Brazilian Coffee Market: QUALITY COMES FIRST
By Ingrid Coifman
Brazil remains the world’s second largest coffee consumer only after the United States. Being also the largest producer and exporter of coffee beans on the planet, Brazil has built a reputation focused on sales volume over the years. This reality has changed recently with the increase of specialty and gourmet coffee being produced in larger scales due to a strong demand for excellence and distinctive flavors by Brazilians, following a worldwide trend.
The Canadian Market
Canada is definitely a market for Brazilian quality coffee, with one of the highest per capita consumption rates for the beverage worldwide (6.5kg per year, according to the Coffee Association of Canada -CAC), which means that more than 60% of the adult population consume 2.7 cups per day on average . Sales to Canada continue growing and reached US$18.1 million last year, a 160% increase over 2013.
US$2 Billion in Sales
Domestic coffee consumption reaches about 98.2% of households, according to a 2014 report published by the Brazilian Coffee Industry Association (ABIC). Not only had the domestic consumption of traditional coffee grown in the last few years, but the consumption outside the household (33%) as well, especially amongst young people between 16 and 29 years of age representing 28% of this group.
ABIC estimates that the volume of roasted and ground coffee sales in 2014 will easily reach around US$2 billion. They also project a 3% increase towards coffee consumption in 2015, reaching 21 million bags this year.
Specialty Coffee in High Demand Gourmet and specialty coffee has grown significantly in terms of export volume, having 90% destined to foreign markets and bringing opportunities for companies in Brazil. The “added value” factor is influencing consumers to look for products with better quality, even if that means higher prices. ‘Gourmet Cafés’ are a trend among Brazilian consumers, turning coffee houses such as Starbucks into an appealing form of investment.
In developed markets like the U.S., Japan, and the European Union (EU), demand for gourmet coffee has grown significantly, reaching price levels superior to 200% of conventional coffee prices.
In Brazil, the consumption of gourmet coffee has been expanding and new products such as capsules/pods, latte and cappuccinos are increasing due to strong demand. The coffee market for single dose (capsules/pods), for instance, is growing rapidly and is one of the promising bets for Brazil when it comes to developing green technologies towards compostable pods. To put in figures, coffee pods reached 1.7 % of the market, representing 54% of total sales in 2014. This has been contributing to the shifting of Brazil’s status as a commodities exporter to an exporter of industrialized quality coffee products.
Brazil: A Country of Many Flavours
The Brazilian-Canadian Chamber of Commerce (CCBC) organized a Trade Mission in Montreal and Toronto last September with the objective of promoting Brazilian coffee in North America and identifying opportunities to expand trade between the two countries.
Coffee audiences in Canada seek a quality product and show an interest in the origin of the coffee they are consuming. “This type of information adds value to our product. Brazilian specialty coffees need to be promoted abroad. There is a great business potential and also many opportunities in a multicultural society such as Canada”, explains Patricia Milan, Superintendent of the Association of Specialty Coffee Producers from Alta Mogiana (AMSC).
Coffee produced in the Alta Mogiana region, which gathers 15 municipalities located in the Northeast of Sao Paulo State, is full-bodied, characterized by its chocolate-like aroma and fruitiness. In total, there are 2,500 producers – 80% of which are small-scale farmers, working in 50 thousand hectares of land. They produce 2 million coffee beans per harvest annually, counting for half of the production of Sao Paulo State, which reaches about 4.5 million beans per year.
Quality and Certification
ABIC launched the Program Purity Seal in 1989 as the first industry program of quality assurance for food in Brazil. The program currently certifies more than 1,099 brands of coffee and has performed over 58,000 laboratory analyses in its 23 years of existence.
In 2004, ABIC created the Coffee Quality Program – also known as PQC – which today is the largest program of quality and certification for roasted coffee in the world. The PQC certifies and monitors many brands of coffee, including gourmet, high quality and greater value coffees.