May 20, 2020

Will COVID-19 Mobilize Producers to Roast Their Own Coffee?

2020’s COVID-19 pandemic has impacted the international coffee production industry, bringing about challenges ranging from dwindling consumer consumption (due to lockdowns closing coffee shops) to restricted exports (as countries try to limit the virus’s spread).

While the virus’s overall impact on the coffee supply chain has been negative, it might be the catalyst for some coffee producers to start roasting their own coffee at origin. Here’s how some producers are dealing with the pandemic, and why roasting at origin won’t benefit everyone.

Lee este artículo en español ¿La COVID-19 Motivará a Los Caficultores a Tostar su Café?

COVID-19 Has Impacted Countries Differently

The Coronavirus has caused many countries to enforce quarantines and social distancing, resulting in public places closing, people staying at home, and borders being closed. This has hurt coffee shops, roasters, and producers. However its impact on producing countries has been unpredictable.

For some countries, it’s mostly business as usual. While Brazil is experiencing port shipment delays, coffee is being exported as usual, and the harvest has already started – with producers taking safety measures while farming, harvesting, and transporting coffee. However, as Brazil already exports large coffee volumes and has high internal coffee consumption levels, it’s been cushioned from the full impact of export restrictions and reduced consumption.

In other countries, the fact that the harvest hasn’t started yet has spared producers from the Coronavirus’s full impact. Because coffee production in Indonesia will only start later this year, coffee shops and roasters have been more affected – with coffee shops forced to close and roasters with green and roast bean stock having to sell their coffees for less. 

A recent survey commissioned by Caravela Coffee also reveals that as Mexico and many Central American countries had already wrapped up their harvest season prior COVID-19 impacting their countries, they’ve also been less impacted than other farmers.

COVID-19 is impacting producing countries in different ways. For many, it’s a trickle down effect. As coffee shops serve less coffee, they purchase less coffee from roasters, who in turn purchase less coffee from producers. When producers are stuck with coffee they can’t export, they might decide to sell it internally. Roasting their own coffee will ensure they retain most of the profits from this, making it an attractive option. However, they’ll need to keep the realities being faced in their countries in mind. 

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Instant Coffee & Imports Are Still Popular

For countries where internal coffee consumption is high, promoting internal sales is a great way for producers to avoid the logistical hurdles of exporting their coffee internationally and maximise the income they bring in from their crop. However, they’ll need to consider that the consumption of cheaper, low quality torrefacto or instant coffee remains high. The demand for instant coffee in countries like Guatemala, Peru, and Bolivia remains significant due to its affordability and convenience, with some countries importing this coffee from neighbouring countries. 

Karl Wienhold is the Director of the Colombian Farmers’ Collective and Exporter Cedro Alto. He says that in Colombia, coffee is exported in US dollars – and that while the Colombian peso has devalued significantly, the peso price of parchment and green coffee remains high. It means that local roasters buying from producers have to compete with exporters who can offer better prices. As the local market can’t afford to pay more for coffee, he predicts that more affordable, lower quality coffee will be imported. 

In some cases, the imported coffee’s price might also have increased. Tomas Gutierrez is Sustainable Management Services Manager at Ecom Costa Rica, and has witnessed this taking place in the country. He says that Costa Rica has been importing high volumes of coffee from Honduras and Nicaragua – despite both countries increasing their price per bag.

Online Coffee Sales Are Increasing

While instant and low quality coffee remains popular, home consumption of specialty coffee has increased amongst certain groups. Many of the people who would usually frequent coffee shops are now working at home, and are seeking out affordable coffee to enjoy at home.

Norberto Vásquez is the Owner of Cabra Negra in Quito, and says that in Ecuador, people are ordering more coffee online as they adapt to working from home. He now takes orders via whatsapp for ground coffee, but notes that demand for roasted beans is increasing, and that the Moka pot, drip coffee machines and the French press are popular brewing methods as they’re easy to find and cheap. 

Some roasters who’ve been offering coffee for sale online are experiencing better sales, and seem to be faring better during the pandemic. Angela del Pilar Barrero Bernal, a producer at organic farm Bodega de la Finca in Colombia, says that she’s gone from selling 20 packages of coffee online every month, to selling 20 packages online in just one week. El Salvadorian exporter and producer Rafael Silva, says that he’s noticed a few producers considering roasting their coffee as a direct result of COVID-19. He also notes that producers who were already roasting their coffee have stepped up their efforts, implementing more active online marketing campaigns to promote and deliver their coffee.

Is COVID-19 Prompting Producers to Roast Their Own Coffee?

Some coffee producers are using nationwide lockdowns to try and enter the domestic coffee market, as they’ve lost a significant amount of business from their usual channels. Daniel Pineda is the Co-Founder of Cafe Nativo and Roastery in Honduras. He says that many coffee producers are concerned over the weakening demand they’re experiencing from abroad, with some having their contracts cancelled. 

For these producers, offering their existing coffee to the local market could take place. However, Daniel explains that as local purchasing power is low, they might have to sell their coffee at below average prices, and that this would only help recoup their losses, instead of profiting them. Despite this, he has witnessed many producers and co-operatives starting to roast coffee.

While some governments are trying to promote domestic consumption, many feel that more support is needed. Luis López works in Quality Assurance at ASCAF, and says that despite local government subsidies and support programs boosting roasted coffee demand in local markets, its quality and prices are too low. “Let’s hope they close down the programs to determine if the consumption truly raised, or if it was just boosted by the government’s support.”

How Can More Producers Start Roasting at Origin?

COVID-19 has impacted coffee producers in negative and positive ways. While some have found that roasting their own coffee is advantageous, many still face challenges to adopting this beneficial service. This will delay the process, but many feel it’s likely to happen in the future anyway.

Federico Bolanos is the Founder of the Alquimia Coffee Company in El Salvador, and says, “I think that more producers will start roasting their own coffee as time goes by… it should continue and grow. I’d like to see more producers learning the roasting craft and roasting at origin to produce the end product that consumers buy, just like wineries produce their own grapes and produce their wines.”

For this to occur, Federico says that they’ll need to learn how to manage challenges like a lack of knowledge of the craft, as well as a lack of roasting equipment, delivery vehicles, staff, dedicated roasting facilities, as well as marketing skills and strategies. 

By integrating this into their operations, roasters could grow their business and possibly enter the coffee shop space. Federico says, “Many producers have complemented their farming business by becoming roasters and done it successfully. Some have even added café operations to have a vertical integrated company”.

While the Coronavirus has dealt a blow to the coffee supply chain, coffee producing countries who decide to roast their coffee could mitigate some of its negative effects by creating an additional income stream for themselves. 

However, this option might not suit all producers at the present moment. Roasting coffee requires an investment of time and effort, which will be compounded by the economic strain currently being experienced by most countries and their citizens. 

With market conditions and consumer demand a huge factor in business success, the best option for some producers might be to wait until the situation improves for the best results.

Enjoyed this? Then Read How To Support Your Local Roaster During Social Distancing

Photo credits: Fernando Pocasangre, Mayorga Organics

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