Investor Presentaiton
MVO
NEDERLAND
On farm sizes
According to the Global Coffee Platform, there are an estimated 290.000 coffee
growers in Brazil, of which 210.000 growers cultivate Arabica (70%). 190.000
of these Arabica-cultivators are smallholders with a production area smaller
than 10 ha.5 Due to the larger production volumes of the other farm types
through mechanical production and larger farm sizes, among others the total
share of non-mechanical smallholder coffee production in Brazil is relatively
small. Nevertheless, virtually all smallholders that produce their coffee in a non-
mechanical way are located in Minas Gerais (129.000).6
It is that group of producers that is of interest to European coffee companies
looking for high quality and sustainably produced coffee. And it is this
group of
producers that are often considering different approaches to tackling the
biggest social and environmental challenges of our times. A number of these
challenges were mentioned during interviews and became apparent during field
visits in Minas Gerais.
EFFECT OF CLIMATE CHANGE
Due to climate change, a number of effects are visible in the production of
coffee. For example, new pests and fungi are taking a toll on production and
post-harvest losses. This results in the possible use of even more agrochemicals.
INTERVIEWS AND FIELD VISITS
Overall it must be said that the Brazilian coffee sector is seen as the most
professional and developed worldwide, and Minas Gerais is the biggest single
producer of coffee in the world. There is a large contrast with other production
countries. Therefore it is considered a fact that Minas Gerais (and Brazil in
general) has a strong impact on the market price of coffee, mainly through their
share in the total supply. Brazilian coffee also has an outspoken taste profile,
for which exists a large demand. Together with the low production costs, this
makes Brazilian coffee a popular ingredient for most of the coffee blends in the
world.
Mechanical coffee picking
Additionally, it has become more difficult to predict the moment of harvest due
to unpredictable rains. Since rainfall now occurs over different periods of time,
one coffee tree can have overripe berries, ripe berries, underripe berries and
flowers at the same time. Mechanical harvesting techniques make it virtually
impossible to selectively pick the ripened cherries of the coffee tree. This creates
either a big post-harvest loss or a diminished quality due to ripe and unripe
beans being mixed.
We found a great contrast in response to climate change with different
archetypes of companies. These different responses are exemplary for the coffee
sector in Minas Gerais. Large scale, more traditional companies look to new
5 Global Coffee Platform, A Quick Scan on Improving the Economic Viability of Coffee Farming (2018).
6 lbid.
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