit from organic. Switching from normal to organic growing reduced her amount of coffee produced from somewhere around 100 bushels to 30 per year, and the price increase is not anywhere close enough to make up that difference.
HUUUGE bug from the Lion King that was present at the plantation.
She has 7 full time employees, many of whom we saw, and she hires more than 70 people to come work when it is time to harvest the coffee once a year. Coffee is an interesting crop because not all the beans can be picked at the same time because the beans ripen at different times even though they could be 1 inch apart on a coffee plant. The workers have to hand pick each bean which is amazing considering the amount of acres that each plantation is on. They also had many dogs on the farm.
Because she is an intelligent woman, she decided to take all the parts of the coffee production process, from the growing all the way to the packaging, and do it at 
her own farm to elimate intermediaries and collect all the cash she can.
Her farm sun dries the coffee beans, as seen in this picture.
It takes longer for her beans to dry because of the altitude and the fact that it isn´t as sunny where her plantation is. She grows a type of coffee that does well in high altitudes and in the shade. They also have their own machine that squeezes the coffee bean out of its brown outer shell. I dont have a picture of it out of the shell but here is a picture of it inside the shell-ish type thing.
We also got a free sample of piping hot coffee, and me not being a coffee drinker, I had a sip and gave it to one of the other students who would appreciate it.
Lots of coffee producers claim they have organic coffee or fair trade and they dont. Fair trade coffee is a distinction that means that suppliers and consumers both get what they want; the best deal. It is basically a way for more profit to reach the smaller producers and farmers instead of going into the pockets of the intermediaries. This is a very good thing because in the past few years the price of coffee has dropped and many small farmers weren´t making enough profit to want to stay in business. Some bigger producers bought out small farms, and some small farms group together and sell their products to a single intermediary which earns them more money. The name of the major coop thing in Costa Rica is COOCAFÉ, the Consortium of Coffee Cooperatives of Guanacaste & Montes de Oro. It began in 1988 to try to get fair trade prices for coffee for smaller scale producers. A little random background on Costa Rican coffee is that they were the first Central American country to register coffee as an export in 1840. Coffee currently brings in 11% of Costa Rica´s export revenues and account for 2.4% of the worlds coffee (http://www.globalexchange.org/campaigns/fairtrade/coffee/cooperatives.html). That may not seem like very much (2.4%), but you have to consider the size of the country. Costa Rica is about the size of West Virginia.
Another random thought about coffee is that it originated in Africa, and the type grown in Costa Rica is Arabica. There are different levels of quality of Arabica, 1 through 5, so people from all walks of life can drink coffee.
Today, we went to Cafe Britt, a plantation of a much larger scale. It is like a big commercial coffee producer, unlike Daisy´s more homestyle feel. We were in the city and then we just stopped randomly and we were at their touristy location, not where they grow the majority of their coffee. Right when we got off the bus we were given iced coffee which was very sugary and decent to my taste buds but I don´t like coffee anyway so it was different. This whole place was extremely commercial and bizarre because Del Cafe.... Tal was so incredibly different. It was like going to a circus. There were 3 tour guides, who were more like actors and actresses, who helped explain the entire process of growing coffee. It takes 3 years for a coffee plant to produce a bean, and then they pick it, dry then, get the real coffee out of the shell, roast it, do other things that I can´t remember, and package it. Also, 80% of the weight of a coffee bean (pictured above in the part about Daisy´s farm) is just the covering around the bean. So a bushel weighing 25 lbs would yield only a few pounds of coffee which seems pretty crazy. This was a much much much larger scale production, even though it was a fake Disneyworld of a coffee plantation. They even had a theater with lights, sound, a stage, etc. It was just ridiculous. It was the place that tourists go, and that just isn´t my style. There were old white people from Florida there, and that just was a slap in the face about how touristy Cafe Britt was. I really wish I´d bought coffee from Daisy because I would much rather support her operation compared to the big corporate commercial place but I didn´t have enough money yesterday to do so unfortunately. They served us a very good lunch in a pretty nice looking restaurant which was a total 180 from yesterdays set up. Yesterday was in the mountains, under an open air shed type of things with 2 long tables and today was this resorty-feeling place with nice carved wooden chairs and gourmet food. It was just so different it blew my mind. They did have some delicious hot chocolate that I bought. I will try to remember to add more pictures later, but its time for bed.
Coffee is a major crop that is exported from Costa Rica, along with bananas. There are different types of plantations here, some in the mountains at high elevations and some are lower down. Yesterday we went to Del Cafe... Tal, a small plantation located North of San Jose in Alejuela, owned by Daisy Rodriguez. She is an entreprenurial woman who started her venture into the coffee business 10 years ago. She first started off with normal coffee (not organic), then she made the switch to organic which wastes about 2 years trying to get certified for that. She grew organic coffee for 3 or 4 years and
then switched back to regular non-organic because of the low profit from organic. Switching from normal to organic growing reduced her amount of coffee produced from somewhere around 100 bushels to 30 per year, and the price increase is not anywhere close enough to make up that difference.
HUUUGE bug from the Lion King that was present at the plantation.
She was also an extremely down to earth woman and was intelligent about her business practices. The cost of growing coffee add up to more than 50% of the price, and a lot of money from small farmers who sell to big companies end up in the hands of intermediaries. Her coffee used to sell for around $1.50 per pound, but a few days ago her farm won an award for having the best coffee in Costa Rica, which increased demand for her coffee greatly and now she sells it for $15.00 per pound.
Giant Flying Ant
She told us that winning the award not only increased her profits and recognition but it also raised the morale of her employees because they were part of growing award winning coffee. 
Giant Flying Ant
She has 7 full time employees, many of whom we saw, and she hires more than 70 people to come work when it is time to harvest the coffee once a year. Coffee is an interesting crop because not all the beans can be picked at the same time because the beans ripen at different times even though they could be 1 inch apart on a coffee plant. The workers have to hand pick each bean which is amazing considering the amount of acres that each plantation is on. They also had many dogs on the farm.
Because she is an intelligent woman, she decided to take all the parts of the coffee production process, from the growing all the way to the packaging, and do it at 
her own farm to elimate intermediaries and collect all the cash she can.Her farm sun dries the coffee beans, as seen in this picture.
It takes longer for her beans to dry because of the altitude and the fact that it isn´t as sunny where her plantation is. She grows a type of coffee that does well in high altitudes and in the shade. They also have their own machine that squeezes the coffee bean out of its brown outer shell. I dont have a picture of it out of the shell but here is a picture of it inside the shell-ish type thing.
We also got a free sample of piping hot coffee, and me not being a coffee drinker, I had a sip and gave it to one of the other students who would appreciate it.
Lots of coffee producers claim they have organic coffee or fair trade and they dont. Fair trade coffee is a distinction that means that suppliers and consumers both get what they want; the best deal. It is basically a way for more profit to reach the smaller producers and farmers instead of going into the pockets of the intermediaries. This is a very good thing because in the past few years the price of coffee has dropped and many small farmers weren´t making enough profit to want to stay in business. Some bigger producers bought out small farms, and some small farms group together and sell their products to a single intermediary which earns them more money. The name of the major coop thing in Costa Rica is COOCAFÉ, the Consortium of Coffee Cooperatives of Guanacaste & Montes de Oro. It began in 1988 to try to get fair trade prices for coffee for smaller scale producers. A little random background on Costa Rican coffee is that they were the first Central American country to register coffee as an export in 1840. Coffee currently brings in 11% of Costa Rica´s export revenues and account for 2.4% of the worlds coffee (http://www.globalexchange.org/campaigns/fairtrade/coffee/cooperatives.html). That may not seem like very much (2.4%), but you have to consider the size of the country. Costa Rica is about the size of West Virginia.
Another random thought about coffee is that it originated in Africa, and the type grown in Costa Rica is Arabica. There are different levels of quality of Arabica, 1 through 5, so people from all walks of life can drink coffee.
Today, we went to Cafe Britt, a plantation of a much larger scale. It is like a big commercial coffee producer, unlike Daisy´s more homestyle feel. We were in the city and then we just stopped randomly and we were at their touristy location, not where they grow the majority of their coffee. Right when we got off the bus we were given iced coffee which was very sugary and decent to my taste buds but I don´t like coffee anyway so it was different. This whole place was extremely commercial and bizarre because Del Cafe.... Tal was so incredibly different. It was like going to a circus. There were 3 tour guides, who were more like actors and actresses, who helped explain the entire process of growing coffee. It takes 3 years for a coffee plant to produce a bean, and then they pick it, dry then, get the real coffee out of the shell, roast it, do other things that I can´t remember, and package it. Also, 80% of the weight of a coffee bean (pictured above in the part about Daisy´s farm) is just the covering around the bean. So a bushel weighing 25 lbs would yield only a few pounds of coffee which seems pretty crazy. This was a much much much larger scale production, even though it was a fake Disneyworld of a coffee plantation. They even had a theater with lights, sound, a stage, etc. It was just ridiculous. It was the place that tourists go, and that just isn´t my style. There were old white people from Florida there, and that just was a slap in the face about how touristy Cafe Britt was. I really wish I´d bought coffee from Daisy because I would much rather support her operation compared to the big corporate commercial place but I didn´t have enough money yesterday to do so unfortunately. They served us a very good lunch in a pretty nice looking restaurant which was a total 180 from yesterdays set up. Yesterday was in the mountains, under an open air shed type of things with 2 long tables and today was this resorty-feeling place with nice carved wooden chairs and gourmet food. It was just so different it blew my mind. They did have some delicious hot chocolate that I bought. I will try to remember to add more pictures later, but its time for bed.
Subscribe to:
Posts (Atom)