Thursday, May 22, 2008
Wednesday, May 21, 2008
Costa Rican Coffee Industry
Coffee production began in 1779 in the Meseta Central in CR. This area contained near perfect soil and climate conditions for the growth of coffee. A native plant of Ethiopia, the blend introduced to CR was first found in Saudi Arabia, hence the name of the type of coffee grown in CR, Arabica. Coffee growing surpassed cacao, tobacco, and sugar in importance to Costa Rica's economy and by the 1830's coffee had become the main agricultural crop of CR. Today, because Costa Rican coffee is so high in quality, it is routinely mixed with inferior beans to make an end product that is up to standard.
Today, according to coffeeuniverse.com, the coffee industry employees over 20 million people, ranks second only to petroleum in terms of dollars worth of the commodity traded, and with an estimated 400 billion cups of coffee consumed every year, it is the world's most popular drink.
Coffee accounts for just under 10% of Costa Rican exports (in value) and is decreasing due to the industrializtion of CR. Because of very fertile land and an abundance of rain fall, CR is an ideal place to grow coffee. To aide in the ease of exporting and to reduce costs, including those of coffee, CR is actively lobbying to join the NAFTA treaty or to sign a similar treaty with the U.S. and other countries where coffee and other products are heavily exported. CR has also been a part of the Free Trade Act of the Americas which has leveled the playing field for coffee growers. Both NAFTA and Free Trade Act have helped reduce the tax and tarriffs that use to be encountered when coffee was exported from CR. This decrease in cost has allowed the industry to grow even larger.
In CR, abother thing that is improving the sustainablity of the coffee industry is the fact that coffee plantations have been forming cooperatives to not only be able to reduce costs in terms of purchasing certain needs of a coffee farm but also in helping to set prices for their coffee beans that will yield a better profit for the growers. Without the formation of these cooperatives, many coffee plantations would fail due to costs exceeding revenue.
It seems as though the coffee industry has greatly benefited from trade agreements made world wide and that the industry will continue to be a mainstay in the Costa Rican economy because of the strides plantation owners are making to increase their efficiency and buying and selling power.
Today, according to coffeeuniverse.com, the coffee industry employees over 20 million people, ranks second only to petroleum in terms of dollars worth of the commodity traded, and with an estimated 400 billion cups of coffee consumed every year, it is the world's most popular drink.
Coffee accounts for just under 10% of Costa Rican exports (in value) and is decreasing due to the industrializtion of CR. Because of very fertile land and an abundance of rain fall, CR is an ideal place to grow coffee. To aide in the ease of exporting and to reduce costs, including those of coffee, CR is actively lobbying to join the NAFTA treaty or to sign a similar treaty with the U.S. and other countries where coffee and other products are heavily exported. CR has also been a part of the Free Trade Act of the Americas which has leveled the playing field for coffee growers. Both NAFTA and Free Trade Act have helped reduce the tax and tarriffs that use to be encountered when coffee was exported from CR. This decrease in cost has allowed the industry to grow even larger.
In CR, abother thing that is improving the sustainablity of the coffee industry is the fact that coffee plantations have been forming cooperatives to not only be able to reduce costs in terms of purchasing certain needs of a coffee farm but also in helping to set prices for their coffee beans that will yield a better profit for the growers. Without the formation of these cooperatives, many coffee plantations would fail due to costs exceeding revenue.
It seems as though the coffee industry has greatly benefited from trade agreements made world wide and that the industry will continue to be a mainstay in the Costa Rican economy because of the strides plantation owners are making to increase their efficiency and buying and selling power.
Visit to Del Cafe Tal
Today, Wednseday May 21st, we traveled to Del Cafe Tal. It is a local coffee plantation that just earlier this month won awards as being the best coffee and CR. The owner, Daisy, believed this meant the best in the world as well. On our visit, the owner and the coffee engineer had lots of information regarding how the coffee business works and the challenges that coffee producers face.
This particuler plantation was located at the highest point in which coffee can still be grown successfully. With the high altitude, there are benefits as well as things that make it harder to sustain a coffee business. Benefits include more humidity and moisture which is a definately beneficial right now since the rainy season should have already begun, but has been delayed for some reason. Something that is made more difficult by the altitude is the lack of sun, due to clouds, that this farm recieves. Since Del Cafe Tal dries the coffee beans in the sun, it takes additional time to dry their beans which ultimately makes them less efficient compared to other plantations.
The owner also expressed to us that the coffee industry has two main sectors, Organic and Non-Organic. Tomorrow, we visit Cafe Britt which is an Organic coffee plantation. Del Cafe Tal was bought by the owner that gave our presentation about 10 years ago. She originally wanted to be an orgainic farm, but changed to non-organic when after 3 years. According to her, there are many reasons why organic plantations are harder to make successful. The first seemed to be the difference in production. When her farm was organic at a size of 2 hectares, she was only producing 30 sacks of beans a year. When she switched over to non-organic, she increased her production to 800 sacks a year. The second problem she highlighted was that the increase in the amount an owner can charge for organic vs. non-orgainc coffee is not enough. She estimated that is was only a couple of dollars more per sack. These reasons make non-organic production much more attractive to owners who are really looking to make a profit.
The owner also identified problems with fraud in regards to Organic coffee. To be organic, a plantation`s soil must pass inspections for not having fertilizers and other things. The problem in today`s market is that some companies are marketing there coffee as organic when in reality, it is not. This has lead to the price offered to organic growers being driven down.
Del Cafe Tal was also very interesting because the owner realized the importance of having the ability to process her crops from seed to shelf. This meant that she planted, cared for, harvested, dried, roasted, ground, and sold to customers. Because she has made her farm capable of all these processes, she does not have to rely on anyone else in getting her product to market. This leads to better efficienty and in the long run, lower cost.
Other interesting facts I found by listening to the owner and engineer of Del Cafe Tal included, 7 full time employees and up to 70 during the harvest. Harvest season begins between December and January depending on how ready the bean and fruit are. The bean pickers are paid by how many bushels of beans they bring in and also the proportion of the color of the beans they bring in. The more red the better (as oposed to green). Degradation of the soil is one of the biggest problems that face all coffee growers. Overplanting and water drainage lead to this problem. Finally, because Del Cafe Tal is such a small Plantation, costs for fertilizer and other necesities for growing coffe were expensive. Realizing this, Del Cafe Tal has joined forces with other farms in her area to decrease costs by buying in "bulk".
Interestingly, when Daisy`s plantation won the award as best quality coffee, she almost immediately found she could charge an increased price for her product. She went from charging $1.50 per pound to $15 per pound. She is looking to use this award as a marketing ploy to get her coffee into the top areas of the world (Europe, Japan, U.S.) at the top price she can recieve. The other positive that came out of winning the award was the increase in pride that Daisy had noticed in her workers. Daisy observed that since the coffee product her employees help produce was recognized and awarded, they are more proud of the jobs they do around the plantation and even do more than what they are paid for.
At the end of our visit, Del Cafe Tal provided free coffee. Although it was not brewed from the award winning beans, I do not think it could be much different. I am usually not one to enjoy coffee, but the aroma and taste of Daisy`s coffee was really amazing. I bought 3 lbs. at $10 dollar a pound to bring home to family and friends. I hope they will enjoy it as much as I did.
A post concerning the Coffee industry as a whole is on its way!!
This particuler plantation was located at the highest point in which coffee can still be grown successfully. With the high altitude, there are benefits as well as things that make it harder to sustain a coffee business. Benefits include more humidity and moisture which is a definately beneficial right now since the rainy season should have already begun, but has been delayed for some reason. Something that is made more difficult by the altitude is the lack of sun, due to clouds, that this farm recieves. Since Del Cafe Tal dries the coffee beans in the sun, it takes additional time to dry their beans which ultimately makes them less efficient compared to other plantations.
The owner also expressed to us that the coffee industry has two main sectors, Organic and Non-Organic. Tomorrow, we visit Cafe Britt which is an Organic coffee plantation. Del Cafe Tal was bought by the owner that gave our presentation about 10 years ago. She originally wanted to be an orgainic farm, but changed to non-organic when after 3 years. According to her, there are many reasons why organic plantations are harder to make successful. The first seemed to be the difference in production. When her farm was organic at a size of 2 hectares, she was only producing 30 sacks of beans a year. When she switched over to non-organic, she increased her production to 800 sacks a year. The second problem she highlighted was that the increase in the amount an owner can charge for organic vs. non-orgainc coffee is not enough. She estimated that is was only a couple of dollars more per sack. These reasons make non-organic production much more attractive to owners who are really looking to make a profit.
The owner also identified problems with fraud in regards to Organic coffee. To be organic, a plantation`s soil must pass inspections for not having fertilizers and other things. The problem in today`s market is that some companies are marketing there coffee as organic when in reality, it is not. This has lead to the price offered to organic growers being driven down.
Del Cafe Tal was also very interesting because the owner realized the importance of having the ability to process her crops from seed to shelf. This meant that she planted, cared for, harvested, dried, roasted, ground, and sold to customers. Because she has made her farm capable of all these processes, she does not have to rely on anyone else in getting her product to market. This leads to better efficienty and in the long run, lower cost.
Other interesting facts I found by listening to the owner and engineer of Del Cafe Tal included, 7 full time employees and up to 70 during the harvest. Harvest season begins between December and January depending on how ready the bean and fruit are. The bean pickers are paid by how many bushels of beans they bring in and also the proportion of the color of the beans they bring in. The more red the better (as oposed to green). Degradation of the soil is one of the biggest problems that face all coffee growers. Overplanting and water drainage lead to this problem. Finally, because Del Cafe Tal is such a small Plantation, costs for fertilizer and other necesities for growing coffe were expensive. Realizing this, Del Cafe Tal has joined forces with other farms in her area to decrease costs by buying in "bulk".
Interestingly, when Daisy`s plantation won the award as best quality coffee, she almost immediately found she could charge an increased price for her product. She went from charging $1.50 per pound to $15 per pound. She is looking to use this award as a marketing ploy to get her coffee into the top areas of the world (Europe, Japan, U.S.) at the top price she can recieve. The other positive that came out of winning the award was the increase in pride that Daisy had noticed in her workers. Daisy observed that since the coffee product her employees help produce was recognized and awarded, they are more proud of the jobs they do around the plantation and even do more than what they are paid for.
At the end of our visit, Del Cafe Tal provided free coffee. Although it was not brewed from the award winning beans, I do not think it could be much different. I am usually not one to enjoy coffee, but the aroma and taste of Daisy`s coffee was really amazing. I bought 3 lbs. at $10 dollar a pound to bring home to family and friends. I hope they will enjoy it as much as I did.
A post concerning the Coffee industry as a whole is on its way!!
Tuesday, May 20, 2008
Mom, Dad, Amy
One last quick post for the day. I want to say hello to my family. Hope everything is going great. I will be in touch soon. Love you guys!! I plan on having some pictures soon.
Visit to CINDE
Monday afternoon consisted of our first visit to a Costa Rican company, CINDE. I really had no idea what this business did in Costa Rica, but there presentation left me with a clear understanding of their important role in the developement of CR.
CINDE was founded in 1982. Originally it was an American organization that was set up in San Jose to explore different possibilities of where foriegn investment could benefit. Today, CINDE is a 30 person company with one employee in NYC that is ran totally by Costa Ricans. CINDE is a non profit organization that works off an endowment that the U.S. left when they got out of the business.
The main business operations of CINDE is to attract foriegn investment to CR. They focus in bringing in businesses in electronics, healthcare, and services. CINDE is supposed to help foriegn companies ffind the best situation for bringing there business to CR. They are a middleman with regards to negotiations with the government and people of Costa Rica.
CINDE has been helpful in Costa Rica´s transformation from a mostly agricultural economy to one that is growing more and more industrialized. Today, there are over 200 companies that are classified as Advanced Manufacturing. CINDE reported that Manufacturing attracts the highest amount of foriegn investment, with Real Estate growing quickly, and have high expectations for the Financial and Services sectors. For the large Manufacturing sector, CINDE believes automotive and aerospace companies will be the next to really begin investing in CR.
One of the things I found intriguing about the investment in Costa Rica is the amount of reinvestment vs. new investment. 86% of foriegn investment is reinvestment whereas new investment consists of just 14%. To me, this means that the companies that are investing here are findaing rewards for doing so and therefor are increasing there investment even more. This makes for sustainability of those industries in CR. This investment also benefits Costa Ricans who are able to get jobs with these companies. CINDE said that foriegn companies usually pay at least 20% above Costa Rican minimum wage.
The biggest reason why foriegn investment is so attractive in CR is because of the incentives a business recieves by moving there business processes here. According to CINDE, with as little investment of $150,000 in a certified Free Trade Zone, businesses can realize 100% exemption on duties and no corporate tax for the first 12 years and 50% discount after 12 years. These incentives seem like they would be a great reason for foriegn companies to invest in Costa Rica. The other reason that I see companies being attracted to invest in Costa Rica is the fact that CR generates 98% of it energy through renewable resources which is a fact in which it seems like a company could use, to make it help make it appear as thought it has gone green.
Overall, the visit to CINDE was very informative. Ontop of seeing their role in the Costa Rican economy, they gave an overwiew of the country and it developement from a banana republic to a developing industrialized country. What I found so interesting and unique about this organization, was the fact that they are basically trying to sell Costa Rica. They are promoters, even almost advertisers for theie country. It seems like the work CINDE does is very important to CR moving forward.
CINDE was founded in 1982. Originally it was an American organization that was set up in San Jose to explore different possibilities of where foriegn investment could benefit. Today, CINDE is a 30 person company with one employee in NYC that is ran totally by Costa Ricans. CINDE is a non profit organization that works off an endowment that the U.S. left when they got out of the business.
The main business operations of CINDE is to attract foriegn investment to CR. They focus in bringing in businesses in electronics, healthcare, and services. CINDE is supposed to help foriegn companies ffind the best situation for bringing there business to CR. They are a middleman with regards to negotiations with the government and people of Costa Rica.
CINDE has been helpful in Costa Rica´s transformation from a mostly agricultural economy to one that is growing more and more industrialized. Today, there are over 200 companies that are classified as Advanced Manufacturing. CINDE reported that Manufacturing attracts the highest amount of foriegn investment, with Real Estate growing quickly, and have high expectations for the Financial and Services sectors. For the large Manufacturing sector, CINDE believes automotive and aerospace companies will be the next to really begin investing in CR.
One of the things I found intriguing about the investment in Costa Rica is the amount of reinvestment vs. new investment. 86% of foriegn investment is reinvestment whereas new investment consists of just 14%. To me, this means that the companies that are investing here are findaing rewards for doing so and therefor are increasing there investment even more. This makes for sustainability of those industries in CR. This investment also benefits Costa Ricans who are able to get jobs with these companies. CINDE said that foriegn companies usually pay at least 20% above Costa Rican minimum wage.
The biggest reason why foriegn investment is so attractive in CR is because of the incentives a business recieves by moving there business processes here. According to CINDE, with as little investment of $150,000 in a certified Free Trade Zone, businesses can realize 100% exemption on duties and no corporate tax for the first 12 years and 50% discount after 12 years. These incentives seem like they would be a great reason for foriegn companies to invest in Costa Rica. The other reason that I see companies being attracted to invest in Costa Rica is the fact that CR generates 98% of it energy through renewable resources which is a fact in which it seems like a company could use, to make it help make it appear as thought it has gone green.
Overall, the visit to CINDE was very informative. Ontop of seeing their role in the Costa Rican economy, they gave an overwiew of the country and it developement from a banana republic to a developing industrialized country. What I found so interesting and unique about this organization, was the fact that they are basically trying to sell Costa Rica. They are promoters, even almost advertisers for theie country. It seems like the work CINDE does is very important to CR moving forward.
Meeting my host family and the first few days...
After what seemed like a very long trip, due mostly to the build up of anticipation, I arrived in Costa Rica late Saturday night. Passing through imigration and customs was exciting for me because I got the first stamp in my passport. As soon as I walked out of the airport, I noticed a difference from back home. Hundreds of Ticos were waiting with signs for people they were expecting. It was unlike anything I have ever experienced at an airport before.
To reach downtown San Jose and Veritas University, where we would be staying, we had to take about a half hour bus ride. Darkness kept me from seeing the mountains around us and from just riding around, San Jose seemed pretty similar to American Cities. When we arrived at the University, I met my host mother. Her name was Viviana and she had a tiny Toyota Paseo that myself and my roomate Nate barely fit into with all our luggage. Her house ended up being 3 blocks away from the University and a great location in terms of some things to do in San Jose. I really was expecting a big family with a mother that was older, but Viviana lives mainly by herself except when her mother or boyfriend stay as well and she is only 26 years old. She is a preschool teacher and has been to L.A. and Orlando and speaks english very well which is great because I do not know any spanish.
That first night was very interesting. We went to Subway for dinner which I really did not expect to do in Costa Rica. Then Viviana took us to 2 bars where we met her friends, her boyfriend, and I had my first Imperial, the main domestic beer in Costa Rica. Here, you can buy a beer for as littler as $1.50. The first bar was more relaxed and was part of a restaurant. Oddly enough the bar had pictures of Hilary Clinton, The Beatles, and other famous works of art. The second bar was more of a dance bar and it played a lot of Elvis music.
My room is actually its own littler apartment that she usually rents out and is in the back yard. To get up the stairs to my room I must pass her dog which is very friendly, thankfully. Viviana also has a pet rabbit, it seems that she is an animal lover. My room has two beds, one is a double which will be nice. I have begun to unpack and get myself situated. My room will be very nice because it will be very private and it also has its own bathroom with a shower. So far, I have not been able to get a hot one, but I am still hopeful.
Sunday was also an eventful day. When I awoke, breakfast was already on the table. It was Guyo Pinto, eggs, and bacon. Gallo Pinto is a mixture of rice and beans and every Tico seems to make it their own way. Viviano´s Gallo Pinto was delicious. After breakfast, the group I am with from Miami had an orientation and tour of Veritas University. We then departed by bus for a narrarated tour of Costa Rica which also included some walking of the streets of San Jose. The city seems to be very young and busy, the parks and shops were all very crowded. That afternoon, we ate lunch at a local restaurant. Again, I had rice and beans but also had a salad and a steak whcih was all very good. I have learned that Costa Rica always seems to have fresh fruits to eat and juices to drink. At this particular restaurant, they had a juice that was made from rice and pineapple. It was quite refreshing and quinched the thirst I had from walking around in the heat. After lunch we traveled to a Souvineer shop where there were handmade Tico masks and other things that are native to Costa Rica. We were supposed to head to a mall but it began to rain so we went back to Veritas.
Sunday night, Viviano took Nate and I to the Multi Plaza which is a mall just outside of Costa Rica. Though most of the stores were closed, we were able to get dinner in the food court. I had rice and beans and chicken. I believe that rice and beans will be a recurring theme in my diet while I am here in Costa Rica. Thankfully I enjoy the taste very much. After the mall it was bedtime because we had our first class in the morning.
Monday class was enjoyable. We also were able to exchange Dollars for Colones at 512 to 1. We had lunch at Veritas, and in the afternoon, we got dressed up for a meeting with CINDE, a non profit organization in Costa Rica. There, we watched a presentation on there role in bringing foriegn investment into CR. I will have another post dedicated specifically to there talk.
I spent the early evening getting my assigned reading done for class. Viviana made dinner which was in her words, pig and vegetables. It tasted like sausage to me. After dinner everyone from Miami met at Pescaditos, a local bar to enjoy some Costa Rican night life.
Today, Tuesday, we had class in the morning and a local Costa Rican came in the afternoon for a lecture on Sustainability in Costa Rica. So far, the lecture and readings are really making me think about how business can be conducted more efficiently and maybe more importantly, how business can benefit from considering the environment when making decisions.
Tonight there is a Dance class that I am planning on attending. Maybe I will learn some Ragae or Salsa!!
To reach downtown San Jose and Veritas University, where we would be staying, we had to take about a half hour bus ride. Darkness kept me from seeing the mountains around us and from just riding around, San Jose seemed pretty similar to American Cities. When we arrived at the University, I met my host mother. Her name was Viviana and she had a tiny Toyota Paseo that myself and my roomate Nate barely fit into with all our luggage. Her house ended up being 3 blocks away from the University and a great location in terms of some things to do in San Jose. I really was expecting a big family with a mother that was older, but Viviana lives mainly by herself except when her mother or boyfriend stay as well and she is only 26 years old. She is a preschool teacher and has been to L.A. and Orlando and speaks english very well which is great because I do not know any spanish.
That first night was very interesting. We went to Subway for dinner which I really did not expect to do in Costa Rica. Then Viviana took us to 2 bars where we met her friends, her boyfriend, and I had my first Imperial, the main domestic beer in Costa Rica. Here, you can buy a beer for as littler as $1.50. The first bar was more relaxed and was part of a restaurant. Oddly enough the bar had pictures of Hilary Clinton, The Beatles, and other famous works of art. The second bar was more of a dance bar and it played a lot of Elvis music.
My room is actually its own littler apartment that she usually rents out and is in the back yard. To get up the stairs to my room I must pass her dog which is very friendly, thankfully. Viviana also has a pet rabbit, it seems that she is an animal lover. My room has two beds, one is a double which will be nice. I have begun to unpack and get myself situated. My room will be very nice because it will be very private and it also has its own bathroom with a shower. So far, I have not been able to get a hot one, but I am still hopeful.
Sunday was also an eventful day. When I awoke, breakfast was already on the table. It was Guyo Pinto, eggs, and bacon. Gallo Pinto is a mixture of rice and beans and every Tico seems to make it their own way. Viviano´s Gallo Pinto was delicious. After breakfast, the group I am with from Miami had an orientation and tour of Veritas University. We then departed by bus for a narrarated tour of Costa Rica which also included some walking of the streets of San Jose. The city seems to be very young and busy, the parks and shops were all very crowded. That afternoon, we ate lunch at a local restaurant. Again, I had rice and beans but also had a salad and a steak whcih was all very good. I have learned that Costa Rica always seems to have fresh fruits to eat and juices to drink. At this particular restaurant, they had a juice that was made from rice and pineapple. It was quite refreshing and quinched the thirst I had from walking around in the heat. After lunch we traveled to a Souvineer shop where there were handmade Tico masks and other things that are native to Costa Rica. We were supposed to head to a mall but it began to rain so we went back to Veritas.
Sunday night, Viviano took Nate and I to the Multi Plaza which is a mall just outside of Costa Rica. Though most of the stores were closed, we were able to get dinner in the food court. I had rice and beans and chicken. I believe that rice and beans will be a recurring theme in my diet while I am here in Costa Rica. Thankfully I enjoy the taste very much. After the mall it was bedtime because we had our first class in the morning.
Monday class was enjoyable. We also were able to exchange Dollars for Colones at 512 to 1. We had lunch at Veritas, and in the afternoon, we got dressed up for a meeting with CINDE, a non profit organization in Costa Rica. There, we watched a presentation on there role in bringing foriegn investment into CR. I will have another post dedicated specifically to there talk.
I spent the early evening getting my assigned reading done for class. Viviana made dinner which was in her words, pig and vegetables. It tasted like sausage to me. After dinner everyone from Miami met at Pescaditos, a local bar to enjoy some Costa Rican night life.
Today, Tuesday, we had class in the morning and a local Costa Rican came in the afternoon for a lecture on Sustainability in Costa Rica. So far, the lecture and readings are really making me think about how business can be conducted more efficiently and maybe more importantly, how business can benefit from considering the environment when making decisions.
Tonight there is a Dance class that I am planning on attending. Maybe I will learn some Ragae or Salsa!!
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