Branding Peru

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By Bethany Haye

Peru is something of a latecomer to the global coffee scene. Before 2012, it was barely on the radar as a notable exporter, having left the International Coffee Organization (ICO) in 1992 amid bad macroeconomic policies that led to disinvestment in agriculture and political violence in rural areas.

In 2015, the mountainous country re-joined ICO and by 2016, it had made a major comeback, accounting for a still-modest 3% of world exports. Coffee is now the country’s largest agricultural export, and though it only numbers 8 or 9 in overall production worldwide (depending on your source), it is third in exports of arabica, with increasing visibility as a supplier of unique specialty coffees.

Peru continues recovering from the rust infestation of 2014 that affected nearly half of the country’s coffee plantations,” according to a May 2018 report by the US Department of Agriculture.

 “Coffee production in marketing year [MY] 2018/19 [April/March] is forecast at 4.3 million bags [60-kilograms per bag], increasing 5% compared to the previous year. Peru’s exports of coffee in MY 2018/19 are forecast at 4.1 million bags, up five percent compared to the previous year,” according to USDA.

The bad news, though, is that low prices remained constant in 2018, making the overall value of the increased, exports lower than that of 2017.

With 17 coffee-growing regions and 28 microclimates, Peru has ideal natural conditions for cultivating excellent and varied specialty coffees and they are consistently ranked among the best in the world.

Award-winning Coffee

“Our coffee always takes the first five places in international contests. The gourmet coffees score 85 and the espresso stands at 84,” according to Lorenzo Castillo, chairman of the National Coffee Board.

The sector’s greatest asset is the Andes mountain range, which stretches north-to-south across the entire mainland. Ninety-eight percent of the coffee farms are located in the mountain range, with three-quarters of the crop grown at elevations between 3,900 feet and 6,500 feet. Most production occurs from April to August when temperatures are ideal for growing at that elevation. Though the majority of production occurs during these months, the different elevations and microclimates in the Andes allow coffee to be harvested year-round.

Today, the Peruvian coffee trade is experiencing a two-pronged boom, with on the one hand, increased consumption in Europe and the United States, where high-quality coffees are gaining appreciation and price benefits that go with it, and on the other, the massification of markets throughout Asia.

The increasing demand of Peruvian coffee in the world markets helps more than 225,000 families that rely on this crop and more than two million Peruvians who are part of the coffee value chain.

But, like its neighbor Colombia, Peru still suffers the scars of guerilla warfare and drug violence which disrupted farming and displaced growers for decades. The Shining Path Communist guerilla faction was active from 1970 to 2000.

 Once that group was essentially disabled, things began to return to normal, but with lingering after effects, including widespread poverty and lack of infrastructure and education in the coffee-growing regions.

In October the Peruvian Ministry of Agriculture published an ambitious and comprehensive 22-year National Coffee Action Plan 2018-2030 (PNACP) with five main goals to address both the lingering plagues of poverty, lack of infrastructure and lack of access to financing in the coffee regions, and ongoing but more recently alarming trends like deforestation and lack of brand recognition in the world market and low domestic consumption.

The dilemma of expanded coffee production and exports versus the deforestation and leeching it can cause, echo that in other countries, but Peru’s territory also covers much of the Amazon basin, making this a particularly serious problem for the world at large. This has put sustainability on top of the priority list, and PNACP deals extensively with this, incorporating input from NGO’s such as UTZ-Rainforest Alliance and Amazon Watch.

Chamber of Coffee and Cacao

The Peruvian Chamber of Coffee and Cacao was founded in October 1991, and has since brought together the main private companies in the sector (producers, exporters, and industrialists) in a mission to promote Peruvian coffee both domestically and in the international market. Although exports are growing, a mere three countries – the US, Germany, and Belgium – account for 62% of all Peruvian exports.

Coffee farmers themselves are also uniting to protect the Amazon by adopting new techniques and developing hardier strains of coffee with the cooperation and input of NGO’s. These include the International Center for Tropical Agriculture (CIAT) and the Council for Smallholder Agricultural Finance among others.

Coffee is one of the main products replacing illegal crops such as coca and eases the inclusion of thousands of farmers into a formal and legal economy. With resources and governmental attention finally flowing into the Peruvian coffee sector, it is a good bet that the country’s excellent brew will finally get the recognition and financial reward it deserves.

National Coffee Action Plan

Strategic Objectives

1  Increase productivity through sustainable production systems

2  Improve degree and consistency of coffee quality with agronomy education for farmers and tree replacement programs

3  Promote access to better quality financial services by strengthening public-private partnerships

4  Improve positioning and commercialization of Peruvian coffee in domestic and world markets by developing brand image and promotional campaigns

5  Improve social, environmental and economic conditions in coffee growing areas and the quality of life of coffee-growing families with on-site medical, nutrition and education programs.