#57 | Re:co Podcast – Vanusia Nogueira on The World Coffee Producers Forum: What to Expect (S1, Ep. 2)

Today, we’re very happy to present the second episode of the “Macroeconomic Dysfunction in the Coffee Trade,” a session recorded at Re:co Symposium this past April. This session convened experts to understand the functions and challenges of the coffee system responsible for the volatile shifts in the coffee market. If you haven’t listened to the previous episodes in this series, we strongly recommend going back to listen before you continue with this episode.

On this episode of the Re:co Podcast, we are pleased to welcome Vanusia Nogueira, Executive Director of the Brazilian Specialty Coffee Association, who explains the motivations behind the first World Coffee Producers Forum event, the organization of the Forum’s committee, and what they’ve achieved over the past 18 months of work. She also sets expectations for their next event, happening July 10-11 in Campinas, Brazil, and for the future.

Special Thanks to Toddy

This talk from Re:co Boston is supported by Toddy. For over 50 years, Toddy brand cold brew systems have delighted baristas, food critics, and regular folks alike. By extracting all the natural and delicious flavors of coffee and tea, Toddy Cold Brew Systems turn your favorite coffee beans and tea leaves into fresh cold brew concentrates, that are ready to serve and enjoy. Learn more about Toddy at http://www.toddycafe.com.

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Table of Contents

0:00 Introduction
2:15 Producers need a fair price to be economically sustainable, which then permits them to be socially and environmentally responsible. However, roasters want their coffee to have a high cup quality, be socially and environmentally sustainable but want to pay the lowest amount they can
10:00 Producers continue investing in technology, education, and quality. But the price is unsustainably low. Even trade shows disadvantage coffee producers because they’re created by consuming countries with agendas driven by consuming countries.
12:45 Producing groups started the World Coffee Producers Forum to fix this imbalance. The Forum’s Committee aims to bring industry actors together as collaborators, find ways to increase coffee consumption and create a neutral study about the economic sustainability of the coffee producing sector.
18:00 The second World Coffee Producers Forum is taking place in July 2019 in Brazil. Coffee producers will be looking for alternatives to offer dignity to everybody who works from seed to cup.
20:00 Outro

Full Episode Transcript

0:00 Introduction

Peter Giuliano: Hello everybody, I’m Peter Giuliano, SCA’s Chief Research Officer. You’re listening to an episode of the Re:co Podcast, a series of the SCA Podcast. The Re:co podcast is dedicated to new thinking, discussion, and leadership in Specialty Coffee, featuring talks, discussions, and interviews from Re:co Symposium, the SCA’s premier event dedicated to amplifying the voices of those who are driving specialty coffee forward. Check out the show notes for links to our YouTube channel where you can find videos of these talks.

This episode of the Re:co Podcast is supported by Toddy. For over 50 years, Toddy brand cold brew systems have delighted baristas, food critics, and regular folks alike. By extracting all the natural and delicious flavors of coffee and tea, Toddy Cold Brew Systems turn your favorite coffee beans and tea leaves into fresh cold brew concentrates that are ready to serve and enjoy. Learn more about Toddy at toddycafe.com. Toddy: Cold brewed, simply better.

Re:co Symposium and the Specialty Coffee Expo are coming to Portland in April 2020. Don’t miss the forthcoming early-bird ticket release – find us on social media or sign up for our monthly newsletter to keep up-to-date with all our announcements.

Today, we’re very happy to present the second episode of the “Macroeconomic Dysfunction in the Coffee Trade,” a session recorded at Re:co Symposium this past April. This session convened experts to understand the functions and challenges of the coffee system responsible for the volatile shifts in the coffee market. If you haven’t listened to the previous episodes in this series, we strongly recommend going back to listen before you continue with this episode.

On this episode of the Re:co Podcast, we are pleased to welcome Vanusia Nogueira, Executive Director of the Brazilian Specialty Coffee Association, who explains the motivations behind the first World Coffee Producers Forum event, the organization of the Forum’s committee, and what they’ve achieved over the past 18 months of work. She also sets expectations for their next event, happening this week in Campinas, Brazil, and for the future.

Also, to help you follow along in this podcast, I will chime in occasionally to help you visualize what you can’t see.

 

2:15 Producers need a fair price to be economically sustainable, which then permits them to be socially and environmentally responsible. However, roasters want their coffee to have a high cup quality, be socially and environmentally sustainable but want to pay the lowest amount they can

Vanusia Nogueira: Good morning, everyone. It’s a pleasure to be here with all of you and as Ric said, I’m here to talk with you on behalf of the all the producers in the world. Some of them are here with us. Some of them or many of them are not able to be here during the Re:co and even during the expo because they don’t have money to come to US for this expo, for this big show that we have here.

Peter Giuliano: Vanúsia has a map of the world with most of the countries slightly above and below the equator colored in green or purple.

Vanusia Nogueira: Here we have the world coffee production. All the colors that you can see they’re in purple, in green are countries, are regions that we are producing coffee nowadays.

According to the ICO, we have six countries, not the five that Ric mentioned, six countries are responsible for 80% of the coffee that we are producing worldwide nowadays.

Peter Giuliano: The countries colored in purple – the top six coffee producing countries – are Honduras, Colombia, Brazil, Ethiopia, Vietnam, and Indonesia.

But there is a very big issue on that. We never used to be organized as a group until three years ago. We did everything separately inside of the countries and also together as country producers. On the other hand, we have the consumer market consolidation.

Peter Giuliano: There’s a picture of a pie chart showing consumer market consolidation. JAB and Nestle take up almost half the pie each and the remaining small sliver is Lavazza.

Vanusia Nogueira: As you can see, this is the consolidation of the market. This is the consolidation that we’re facing in the industry during the last two years and they are very well organized globally. They’re very good companies and they are working together and they are globally organized and they are globally asking for their suppliers, asking for their products not only in many of the cases, not only for coffee, but also for cacao, for tea, for many other beverages. And then, almost three years ago we decided as the leaderships of the coffee production countries to start to reflect about in this market as producers. Not together at that moment, not together with the industry or not together with the other links off this chain and then what we realized, what are the producers always looking for? We are looking for good products, we are looking for money, we are looking for sustainability, social sustainability, environmental sustainability. But in which way? We are looking for the better product that we can offer to our clients. Even for the commercial markets it’s all to the specialty markets but we need to have a fair price for that. Why? Because the fair price will give us the economic sustainability and if we have the economic sustainability we can care, and we love to care. The social responsibility, the social sustainability and also the environmental sustainability but first of all, we need the economic sustainability as producers.

On the other hand, we have the industry. What is the industry looking for? The attributes, it’s the same. They are the same. They’re looking for products, price, social sustainability, economic sustainability and storytelling. They would like to show the compelling stories to the world. We would like to leave the compelling stories, we don’t like, we don’t need to show these compelling stories to the world. But the problem that we have here, it’s the balance of these attributes. They are looking for the industry, the market, the buyers. They are looking for the better quality they would like to have for attaining their customers, their market but they would like to pay the lowest price they can, the lowest price as possible for the good quality that you would like to have and they asked for us, they required us to show the social responsibility, the environmental sustainability and to construct, to build the good stories for them.

This is the point; this is our perspective. This is the way that we as producers, we are thinking of this market. We were thinking of this market three years ago and then for us who is the weaker of our perspective as producers? Who is the weaker of this?

Peter Giuliano: Vanùsia has four photos up on screen – a person working on drying beds, a coffee picker, a person raking coffee parchment, a roaster, and a Nestle factory

Vanusia Nogueira: We are many small producers in the world nowadays. We estimate that we are around 25,000,000 producers in the world. That is an estimate that is shown to us and they just wanted to research that this is not a correct the number. The number of the producers nowadays it’s 50% of that, it’s 12 and a half million producers, it doesn’t matter. If we were talking about 25,000,000 producers we are talking and average of 6.7 bags per producer every year. If you can talk about the half of the producers, we will talk about 13 bags per producer per year in average. Yes, we have many big producers, larger producers, mainly in my country, in Brazil. We have many producers in Brazil that are producing thousands of bags but this means that if they are producing thousands of bags, there are producers, there are millions of producers, thousands, millions of producers that are producing two bags, three bags and then you need to leave with this and even for those producers, the biggest producers that produce thousands off bags in Brazil, they’re very small if we compare with the big industries that buy millions of bags.

 

10:30 Producers continue investing in technology, education, and quality. But the price is unsustainably low. Even trade shows disadvantage coffee producers because they’re created by consuming countries with agendas driven by consuming countries.

Vanusia Nogueira: This is the relation that we’re talking about but as far as we can, we’re doing our homework. We are as producers investing in our properties. We are investing in infrastructure, we are investing in new technologies, we are investing in new varietals. We are trying to find which will be the varietal that will replace the Geisha, we are trying to manage mainly things at this moment because we’re investing even when we have all these issues. We are investing in training and how our producers nowadays they can talk with the buyers about the physical classification, about sensory skills. We are investing in new classes. We are investing new training and you know how. So, we are investing in fermentation. We are investing in many things as producers and we are also investing in our communities. Why are we investing in our communities? Because we need to create and to educate our new generations and we also need to manage the gender equity. We need to work with all of these things and we’re investing in all of these things to supply the highest quality possible to the market. But we think we deserve a fair income. This is our point. This was our point, our conclusion almost three years ago and then we decided to analyze the international events and we realized that the majority of the international events, coffee events that we have, conferences, expos etc. are organized and realized by consumer countries with agendas driven by consumer countries.

 

12:45 Producing groups started the World Coffee Producers Forum to fix this imbalance. The Forum’s Committee aims to bring industry actors together as collaborators, find ways to increase coffee consumption and create a neutral study about the economic sustainability of the coffee producing sector.

Vanusia Nogueira: So, we decided to organize our first big meeting as producers and we organize as Ric said in 2017. in Medellin. Our first World Coffee Producers Forum. We decided to do that with a very good and very important agenda which was our agenda for that moment. We talked about economic sustainability, climate change and social responsibility. We asked and we invited all the people to be there with us, together join forces to act not as a competitors but as collaborators trying to find solutions for the problems that we are talking about today again and we decided to talk together. We decided to show to the press our dilemma. We decided to think about ways to get this point to the new generation of consumers. These were our points, our main points during this conference, this forum that we had in Medellin and as a results of this first forum we had four specific conclusions. The first one was we needed to be together. We needed to go forward as a group of producers and then we created a committee.

Now we have a World Coffee Producers Forum Committee. In the first moment, it was composed only by representatives of all the regions of coffee and then some months after we invited some people from the industry, from the association’s off the industry and now we have representatives of SCA and CA, the Japanese Coffee Association, the Swiss Roaster Association. We have many people that are together with us and we are meeting, and we are talking very frequently. This was our first point, our first conclusion. The second conclusion was that we needed to find ways to increase the consumption. We need to study this and we need to find ways to increase the consumption because we realized three years ago or two years ago and many years ago that one of the problems of this market is this demand. We need this balance of demand, supply and demand and we need to go look for that. We need to address this kind of point.

The third one was we needed to have a neutral study about our economic feasibility as a sector and then we contracted the professor Jeffery Sachs from the Columbia University and his team to prepare this is study for us. They are finishing this study and we will present this study to the market in three months. And finally, we decided that that forum was really, really very good and we couldn’t stop in our first forum and we decided to have the second forum and the second forum will be exactly in three months in Brazil in Campinas.

 

18:45 The second World Coffee Producers Forum is taking place in July 2019 in Brazil. Coffee producers will be looking for alternatives to offer dignity to everybody who works from seed to cup.

Vanusia Nogueira: We are preparing the second forum, World Coffee Producers forum to be there. Why Campinas and why July in Brazil?  Because July we will be in the very middle of our harvest season. Campinas is a city which has a very good structure. We will be very well accommodated there, and it’s very close to many points of coffee productions and then if the people would like to visit some farms, some structures that we have in Brazil, they can go before or after the forum. And also, just after the forum, the forum we will address during this forum the agenda will be price and price and price again as we’re doing here today and tomorrow. But just after the forum we will have the announcement that it is the event organized by SCA that will be held in Poços de Caldas and we will have the opportunity to work, to talk and to discuss about the new links, the other pillars of this sustainability too in Poços de Caldas from Friday to Sunday. [Avance is now being held in Campinas, Brazil. For more information, click here.]

What do we expect from this second forum? Let’s open our minds, this is the point. We need to look for new alternatives for this business, for the coffee business. As Ric said, there is no one answer, there is no one solution. If the problem was really we already found the. We didn’t find it because you have many points that we need to take care of that, and we need to find alternatives. Does this chain need all the links that we have nowadays or not? All the business that we’re doing, we are doing the correct way or not? This is what we expect to continue the discussion that we are sighting here today in tomorrow and we can continue with this discussion in Campinas in three months and then here it’s an invitation, to all of you. Join us in Campinas. Our keyword is dignity. We’re looking for dignity for all the people that are working in our sector, from seed to cup, not from seed to cup. There is nobody that is inferior or superior on that and if the seed doesn’t survive the cup will not survive too. Thank you.

 

20:00 Outro

Peter Giuliano: That was Vanusia Nogueira at Re:co Symposium this past April.

Remember to check out our show notes to find a link to the YouTube video of this talk, a full episode transcript, and a link to speaker bios on the Re:co website.

Re:co Symposium and the Specialty Coffee Expo are coming to Portland in April 2020. Don’t miss the forthcoming early-bird ticket release – find us on social media or sign up for our monthly newsletter to keep up-to-date with all our announcements.

This has been an episode of the Re:co Podcast, brought to you by the members of the Specialty Coffee Association, and supported by Toddy.

 

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