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The first coffee producer located in the ‘Cerrado’ tropical savanna ecoregion of Brazil in Minas Gerais state, Alto Cafezal is an established pioneer and innovator in the industry. Founder and President José Carlos Grossi has overcome domestic and international challenges, including the climatic differences of the Cerrado.
“All the difficulties that I have been through have forced me to find ways to overcome them. This is how I have found new solutions and alternative forms of making the business work,” Grossi says.
Alto Cafezal is investing in new technology and increasing production capacity to continue the average 10 percent annual growth and meet demand.
“When the company was founded in 1972, no one thought a coffee producer in the Cerrado would work,” Grossi recalls. At that time, the region was sparsely inhabited with little infrastructure. The decision to invest in coffee cultivation there was inspired by government plans, together with the IBC (Brazilian Coffee Institute) to develop coffee at the Cerrado.
The first harvests in 1975 and 1976 were small and doubt over the success of the region prevailed. Coffee in Brazil was traditionally grown on fertile soils very unlike those in the Cerrado. New studies and methods were needed to guarantee the future success of the local industry.
The decade tested the survival of coffee production in the region, whose initial difficulties forced many (70 to 80 percent) out of business.
For Grossi however, the challenges were “the spice of the market.” The growing company managed to increase harvests and consolidate production. “We didn’t suffer losses – our cultivation was successful and attracted other farmers to the area,” he remarks.
Throughout the 1980s, farmers and producers in the Cerrado fought to defend their interests, founding associations to favor prices, production and quality. Important contracts were agreed during this time with national brands and exports of the region’s coffee began. Nowadays, the Cerrado in Minas Gerais produces more than five million sacks of coffee a year – more than the majority of Arabica Coffee producing countries worldwide.
Cerrado in Minas Gerais is responsible for 12 to 15 percent of Brazil’s Arabica Coffee. “Coffee culture in the Cerrado broke the paradigm that coffee is only grown on fertile soils. We are a part of that achievement,” Grossi says.
A Taste of Technology
Success is a result of strategic investment in machinery. Alto Cafezal invests constantly in technology, most recently for quality selection, to ensure the quality of the coffee. “Brazil has the know-how to make good coffee. Our machinery is made (or assembled) in Brazil and meets international standards.” Grossi affirms.
Alto Cafezal coffee is grown in 2,600 hectares. Annual production averages 100,000 sacks, depending on the harvest, demand and economic conditions. “This year’s production figures are lower than 2013/2014, because we are renovating some of our plantations. Next year, our aim is 110,000 sacks,” Grossi explains.
Production is vertically integrated. The producer’s ten farms are all equipped with harvest machines, wet milling, drying and hulling that dry, process and classify coffee beans. Grossi elaborates: “Coffee is sieved by size; 19 is the largest and 14 the smallest. It is bagged in 60 kilogram sacks – or larger bags if required and sent to the storage facility.”
Storage has been the focus of investment in recent years, as production has steadily risen. Facilities currently have a 420,000-sack capacity, which is enough to house Alto Cafezal’s daily 4,000-sack output. The company also offers services to other producers.
80 percent of Alto Cafezal’s coffee is exported – the company’s own fleet of vehicles and third party trucks deliver the coffee to the ports. Over twelve years of exports, countries such as Japan, Switzerland, Italy and the United States have all developed a taste for Alto Cafezal. “The real test is in the taste,” Grossi says. Despite production technology tasting and analysis (including size and measurements) before export are an important part of guaranteeing quality.
“Quality is not a compromise. We have technology at our finger tips, but our employees are a vital part of the process,” he continues. During harvests the 300 staff grows to up to 900, affording a flexible structure that adapts to the economic and commercial trends. The ‘human-touch’ is clear in Alto Cafezal’s company culture, despite being one of Brazil’s largest producers.
“We see ourselves as a producer, made up of lots of partners and companies united by our attention to quality,” Grossi explains. Alto Cafezal is a generic form of referring to Grossi’s businesses, which he manages centrally.
The market perception of Brazilian coffee has also changes according to Grossi: “In the past, although Brazilian coffee was an important export, it was not necessarily considered good. Today, thanks to better infrastructure, certifications and associations such such as the BSCA (Brazil Specialty Coffee Association), Federação do Cafeicultores do Cerrado and ABIC (Associação Brasileira da Indústria do Café), there has been a shift in opinion.”
Recently, the region of the Cerrado Mineiro became the first the coffee region of Brazil to reach the Designation of Origin status. Since 2005, the region had won the INPI (National Industrial Property Institute) recognition of Geographical Indication, being also a pioneer in this achievement. There is a global trend in which consumers are increasingly seeking information about the origin of the product they are consuming. These consumers, especially young adults, want products with guaranteed and traceable origin.
The improvements have beaten the odds considering Brazil struggles with high production costs, taxation and difficult labor laws. For Alto Cafezal, the Cerrado and its 400-mile distance from ports have also presented obstacles – points which are celebrated achievements for the company.
“Balancing volume and quality is important. Constant improvement is a priority,” Grossi states.
Undeniably, Alto Cafezal’s success is also attributed to trust, a firm platform for the growth Grossi predicts for the future. It is trust established through taste, technology and unrelenting passion for the industry. Grossi’s outlook is simple: “After 42 years in business we don’t speculate – we focus on production and improved quality year after year.”