Peru’s speciality coffees: sustainability challenges

Peru’s speciality coffees: sustainability challenges

02/10/2018

We are currently witnessing a boom in sales of speciality coffee from different origins, each type with its own characteristic flavour, aroma and fragrance. The price of these coffees is not determined by the New York Stock Exchange but rather by their sensory qualities. This opens up a window of opportunity for small-scale farmers to innovate in their production practices, to invest in quality processing of the coffee, and in this way boost their incomes.

Rikolto has tapped into this potential in Peru. For the past five years, our colleague Paola Mercado has coordinated a programme for sustainable and inclusive development of the coffee sector. She has worked closely with the cooperatives Pangoa, APROCASSI and La Prosperidad de Chirinos, and at national and international level with the Peruvian National Coffee Board (JNC) and other key players in the chain.

Today, Paola is leaving Rikolto. But not before she takes time to share the lessons she has learned and make some recommendations. A farewell interview over a cup of coffee!

Why is Rikolto investing in high-quality coffee to improve the development of Peru’s coffee sector?

Paola: Despite Peru being one of the world’s top coffee producers, only 3% of its exports actually achieve an excellent quality rating. This is in stark contrast to the growing market demand for speciality coffees produced to high environmental standards or under fair labour conditions, and the possibility of offering producers better prices than they receive in the conventional market.

This is why Rikolto is working on pilot projects to improve coffee quality, starting with a project involving the cooperative Agraria Cafetalera Pangoa, which has 680 members.

How did we start working with Pangoa?

Pangoa is a shining example; their offices are the cleanest I’ve ever seen. A pleasure to visit. We started working with them back in 2014 after the coffee leaf rust crisis of 2013, which resulted in them suffering losses of up to 40% of their production volume. The cooperative was taking steps to remedy the situation. They changed their coffee variety to one that was more resistant to the disease. They also began overseeing quality management more effectively and were becoming more aware of market trends.

That was when we began providing guidance and funding across four different areas: training the producers to improve their agricultural practices; organising the farmers into groups according to different altitudes; improving the process of collecting the coffee beans from the farms and quality control; and, finally, supporting the management and marketing of the cooperative.

We trained producers to improve their practices in selective harvesting, fermentation, washing and drying, all of which determine the final quality of the coffee. One crucial step in evaluating quality is coffee cupping, or coffee tasting. Just like wine or beer, coffee is scored according to a set of criteria. This is crucial information that determines the price the cooperatives can negotiate for their coffee beans. Cupping is usually done by what is called a Q Grader, a professional who traditionally works in a coffee lab and awards points based on an internationally accepted scoring system. We introduced “mobile cupping” methods, which make it possible to carry out quality controls in the field, instead of in a laboratory. We even initiated competitions between the committees to try and highlight the issue of quality.

(the video below shows mobile cupping in practice - no English subtitles)

We really invested a lot in training young people, especially in cupping to help them obtain official certification as a Q Grader. Having cupping capabilities and Q Graders helps raise the status of the cooperative, which in turn helps market its coffee.

In the area of information technology, we supported the development of software that provides producers with quality control results just a few hours after the coffee has been brought in for storage. And in order to improve the marketing and management of the cooperative, promotional materials were designed and funding was made available to take part in international trade fairs.

From the lessons learned with Pangoa, what recommendations can you give to our stakeholders working in the coffee sector?

We learned a number of lessons from Pangoa that helped us in our later support to two other cooperatives, APROCASSI and La Prosperidad de Chirinos. Generally we encountered obstacles, such as finding the right specialists in Peru who could provide the necessary training, or the lack of opportunity for cooperatives to drive forward innovation.

But let me pick out three concrete lessons: first, categorising producers according to the altitude at which their coffee is grown. The reason for this is that coffee can only be classed as high quality if the farm is situated at over 1,600 metres above sea level. For farms at lower altitudes, producers are advised to diversify their product range, and go for honey or natural coffees, coffees with a special story, etc.

The second factor is that any strategy aimed at quality improvement must take into account the volatile nature of the market and you have to look at training in a holistic way. The technical support to the cooperative and its members must be in line with the market.

And, finally, farmers are used to receiving training and they understand why it is needed, but perhaps they are starting to tire of the topics covered. Which is why it is important to innovate both in learning techniques and in the range of subjects addressed. We have found that the topics of cupping and barista training have been well received and well attended, because it’s a new and very practical thing.

When improving coffee quality in Peru, what risks might make it difficult to sustain these activities over the long term?

Sustainability is a complex issue. We started to work on quality improvement with Pangoa in 2014 and finished in 2016. A year and a half later, we saw that some of the measures were ultimately simply not sustainable. The cooperative has to constantly seek new coffee buyers, make production plans accordingly, improve agricultural practices and quality control in line with market trends, etc. It’s not easy to maintain that dynamic.

Maintaining the consistency of coffee quality over time is another major challenge. A producer may obtain a grade of 86 in cup quality one year (it has to be above 85 points to be considered a quality cup), but there is no guarantee he will get the same score the following year. There are many factors that cause quality to fluctuate, ranging from environmental factors to a disappointing harvest.

Another factor is training. Practically zero training is being offered either because there simply aren’t enough resources available or because there are no technical/agricultural advisers available. This means we have to work with the cooperative to continually assess what can be done to keep driving the development of training plans and making constant improvements in quality.

You mentioned innovation. Does working with speciality coffees make it easier to roll out innovation?

Keeping up to date with innovation is very important to be able to follow new trends in the market. This is why we insist so much on cupping and quality control and why we developed the information system I mentioned. At the moment, all Pangoa producers receive the results of the physical and sensorial analysis of the coffee they deliver. So they can really see their quality scores and adapt their practices accordingly.

Finally, these processes have only been made possible thanks to the willingness of people to learn, and also unlearn, and of course their human qualities.

Before the launch of the project, we only did cupping for organic coffee, but now we have organised ourselves to cup all our coffee, including non-organic. We don’t start collecting the coffee from the farmers before we know its quality.

Wilder Ruiz Responsible for quality management within Pangoa cooperative

Paola: If I listen to for example Wilder Ruiz now, the responsible for quality management, he can reel off all the properties and characteristics of coffee. I would never have imagined this at the start of the project. This is how we get producers to fall in love with the product and that then improves the quality of a cup of Peruvian coffee.

Key facts and figures

  • Producers are paid according to the quality of the coffee they deliver, with prices ranging from USD 140 for standard quality (between 80 and 83 points), USD 170 for a quality rating of 84, all the way up to USD 500 per sack for coffee scoring 100 points.
  • 15% of the coffee produced by the Pangoa cooperative is below 81 points, 60% scores 81 points, and 25% is over 83.
  • The cooperative now has three Q Graders, which increases buyers’ confidence.
  • Quality coffee is still sold in micro-batches, ranging from one sack to 12. Pangoa has managed to sell up to 160 sacks (each sack represents 1 quintal).

Editor: Selene Casanova