Brazil’s Coffee Regions

There are three main coffee growing areas in Brazil: Mogiana, Sul Minas and Cerrado. These areas feature moderate sunlight and rain. The temperatures are steady year-round, ideal to grow Arabica and Robusta coffee trees. Arabica accounts for about 70% of total harvest. Robusta, a hardier plant that produces lower quality beans makes up the remaining 30%.

The Mogiana region: This is the area along the border of São Paulo and Minas Gerais states north of São Paulo. The Mogiana coffee region is named after the Companhia Mogiana Estrada de Ferro train line that ran through this area when trains and coffee were inseparable companions in commercial and community development. The Mogiana area is known for its rich red soil.

The Sul Minas region: This is the heart of Brazil’s coffee country. The rugged, rolling hills of Sul Minas, are located in the southern part of Minas Gerais state northeast of São Paulo.

The Cerrado region: This is a high, semi-arid plateau surrounding the city of Patrocinio, between São Paulo and Brasilia. This area is located in Brazil’s central high plains region.

Of all the coffees growing in these regions, Brazilian Santos Bourbon is Brazil’s best well known Specialty Coffee.

Santos is a market name referring to the port through which this coffee is traditionally shipped.

The Arabica coffee plants that produce this coffee came from the rich volcanic soils of the island of Bourbon, now called the Island of Reunion.

From a historical perspective, the island of Reunion is located in the Indian Ocean, East of Madagascar. This island was an important stopover on the East Indian trading route. When the Suez Canal opened, the island lost its importance.

Fortunately for Brazil, the trees imported from the island of Reunion took root very well and started one of Brazil’s main cash crops.

Brazilian Santos Bourbon is a light bodied coffee, with low acidity, a pleasing aroma and a mild, smooth flavor. Brazilian Santos Bourbon is dry-processed (dried inside the fruit) which is why some of the sweetness of the fruit carries into the cup.

Brazil’s best coffee: Bourbon Santos

Of the many market names for Brazilian coffee, only one, Santos, is of importance for the specialty-coffee trade.

When not suffering catastrophic frosts, Brazil produces 30 to 35 percent of the world’s coffee. Vast plantations of millions of trees cover the hills of south-central Brazil. For the commercial coffee industry, Brazil is of supreme importance, a giant in every respect, but for the specialty-coffee trade, it shrinks to something smaller than El Salvador. Despite all the coffee produced in Brazil, none ranks close to the world’s best. The Brazilian coffee industry has concentrated from the beginning on producing “price” coffees: cheap, fairly palatable, but hardly distinguished.

Of the many market names for Brazilian coffee, only one, Santos, is of importance for the specialty-coffee trade. Another, Rio, is significant mainly because it lends its name to a peculiar medicinal flavor that coffee people call Rioy.

Santos coffees are grown mainly in the state of Sao Paulo. In the nineteenth century, the harsh flavor of Rio coffee competed for popularity with the mild Santos. Much of the famous New Orleans coffee was Rio coffee, with chicory added, and some coffees dark-roasted in the United States today for the Latin taste may still include Rio coffee. This is because Latins, who drank the cheap, Rioy-tasting natural coffees at home while the more expensive, washed milds were being sold to the United States, may still crave a bit of the old home-country harshness in their dark-roast blends.

Santos coffee, named for one of the principal ports through which it is shipped, comes mainly from the original Bourbon strain of Coffea arabica brought to Brazil in the eighteenth century from the island of Bourbon, now Reunion. For the first three or four years these trees produce a small, curly bean that coffee people call Bourbon Santos. This is the highest-grade coffee Brazil produces, and it will more than likely be the coffee a store sells as Brazilian. After three or four years, the beans begin to grow larger and flat; this coffee is called Flat Bean Santos and is cheaper and less desirable than Bourbon Santos. Bandeirante is a particularly good and consistent Brazilian estate-grown coffee that appears frequently on specialty coffee lists.

Bourbon Santos is smooth in flavor, medium in body, with moderate acidity in short, another decent but hardly extraordinary coffee. Since it generally sells for about the same as more distinguished, unusual coffees, I see little reason to buy it except gourmet curiosity. The cheaper Brazilian coffees are occasionally for sale in specialty stores, presumably to be used by consumers to save money in their private blends.

Coffee shop sells coffee from own farm

Coffee shops in São Paulo are selling coffees produced by their own estates. One could say that growers’ families are actually opening coffee stores in the city. The trend is more and more visible due to value addition in sales of the finished product (by the cup) rather than of green coffee (by the bag). Suplicy Café is one of the examples with its Minas Gerais’ Santa Izabel Estate now supplying 60% of all the coffee sourced by the shop. The entire line of coffee beverages prepared at Octavio Café, part of the Octavio group that owns Dallis Coffee in the US, come from their own coffee farm located in Pedregulho, state of São Paulo.
Source: O Estado de São Paulo

Coffee consumption patterns in Brazil

Over the last five years, economical stability and higher wages in Brazil favored the ascension of more than 20 million people from the lower social classes to the middle class. The “new middle class”, as it is being referred to, already accounts for 49% of the total population, or 95 million Brazilians. According to the renowned Getúlio Vargas Foundation, an average middle class family has a monthly income between US$ 650 and US$ 2,700. With more available money and more access to credit, this new middle class represents a group with specific socialcultural characteristics that have already begun to influence consumption patterns.
If we take a look at the Brazilian coffee market we note interesting facts related to these recent changes. The middle class share in the total coffee consumption rose from 37% in 2003 to 42% in 2009, a growth of almost 14%. Out-of-home consumption grew at an incredible fast pace – 170% increase over the same period – pushed largely by the new middle class, as the 2010 ABIC Consumption Trends survey indicates. Out-of-home consumers are looking for different types of coffee beverages, namely espressos, cappuccinos and other milk-based preparations, different from the traditional filtered coffee they usually drink at home. From 2003 to 2008, out-ofhome consumption of espresso grew 30% and cappuccino an amazing 127%!
The 2010 ABIC survey indicates that the concept of coffee quality in this segment revolves around purity, aroma and flavor. The brand of the coffee they are used to buy as well as its quality are strong determinants of purchase for these customers. They are also more inclined to pay more for higher quality coffees as compared to previous years.
A higher demand for instant coffee is also noticed amidst this new middle class as they look for more practical  products. According to a recent survey done by Nielsen, the middle class contributed to the increase in sales of products linked to practicity and health & well being in the country in 2009. Apart from soluble coffee, instant soups, easy to prepare pastas, yogurts and disposable diapers also registered above average sales.
Companies and industries of different segments are maximizing efforts to adapt and launch new products that best serve the needs of this emerging class. On supermarket shelves one can witness more and more “pouch” products, as well as smaller-sized packages, that make consumer goods more attractive and accessible to this type of client. The variety of options in the Brazilian retail include instant coffee offered in small portions of 50g and R&G coffee, traditionally sold in 500g pouch packages, now also available in packages of 200g.
Coffee is the second most drunk beverage in Brazil, after water, and is consumed by 97% of the population over 15 years of age. The rise of the new middle class is creating new opportunities for the coffee industry, but challenges are there too nonetheless. Over the last five years, coffee-substitute products have also registered growth in sales, mainly ready-to-drink juices, powder refreshments and soft drinks. Children seem especially attracted by ready-to-drink  chocolate beverages. Coffee companies now have to fight for more space in an expanding sector.
But, for ABIC’s executive director, we should expect a positive scenario: “coffee consumption in Brazil will grow 5% per  year over the next years, in a rather conservative perspective”. If the country keeps this pace, aided by the  expansion of consumption in the middle class, the domestic market will demand around 21 million bags of coffee by  2012 which will possibly position Brazil as the largest coffee consuming country in the world.
Last year, the Brazilian per capita coffee consumption reached 5.81kg/year. Sales of the Brazilian coffee sector in 2010  are estimated at more than R$ 7 billion (US$ 3.9 billion).

Senseo vs Nespresso in Brazil

In the same day that Sara Lee launched its Senseo coffee machine in Brazil, Nestlé, owner of Nespresso and Nescafé Dolce Gusto, announced a 16.6% price reduction in its less expensive coffee makers. Nestle also introduced a loyalty program for Dolce Gusto consumers. Other single-serve brands, such as DeLonghi and Illy, have also dropped their machine prices by 15 to 20% in Brazil. Sara Lee is expected to become Nestlé’s main competitor in the Brazilian single-serve segment. Source: Valor Econômico