The Real Panama

by

By Bethany Haye

When someone says Panama, the free association word has for time immemorial been ‘canal’, and more recently ‘papers’. The small iguana-shaped country linking Central and South America has had a tumultuous history largely shaped by those two themes: geo-strategic positioning and domestic and international corruption. Now it is associated with the height of luxury, the $250 cup of coffee.

Coffee first arrived in Panama in 1742, on a ship coming from the French Caribbean, probably from Haiti. Or with a retired English sea captain in the 1800s who settled in Panama and planted some beans collected during his botanical studies. Or in 1780 with a Spanish settler named Pedro Antonio de Ayarza, the history is debated. The first written record of coffee being planted in Panamanian territory dates from the 1780s to the 1790s, in the low-lying area of Portobello, the absolute wrong place for coffee cultivation. No one figured this out until the 1820s when coffee was moved into the mountains of the Western Highlands and the Boquete Valley where it thrived.

Independence, unification with Grand Colombia, secession therefrom, a canal, several dictatorships, an American invasion followed. Things finally quieted down after the 1999 return of the Canal to Panamanian ownership sent the economy soaring. Panama is now considered one of the most stable and reliably growing economies in the world. Average annual growth was 7.2% between 2001 and 2013, more than double the regional average, and it has been 5.6% during the last five years.  In 2015, Panama topped the Gallup-Healthways Global Well-Being Index, an annual ranking of well-being based on people’s sense of purpose, financial security, and health, for the second year in a row. Growth is calculated at 6% in 2019, and US dollars are legal tender and used for all paper currency.

So, the timing couldn’t have been better for the arrival of the Geisha phenomenon.

Geisha madness

In case you’ve been in a sensory-deprivation tank for the last 10 years, Geisha is the world’s most expensive coffee, with Klatch Coffee of San Francisco charging $75 (that’s USD) a cup – and that was before the price went from $803/pound at the May 2019 Best of Panama (BoP) auction to $1,029/pound at the July auction – and, this just in,  in September  2019, a Dubai retailer paid $10,000 for a kilo of Ninety Plus’s prototype of a new Geisha strain. It will retail at $250 per cup. Just in case you may not get around to tasting a $250 cup of java in this lifetime, Ric Rhinehart of the SCA describes the flavor this way:

“You might spend your whole life occasionally encountering one or two [floral and/or fruit] notes together in a really great coffee… [but with a top Geisha] “you encounter a whole symphony of these notes in one cup.”

Others have cited lime, honeysuckle, and papaya tones, and Willem Boot, who operates two prize-winning Gesha-growing farms near Boquete adds “rose, jasmine, and bergamot notes.”

This unique coffee has as history as rocky as Panama itself, the varietal being brought to Panama by the aforementioned English sea captain from the Gesha region of Ethiopia in the late 1800s. The seeds were later sent to the CATIE research center in Costa Rica and then to Panama around 1963 in the hope that the hardy plant would resist endemic coffee leaf rust, Ojo de Gallo and borer beetles.

The farmers found it survived the challenges but didn’t yield much. They observed that the coffee lacked flavor. It was pretty much forgotten for four decades, many of the plants being uprooted or cleared, and the paltry yield blended with other varieties. Only a casual and serendipitous occurrence launched Geisha’s spectacular comeback.

In the early 2000s, Price Peterson of the Hacienda Esmeralda decided to seed some plants at his high-altitude Jaramillo Farm, an area of mineral-rich volcanic soil. When the first beans were harvested, processed and tasted in 2004, the Geisha phenomenon exploded. The first harvest won the top prize – and price - at that year’s Best of Panama (BoP) competition, went on to win repeatedly, and the rest is history. Peterson, whose grandfather Rudolph Peterson began coffee farming in the region in 1967, also owns the Canas Verde farm which also broke BoP records in 2017. On their El Velo Farm in Alto Quiel, they have planted Geisha as well as other varieties including the naturally low-caffeine Laurina, Salvadoran Pacamara, Guatemalan Mocca, and Kenyan SL-28.

The Petersons are going beyond just commercializing the rock-star Geisha variety, they have returned to Geisha’s roots in Ethiopia to cultivate and optimize other hardy resistant varieties from that country, collecting more than 400 Ethiopian varieties in a long-term project to explore new disease-resistant coffees that produce an excellent cup, and are commercially sustainable.

The Lamastus family is the third-generation owners of the Elida Estate, (2018 BoP winner for both washed and natural Geisha) and record-holder for its highest-scoring coffee, also going a long way to put Panama on the coffee map of the world.

In a way, the Petersons are the poster family for the expat origins of coffee cultivation in Panama. Other well-known farms descended of expats are the Scottish founded Kotowa Coffee estate, and the Torcaza Estate in Volcan Baru, bought by Swedish immigrant Carl Janson in the 1940s and still owned and run by his sons and more recently, Finca Dos Jefes, bought in 2003 by Dee Harris and Rich Lipner.

Boquete and Volcán-Candela lie in the mountainous western province of Chiriqui, by far the main production zone (74.2% of the total national harvest in 2016-2017), with elevations ranging from  2,300-3,500 feet (700-1,070m), perfect topography, plentiful fresh water, and lush and varied fauna providing shade and biodiversity; volcanic soil and the right humidity levels.

Coffee production in the Boquete Valley began early in the 20th century, although coffee was growing wild all over the Pacific coast of Panama by then, probably due to errant seeds from the first introduction of the plants centuries earlier. Arabica accounts for 82% of production, most of it Caturra and Typica, with robusta at 18%. Chiriqui is followed by Cocle with 13.8% and Colón with 5.2%.

Panama’s coffee production – 12,236 metric tons in 2018, a drop from 14,341 tons in 2017, is infinitesimal compared to the larger coffee-producing countries, accounting for a tiny .01% of world production.  Between 2017 and 2018 the coffee harvest in Panama fell by 15%.

Export volume has risen and dropped in the past 10 years making graphs literally look like roller coaster tracks. In coffee year 2013/14, the country exported only 45,000 60-kilo bags, rising dramatically in 2015, only to plummet again, until the first quarter of 2019 registered a stunning 38% drop in the value of exported coffee with a 22.7% drop in export volume to 222,000 kg.

This drop in exports is proud Panama’s answer to the tanking of prices on the international markets. Local coffee growers prefer to market their coffee in-country, according to the ministry’s Coffee Program of Agricultural Development (MIDA). And they’ve been on it, slowly but surely. Sometime in the early 1990s, Price Peterson, and Wilford Lamastus Jr. were among a dozen or so specialty growers to establish the Specialty Coffee Association of Panama (SCAP) to promote Panamanian coffee worldwide and domestically. As in other producing countries, domestic consumption remained low until very recently. It was Wilford Lamastus of Elida Estate who opened the first specialty café in Panama City, Bajareque Caffee House.

This launched the specialty retail scene in the city’s trendy San Francisco neighborhood, where café’s like barista-owned and run Leto Coffee Brew Bar and the flagship of the Café Unido specialty chain proliferated. Also in Panama City: Paddle Café, Mentrititas Blancas, Dodo Ban, and Casa Sucre Coffeehouse in Casco Viejo, serve top-tier specialty coffee to hitherto coffee-frustrated tourists and an ever-increasing stream of appreciative natives.

The consumer market is now responding to a better educated and higher income generation of Panamanians who benefit from an economy based largely on service industries like banking and finance. And, unlike other producing countries, two main indigenous groups, the Bugle and Ngobe people own most of the smaller coffee estates which has an important social impact and contributes disproportionately to the sustainable and environment-friendly practices that characterize Panama’s coffee sector. The mid- and large-scale plantations are owned largely by European or North American immigrants or their descendants.

But the most important takeaway from an overview of Panamanian growers is the curious and innovative attitude, a constant striving for continuous improvement, which, according to one roaster, “keeps buyers attentive and enthusiastic about what will come out of the country each year.” It is also a direct relationship between the producers and the exporters which goes a long way to explaining the contrast in the situation of Panamanian growers and those in nearby countries. Panama’s producers are more sophisticated. They live in a higher income country, and they understand the specialty market.

Buyers know the producers, often by name, and work with them directly. They cup and buy coffees privately, often competing personally amongst themselves over coffee stocks. As opposed to most producing regions, where farmers are encouraged to abdicate this relationship to well-meaning but disconnected government-led associations and wholesalers, losing the connection to their coffees as it passes through a long chain of intermediaries.

As one specialist remarked, “a dehumanized supply chain leads to inhuman prices. Panama shows us that when the buyer sees the producer as an equal and a friend, the value of the product naturally increases.”