2012

Peru – The New Gold of the Andes

AOn the road up toward St Ignacio in the heart of the Coffee region of Northern Peru, I am struck by how far we are from the ports on the Pacific, or anything else for that matter. We are already five hours out of Chiclayo, headed toward Jaen, and then ultimately St Ignacio within sight of the Ecuadorian border. We are going deep to find those coffees in Peru that deliver the unique qualities I have come to expect from Peru. To those who know me, it should come as no surprise that Peru is one of my favorite countries – not because of the cuisine (which is extraordinary and always a surprise) but because of the entire Peruvian coffee industry’s intense desire to lift the international status of their coffees to premier levels.

Lifting the perception of Peruvian coffee however is no small task. Peru is the fifth largest exporter of Arabica coffee worldwide. However, the country faces daunting challenges as it hopes to capitalize upon the foreign exchange potential of its coffee crop, not the least of which is the sheer vastness and inaccessibility of the country itself.

Peru is split by the Andes Mountains, the powerful uplifted monumental peaks that stretch from Punta Arenas in Chile to Lake Maracaibo in Colombia at an average height of 4000 meters (13,000 feet). As the west of Peru is startlingly arid, the eastern sides of the Andes are overwhelmingly lush and here is where the coffee grows. Traveling to the coffee growing regions on often-perilous roads and mule trails, these farms and communities are nurtured by the many furious rivers, headwaters of the Amazon, that cascade out of the highlands, embarking on the journey to the South Atlantic. Of all the Latin coffee locations I have experienced, the region around Jaen and northern Peru is by far the most lush and verdant; and very far away from the consumers who crave their coffee. Coffee grown in this region must cross the spine of the Andes over dangerous and lawless roads to the dry mills in Jaen, four hours away, and then on to Chiclayo over eight more hours onward.

It is the dual challenge of nature and infrastructure – and the often cross purposes of their goals – that define the difficulties. Roads with perilous grades and shoulders rising and dropping like roller coasters through the mountains, interspersed occasionally with tiny hamlets wedged between the road and abrupt cliffs dropping hundreds of feet. Nature often reclaims these roads through massive landslides that scrape the efforts of man from their precarious mountainside perches.

Because of these, and many more challenges, development of more efficient supply chain innovations is slow and expensive. Most coffee in Peru is wet milled on the farms using small pulpers and ad hoc patio systems. Farmers reduce the moisture content to approximately 20% and then transport the “almost finished” coffee to the dry mills. According to Isabel Uriante Latorre, the General Manager of PROASSA, the primary dry mill for Café Feminino in the North of Peru, the wet processed coffee typically is delivered from the farms every two weeks. PROASSA is in Chiclayo, the major urban center in this part of Peru and is at sea level. This decentralized system inevitably leads to potential inconsistency in quality and provides a fertile environment for fungal development and rot.

This antiquated in-country supply chain is a direct result of the market driven environment that existed up into the 1970’s, what I think of as the “Pre-SBC/Starbuck’s Era.” During this period, there were relatively few buyers, and their focus was on quantity and immediate supply rather than quality and value differentiation. The coffee industry in Peru made the strategic decision to place large consolidated dry mills closer to the ports and transportation network along the Pacific. A clear advantage at the time but in today’s market, handling coffee in this way is not considered “best practices.”

The Agricultural Ministry in Peru recognizes the challenges faced by the coffee industry in Peru and especially the great benefits potentially available through changing the current system. Although there are enormous political and powerful business interests to overcome, the Ministry understands that internal supply chain innovation is necessary in order to become a world-class Specialty coffee supplier.

And change is happening, one the most highly regarded farmer organizations in Peru is CENFROCAFE in Jaen– high in the Andes. This Cooperativa is organized around 84 farm associations and six dry mill processing and finishing associations, which funnel the coffee through the finance, marketing and sales office in Jaen. All of this is taking place above 1000 meters altitude. This organization provides direct access to international markets for thousands of farm families. Approximately 92% of the coffee moved through CENFROCAFE is certified Organic and 100% is certified Fair Tradetm.

Instrumental to the success of CENFROCAFE is the high level of access and communication between all elements of the association. Members must be prepared for continuing innovation and reinvestment in order to meet the quality standards of the Cooperative.
One such processing association is Casil, Ltda in St. Ignacio Peru. Deep in the coffee growing region in the northern tip of Peru and within sight of the Ecuadorian border, this dry mill is within easy access to the entire region and receives coffee daily during harvest. Coffee processed on the farms is quickly consolidated through the farm associations and transported Casil for finishing and dry mill processing. The Coop is financing construction on new warehousing facilities for storage in parchment and storage in anticipation of markets. A full cupping lab rounds out the mix with a “Q” grader on-site for grading and quality control. The level of professionalism at Casil, and throughout the Cooperative shows in the faces and pride of its members, the numerous international customers purchasing their products at significant premiums, and their consistent success at cupping competitions against other Peruvian coffees.

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We had the opportunity to meet two farmers, who are members of Casil, and hear their stories. Both were extraordinary in their affirmation of quality and the happiness of being part of a larger world through the Cooperative.

Here is the foundation upon which a new and modern Peruvian coffee culture will be built. David Bisetti, owner of Bisetti’s and Arabica cafes in Lima along with Hannah Scranton, as well as KC O’Keefe, owner of Café Verde in Lima all believe that the activities of CENFROCAFE, and other actively supported innovations by the Ministry of Agriculture, will serve as potential models for demonstrating to the world that Peru is truly a world-class supplier of some of the finest coffees in the world.
The coming Expo Café in Peru in November will once again demonstrate Peru’s commitment to continuous improvement as the ethos of quality expands throughout Peru.

For more info on Peru including video interviews with David Bisetti and Hannah Scranton, KC O’Keefe, as well as farmer interviews, photos and much more, visit 
www.coffeetalk.com

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