Costa Rican charm

Central America’s oldest coffee producing country has built its industry on quality, supporting producers, and socially and environmentally sustainable models of production.

Coffee is one of Costa Rica’s oldest agricultural products, with a history dating back almost 200 years. In the 1820s, the Costa Rican government distributed coffee plants and offered numerous incentives to encourage families to take up coffee farming, creating an industry that, to this day, is still made up of 90 per cent smallholder producers.

Since 1933, the Instituto del Café de Costa Rica (ICAFE) has overseen the country’s coffee industry, aiding its agricultural and economic development. Funded by a 1.5 per cent export tax on all Costa Rican coffee, ICAFE reviews the sale of any and all coffee contracts, making sure producers receive around 80 per cent of the free-on-board price, more than any other producing country in the world can guarantee.

For a long time, coffee was Costa Rica’s number one agricultural export, before being dethroned in the 1990s by bananas – and since overtaken by pineapples.

“Pineapples and bananas are grown on big farms by international enterprises, but in coffee, there are a lot of smallholders,” says Max Gurdián of Café Capris, the in-country partner of coffee trader Volcafe.

“Coffee is not as big an agricultural product, but it’s still more important in terms of income distribution. When you talk about coffee, you are talking about almost 30,000 farmers, as well as the 75,000 pickers every year who rely on it.”

According to the United States Development Authority’s Foreign Agricultural Service, Costa Rican coffee production reached 1.47 million 60-kilogram bags in its 2019/2020 crop year. It estimates the 2019/2020 crop year will reach 1.5 million bags.

After the industry-wide coffee price crisis of the early 1990s threatened the crop’s viability in many countries, Gurdián says the industry collaborated to differentiate itself in the market.

“Costa Rica only accounts for about one per cent of world coffee production, so we knew we couldn’t compete on quantity,” he says. “Instead, we decided to compete first and foremost on quality, alongside more sustainable models of production.”

The Specialty Coffee Association of Costa Rica (SCACR) was formed in 1993 to help the industry achieve this goal. Its Executive Director, Noelia Villalobos, tells Global Coffee Report the organisation of stakeholders from along the value chain’s first step was to improve the education available to farmers.

“Twenty years ago, farmers wouldn’t taste their own coffee, they’d just give it to a big mill for processing. We started teaching producers the importance of picking the ripest cherries and tasting or cupping their own coffees so they could learn what makes a difference,” Villalobos says.

“We also educated millers on protocols and the way to process coffee properly to get the best quality out of it. We introduced a quality certification that a mill could give to its best coffees, but phased it out as the quality had reached the point it would apply to a mill’s entire harvest.”

The SCACR continues to hold regular training sessions for the Costa Rican industry, but its focus is now more on promoting Costa Rican coffee to the global community. The organisation is the in-country coordinator of the Cup of Excellence which showcases its producer’s best coffees and latest innovations.

Villalobos says greater knowledge within the industry has also led to what she calls a “micro mill revolution”, where producers show more interest in vertically integrating their businesses.

“When we started the Cup of Excellence, there was about 20 micro mills, and now, from the 290 plants we have in Costa Rica, they make up more than two-thirds. These are producers who are now also millers and can commercialise or sell their own coffee to exporters. This has helped some families bring back their younger generations who left for the city but are now exposed to a more interesting part of the coffee business,” she says.

“On the other hand, we now have a lot of micro mills producing micro lots. It’s not easy to export just one or two bags of coffee, even if there is demand from small roasters or buyers on the other side. A lot of micro mills appear, but we also see them disappear. There’s been some bad to the trend, but it’s mostly been good because it shows that producers have become more engaged in the industry.”

A reputation to protect
Costa Rica’s unique, quality-drive position in the market may bring many benefits, but Eduardo Gurdián Pacheco, Owner and Manager of Hacienda Pilas farm, says it’s one that’s challenging to maintain.

“We receive good prices for Costa Rican coffee, so as coffee growers, we need to defend that. It’s quite expensive to produce coffee in Costa Rica, so we need to be very productive and it’s difficult to maintain quality at volume. There is also a social and environmental responsibility we hold while maintaining that quality and production,” Pacheco says.

“Labour is very expensive in Costa Rica compared to other Central American countries because we have a lot of ‘social charges’ to that labour, like insurance, health care, and minimum wage. For me, it’s the social responsibility behind our coffee cup that separates us from the rest of the world.”

Labour became an even more pressing issue for the Costa Rican industry in 2020, when COVID-19 forced the country to close its borders. A majority of the country’s pickers during the harvest season are migrants from Nicaragua and Panama – about 40 per cent each – with locals making up the other 20 per cent.

“This last crop season, the pandemic brought many health challenges and has been the most stressful harvest in my life. Hacienda Pilas manages 300 pickers during the harvest season. It’s a lot of people and we need to take care of them,” Pacheco says.

“We worked on the housing to ensure safer conditions and that there weren’t too many people in each house, taught people to wash their hands and use a mask, and to keep their distance during daily work. It was a big challenge last year and we invested a lot, but out of our 300 pickers, I’m proud we had zero cases.”

Hacienda Pilas is located in the West Central Valley, one of Costa Rica’s eight main growing regions. The farm was able to recruit enough Costa Rican pickers due to the increased number of people finding themselves out of work.

“Many people from Costa Rica have become unemployed due to the pandemic, so they’d come to pick coffee. This year, I’ve had pickers who never picked coffee before, so when they arrived at Hacienda Pilas, they realised it wasn’t as easy as they thought,” Pacheco says.

“I don’t think COVID will end in 2021, so we will face many of the same challenges in 2021.”

Another ongoing concern of Costa Rican producers is climate change. Pacheco says there is a need for producers to make their agricultural systems more resilient to longer dry seasons, warmer climates, and problems with pests while reducing chemical usage.

“When I joined Hacienda Pilas, we only grew Catuai, but now with diseases like leaf rust and larger dry seasons, we need to keep changing and planting new varieties that keep good qualities and are robust against new challenges,” he says.

Max Gurdián says there is also a growing international demand for coffee that is sustainable and organic.

“Over the last few years, more roasters want products that guarantee they are pesticide-free. That’s a big challenge, because many farmers cannot be completely organic while maintaining the same volume of production,” Gurdián says.

“In our case, we have to work together with farmers to find solutions to produce quality, quantity, and in a safe way.”

He adds that while COVID has impacted demand for the more expensive coffees, like those Costa Rica tends to produce, the country’s reputation has helped it stay afloat.

“When people cut budgets, they start with the ‘fancy’ ingredients, and that’s where Costa Rica sits. Selling the harvest this year was a big challenge for us as exporters,” Gurdián says.

“At the same time, many of our Costa Rican customers want Costa Rica in their blends or single origins, and they’re very loyal to us.”

Greater appreciation
Difficulty in selling or exporting coffee may have also strengthened ties between the country’s producers and roasters. At almost four kilograms per capita, Costa Rica is the second largest consumer of coffee of all producing countries, behind only Brazil.

Usually, this means the country’s roasters are required to import coffee from Nicaragua and Honduras to meet demand, while Costa Rica’s highest quality coffees are sent overseas for a higher price. SCACR’s Villalobos says coffee is ingrained in Costa Rican culture.

“Many people grew up in between coffee plantations – our school year is even based around the harvest cycle,” Villalobos says.

“Part of what the SCACR does now is run courses for baristas, roasters, coffee cuppers, or for people that just love coffee. Now, a specialty coffee community has grown and you can find a lot of coffee shops in San José and other cities, as well as a lot of coffee schools.”

Villalobos says ICAFE is utilising the connectivity of the Costa Rican coffee community with the development of an app that will provide a traceable view of the supply chain to both producers and consumers.

“We have eight growing regions with a lot of different microclimates that create different flavour profiles. But to me, the added value of Costa Rican coffee is the added value of ensuring the producer is getting a fair price,” Villalobos says.

“ICAFE’s traceability and sustainability statement Collects and transparently communicates strategic information along the coffee value chain of Café de Costa Rica, to achieve a greater sustainability for the entire coffee sector.”

Gurdián agrees Costa Rican coffee has a flavour unique to its terroir, however, this is not what separates it from other on the market.

“As an exporter, I cup coffee every day, from every place around the world, and there are many good coffees that are unique to the area where they are produced. What makes Costa Rica really good is the consistency of its quality,” Gurdián says.

“If someone buys coffee from Costa Rica, we are able to reliably deliver the same quality every year.”

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