by Rod Hughes
A combination of volcanic soils and high mountains has made Costa Rican coffee a prime choice of connoiseurs throughout the world for rich flavor. And no one knows coffee better than the giant Starbucks chain of 7,500 coffee shops that stakes its reputation on quality, enough to heavily promote the gourmet Terrazú variety, buying from 2,600 small farmers in the Los Santos region of Costa Rica.
Until now, Costa Rican coffee has been under-promoted, only two gourmet coffee exporters Cafe Britt and Sun Burst pushing the product abroad. Colombia, with its iconic Juan Valdez and his burro, has done much better advertising. Both countries produce high mountain coffee valued for its flavor and both have been depressed by the one-price-fits-all international market. Brazil produces far more coffee than both these countries combined but its coffee is used for filler in U.S. blends because of its abundance on the market while the flavor coffees often go begging.
But along came Starbucks and it may not been too much to say that today’s daily La Nacion headline is right on: “Starbucks Empire Saves Costa Rican Coffee Producers.” At the end of 2001, coffee prices on the exchange in New York dropped to $50 per 100 lb. (46 kilo) sack, then slid to a rock bottom of $44.70, notes La Nacion. Production costs are around $90 per sack. Local coffee producers were well on their way to bankruptcy, says the manager of the farmers’ cooperative Coopeterrazú, Carlos Rivera.
But Starbucks is willing to pay 40% more for premium coffee, a price they pass on to the taste-conscious U.S. consumer. A container of Costa Rican coffee costs $2 more than the regular sort and a lb. of ground coffee costs $8 to $13 more. Moreover, the producers, under contract for up to three years, no longer suffer the violent fluctuations of the market price. And this, in the specialized Los Santos region where nearly nothing else is produced, is like a life jacket to a drowning man.
One has only to remember back to the late 1970s to understand how important the price of a commodity such as coffee can devastate an economy. In the 1970s Brazil, whose coffee production is in the southern temperate zone, suffered a killing freeze. Without much of Brazilian coffee beans on the market, the price of coffee skyrocketed. Basking in the favorable balance of trade, a series of Costa Rican administrations borrowed heavily from international banks “as if there was no tomorrow,” the weekly Tico Times reported. “Then tomorrow came,” added the paper, speaking of the near-collapse of the country’s economy in 1980-81 when the coffee price fell through the floor as sprawling Brazilian plantations returned to production. Heroic renegotiation was needed before the country stabilized amid runaway inflation.
Starbucks is a good friend to have. Founded in Seattle in 1971, it spead to 39 other countries with 600 outlets in the U.S. alone. Nor is it just generous with its suppliers, notes La Nacion; Fortune magazine listed Starbucks as 16th in the 100 best companies to work for.
Ask Yamileth Luna and her husband Sergio Salvador how generous Starbucks is. Ten years ago they founded a company to produce diaries and other organic paper products out of banana, mango and lime castoffs. Starbucks found out about their Cañas y Bamboo company and Starbucks’ executive Philip Clarke ordered 60,000 units. When the couple protested they could not afford to purchase that much raw material, Clarke said, “No matter. We’ll advance you the money.”
Or Cecilia Facio who was invited to exhibit her ceramic Costa Rican-made coffee mugs in U.S. coffee shops. “At first, they wanted to order 80,000 units but I told them that was impossible,” she told La Nacion, “We can produce maybe 20,000.” She and five other persons in Tres Rios process a ton and a half of clay, make molds, bake it and paint it in order to turn out 1,200 per month. Clarke asked her to design floral and fruit motifs to be manufactured in another country.
All this was the “I am Starbucks” April promotion featuring three local artisans. The company is very big on sustainable use of resources and Scott McMartin, the company’s director of education and sustainability says, “The love affair (between Starbucks and Costa Rica) began several years ago and the efforts in marketing that involve Costa Rica are a celebration… of that love…”