Market Reports

Cafè de costa rica’s seal of sustainability

First it was Champagne from France. Then Mexico took its Tequila to the world trade courts to protect its identity. Since the world of coffee started to look at international trade regulations covering what constitutes the denomination of origin the issue has become a hot topic. Costa Rican coffee hasn’t escaped the challenge of maintaining its identity. With wildly differing premiums paid per pound of Central American beans, coffee smuggling and contraband sales are not uncommon practices in the industry. But registering Café de Costa Rica as a Geographical Indication, and eight production regions as Origin Denominations (currently underway) has been more challenging than the official Costa Rican Coffee Institute (ICAFE), imagined. “It was the year 2000 when visionary people decided to answer a big concern. The big question at the time was how to protect the quality, and furthermore the value proposition, of our unique sustainable production,” Mario Arroyo, Marketing Director of ICAFE, tells GCR Magazine. “This triggered the idea of Geographical Indication and the eight Origin Denominations as seals of the origin’s sustainability throughout the chain.”  The debate over Geographical Indication of coffee made headlines in the mid 1990s when a California-based company sold 10 times more Kona coffee than Hawaii could produce. It turned out that most of what it was selling was Central American beans. By 2005, the aftermath of what became known as the “Kona Kai scandal” was still weighing heavily on the specialty coffee trade. That year, the world of coffee reached common ground that denomination of origin-type trademarks would be the best measure to protect the uniqueness of a country’s coffees. And so ICAFE also started in 2000 to secure all of Costa Rica’s coffee producing regions with their individual seals of Origin Denomination. Arroyo recounts, however, that it turned out to become a much more tedious affair than they imagined. Global trade regulations for these highly coveted seals involve a complicated and time-consuming process, especially considering the complexities of each region. “We first launched the concept of different producing regions in 1988 and today we have eight different growing regions in Costa Rica. All these regions are entirely unique. Moreover, growing quality implies the interaction of so many aspects: genetic, agronomic, climatic, geographic, social, economic and environmental variables that must be protected as added value. These relate to the uniqueness of the origin and benefit the producers,” says Arroyo. “Costa Rica geology is very notable, sharing an incredible biodiversity and ecosystems formed by two tectonic plates pushing against each other. This process formed the volcanic soils that give distinctive organoleptic characteristics to each of the defined regions and future Origin Denominations.” ICAFE has worked in conjunction with the regions to obtain Geographical Indication (already registered) of Café de Costa Rica and the eight coffee Origin Denominations (currently in process). This is important, since to obtain the registrations, three main topics are considered to grant the titles. The first is geographic delimitation and historical background, showing that each area has been in the relevant business for some time. The second is regulations, which are the relevant details concerning the delineation of the production zone, altitude, authorised varieties, and production, among other factors. The third consideration is the operators of the Origin Denomination and/or Geographical Indication, a council that represents the producers and has the authority to regulate and successfully achieve and maintain its prestige as perceived by the consumer. “Geographical Indications are more than just a name or a symbol. They reflect a reputation strongly linked to geographical areas of varying sizes, thus giving them an emotional component.  A Geographical Indication’s reputation is a collective, intangible asset,” according to the World Intellectual Property Organization, or WIPO, which manages the seal. In the case of Costa Rica, the Geographical Indication today applies to all the coffee produced within the frontiers of the small Central American country and is “a sign used on goods that have a specific geographical origin and possess qualities, a reputation or characteristics that are essentially attributable to that place of origin,” WIPO documents read. The key difference between Geographical Indication and Origin Denomination – also known as “appellation of origin” in trade vocabulary – is that “the place of origin must be stronger in the case of an appellation of origin,” according to WIPO documents. This, trade analysts and industry officials argue, makes it easier to apply for recognition as a nation, rather than individual regions that often have to provide much more excessive and detailed paper work. The Geographical Indication of Costa Rican coffee is an acknowledgment of the incredible characteristics of this country’s beautiful production. “Our bean has been recognised over time as being of high quality and we know how to maintain and promote that quality. But we also know we are not the only ones in the world with these kinds of qualities so we had to find ways to add value to the coffee,” says Arroyo. “For more than 205 years we, as a country and thanks to our visionary coffee farmers, have been finding ways to improve livelihoods and nourish capital creation in terms of social, physical, financial, nature, and human assets. This is the biggest value proposition of the Geographical Indication and Origin Denominations. They warrant sustainability and let customers know that we are not ‘expensive’. Our beans are priced to cover the real cost of being genuinely monitored, verified and registered as sustainable .” Costa Rica’s coffee history is well documented. The first trees were planted in 1779 in the Central Valley around the capital of San Jose. It was in 1808 that bigger commercial plantings started in earnest. “We recognise coffee was introduced to Costa Rica [by] 1808 and we know that for sure because in 1808 thanks to Father Felix Velarde, who wrote in his last will, he was leaving a nursery of coffee and eight year coffee plants to be distributed  within the habitants,” says Arroyo. “The local people quickly saw how coffee was doing really well here, producing great yields and great quality and that would soon generate a revolution. The government promised land titles after five years of proved coffee cultivation, the first land redistribution of the emerging Republic,” he says. Hence began the initial development process in Costa Rica, largely thanks to coffee.  Production reached an all-time high between 1989 and 1991 with total annual output of 2.7 million 60-kilogram bags. But when coffee prices hit historic lows between 2001 and 2003, hundreds of producers abandoned the crop and output plummeted. Today coffee production has stabilised at about 1.5 – 1.7 million bags, ICAFE data shows. “Since its earliest beginnings Costa Rica has seen a lot of progress thanks to coffee. Thanks to these revenues, Costa Ricans were able to go and study abroad bringing into the society new concepts and technical knowledge. Coffee has and continues to generates work, it has a great social impact, and coffee generates wealth through rural development and jobs,” says Arroyo. “But today we have a constant struggle between development and growing coffee because the locations of the best soils for coffee are all in the areas closest to the capital. Tres Rios is an example of this and today we probably, at the very most, have only 30,000 bags of production left here, all strictly hard beans.” From climate change to the ongoing demand for increased efficiency at all levels of production, Arroyo admits that the challenges to the future of coffee can seem overwhelming. But thanks to seals such as Geographical Indication, ICAFE firmly believes that Café de Costa Rica  is here to stay, even if there may be less of these famed beans available today. “We have some of the highest differentials paid for coffee in the world and this is due to the recognition of the social, economical, and environmental standards we have as a coffee origin. This is particularly amazing considering we only produce 1 per cent of the world’s production,” he says. “We are very proud of this and will continue to work on improving these sustainability standards.” 

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