toffee, cooperatives and culture
4
working relations
There is still an awful lot of coffee in Brazil, and much of it stays there. The
volume exported, especially by Cooperativa Regional de Cafeicultores em
Guaxupé Ldta, one of the largest growers in the world, is destined for
increasingly niche markets in the EU and more recently the US. As export
director of this hugely successful cooperative, Joaquim Libanio Ferreira Leite
is clearly excited by these new trends. As the industry grinds into gear to
meet these changes, he explains the importance of espresso and why dealing
with a cooperative bank makes life easier for cooperatives.
est Arabicas
Éocal melange
New ltaly
Major help
Banking support
What sNewS Issue 6* June 1998
The 7,000-member cooperative active
in the Minas Gerais region of Brazil
north of Sao Paolo is one of the oldest in
^lic country. Established in 1932 in an
area which is also one of the country's
oldest coffee growing centres, the cooper
ative will produce 2.5 million bags of
beans this year, a number which will
increase turnover to around USD 420 mil
lion. This volume and turnover means the
Cooperativa's output represents 8 percent
of Brazil's total volume, which is between
7 and 8 percent of world production. One
final number here. The Cooperativa con-
tributes just under 3 percent of all the cof
fee grown worldwide. And all this front a
cluster of growers, many of whorn farm
with very small holdings of around 10 to
12 hectares. 'Actually,' says Leite, 'it is
their size which makes membership of the
Cooperativa a viable option.'
While the blending process usually brings
in coffees from different regions of the
world, the Cooperativa makes its own
melange of two local varieties for domes-
tic consumption. 'You take beans from the
south of Minas Gerais,' he explains, using
terms more often associated with fine
wine. 'These are a little acid with a very
light body. Then you add, for instance,
another coffee from the area further north
armers in the region have been growing
coffee since the early 19th century. But
coffee production as a major industry did
not really take off until the late 1950s.
Now, the Cooperativa reserves much of its
produce for its liuge domestic market. For
this market, they have long-since devel-
oped an integrated chain, from grower to
finished product. The volume that is
exported, 35 percent of total production,
is earmarked by specialty blenders in the
EU. 'Germany remains our biggest mar
ket,' he confirms. 'But we are also export-
ing to ltaly, Switzerland, Belgium.' These
undoubtedly rank among the more dis-
cerning of coffee consuming nations:
'We're well known in Europe as the pro
ducers of the best Arabicas,' he says.
ccordmg to Leite, coffee is very much
the sarne as other commodities, such as
whiskey and some wines, in that the end
product is the result of a fine melange.
'Coffee follows the same track,' he says.
Joaquim Leite - reciprocal relations with Raibo
which is full of body, but has no acidity at
all. It's a beautiful marriage between the
two.' And clearly a very successful one on
the home front.
Although the Cooperativa exports green
beans, raw materials for further process
ing elsewhere, Leite says the clear trend
towards designer coffee also has implica-
tions for growers. 'This is especially
apparent in demand from the US,' he
notes. 'Americans are becoming increas
ingly cosmopolitan these days. In the
industry we believe a new ltaly is being
born there. The one end product which
has done this alrnost single-handed is the
espresso. It has become widely accepted
and demanded by consumers. Regular
coffee changes a lot from place to place.
When you buy an espresso, you know
what you're going to get. Now, demand
for espresso in the US is growing strongly
- that's a marvellous development for us
as growers of fine Arabicas. In the past,
the EU was our top market, now we're
developing rapidly in the US because spe
cialty niche markets are opening up.'
In response, coffee growers like the
Cooperativa are pushing to seek out these
new markets, a move which, according to
Leite, is enhanced by the relationship with
Rabobank. 'We do not need much finance
at home,' he says. 'But when we look at
out export market, then we need a num
ber of things from a financial partner -
export finance, of course, is one part of
the business. We are represented by a net-
work of agents in our priority markets,
but the trade itself is quite volatile. The
fact your bank understands that is already
a major help.' The relationship with
Rabobank dates back to the very begin-
nings of Raibo in Brazil. 'It is quite spe
cial, I think,' he says. 'Rabobank talks the
same language, you're also a cooperative,
you understand the culture deeply - and
that is really important. There is also a
warmth you don't feel with other banks.
And you know agribusiness and the sce-
narios we come up against, often on a
daily basis - this is, after all, a volatile
business.'
In any business, you don't have to be best
friends with your counterparts, but that
warmth is clearly appreciated by this huge
cooperativa. 'We feel there is a real inter
est in what we're doing. The bank is
always trying ways to support us, for
example by introducing us to other play-
ers, other customers. Before the sustain-
ability conference started, I was taken to
call on a big cliënt of the bank's here in
Holland. That initial contact was
extremely positive. Our experience is that
Raibo is willing to go that extra mile.' In
his experience, and he worked in banking
for 10 years, this is a very different
approach from other banks. 'I think that
is why you are so successful in Brazil.'
The difference is reciprocal. It appears
that not only does Raibo do Brasil think
with the Cooperativa, the Cooperativa
also thinks with us. During preparations
for the recently published world coffee
study, Leite spent a whole morning dis-
cussing developments and trends in the
industry with our researchers. 'I was more
than happy to contribute,' he says
warmly. And clearly he means it.
