Friday, August 20, 2010

Coffee Production and Consumption in Peru: A Response to A Reader's Question

In response to my post on the global travels of the coffee bean, a reader from Peru, raised a question that I promised I would look into. "A" said:
I work in Peru, where a lot of coffee, particularly organic coffee, is grown. What's always seemed strange to me is that quality coffee is not available in most of the country. Whereas brewed coffee is sold at every street corner in non-coffee producing countries like Chile and the US, Nescafe instant is the only coffee you'll find in most Peruvian stores, restaurants, and homes, even in cities of 70,000 people or more. It costs more than in the US (while most foods cost less), about a day's wages for a rural laborer for an 8oz/225g can of instant coffee. Instant coffee is really popular as a breakfast item, often with sugar and evaporated milk.

What kinds of economic patterns could lead to a product being less available and more expensive in the country in which it is produced? Why don't growers bring beans to markets in the highlands or the coast and undermine Nestle's monopoly with a cheaper, tastier product? I have never been able to fathom it. It may have something to do with the fact that part of instant coffee's appeal is that it is a pre-packaged product you buy in a store, not at the market. As such, it is a marker of middle class identity. Or maybe the growers have exclusive contracts keeping them from selling their beans domestically. Does anyone have ideas about what's going on?
Well, it's an interesting question. Why wouldn't Peruvians take advantage of the locality of a popular product? Are they not interested in coffee? Are there mitigating circumstances—as there usually are? I contacted Dr. Kevin Birth from the Queens College Anthropology Department to see if he could shed some light on the question for us. While Dr. Birth has not worked in Peru, his fieldwork was based in Trinidad and his experiences may allow us to understand what may be happening in Peru—interestingly, Trinidadians also grow coffee and drink Nescafe.

Birth draws attention to labor practices and the economic status of Peruvian coffee growers. He says:
First, coffee production is very labor intensive, so adding the roasting and grinding of beans is probably something that most farmers would not want to do. Moreover, to create a viable product would involve processing a lot of coffee, and then waiting for buyers. One of the interesting aspects of volumes two and three of Marx's CAPITAL is his discussion of turnaround time. For a coffee grower, the turnaround time for selling the beans in bulk is much shorter than the turnaround time for roasting the beans and selling them one cup at a time.

Second, coffee roasters are not simple devices and are rather expensive. In the US, a roaster than can handle less than a pound of beans at a time sells for $150 and up. Even for a well-off farmer, that is a significant capital expense that will result in additional labor requirements that in the end involves the sale of the product in small amounts. Even in the US, most coffee roasters prefer to sell in bulk rather than peddle small quantities for retail.

So the short answer is that for most coffee farmers, roasting coffee is more trouble than its worth and delays payment for the product. There may be other factors at work in Peru, but these two factors probably apply.
Readers may recall that "Hasufin" attempted to address this question and floated similar ideas. Hasufin noted that the roasting industry may not be present in Peru and the market may simply not exist. When combined with Birth's proposals we can suggest that labor may inhibit the development of a coffee "culture" such as that which we have in the United States.

Hasufin also suggested that growers may have their crop committed to export, which is similar to a point Birth makes about the management of commodities:
The relationship between production and consumption is always complicated. In the US, farmers grew grain and drank rum until the 1780s, at which time they began to ferment and distill grain and drink whiskey. The reasons why they shifted from rum to whiskey was not that they lacked the capability to make whiskey (some even bought molasses and made rum before the 1780s), but because the export market for flour began to decline and the price of rum began to climb--rather than let all the grain go to waste or be sold under the cost of production, they distilled it.
I want to pull this point back to my note about the ways in which coffee is valued:
One of the main ways coffee is graded is origin. This has a lot to do with the texture and flavor of the beans. And while patronage may come down to personal preference, some of the hype around origin is linked to the the idea of authenticity. Who can claim coffee? Who can wield it? And consequently speak with some authority on its properties and control the supply? Ethiopia, the country linked to the original legends of discovery, actually has the smallest output which is partly due to the socio-political history of the African continent overall.
While Peru is not one of the "top" producers of coffee, it is still a major exporter. So Peruvian coffee is likely more valuable outside of the country. For example as this article suggests, as Colombia's hold on the coffee market slips, Colombian growers are looking to roasters to help boost their sales. However, there is no word on whether the product would be marketed internally—efforts seem to be focused on a global market. 

It may very well be that if market demands drop low enough, there may be a concerted effort to develop Peru as a coffee destination—a place where coffee is grown and savored, and experienced in a new way. But that change would have to begin with changing Peruvians' relationship with the drink and would required a concentrated effort from government powers and the growers themselves and would represent a significant shift in the cultural climate of Peru.

Readers interested in the relationship between consumption and production may want to read Sidney Mintz's Sweetness and Power.

Many thanks to Kevin Birth for his time and thoughts!

9 comments:

  1. I was served instant Nescafe in almost every household I visited in highland Guatemala a few years ago. I don't know about members of those particular families, but over the years many, many people from the region over have been forced to travel to the coastal plantations to pick coffee in order to support their families. I think there's an extensive description of coffee plantation debt peonage in Rigoberta Menchu's autobiography.

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  2. Thanks for the tip, Joe.

    Readers, "I, Rigoberta Menchu" is the name of the autobiography and may also be a good resource for context. But read it with a grain of salt if you do: anthropologist David Stoll found many inaccuracies in her story and it is doubtful that her story happened as described. Still it may provide an interesting perspective.

    Here's a link to the piece on Stoll: http://www.nytimes.com/1998/12/15/world/tarnished-laureate-a-special-report-nobel-winner-finds-her-story-challenged.html?ref=rigoberta_menchu

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  3. Yes, absolutely it should be taken with a big grain of salt. The original Spanish title is pretty clear about the political motivations behind the book's publication: "Me llamo Rigoberta Menchú y así me nació la conciencia." In English, that's roughly: "My name is Rigoberta Menchu and this is how my conscience was born."

    But Stoll's title is revealing too: "Rigoberta Menchú and the story of all poor Guatemalans". He points out that some of the things she describes in the book did not actually happen and that many poor Guatemalans don't share her political perspective. He also points out that the experiences described in Menchu's autobiography, whether they happened to her or not, did ring true for his contacts. One of them even told Stoll: "All those things that happened to Rigoberta, they happened to me" (Pp. 7).

    Anyway, back to coffee. It sounds like Nescafe might play a pretty big role in "the story of all poor coffee producing countries." Or at least several of them.

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  4. "It sounds like Nescafe might play a pretty big role in "the story of all poor coffee producing countries." Or at least several of them."

    It does indeed. And it may be worth investigating.

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  5. One page on the Nescafe website (http://www.nescafe.com/worldwide/en/well-being/Pages/Myth+to+Facts.aspx) states that "Over 800 billion cups [of coffee] are enjoyed every year" and that "Globally, NESCAFÉ is consumed at a rate of more than 4,000 cups every second!" 4,000 cups per second works out to a bit more than 126 billion cups per year, if I did my math right. That means Nescafe makes up more than 15% of all coffee served globally.

    I notice that their list of country-specific websites (http://www.nescafe.com/worldwide/en/Landing/Pages/UsefulLinks.aspx) doesn't include many of the coffee producing countries, Peru, Trinidad and Guatemala included.

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  6. You've definitely started something here, Joe. And it's proving to be a real distraction! Fifteen percent is not a small number. I'm trying to pull some research on identity and consumerism that might be helpful. May be a few days before I can get to it and put together something for the site but feel free to send along anything you might uncover/find interesting in the meantime.

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  7. On the topic of identity and consumerism, there's an article from earlier this year in American Anthropologist about "Soviet" sausages in Lithuania. It's nothing to do with coffee, but it is very interesting. You can get it here:

    http://onlinelibrary.wiley.com/doi/10.1111/j.1548-1433.2009.01194.x/abstract

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  8. Krystal, another great topic. I lived in Peru in 95-96 and only ever saw Nescafe in homes and shops. When I returned to the US, many people asked about the "delicious" Peruvian coffee... which I never even saw. I've often wondered about this. Now I have a few more resources to weed through. Thanks!

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  9. This "the cobbler's children are barefoot" is a common phenomenon. Japanese tourists would often come to the US to buy cheap Japanese cameras and electronics, just as Americans flock to Canada to buy US developed and produced pharmaceuticals at reduced prices.

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