Much like in other Central American countries, coffee production has played an important role in Nicaragua’s history and economic development. Coffee was first cultivated in the country at scale in 1850; just 20 years later, in 1870, it was largest export crop in Nicaragua. It continued to hold this crown for the following 100 years.

Today, coffee remains a key Nicaraguan export, and it was a significant economic force throughout political instability in the 20th and 21st century. However, despite its status as an established origin with a coffee sector that employs more than 330,000 people, the country’s economic growth is expected to fall by 5.9% in 2021, largely as a result of the Covid-19 pandemic.

To learn more about Nicaragua’s coffee sector and the challenges it faces, I spoke with William Ortiz, the Nicaragua Country Manager for Caravela Coffee, and Silvio Sanchez, a producer at Finca Santa Teresa in Nueva Segovia. Read on to find out what they said.

You may also like our article on how Nicaragua’s political climate affects its coffee sector.

Understanding Nicaraguan coffee

Although its exact position fluctuates, coffee consistently ranks in Nicaragua’s most-exported products every single year. The sector employs more than 330,000 people; this is around 5% of the country’s population, 15% of its labour market, and over half its agricultural workforce.

In 2018, coffee exports from Nicaragua were estimated to be worth an estimated US $433 billion. Europe and North America were the country’s two largest target markets. 

Figures from the World Atlas in 2019 showed that Nicaragua was the 12th largest exporter of coffee in the world, below Honduras (6th) and Guatemala (10th) and above Costa Rica (15th), El Salvador (19th), and Panama (37th).

Additionally, in the past few years, Nicaraguan coffee production has grown consistently. While there was a decrease in 2019/20, the 2018/19 coffee year saw the country’s production volumes grow by 3.4% to a total of 2.9 million 60kg bags. 

William Ortiz is Caravela Coffee’s Country Manager for Nicaragua. He says that the average Nicaraguan coffee farm is roughly 5 hectares in size. He tells me that while poor infrastructure has historically made life difficult for producers, things are changing.

“When we first arrived, producers had very few ways to sell their coffees,” William says. “Washing and drying stations and mills were limited, and producers had little access to education [to learn more about their coffee]. 

“However, since our time here, we are proud to have become a part of the growth of a more quality-sensitive Nicaraguan coffee community.”

Historically, Nicaragua has also faced a number of political and economic challenges thanks to years of political and social unrest. The effects of this have unfortunately been felt across the country’s coffee sector.

Objections to the rule of the dictatorial Somoza family led to decades of unrest in the 1970s and 1980s. More recently, protests, demonstrations, and wider civil disobedience have led to economic upheaval. 

Silvio Sanchez is the owner of Finca Santa Teresa de Mogoton in La Union, Nueva Segovia. He tells me that for the coffee sector, these difficulties have meant one major thing. “[Nicaraguan producers have] produced their coffees simply, and sold them locally for a very low price and with little consideration for quality,” he says.

Quality, flavour profiles, varieties & processing

Generally, Nicaraguan coffees are associated with bright, citric acidity, a smooth body, and floral, citrus, or chocolate flavours. However, across the country, common flavour profiles vary depending on the region and its particular microclimate.

For example, William says that coffees grown in Jinotega often have mild acidity, floral flavours, and notes of yellow fruit, while in Nueva Segovia, the cup profile can be completely different.

Silvio notes that the coffees he produces at Finca Santa Teresa deliver particularly unusual flavours. “My coffees, in particular, are far different to the normal flavour profile for Nicaragua,” he tells me.

“They are very delicate and floral, because we are very focused on the nutrition and processing of our coffees.”

Nicaragua has also improved its reputation for quality in recent years. Since the Cup of Excellence came to the country in 2002, quality has become a bigger focus for international buyers. Subsequently, many have taken more of an interest in Nicaragua as a coffee origin.

As with most other producing countries, higher altitudes have been associated with increases in coffee quality in Nicaragua. However, William tells me that there’s massive potential at lower altitudes, too.

“While lower altitude farms do have more risk with disease and drying issues, if controlled properly, there’s a lot of potential to increase quality in lower altitude regions such as Jinotega and Matagalpa,” he says. “This is something Caravela has been investing a lot into.”

Popular varieties in Nicaragua are similar to those found in other Central American countries. These include Marogogipe, Pacamara, Bourbon, Catuai, Geisha, and Pacas. Most of these varieties can thrive in the country’s range of microclimates, leading to plenty of choice for prospective buyers.

And while Silvio notes that washed coffees are popular in Nicaragua, he adds that things are changing. Both he and other producers have been experimenting with other processing methods and fermentation.

“I’ve been very focused on natural processed coffees, as they’ve given me nice results and a unique, sweet coffee profile,” Silvio tells me.

Producing regions & trade in Nicaragua

Despite being the 12th-largest producer in the world, Nicaraguan coffee is mainly produced in a small northern pocket of the country. This consists of just five regions: Esteli, Jinotega, Madriz, Matagalpa, and Nueva Segovia. 

As mentioned above, each is unique in terms of cup profile. This is because the unique microclimates of each region influence production in a completely different way. For instance, despite both being from Nicaragua, coffees from Madriz and Nueva Segovia will generally have different flavour profiles.

Producers like Silvio in Nueva Segovia enjoy a microclimate that is well suited to coffee production, and altitudes above 1,500 m.a.s.l. “Thanks to this, we aren’t affected by weather patterns and heat in the way that lower altitudes usually are,” Silvio explains. 

In lower-altitude regions, such as Jinotega, he says that coffees are much more susceptible to disease; flavour profiles are generally not as complex.

However, William notes that farms in these areas can still produce higher-quality coffees if managed with appropriate attention to detail.

He says: “There’s also a quality over quantity mentality in high-altitude regions, while there’s a quantity over quality mentality in low-altitude regions across Nicaragua.”

William also notes that coffee trading in Nicaragua has had an impact on how the country views quality and differentiation today. 

He says that beyond the producers, the actions of other supply chain actors in Nicaragua have made it difficult for the country to become renowned for its quality.

“This is due to wet and dry mills taking high-quality coffees and ruining them by way of poor quality control practices and not paying enough attention,” he says. 

Finally, he adds that many Nicaraguan producers don’t have the space or money for drying beds or mechanical dryers. This means that many have to consequently sell their coffees “wet” to dry mills. If these mills have poor quality control practices, the final sale price for the producer may in turn be affected.

Sustainability & quality

As with most other producing countries, both social and environmental sustainability have become priorities for the Nicaraguan coffee sector in recent years. As such, supply chain players like Caravela have announced a number of initiatives that support producers to be more financially sustainable and protect the local environment.

William says that as Nicaraguan coffee has grown in quality, more and more producers have found that their financial stability has improved. He tells me that the strong relationships that Caravela has with producers in Nicaragua aren’t exclusive; this allows them to build relationships with other buyers, ultimately scaling and improving the sustainability of their production. 

Much like in El Salvador, William also tells me that Caravela have also implemented a PECA (“Grower Education Program”) programme in Nicaragua. In short, this program educates producers to improve quality and supports them to be more environmentally sustainable by limiting contamination and waste.

Both Silvio and William believe that Nicaragua’s rich variety of growing regions and microclimates can support the country to consistently improve the quality of its coffee in the years to come. However, it’s clear that producers need to appreciate the environment at farm level and understand that continuous improvement is key.

Altogether, Nicaragua still has a massive amount of untapped potential for high-quality coffee production. Despite its troubled economic and political history, favourable microclimates for coffee production and an increasing focus on quality means that the country only seems set to grow in the coffee sector.

Enjoyed this? Then read our article on Hurricane Eta and how the coffee community can support producers in Central America.

Photo credits: Caravela Coffee

Please note: Caravela Coffee is a sponsor of Perfect Daily Grind.

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