Rising prices

The first was technological advances giving machines the edge over humans preparing your coffee. The second is an increase in labor costs as countries face worker shortages. The third is an increasing number of consumers getting comfortable with digital and contactless purchasing, which makes them less averse to automated production.

Further, all consumer packaged goods (CPG) firms, including the drinks industry, may soon feel the effects of inflation. Workforce shortages, supply bottlenecks, extreme weather events linked to climate change and other distortions rooted in the pandemic have pushed prices of inputs sharply above those of 2019.

But there is hope for sellers — in the Asian market. Euromonitor believes that China and Japan aside, the ASEAN states could add $168 million to retail sales of coffee by 2025. Two coffee-making countries in Latin America should take note and act on this potential.

​Costa Rica: Looking for a niche

Small-scale coffee farming is said to have moulded Costa Rican society in the late 19th and early 20th centuries. Alongside pineapples and bananas, it was long the country's star product.

Today the country devotes 93,000 hectares to coffee farming, which employs some 27,000 family enterprises. While the volume of harvests has slightly fallen since 2019, Costa Rica does target smaller, gourmet markets. David Ortiz, a spokesman for the Costa Rica Coffee Institute (ICAFE), tells América Economía that Costa Rica focuses mostly on specialty coffee consumers in the United States and Belgium.

Coffee now constitutes 1% of the national GDP, with 1.3% of it exported to Japan and 3.9% to South Korea. Ortiz tells América Economía, "The Chinese market is very important as it is developing in terms of specialty coffee, but we need to focus efforts on finding those market niches that can aid its commercial development" in China, and other East Asian countries.

Ortiz says the pandemic was hampering exports due to a shortage of containers and there were still risks of "some kind of infection in our containers," although Costa Rica had implemented protocols to block infections among farmworkers. He cites climate change as another threat, despite adaptation measures like the Nationally Approved Mitigation Actions designed to make coffee production carbon neutral.

​Blockchain java from Peru

While not traditionally associated with Peru, coffee has become its third farming export, after blueberries and grapes. The Agricultural Development Ministry (Midagri) measured coffee exports in 2020 at 3.5 million sacks (each holding 60 kilograms of grains), shipped mostly to Europe and the United States. This is expected to increase 10% in 2021.

Mario Ocharan is the head of exports promotions at Promperú, Peru's country brand agency. Ocharan tells América Economía that the country is now the world's 10th conventional coffee exporter: "We were in 20th position in 2010. We're also the world's second organic coffee exporter, after Mexico, and number one for specialty and fair trade coffees."

Ocharan says certain regions in Peru have unique coffees that have won awards abroad. Peruvian coffee's "big achievement this year was to attain between 20 and 30 centavos more per quintal" on the New York Stock Exchange, thanks to improved quality. "They're almost beating the coffees competing directly with us in Asia and Central America," he says.

Ocharan attributes this success to conditions like Peru's differing climates, but also collaborative efforts to make production more competitive, "from the selection of seeds to using blockchain, where something as traditional as coffee is digitized as far as it can be through these certified international sales."

Sent to Singapore

This is helping Peruvian coffees enter the Asian markets. In May this year, a contest and digital auction allowed one of its specialty coffees — the Origen Marín Lote 45 from Villa Rica in the province of Oxapampa — to be sold out and exported to Singapore. Ocharan says Peru is working to take advantage of interest in countries like Japan, South Korea, Indonesia and China for "these special coffees we produce."

The government and Promperú have created the Café del Perú brand to promote the particular qualities of Peruvian coffee. One objective is to target the diverging tastes of different markets in Europe, the United States and East Asian countries.

The plan has three pillars, according to Ocharan. The first is diversity, not just in genetic variations, but also in altitude levels and the ways these coffees are processed. The second is specialty. And the third is centering its Peruvian origin, showing the world Peru's ancestral quality and that local agriculture doesn't end with coffee. Peru is the cradle of so many products like potatoes, quinoa and the Alpaca-based fabrics. The beans might just kick off more demand for these goods.