The Highs and Lows of Brazilian Coffee.
Counted among the world’s largest production of coffee, Brazil is the most important player in the area. Feeding an enormous internal and external market, the grain produced in the country is of intense significance for coffee makers around the world.
Coffee and Brazil
Coffee plays an essential part in the history of Brazil. The plant, originally from Ethiopia, was first brought to the country Brazil by French settlers who established themselves in the state of Pará in the early 18th century. Thriving in the ideal conditions provided by the climate, the coffee fields spread from the North of Brazil along the country, concentrating in the areas along the shore. During this period, sugar plantations represented the primacy economic activity in the country and coffee was merely a luxury. Nobody could have imagined at the time that it would become the major player in Brazil’s vibrant history of even greater importance than New Orlean’s Sugar rush or the Irish potato famine.
However, by 1820, coffee represented the most exported product from Brazil, after the sugar cane started to lose importance in the international markets. The production peaked when the coffee plantations gained the fertile soils of Vale do Paraíba – a region that makes up part of São Paulo and Rio de Janeiro states.
By the 19th century, the Brazilian coffee was the number one export product filling up the European and American cups and in 1840 and Brazil became the largest coffee exporter of the world. The country was greatly enriched by this and a new society is formed, ruled by the so-called “coffee barons”, the wealthy owners of the grain’s plantations.
Not only did these “coffee barons” detain the economic power in Brazil, but they also wielded significant political power, first contributing to the Proclamation of the Republic and then strongly influencing and even determining the direction of the country’s future presidents’ elections.
During the coffee era, Brazil experienced a period of great progress, with the agrarian elite investing in bank institutions, infrastructure, railways, credit expansion and industrialization. The money earned from coffee exports was the essential capital that would bring about important changes in the country’s society, economy and culture.
While the world was becoming slaves to their coffee, the industry relied almost entirely on the ownership and working of slaves and the market was heading for a crash. After the abolition of slavery in 1888, the coffee production industry almost collapsed.
A solution for the lack of labour was soon found with government programs that encouraged European immigrants to work in the Brazilian coffee fields. The European workers added new features to the Brazilian society, accelerating the country’s urbanization and increasing the internal market and this decisively contributed to the growth of the national industries, changing the face of Brazil forever.
The young Republic was growing and developing by reaping the fruits of its beloved and addictive commodity. However, even the steadiest and most profitable economic activities couldn’t survive the Great Depression of 1929 and coffee was no exception. As people could not afford to buy coffee the demand dried up.
By that time, United States were the largest buyer of the Brazilian coffee, followed by the European countries. The prices plunged and thousands of coffee bags were burned in Brazil, bringing an uncountable loss to its producers which is still being felt to this day.
The changes that Brazil would face during the Republic also contributed to the end of Coffee Era in the country, and together with it, came the decadence of the rural oligarchies’ influence. The commodity and its producers gradually lost its awareness and leadership in the Brazilian economy, preparing the ground for the growth of other economic activities.
Yet, as is clear now coffee never left its role as an important product for the Brazilian economy and the beverage remains as one of the most valuable commodities of the country.
THE BRAZILIAN COFFEE INDUSTRY
Without a doubt, Brazil is the largest producer of coffee in the world and controls more than 30% of the international production. This makes coffee one of the most important agribusiness commodities, maintaining steady and growing value in the stock market. The golden grain was responsible for 10.2% of the Brazilian exported commodities in 2013 and despite the current drought in the country the year’s harvest invoiced over USD 7,841 billion! Around 10% of all the coffee exported is the Arabica type, followed by the Robusta variety with 5%.
The coffee industry is spread along 13 Brazilian states with the largest located in the states of São Paulo, Minas Gerais, Rio de Janeiro, Espírito Santo, Bahia, Paraná and Goiás (listed here in order of importance). It has been estimated that there are around 300 thousand coffee plantations in the country, spread in 1950 cities.
The traditional element of competitiveness is found in the coffee production costs in Brazil, this has determined the comparative advantages of this country compared to others. While the Brazilian climate seems to have been made for the plantation of grain the Brazilian coffee production is based on quantitative parameters, and this is what gave the country the image of a producer of a bad quality coffee.
However, influenced by the growing demand for the so-called special coffees, producers are currently investing in the production of a more elaborated variety, especially in the South of Brazil, where the weather is milder.
AS SUCH, The Brazilian coffee is mostly exported as green coffee, soluble, roasted and ground coffee, concentrated and essential extracts and your basic coffee residues.
Internationally, the largest coffee buyers of the Brazilian blend are: Germany, United States, Italy, Japan and Belgium (in ascending order). An important institution regulating the coffee exports is the Cecafé (Coffee Exporters Council).
THE EVER EXPANDING COFFEE CULTURE.
Numbers show that Brazilians never get tired of their coffees. Indeed, Brazillians unlike the rest of the world will happily drink strong coffee before going to sleep at night. Brazil is not only the first exporter of coffee worldwide, but it’s also one of the drink’s largest consumers. The internal consumption of coffee is non-stop growing, what can be proved by some numbers. The population’s intake of coffee increased from 8.2 million bags, in 1990, to 20 million bags, by the first months of 2012.
A survey made by IBGE revealed that coffee is the most consumed product on a daily basis by the Brazilian population above 10 years old. That represents 79.7 liters of coffee drank per inhabitant during a year which is higher than New Yorkers.
This figure is despite the fact that the coffee consumed inside the country is the worst of its production, as the finest crops are destined to exportation. Perhaps this is one of the reasons why the coffee Brazilians drink on a daily basis is cheap and popular, costing around BRL 2.00 a cup or BRL 5.00 half a kilo of the powder bought in supermarkets. Cheap and strong is what Brazillians like and paying a high price to enjoy a cup of coffee seems alien and strange to them.
Also, people here are resistant in leaving their day-to-day black coffee behind. The most accepted variation is adding some milk to make the super popular “média”. Even the machine coffee finds some resistance from Brazilians and in addition a lot of people still turn up their noses to the Frapuccinos, Mochas, Caramels, Fruited, Macadamia, Frozens, Iced, Cinnamon, Nuts, whip creamed coffees, among other creative and altogether strange coffee recipes with odd names that are so popular abroad (prime example is the disgusting orange-chocolate coffee blend that arrived in Britain in early 2014).
Even though the massive majority of Brazilians don’t care about the type of coffee they are drinking, as long as it’s strong and black, the niche market of expensive high-quality coffees is growing in many parts of the country which has revealed a promising niche, in which several companies are already investing and succeeding.
The gourmet coffee market is concentrated in the largest cities of the country and mainly fed by multinational franchises coffee machine sellers that managed to advertise their products well, to the point of creating a new culture of coffee in Brazil, but still with restricted range to a specific profile of consumer.
Brazilian Coffee Industry Association
The Brazilian Coffee Industry Association was created in 1973 and represents the most important regulatory institution of the coffee industry. Its operations integrate industries, retail and consumption units facilitating not only quality but quantity. The institution counts with several programs focusing on the purity, quality of Brazilian coffee and, more recently, the sustainability in the coffee fields.
Currently, having 500 roasting and grinding companies throughout the national territory with headquarters located in Rio de Janeiro the institution is formed by a Deliberative Council, a Consulting Council and six Executive Boards including the likes of Management, Communications, Economics and Finance, Marketing, Quality and Institutional Relations.
Their responsible is to provide its associates a complete database with macroeconomic studies, opinion and market polls, aside from sectoral diagnosis, legal guidance in the areas of taxation and labour, constitutional and consumer protection, detailed register of companies, brands and products; statistical information production and consumption, financial advisory and business and technology development information. Basically to ensure that the industry is as well informed as possible so that this beautiful anti-sleep beverage can keep appearing upon our desks.