After Rust Crisis, Mexican Coffee Brews SuccessTue, 10/09/2018 - 10:54
The Mexican coffee sector has been hit hard in recent years by an epidemic of coffee leaf rust, a fungus-based disease. But the industry is recovering and despite negative external factors, consumption and exports are on the verge of increasing, says Félix Martínez, President of the National Association of the Coffee Industry (ANICAFE). “The rust crisis of 2012-13 affected the Mexican industry. However, a joint effort between the private and public sectors has repositioned the industry and we are again experiencing growth.”
The Mexican market had faced challenges before but Martínez says the inadequate management of the first stages of the epidemic caused Mexico’s coffee production to plummet. This led all members of ANICAFE, a 40-year-old association that groups the 35 most important companies in the sector, to participate in solving the crisis. “We went from producing 4.4 million 60kg sacks of coffee to 2.3 million, dropping from fourth to 11th in the international ranking," Martínez says.
One action implemented by the government, coffee farmers and the association was the incorporation of genetically modified, rust-bug-resistant seeds. “A few years ago, genetic material for coffee seeds was nonexistent in Mexico. The rust crisis led us to import seeds with new characteristics and to develop research centers that would allow us to generate our own seeds.” In addition to introducing these new seeds, Martínez says the epidemic led the industry to change the way coffee beans are grown. “To recover production, we increased the density of crops. Instead of having 1,500 coffee plants per hectare, we now have 3,000 per hectare, which means higher production from the same land space.”
Martínez says the local industry also has been boosted by an increase in consumption levels in the country. “We estimate that coffee consumption in Mexico is around 1.45kg per capita.” He also suggests that the growth the industry has experienced in recent years is related to the successful business model of Starbucks. “The phenomenon of coffee shops began when Starbucks arrived in the country more than 15 years ago. Many other brands and several of our associates have decided to establish similar shops.”
One area of opportunity for further growth is exports. “Coffee exports had fallen substantially but they are now picking up, which is the best parameter we have to illustrate growth in production,” Martínez says. Some coffee companies weathered the rust crisis through coffee exports that included added value, such as instant coffee. Mexico’s capacity to produce instant coffee is almost equal to Brazil’s. “Brazil can produce around 100,000 tons of instant coffee per year, while Mexico’s capacity is around 96,000 tons. We expect to surpass Brazil in a couple of years.”
Like its other exports, Martínez says Mexico’s success as a coffee exporter lies in its geographical location. “We have taken advantage of Mexico’s location next to the US. Our members import coffee from Vietnam and Brazil, process it and then export it to the US.” He believes there are many other markets that have high potential for coffee exports and instant coffee in particular, including England, Japan and South Korea.
The domestic industry also offers untapped opportunities, such as ecotourism, an area in which countries like Costa Rica and Colombia have taken the lead. “Coffee is a crop that preserves the biodiversity of the areas where it is harvested and can become a fundamental piece in the ecotourism segment,” says Martínez. “Countries like Colombia and Costa Rica offer tours around coffee plantations that let visitors observe local flora and fauna while learning more about coffee plants. Mexican states like Chiapas, Veracruz and Puebla are already offering these kinds of tours but we can do more.”