Colombia coffee growers look to roast for revenue

With some Colombian coffee farmers struggling to stay afloat, two coffee-growing cooperatives have launched a business model to market their roasted coffee directly to buyers and improve their revenues.

The trend of growers turning to roasting is no novelty in countries like Peru, Ethiopia, Guatemala, and Mexico. But it is new to Colombia, the world's No. 3 coffee exporter and a top producer of high-grade arabica beans.

One of the cooperatives, known as Asoprounion, representing 400 families in the southern province of Narino, already sells fresh-roasted specialty coffee to local and international buyers, with interest from Argentina to Canada.

Asoprounion began producing 7,000 kilos (15,400 pounds) of processed coffee per month in December and expects to sell 14,000 kilos of coffee per month this year.

"We are a coffee association that not only produces coffee, but also transforms the beans into a value-added product that gets sold at a much better price than producing just green beans," Luis Carlos Burbano, head of Asprounion and producer of specialty coffee told Reuters in an interview.

Like Asprounion, 10 other coffee associations in Narino signed up to produce 140,000 kilos per month this year looking to win the palate of local and international drinkers.

"With processed coffee, we will increase net profits, which will be reinvested in our communities to improve the quality of life of coffee producers," Burbano said.

Following the success of Narino, a coffee growers' cooperative in the municipality of Genova in Quindio province this month inaugurated a roaster that will allow producers to grind their beans and sell directly to customers.

"Intermediaries of the coffee business got the premiums on our specialty coffee. The idea with this project is that those premiums go to the pockets of coffee producers," said Jorge Hernan Lasso, Genova's agriculture secretary.

Asoprounion expect to sell a pound of its roasted beans at $14 to $17 in international markets compared with the $2.5 per pound of Narino specialty beans.

Genova coffee producers say they will be happy if they obtain at least $8 per pound for their processed coffee. Quindio, the fifth largest coffee producing region in Colombia, accounts for 5.8 percent of the country's total production.

NARINO TARGETS OVERSEAS

Narino, which produces one of the best specialty coffees in the country grown on high volcanic slopes, plans to produce 240,000 70-kilograms bags this year, 72 percent more than the 139,280 bags produced last year.

About half of Narino's green beans are sold to the U.S. coffee chain Starbucks (SBUX.O) under the origin brand Narino Supremo. The Colombian Coffee Growers Federation sells the remaining coffee to Nespresso, Nestle's (NESN.VX) brand.

But Narino wants to secure a better price for its specialty coffee. The Narino governor's office has requested a certification of origin to guarantee the department sells 100 percent Narino coffee.

The state's growers are currently negotiating with new buyers in Japan and the United States.

Volcanic soil along with the cloud-covered climate in the area provides an ideal environment to grow high-quality coffee and the province accounts for 3.4 percent of Colombia's total coffee output.