African Gourmet Robustas:
A Golden Opportunity For Producers And World Consumers
EAFCA Conference 2008, Kampala, Uganda, February 14, 2008
Ladies and Gentlemen, Good Afternoon,
My name is Pierre Leblache, I am a French born American living and working in New York, and I am the founder of the World Alliance of Gourmet Robustas, an association dedicated to the improvement and the promotion of good robustas to be used as Gourmet coffees. Thank you for attending this presentation as I would like to discuss with you the case of fine robusta coffees in today’s specialty sector. After I have made my case, your questions will be welcome and I shall try to address them in the specific context of the African Gourmet coffee market situation.
These last 20 years, the evolution of coffee prices has been traumatic, hardly a surprise if one considers all the factors which altered its production, consumption, and more than anything else, its image and status: Frosts, port strikes, droughts, evolution in futures trading and marketing changes can be construed as part of a commodity’s “normal life”, but events such as the collapse of an international agreement or the emergence of a new producer zooming from zero production to becoming nr. 2 exporter are bound to produce a bumpy ride… This is exactly what happened to coffee, with price fluctuations in a range of 1 to 9 between 1989 and today, almost 3 times as wide as during the previous 20 years. That some coffees fared better than others is an understatement: Generally speaking, arabicas survived and prospered, with many types reaching record recognition and prices. Robustas were the big losers; Most of their producers have been fighting to remain barely profitable, and many have failed. Whether their fate can improve, what it will take and what benefits there will be for consumers are some of the questions worth talking about.
It is often said that every crisis has its good points, and this did apply to the progress of arabica specialty coffees during the price collapse which followed the lifting of quotas in 1989. While the Gourmet concept was born around 1985, very few origins (Kenya, Ethiopia, Colombia, Jamaica, one or two others…) recognized it at the time. Specialty coffees only developed strongly when exporters realized that quality premiums were the sole way to compensate for prices reduced by half or more. Soon, 20 arabica origins were in the specialty business, promoting their best coffees but also boosting the value and image of their whole production… Even though any country’s coffee output necessarily includes 20% of defective beans, the words “Costa Rican Triage” do not exist.
The same has not happened with robustas. In the post International Coffee Agreement (ICA) free market, they have suffered growing indignity and mostly remained unable to recover. At a time, producer prices sank to two thirds below those of arabicas, and their usage remains almost exclusively for solubles, fillers and cheap blends… Nothing glorious!
Robustas Then and Now…
And yet, Robustas were not always an ugly duckling. Up to the 1970s, it was common talk, among people who traveled, that coffee was generally good in Europe and bad in North America. In those days the U.S. imported mostly arabicas, while Europeans brought the beans from their former African and Asian colonies, chiefly robustas. It is ironic to see that Italian Espressos, upon which today’s gourmet culture relies so much, were then made with robustas, and that arabicas now represent over 99% of specialty imports.
When the London Robusta Futures Market opened, in the 1950s, robustas did not trade at a discount to milds. The differential appeared later, and for two unrelated reasons: While the coffee tendered in New York was mostly washed, the lots delivered to the London market were dry processed. That washed coffee should trade at a premium to naturals makes sense, but this has nothing to do with the variety of the coffee. Then Brazil had two frosts, in 1955 and 1957, which created a shortage of arabicas and therefore a premium. Over the years, the situation remained and robustas became second class coffees. Still, up to the late 1980s, they held their place comfortably. In the USA, the “Three Large Roasters” as they were called, purchased approximately 5 million bags of robustas, the big majority coming from Indonesia for medium grades , and from India, Ivory Coast, Uganda and Cameroon for the best qualities. Europe purchased 15 MB from the same origins, more from Madagascar and less from Indonesia.
These coffees traded at a premium to the London Market, just as the Centrals did against the C Contract. With robusta futures being on average 20% cheaper than milds, that made good robustas much more expensive than mediocre arabicas, a very understandable situation which has not been repeated in today’s world of Gourmet coffees. On rare occasions, such as during the infamous “Operation Patricia”, the ill-engineered attempt, in 1986, to squeeze the robusta market and to ship millions of robusta bags to Trieste, the London market jumped above the C contract: Ivory Coast Gros Grains became (briefly) the most expensive coffees in the world. More significantly, these Prime Robustas bore in them the same improvement potential that was so cleverly used in Central America during the rise of the Gourmet phenomenon, and that robusta producers failed to seize.
There were other sources of good robustas: Vietnam was yet totally unknown, but Brazil used to export its Conilons to the United States in spite of an tacit agreement with Africa not to do so. Ecuador had the cheapest freight to North America, and their preparation could be excellent. Had Ecuador washed its robustas, it could have become a Costa Rica before its time. Numerous smaller origins had a strong demand for limited quantities: Angola, Liberia, Sierra Leone and Zaire. The production of all those countries collapsed for various reasons, civil wars, mismanagement and others. When one comes to think of it, the decision by Vietnam to become a major coffee producer, around 1990, was timely, intelligent and very much to the point..
Whatever their distinguished past, most robusta producers have good reasons to fear the future, as the long term perspective for their coffee is bleak: Overproduction shows no sign of abating, on the contrary. Besides Vietnam and Indonesia, a third Asian robusta front is developing. Five smaller countries (Laos, Cambodia, Nepal, Bhutan and Myanmar) gradually increase their output and will further pressure prices. Within 10 years, their combined exports could challenge those of Vietnam today. Prominent organizations in the U.S. and elsewhere have been calling for the establishment of minimum quality standards, so as to bar entry of the lowest grades into main consumer markets.
That would be a blow to many origins. Furthermore, robustas have a bad image in the consuming world. They are the coffees everybody loves to hate, and this is the result of several factors : Although they can display excellent characteristics in appearance and cup, the way they are overwhelmingly processed, the unwashed dry method, does very little to reveal and enhance their qualities. Their traditional use over the past 15 years as soluble coffees or fillers for cheaper blends does not help either. Add to this a complete lack of promotion, strong anti-robusta lobbying by arabica producers, and the result is hardly surprising. Thus, they find themselves caught in a deadly spiral: Low prices generate poor self esteem by producers who cannot afford good processing. This makes the coffees even less usable, which generates lower prices, etc… All this constitutes a bad omen.
Breaking the Evil Spell
In this dire situation, the silver lining is that coffee crisis have existed before, and that solutions have been found: When arabica producers lost 70% of their income in the early 1990s, the more dynamic and visionary worked hard towards quality, promotion and astute marketing. They succeeded, and generated prices never reached before. An excellent illustration of this is the existence of EAFCA.
This is exactly what can and must happen with robustas, and there is no reason why it shouldn’t. “Coffea Canephora” which is the scientific name of the robusta plant, is in no way “worse” than “Coffea Arabica”. Its characteristics, though different, can be just as good, and what matters is its processing. Especially in today’s specialty world, consumers want a good visual aspect, distinctive cup attributes, homogeneity, regularity and reliability, most of which depends on how cherries and beans are handled between picking and shipping. Clichés about “Arabica Superiority” such as “more acidity” or “less caffeine” omit that many consumers prefer neutral coffees, that many robustas have a low caffeine content (such as in India) or can even be naturally decaffeinated.
That robusta producers need a renewal and an improvement of their offering is an understatement: Compared to milds, twice as many robustas have a production cost higher than their market value. World Bank estimates forecast the disappearance of many origins as exporters before 2020. Since 1990, no less than 10 countries have practically disappeared from export statistics, such as Angola, the Philippines, Liberia, Sierra Leone and others. Even an former large producer like Madagascar is down to 15% of its former self. At the other end of the range, Vietnam is now the world’s nr. 2 exporter, but until recently with dismal unit values and the widely perceived stigma of having murdered an industry. Becoming recognized as a quality producer, even for small quantities, will boost its image dramatically.
Consumers too need high quality robustas: The specialty market requires diversity. No coffee type or brand can be marketed in too large quantities, as this would make it look unattractive. A key demand of coffee drinkers is for a large variety of types covering widely different tastes. As the market expands, very ordinary arabicas are increasingly brought in and absurdly called “Gourmet”, even when they lack any distinction.
Not surprisingly, carefully selected and processed robustas will always be superior to mediocre milds. Also, in historical robusta importing countries like France, Belgium or Italy, many consumers notice and miss the absence of a component in their fashion designed espressos, something which weights on the acceptance by Europeans of large chains of coffee bars, especially when they falsely boast that do not buy one single bean of robusta. Providing wi-fi access for clients’ computers is nice, but what if people don’t like your coffee? How can the aspiration for diversity be better proven than by the geometric multiplication of cookie-cutter coffee bars when at the same time one of the highest world authorities on coffee describes many of their products as “something extremely dark which smells as if it's been through a fire that has been extinguished by a fire brigade"?
Finally, in an expanding gourmet market, a wider price range will be needed to accommodate growing demand by coffee lovers of more modest means. Even accounting for large quality premiums, robustas constitute the largest pool of improvable and affordable coffees.
That today’s situation was largely caused by producers and origins themselves makes little doubt. Mistakes have been made, opportunities have not been seized, warnings have not been heeded. Since all this lies in the past and cannot be undone, it does little good to dwell on it. Other reasons can be found with importers, roasters and retailers, but the perceived inferiority of robustas is so well entrenched in the consuming sector after all these years that the onus of proof now lies with producers. Only when they have made their case will the Gourmet industry give them another chance and accept them more widely.
To do this, producers must wage a battle on several fronts, starting with the processing method: Washing is the key, as so much in the gourmet process relies on the coffee’s aspect and as washed coffees look infinitely better than naturals. 20 years ago, washed robustas could be found in several places, but they now remain exported only from India and marginally Guatemala. Many origins have the know how and the technology to produce them, starting with dual producers of arabicas (which they often wash) and robustas. The list includes at least 10 countries, 4 of them in Africa. Almost none of them wash robustas, but they must start without delay. Other producers, some large, have no experience at it. They should aim to produce Fully Washed as quickly as feasible, possibly going through an intermediary phase, semi washed and polished coffees, as is the case in Vietnam and Indonesia.
Once the washing approach is selected, either fully or in its provisional phase, dry processing must be fine tuned and aim at “zero defect”, with the creation of new types with specific names. The old FAQ types will obviously remain, but a small percentage of the crop must be improved to far better standards. Quality control must be rigorous and reliable, so as to guarantee the new types’ homogeneity and regularity. For some origins, the old prestigious types of the past must be re-introduced. Finally, these new coffees must be marketed exclusively through high paying importers and distributors, as is the case with gourmet arabicas. The promotion and marketing of specialty coffees is so different from that of industrial beans that using separate channels is an absolute must: Bulk importers are simply unable to obtain high enough prices from their established roaster clients.
Summing it all up, the key to developing gourmet robustas is threefold: Catching up with a 15 year late start, dedicating the same efforts which arabica producers initiated years ago, and marketing premium robusta types as worthy alternatives.
Specialty Robustas: Inventory and Potential
Over the past 20 years, robustas as a whole have grown to constitute about 37% of all coffees produced (from 34%), and their regional distribution has shifted vastly:
Latin America has remained fairly stable, around 17% of all robustas, Asia has soared and passed the 55% mark, but Africa has sunk to 28% or less. Some old traditional origins have collapsed, new ones have emerged and strived, others have maintained their position as leading exporters. The robusta map remains in motion and many more changes are predictable. Nothing is lost nor is anything permanently won but any position conquered or abandoned alters the strength of each region.
Latin America has the fewest robusta origins. Although Brazil’s conilons are mostly used for domestic consumption, some could be washed and exported at a premium. The know-how certainly exists, as it does in Ecuador. The attitude, however, has not changed since the time of quotas and they are still considered second class coffees. With a different cultural attitude, many Brazilian and Ecuadorian robustas would outprice natural arabicas. Mexico also has a washed robusta potential, mostly in the hands of cooperatives and just starting to be improved. Finally, Guatemala has a microscopic production of washed robustas which already sell confidentially at very high prices.
In Asia, India receives the highest existing premiums for some among the best washed robustas anywhere. So far, these coffees have not achieved the recognition they deserve as a separate class, possibly because their marketing is not fine tuned enough towards specialty importers. Indian exporters remain fiercely loyal to their traditional buyers, and some are being taken advantage of. Their premiums should and can be much higher. Vietnam and Indonesia are getting improved prices with semi-washed and polished robustas.
The acknowledgement, breakthrough and windfall should come when those coffees become fully washed, in a few years. When this happens, their image will improve immensely. However, I find it very encouraging and remarkable that niche producers in Vietnam have started to produce and market very specialized washed coffees. Many of you have heard about the Luwak Indonesian coffee collected from the excrements of the civet cat, a small fox-like animal and reputedly excellent, but I cannot blame you for not wanting to try it. Well, a Vietnamese coffee type now replicates the same fermentation and magnificent cup, but safely done in less risky and more appealing surroundings. Similar initiatives towards specific types can and must be taken elsewhere.
No continent has suffered more than Africa in terms of coffee exports value and market share. Although this applies to both varieties, chiefly robustas have been affected. No less than 20 origins on and near the continent are robusta producers, but only 2 countries, both members of EAFCA, market washed robustas and only with token stocklots. The most obvious candidates and the closest to immediate rewards are those origins which used to sell them in the past, as planning and implementation will be easier than elsewhere. Through the right channels, these coffees’ premiums will soar.
Uganda and Tanzania can be in the frontline, and also Burundi though for smaller volumes. Ivory Coast and Cameroon could also do well and have recently shown impressive test samples. Since their washing experience is at best remote, the Vietnamese approach of semi-washed and polished appears particularly well suited, something which would also befit the Democratic Congo. Madagascar, which has an exceptional potential with its naturally decaffeinated Mascarocoffea, could eventually do well after removing the obstacles in the way.
Following the OAMCAF debacle last year, the important matter is not only how to structure the trade of West African coffees but also whether such a structure is needed at all. The least one can say is that the recent creation of ACRAM (Agence des Cafés Robustas d’Afrique et de Madagascar) has met with some skepticism as many observers see in it a copycat of the failed OAMCAF, wiping off the debts and merely buying new clothes in a time of decentralization and deregulation. If and when the new organization finds its bearings and acts decisively, credibility will follow.
In the meantime, a growing feeling is that since no such multinational organization exists anywhere else, none is specifically needed for African robustas, but that one would be welcome to help promote the cream of the crop, I mean Gourmet robustas. I am not a policymaker, but I can recognize success when I spot it: After witnessing the spectacular growth and prestige of EAFCA, I cannot help imagining that a West African chapter or maybe a Robusta chapter of your organization could fill that void and meet with the same success that you have built over such few years.
If, one day, the East African Fine Coffees Association drops the E. and becomes AFCA, the African Fine Coffees Association, the consuming world will notice. Similarly, a larger participation by African origins and robusta exporters to organizations especially dedicated to high quality robusta types would enhance their visibility and appeal.
On the consuming side
Twenty years after the Gourmet coffee concept started, arabica producers have succeeded far better than their robusta colleagues to make their variety look better, superior, more attractive and more expensive. However, in some areas of Europe or emerging high quality consumer markets, there is an enormous demand not for arabicas or robustas but simply for good coffees. If you go to India where a whole new class of yuppies is expanding in certain cities like Bangalore, there are coffee bars where the most expensive types offered are robustas.
Why? Simply because once a robusta is well processed (washed) and well prepared, it has its own fragrance, flavour, boldness and cup which are different from those of mild coffees but preferred by many. The problem is not in the robustas’ cup, it comes from the fact that so few are well prepared. Therefore, the solution is to improve them. When a market expands such as this one, it is important to offer types which are enjoyed and affordable by all, whatever their financial means. After sinking to very low levels, robustas are now back to between 65% and 75% of the price of arabicas, a price good enough for growers and exporters to take good care of their beans, but competitive enough to attract more consumers.
The consuming world uses futures markets much more than exporters, and the LIFFE contract has in this respect been an instrument of segregation between arabicas and robustas. With its small lot size, odd delivery months and complicated options rules, it had until recently isolated robusta futures trades in a separate world. One major tool to improve the integration of good robustas lies with a new futures trading market which has opened in New York last September, The new robusta CR contract has units and characteristics similar to the arabica C contract, thus permitting traders to hedge their coffees and arbitrate positions between milds and robustas for the first time. While trading on that exchange has just begun, it is set to revolutionize the access to robustas, just as the development of more forums dedicated to them would contribute.
Building up Gourmet Robustas
While the robusta decline has been apparent for over 15 years, help has been slow to come. Apart from arabica / robusta dual origins which gave priority to their pricier milds, producers generally lacked initiative and overlooked the incentive to produce quality. In many countries, political and economic instability did not help. Coming from various sides, advice and offers to help re-establish ancient washed robusta types have met little producer interest or efforts.
On the consuming side, developing markets such as Eastern Europe have fuelled the need for cheap coffees; The low-cost supply has increased with Vietnam’s gigantic production. As the USA lifted their trade embargo, most Vietnamese robustas became a perfect match for undistinguished needs. Punctual and episodic efforts have been made to remedy the situation, but as long as otherwise serious NGOs will insist on including in their coffee studies and projects origins which are notorious non-producers, the results have been spotty at best.
During the last 3 years, more origins and producers have understood that upgrading quality remains the last option to escape low prices and become profitable again. In several countries where washing techniques are known, the need is strong to apply them to robustas or to develop intermediary steps. More exporters have been displaying improved types at major events such as the SCAA convention or the Tea & Coffee World Cup.
Sales have followed but quantities have remained small. In a market driven by competition on price with not many people bothering to differentiate among qualities, higher-end robustas have kept selling confidentially as specialty roasters have very much lacked the awareness of their potential. When deserving robustas come into the market, they are still too often regarded as token stock lots or niche players, even though they could outperform more mediocre and expensive milds.
Specialty importers and roasters must be persuaded to offer well prepared robustas, which will tend to encourage producers and exporters. One very encouraging sign is the absolute lack of prejudice against robustas in new and potentially important consuming markets such as China, no doubt due to less intense and efficient lobbying against them by latin American exporters or large retail chains which loudly pretend never to use them, something which remains to be proven.
In 2002, a coordinated undertaking was initiated by several producers, importers, experts and consumers, who created the World Alliance of Gourmet Robustas, in order to facilitate robusta access to the gourmet sector. Based in New York, the alliance links about 50 companies and professionals from all venues of the robusta coffee chain on 4 continents, a modest but growing membership. Its objectives and activities can be consulted on its website www.wagro.org.
Among others, they involve creating an awareness of the robusta alternative, promoting washing, developing new higher-end types, helping market them, advertising the variety’s competitiveness, and exhibiting promising coffees at specialty trade shows. We have also coined a phrase which has become our leitmotive and which many producers of milds find sacrilegious “Robustas, the Other Gourmet Variety”. Such initiatives are clearly helpful and they do need major involvement by the robusta sector to make a strong difference.
We are quite proud that that the words “gourmet robusta” do not sound any more as an oxymoron, and that several origins produce excellent types. However, the quantities remain too small and the prices are not optimized. A lot of work remains therefore to be done, including information at all stages of the robusta industry and especially on processing, quality control, pricing and general marketing. As the gourmet sector grows, so does demand for diversity, with an immense untapped pool, largely in Africa. Many signs are positive but more involvement is needed throughout the robusta chain, as not enough participants involve themselves in giving robusta its class back. We all can, we all must help.
Thank you very much for your attention and patience. I shall be glad to answer your questions.
