The San Juan Star / July 30, 2001
By Larry Luxner
KINGSTON, Jamaica -- While growers in dozens of coffee-exporting countries from Ethiopia to El Salvador grumble about record low world coffee prices, in Jamaica the prevailing attitude seems to be "no problem, mon."
Here, in the mist-covered villages of Jamaica's Blue Mountains, growers can't produce enough of their prized beans to satisfy world demand, especially among the brand-obsessed Japanese.
"Jamaica's Blue Mountain is a unique coffee," says Gonzalo Hernández, chief executive officer of the Coffee Industry Board of Jamaica, which is based in Kingston. "Jamaica Blue Mountain is a unique coffee. Kenyan coffees have high acidity, and Sumatran coffees have a strong body. But Blue Mountain is a perfectly balanced coffee in terms of acidity, body and aroma. On top of that, it has found its right niche in Japan. So the demand in Japan is very strong."
Hernández says he's seen Blue Mountain retailing for as much as $80 a pound in Tokyo specialty stores, and a single cup of Blue Mountain costing an astronomical $25.
"In December, I was in Taiwan, and saw Blue Mountain in a Taipei coffee shop for $110 a pound," said Hernández, a Costa Rican coffee expert who travels around the world extolling the virtues of Jamaica's famous brew. "Historically, Japan has taken most of our coffee. One of our goals now is to diversify our offer, and make it available in some other markets like the United States, Europe and elsewhere -- even though we could easily sell 100% of our coffee in Japan."
The coffee industry provides a livelihood to 26,000 Jamaicans, including Uriel Stewart, whom everyone in these parts knows as "Ralph." The proud owner of around 5,000 coffee trees, Ralph is only too happy to show visitors around his six-acre farm on the side of a mist-covered mountain.
Despite Blue Mountain's excellent reputation, however, Ralph says business could be better.
"Last year, I didn't make any money. The year before, I didn't make any money," he said. "Now that production is coming back up, I'm looking at around 700 boxes."
He adds: "When the Jamaican dollar was six to one U.S. dollar, we were getting J$1,200 a box, and that was a much better price. Now the Jamaican dollar is 46 to one, and we're getting J$1,700. So over the past eight years, we have not gotten a raise for our coffee," he said. "I don't deal with the marketing. We have to depend on the Coffee Industry Board, the people who buy our coffee. When I sell a box now, I don't know how much I'll be getting by the end of the crop. I can't budget, and that's one of the things that has shook us up. We don't have a say in these things."
Faring better is 66-year-old Andrew Bloomfield, who runs a 10-acre coffee farm about five minutes' drive down the road from Stewart. This year, says Bloomfield, his production will come to around 900 boxes, though in some years production has gone as high as 1,200 boxes.
Compared to the bigwigs of the Latin American coffee world, Jamaica is a tiny player. Its annual production of 20,000 hundredweights -- grown on about 4,000 hectares of land -- pales in comparison to Costa Rica (2.5 million quintales), Guatemala (6 million), Colombia (10 million) and Brazil (35 million).
But when it comes to quality, there is no comparison.
"The outstanding work that Jamaica has done is in the marketing, and the creation of a brand image for Jamaican coffee," says Hernández. "Even the non-Blue Mountain coffee is sold at a super premium. Colombia's Juan Valdez campaign has cost millions of dollars, but Colombia also exports 10 million bags, so they have to use a mass-marketing approach. Jamaica has been much more selective."
Coffee exports currently bring Jamaica between $25 million and $30 million a year. That's peanuts compared to what Jamaica earns from sugar, bauxite, rum and garment exports -- not to mention the all-important tourism industry -- but, says Hernández, "in terms of image, it means so much for Jamaica because it's the premier coffee of the world."
Hernández explains: "The variety we plant here is arabica tipica, which has the highest cup quality. Most of the other coffee-producing countries prefer to plant some other arabica varieties, which produce more coffee in quantity terms, whereas tipica doesn't produce a lot of coffee. In other words, we don't sacrifice quality for quantity. We prefer to plant a variety that produces less coffee but a higher quality."
He adds that the Blue Mountain mist "has an effect on the ripening process, slowing it so the coffee bean has more time to develop all those characteristics. Also you have cool temperatures in the Blue Mountains, from 60 to 75 degrees, and the rainfall patterns are ideal for coffee. So if you put all that together, you're going to end up with a unique coffee."
Perhaps the most important aspect, says Hernández, is quality control, which he claims is "the strictest quality control in the world. Before the coffee bean is exported, it has to pass the approval of the quality control department."
Asked how he decides which cherries to export, Bloomfield says the process is relatively simple. "We put the coffee in water and float it. The red cherries that sink are good beans, which we sell to the coffee board, and the ones that float are often defective and are skimmed off," he said. "Most of the farmers take those beans and sell it locally or use it for their own consumption."
Blue Mountain is currently sold under various labels, including Country Traders and Jablum Mavis Bank. Jamaica exports roughly 65% of its total production, and of the part that's exported, 95% goes to Japan. The remaining 5% is shipped to the United States and Europe, which much smaller quantities going to Australia, Argentina and other emerging markets.
About 90% of Jamaica's exports are green beans; among the island's most important private roasters are Coffee Industries Ltd. and Jamaica Standard Products.
Hernández says Blue Mountain retails for $40 to $60 in the United States, compared to $8 for a pound of Guatemalan Antiguan coffee.
"If you use price as an indicator, Jamaican coffee is the most expensive in the world," he says. "If people in Japan are willing to pay $80 per pound of roasted Blue Mountain coffee, it's because it's worth it. Otherwise, we'd have our warehouses full of coffee, and that is not the case. Blue Mountain got in the psyche of the Japanese. It's a super premium brand. There have even been attempts to use the name in some other products like clothing because the brand is so powerful."
One reason Blue Mountain costs so much is the high wages involved in this very labor-intensive industry.
"The Jamaican coffee farmer is the best-paid coffee farmer in the world. In Puerto Rico, workers get $21 for a 60-pound box of coffee," he says. "Here in Jamaica, these guys get twice as much -- around $40 -- because the coffee is more valuable."
Indeed, as the rest of the coffee-growing world suffers from low prices because the price is determined by supply and demand, "in Jamaica, we don't play by those rules," says Hernández. "We have a fixed price, which is the best price in the world, and we don't care about supply and demand. We have a limited quantity, so we're more selective in deciding the markets where we want to go. This would seem unbelievable for some people, but we can actually choose where we want to go."
According to industry sources, the fixed price for Blue Mountain green beans, FOB Kingston, is around $13 per pound. That compares to an international price of 57 cents a pound for regular coffee.
The obvious question, then, is: could other countries copy Jamaica's success in exporting a high-priced product like Blue Mountain?
Yes and no, says Hernández.
"Costa Rica is trying to find niche markets where they can sell their coffee at higher prices. They don't want to depend so much on the New York contract C market, where the price is determined by supply and demand. That's where they're paying 57 cents per pound right now. Costa Rica cannot hope to get the prices Jamaica gets, but for these guys to go from 57 cents to $1.20 would mean the world to them. It would mean the difference between remaining in business and going bankrupt.
"The problem is, it's not just the coffee grower," he continued. "It's a social problem. Most of the manual laborers are people who don't have any other skills. At least Costa Rica has diversified somehow with high-tech, but countries like Guatemala, where the level of education is so low, will really be affected. If those coffee jobs aren't there, what are they going to do? They cannot go and work for Intel."
In general terms, though, Hernández said the coffee-producing world must start thinking about its options. "If you want to be in the coffee business, the only thing that makes sense is to start finding market niches where you can make more money," he said. "Otherwise, you're destined to die."