Auspicious Origin
Finding and Preserving Distinction in the Peruvian Cup
by Julie Beals
photographs courtesy of Jungle Tech

In our January 2002 issue, Fresh Cup reported on the state of Peruvian coffee production and export. The country was beginning to emerge from immense political and social challenges and was on the verge of making a name for itself in the world of specialty coffee. Mass production of low-quality coffee, characterized as overly mild, fermented and earthy, was still an overriding issue. Growers were rarely given incentives to learn how to process coffee properly to prevent these defects. And for farmers who didn't often taste their own coffees and had no financial motivation for exact fermentation control, the problems persisted. While obstacles remain, efforts to ensure that signature specialty Peruvian coffees are brought to market are reaping positive results, and producers are being recognized and rewarded for their efforts.

A HISTORY OF COFFEE IN PERU •Toward the end of the 19th century, Peruvian coffee production mainly targeted the domestic market, with only a small percentage of beans exported to Chile. • In Chanchamayo, a fertile valley in the center of the country initially colonized by French, German, British and Italian settlers, coffee first was cultivated in association with other crops such as sugarcane, coca, tobacco and cocoa. It was only in 1850 that coffee production became firmly established in the region, due to the efforts of Jesuit priests who helped spread its cultivation. •The rise in international prices in the late 19th century first enabled Peru to become a coffee exporter. At that time, its main markets were Chile, Britain and Germany. • In the 1930s, the Chanchamayo Valley became established as an important coffee-producing area, with industrial facilities that made it possible to process large quantities of beans and guarantee uniform quality. At the time, British-owned companies were trading the coffee produced in the Perené valley, including the Chanchamayo, Tarma and La Merced areas. The policy was to produce high-quality coffee as a means to ensure a high price. • The Peruvian Chamber of Coffee (CPC) was founded in 1991 with the objective of improving Peruvian coffee quality and image, representing the export sector of the business.

Overcoming the Past-and Geography
Even in the last century, Central and South America have seen tremendous political and social upheavals. And not many struggles equal those seen by Peru. Lengthy border disputes with Ecuador and Chile resulted in armed conflict. Military coups repeatedly interrupted civilian constitutional government. Sweeping land reforms of the 1960s resulted in chaos in agricultural production and exportation. The emergence of terrorist groups in rural areas in 1980, followed by the Tupac Amaru Revolutionary Movement (MRTA) in Lima, created further disorder, with some militia groups forcing farmers to cultivate coca and forego other crops.
   A marked turn for the better came for Peru at the turn of the century, with the election of president Alejandro Toledo in 2001. Toledo has restored democracy following the authoritarianism and corruption of past leaders. Private investment is already rising and becoming more broad-based. The country's economy is becoming one of the most dynamic in Latin America, showing strong growth over the past three years and a degree of stability that has encouraged foreign investment.
   This is all good news for Peru's coffee market. As in other producing countries, solutions to quality issues are possible when education and financial motivation are provided through direct relationships with buyers, incentivizing farmers to carefully process their harvests in exchange for the direct rewards that come with increases in quality.
   But perhaps the most formidable-and certainly the most constant-obstacle to bringing Peru's coffees to market is the sheer size and scale of the country. Within Peru's borders are almost 500,000 square miles of rugged landscape, while the Andes mountains create a barrier between the coast and the interior, rising a dramatic 18,000 feet in some areas. To put this in perspective, Peru is only slightly smaller than Alaska, or about one-fifth the size of the continental United States. And imagine a mountain range that spans more than 1,400 miles (the length of the entire west coast of the U.S.) on the landward side of any U.S. port city, such as New York, Los Angeles, Miami or Seattle, isolating it from the rest of the country.
   George Howell, owner of Terroir Coffee and co-founder of the Cup of Excellence, has been a consultant in Peruvian coffee off and on since 2000. He notes, "An immense challenge to the country is transportation. It costs more money to get coffee from growing areas to [the port of] Lima than it does to ship that coffee from Lima to New York. These are the difficulties-tip-of-the iceberg kinds of difficulties." From Lima, eight to 16 hours of driving over treacherous roads is required to reach farms in the vast interior's major growing areas.

Vast Potential in Smaller Lots
While no country can quickly stabilize after several major upheavals, and Peru's landscape always will be a challenge, systems are being put in place to assure that coffee exports and overall quality of life continue to improve. Given the obstacles, the fact that exquisite coffees are reaching the market from Peru's isolated interior is a testament to the ability of Peruvians to recognize and seize opportunities for positive change and growth, and the willingness of outsiders to become involved.
   In the last 10 years, Peru has increased production threefold and is on schedule to ship 3.5 million bags of coffee in 2005. Peru's exports are increasing in quality and quantity in the midst of the coffee crisis, sending the message that Peruvian coffees are competitive, both in price and quality. And given the many growing regions that have yet to be fully realized, Peru's position can only improve.
   One unique offering from Peru is the Typica variety, an original, nonhybrid coffee that is somewhat rare and therefore highly sought after. Of Typica, Alan B. Odom, InterAmerican Coffees' vice president of sales, says, "It generally has better cup profiles, but it suffers because growers have gone to hybrids for higher yields or for disease or pest resistance. But in countries like Peru that continue to plant Typicas, it's a big positive for the growers."
   And as importers and roasters continue to discover, there are farms producing high-quality coffees in the highlands of Peru. Luis Navarro is president of the Peruvian Coffee Chamber and co-administrator of Peru's National Cupping Competition. He has been exporting coffee from Peru since 1983. "Peru is a success story," he says. "We are now able to focus on the smaller gourmet markets, which will promote the quality of the coffee even more. . Specialty coffee production is on the rise, and excellent coffees are found in high-altitude areas," he says. "Peru has fine coffees, as good as Guatemalans, Columbians and Costa Ricans. That's one thing many people did not know [until recently]."
   On Howell's 2001 trip there, he visited growing regions in the north, one of which was in an area called Divisoria. "I was really looking to see where the quality was and if those areas could be defined in any way," he says. "I was trying to determine if the quality that potentially existed there could be brought to market." He ran into one small lot that he says "was one of the two best coffees I've cupped in my life from Latin America . which had what I'd call an Andean quality. Once you've had it, you know it. . It has sweetness to it that you simply don't find normally."
   In all cases, Howell sees tremendous potential for high-quality coffees to make their way out of Peru. However, these superb finds run the risk of being blended into large container loads. "The potential is present in Peru to produce signature coffees, ones that reflect their place, their origin and perhaps variety, but the systems in place that are charged with assuring quality require greater organization," he says.
   Odom says, "Taking a high-quality coffee and mixing it with a less desirable lot to try to improve the lower-quality beans is a natural response, until [growers] realize the market pays for quality." The infrastructure isn't always in place to keep different qualities of coffee separated and sold for different prices.
   According to Howell, the fact that coffee is treated as a commodity throughout the world encourages many growers to focus on quantity produced instead of quality. On occasion, it is possible to find phenomenal lots from the comité (farm groups that are smaller and simpler than co-ops) that many times consist of 15 to 20 families working together in their own wet mill, producing 20- to 40-bag lots of coffee. "There you can find extraordinary lots on occasion," says Howell. "And if there were more incentive, more infrastructure, I'm sure there would be more of that, but instead, those lots usually get swallowed up into the larger bulk lots."
   It's a system Howell has seen in most producing countries, promoting fair or average quality coffees, but not truly exceptional ones. "More cupping and education will increase the ability to pick out unique expressions that could really represent Peru and define it as something extra special," says Howell. Logic would have it that more cupping and education will lead to assurances that signature coffees will make it to market intact. "It's a matter of time and creating infrastructure," says Howell.

Representatives from U.S.-based roasting companies award coffee farmers in Cusco, Peru, for their outstanding cups.

Wet Mills: Consistency Versus Artisanship
All Peruvian coffee is washed. Countries such as Peru, with a reliable water source and a more humid climate, tend to wet-process their coffees because it results in a more refined product, sought out by the specialty market and thus commanding a higher price. (Though some roasters are starting to seek different flavor profiles, experimenting with semi-washed or natural process coffees.) Odom says wet milling (de-pulping, then fermenting and drying) is "a more desirable method to get what's best out of the coffee, at least with the bulk of what people are looking for out of a Peru, along with the highest price."
   Typically, families in Peru independently farm and wet mill their own coffees. Each farmer harvests the coffee during the day, de-pulps the cherries in the evening, then washes the fermenting parchment and spreads the coffee out to dry the following day. Larger, more centralized wet mills in Peru's central and southern growing regions provide an alternative to local wet milling and are catching on slowly as an attempt to solve quality problems.
   It is too early to know if centralization will become the standard in Peru. There is disagreement over whether it will provide consistency in quality or negatively affect the unique characteristics of different coffees. Better infrastructure in the form of roads and transportation are certainly needed, and organization is required to assure consistent quality and some separation of lots.
   While there is some merit to the centralized approach, grouping farmers into collective wet mills could wash away their individualism. K.C. O'Keefe is co-owner of Jungle Tech, a Peruvian coffee import company. He asks, "What happens to farmers who use unique husbandry methods? Or to the flavor profile of cherries brought from a farm at 5,500 feet versus one at 3,000 feet that arrive at the mill on the same day? How can soil preservation and fertilizing attempts be recognized and rewarded if there is no way to measure their effect in separate cups? How are farmers honored for their individual craftsmanship and efforts?"
   Another concern about the advent of centralized mills: They could be positioned to create monopolies within their regions. If farmers grow and pick cherries and rely on a centralized mill to process them, a single mill could set prices, creating farmer dependence. O'Keefe believes this will counter the interests of micro-farmers, bringing fewer unique coffees out of Peru.    O'Keefe stresses that the opportunity that our industry provides for uniqueness, regardless of volume, is what defines it as specialty. Some micro-farmers produce as few as 15 bags of coffee each year. The infrastructure and delivery system in Peru, and perhaps the container-load mentality, still inhibit recognition of skilled micro-farmers. But if there are coffees that can be considered Peru's signature, it is worth the effort to bring them to market.

A Peruvian coffee farmer and his raised-bed drying system.

Retaining Culture and Quality: Cupping, Processing and Infrastructure
   Lack of infrastructure in the trading system and geographic isolation has kept farmers from understanding that a market exists for high-quality coffee, one that can reward their efforts. O'Keefe recalls a bean grading experience where 97 samples were analyzed over a five-day period, giving each coffee individual attention. "The growers were surprised and grateful for the evaluations even if the results were negative. They had never received a report of their coffee quality-not by local buyers, nor by their cooperatives," he says.
   Cupping at the farm level could negate the need for centralized milling. O'Keefe says, "Standardization is necessary, but for Peru, cupping is the path to knowing what standards to embrace within a micro-milling model. It would be great if we could develop those standards, retain a competitive, free-trade internal market in the interest of independent farmers and offer the world a chance to buy some of the most unique Peruvian coffee."
   Howell notes, "Farmers need to be the key people in cupping sessions, tasting what the market is looking for, enabling them to test the quality of their production." When farmers taste what the market demands, it is presumed that they will then cultivate it-one key to bringing more Peruvian coffees into the premium and specialty grade categories.
   Howell offers the possibility for a paradigm shift in the approach to cupping at origin: "Once you start cupping coffee for its good traits as opposed to its negative traits-because traditionally professional cuppers are trained to cup for defects-and start talking about what's good about the coffee, people start lighting up and getting enthused and excited, and that kind of culture needs to develop." On one of his trips to Peru, Howell met with a small farmer who served him exceptional coffee on the dirt floor of his home. "I said, 'Wow, this is really good. How did you do it?' And he said, 'I always drink my best coffee.' And that was a unique statement. It gets away from this idea in most producing countries that you drink your worst and you sell your best. This guy, as with wine growers, was 'into his thing' and proud of it, and that's the kind of culture we need to see develop," says Howell.
   O'Keefe has cupped with growers who once rarely tasted their own coffees, let alone cupped them. During the cuppings, farmers asked how their coffees compared to others in the region and how they could improve their cup quality. O'Keefe and others have offered feedback and suggestions. Each time O'Keefe returns to these communities, he sees improvements in fermentation tanks and drying systems, confirming that the farmers are indeed implementing processes that improve the quality of their coffees. "It's a joy to see the farmers of Peru make a direct connection between the farm and the cup," he says. "Now it's our turn to make the direct connection between the cup and farmer."
   Cupping in search of a coffee's positive traits is important, with coordination between groups that share common goals, despite some competing interests. Cooperatives, associations, fair trade, organic certification, shade-grown certification-all are buzz words for sustainable coffee trade, and all are offered as solutions. Howell stresses that these groups must come together: "You see the organic movement, shade grown, fair trade, which is very valuable and necessary, but they're not enough. Quality has to be an emphatic partner along with that, otherwise what you see is a run towards organic, and prices fall." A coffee that is a pleasure to drink, one that has been grown and processed correctly, is always more marketable in the long run than one that is fair trade, organic or shade grown but lacks a desirable flavor profile.

Cupping individual lots is one key to bringing signature coffees out of Peru.

National Cupping Competition
Cupping contests are a natural tool to promote quality, as evidenced by the success of the Cup of Excellence, with its competitions in numerous countries providing a bellwether to great coffees. As cofounder of the organization, Howell describes it as "a cupping competition and auction designed to find the highest-quality growers in the host country, identifying and therefore promoting them."
   Odom adds, "One thing [Cup of Excellence] does is highlight an origin, proving that there are great coffees to be found within that origin. It does a good job of putting people's focus on an origin that otherwise might have missed their attention."
   And the real success is after the auction, when importers who follow the competition are drawn to regions, farms and co-ops that may have missed their attention, or that they were once unsure of. "They say, 'This has promise,'" says Odom. "'Let's do business there on our own.'"
   The success of any such event depends on its ability to provide meaningful rewards to the best coffees. "Producers and buyers know the requirements, the competition and what it takes to win. Being awarded in such a well-organized competition is the highest honor a producer can seek," says Navarro. "We had [cupping competitions] in Lima in the past, but they were gatherings for putting a medal around someone's neck," he says. "These events need to focus not just on the prize. A producer must be paid for bringing a winning coffee to the competition. It's useless to have a medal without [a sale accompanying] the awarded coffee."
   In its first year, Peru's National Cupping Competition used the "pay to play" model, with measurable success. "The first time we did it," says Navarro, "the winner was from an area in northern Peru, and a Japanese buyer paid top dollar." This kind of encouragement lets producers know, in very concrete terms, that their quality beans will be sold at a fair price.
   The ultimate goal is to bring the Cup of Excellence to Peru. Howell is cautiously optimistic: "The idea [behind the National Cupping Competition] is to bring Peru closer to being able to do a Cup of Excellence, a national program. It's a matter of organization and having all the entities and resources along with good communication. That requires small steps. Peru is a large, complex country with multiple growing areas, so it's difficult to pull all that together. It requires a lot of resources. There aren't many other countries that have this many growing regions, this large of an area, this difficult of a topography."

Relationship Coffee: Farmer Reward System Developed
In a country where more than 150,000 farmers hand pick and process their own coffees, education and financial motivation are key to discovering and developing quality coffees. Farmers are often unaware of the best methods of production and processing. What's more, the remoteness of the farms from roads and towns hinders the development of controlled wet mills and drying stations.
   Perhaps the best option for preserving exotic Peruvian coffees is to establish direct relationships between growers and buyers to promote the cultivation of exceptional coffee. "There are exporters, but it takes an importer, and/or roasters, to help out where they can to find a demand to make that happen," says Odom.
   O'Keefe, for one, has found buyers willing to participate in the individual reward of farmers, paying as much as $4 per pound for highly regarded coffees in micro-lots, thus enabling attempts to extract and honor the best that Peruvian coffee farms can offer. These buyers are sometimes accused of "taking the cream off the top," says O'Keefe. But he views it as giving maximum reward to hardworking individuals who deserve to have their efforts recognized, regardless of whether the coffee comes from a small family farm or a large estate. Some have even called this model anti-cooperative, but O'Keefe suggests that every cooperative could implement the use of cupping as a way to match clients with their coffees. "This method would allow the co-op to reward individual farmers for the quality they produce, rather than dividing premiums equally among farmers," he says.
   Through micro-lot cuppings, it is possible to find outstanding coffees that are worthy of celebration. O'Keefe and Jungle Tech recognize the effort put into creating these coffees with an annual awards ceremony in which a farmer from each community is recognized as "best of community." The award has generated synergy among the farmers and recognition from buyers who pay a premium for their coffees. "It's a joy to tie the whole experience together and encounter a way to encourage the group and individuals at the same time," says O'Keefe.

On the Horizon
Growth of the Peruvian coffee industry can be attributed to a free market, greater sociopolitical and economic stability, increased private investments in coffee producing areas and greater awareness of Peru as an origin of quality coffee.
   Peru's ambitious efforts to improve the quality of its coffee and to ensure that it consistently meets its delivery commitments are paying off. The New York Board of Trade has revised its rating of Peruvian coffee, which has earned international recognition for its quality. These quality improvements have been led by the private sector, targeting growers who receive training in cultivation and processing techniques in order to ensure Peru's high-altitude coffee reaches the market with superior quality and improved consistency.
   "So long as [coffees] are processed correctly, which is the biggest challenge facing Peru, it has the altitude, the soil conditions, the heirloom variety, to stand out as an origin," says Odum. This upward trend is of course good news for the coffee trade, while challenges remain in terms of bringing more producers onto the playing field and more specialty coffees to market through an infrastructure that makes this possible.