Overview
Over two billion cups of coffee are consumed by the world every day. As the world’s 11th-largest coffee producer, exporting 4.1 million bags of coffee annually, Peru has a diverse and evolving specialty coffee sector. Though coffee is the country’s second-biggest agricultural export by value, most small farmers responsible for growing the nation’s coffee live in poverty, with little protection against the impact of large global corporations, market fluctuations, and climate changes, including rust outbreaks. The burgeoning coffee culture has also threatened the biodiversity of the Amazon in Peru. High-yield coffee growing practices have turned coffee production into one of the major drivers of deforestation and forest degradation in the country.
The Coffee Industry in Peru
The coffee sector in Peru is controlled by large cooperatives that manage thousands of small farmers throughout the coffee regions of the country. These companies sell their coffee for the global price determined by the New York Stock Exchange on a daily basis. However, they do not pass these profits onto the producers, often paying their suppliers prices that are lower than the cost of production.
“Coffee farmers do 70% of the work in the coffee chain, but only earn 10% per bag of coffee “, says Jose Uechi, co-founder of Cafe Compadre.
Cafe Compadre was launched seven years ago to address the situation. The four co-founders sought to improve the quality of coffee beans produced by small farmers, believing this would improve their prices. With their technical background, two co-founders Jose Uechi and Juan Pablo Pérez delved into developing environmentally friendly solar coffee machines to help coffee farmers take more ownership of the coffee production process. They wanted to provide solutions for farmers to roast their coffee since roasted coffee can be sold for a higher price than parchment coffee.
Café Compadre Co-founders Juan Pablo Pérez(left) and José Uechi (right) with coffee farmer
However, once they began to work with local farmers, the co-founders quickly realized that the farmers faced bigger obstacles. For instance, many coffee farmers were simply too far away from consumers, with no knowledge of the market and the worth of their quality coffee.
These issues encouraged the co-founders of Cafe Compadre to support the farmers by becoming more involved in the entire coffee value chain, creating their own specialty coffee brand. They pivoted their company with a new mission in mind — to promote sustainable fair trade coffee production practices and to spread the coffee culture in Peru, where only 180,000 bags of coffee are sold each year.
“Our mission is to educate people in Peru on what good coffee is, why it is important to buy coffee, and how to enjoy good coffee at home. We found no other way than to create a coffee brand to accomplish all of this,” says José
Commercial Coffee vs Quality Coffee
In a typical commercial coffee production model, farmers handpick cherries from a tree without regard to the ripeness of the cherries. Then, the cherries are pitted by machines and dried in large quantities. At this stage, the dried coffee, also known as parchment coffee, is sold to intermediaries who then store and hull the coffee beans. The intermediaries perform quality control and sell the hulled green coffee beans to large plants that roast the coffee beans as the final step.
To produce specialty coffee, Cafe Compadre eliminates the intermediaries and works directly with farmers located in the remote central Peruvian jungle, training the farmers to pick only the coffee beans that are free of defects and at peak ripeness from each harvest. This way, the farmers preserve the quality and flavor of the coffee while maintaining a traceable and sustainable production process. In 2019, the social enterprise paid farmers 50% more of the average price paid to farmers for normal commercial beans.
The company also developed the marketing and distribution channel for the coffee, targeting mostly a B2B clientele, including offices and the HoReCa sector in the Greater Lima area. They focused strongly on appealing to consumers, by fostering an appreciation for the rich taste of specialty coffee.
With its engineering expertise, Cafe Compadre continues to develop tools to help farmers increase their production capacity. Among the technologies that the enterprise recently created is a solar-powered coffee bean dryer that regulates temperature and humidity levels to protect drying coffee beans from the effects of changing climate conditions.
All images by Diana Arteta