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Caffeine Boost For Africa’s Economy

Published 4 years ago
By Melitta Ngalonkulu

For many, a morning doesn’t start until they’ve had a cup of coffee. The hot beverage has become a ritual, in homes and businesses, across the continent. But not just in Africa; the global coffee market is worth an estimated $100 billion and is projected to grow at 4.7% per year up to 2019.

In South Africa, hidden in the hills of the KwaZulu-Natal province, overlooking Port Edward is Beaver Creek Coffee Estate. This is where 10 to 15 tons of coffee is produced annually, on 14 hectares of land. The farm imports a further 35 to 40 tons, with a large portion of that coming from Africa.

“There is a growing demand for the high-end, specialty coffee. People are looking for coffee that is distinct in its character and that they know exactly where it is grown. This region is one of the best to grow coffee in the world, a combination of latitude, altitude, and ocean currents create ideal climatic conditions to produce world-class coffee,” says Dylan Cumming, a farmer, roaster, barista and Managing Director of the Arabica coffee producing family business, Beaver Creek.

Established in 1984 with just four trees, Beaver Creek has gone through three generations. The founders Ed Cumming and Doug Tupper planted the first crop in 1986 and three years later they harvested the first few kilograms of Arabica coffee. Now the farm boasts more than 60,000 trees, and brews R12 million ($915,000) annually.

“People are looking to try coffee from a specific origin which is of high quality in terms of its taste. We grow and harvest from three cultivars – SL28, Catuai and Catimor F6 – with each day’s harvest and cultivar being tracked from field to roast with our lot tracking system,” says Cumming.

Producing coffee is a lengthy process, says Cumming. They collect the fruit from February to October and start selling once the coffee completes the curing process, which includes fermentation, drying, hulling and grading.

Dylan Cumming, the Managing Director of Beaver Creek Coffee Estate. (Photo supplied)

Beaver Creek keeps it old school.

“A lot of the equipment that we use is over 50 years old. The technology that was used then is still very efficient. We continue to develop our processes and methods around these machines to maintain the quality that our trees produce,” says Cumming.

The farm supplies retailers and coffee shops around South Africa, as well as exports to countries, such as Japan, the United Kingdom (UK), the United States (US), Denmark and Germany.

Around 800 kilometers down the east coast of South Africa, in Port Elizabeth, is another family business, Masterton’s Coffee and Tea Specialists. The founder of Masterton’s, Ronald John, known as Jock Masterton, was an immigrant from Scotland who came to South Africa in the 1920s. He served as an officer in the Black Watch regiment during the First World War.

According to his grandson, and director of the roastery, Ryler Masterton, a fellow officer from South Africa was the reason for Ronald’s immigration.

“He then worked as assistant manager on the farm Three Rivers in Vereeniging, where he met his wife Marjorie, who at the time was visiting her uncle, the farm manager,” he says.

The couple relocated to his wife’s hometown, Port Elizabeth. In pursuit of being an entrepreneur Ronald went to Sri Lanka [formerly Ceylon] to study tea tasting. When he returned to Port Elizabeth, he opened the first tea and coffee house in the city center. Months later, the roastery moved to where they have been for the last 93 years.

“Both the global and South African coffee industry has grown and developed in leaps and bounds, since we first opened our doors. We like to think of coffee as not just a product, but an experience. Global trends and developing coffee cultures, as people want to know more about coffee, experience greater varieties and enjoy the different experiences, have really been the driving factors in this rapidly growing industry,” says Masterton.

Tough Times For Cocoa Bean Counters

Finding the right blend can make all the difference in these tough economic times.

“Someone once jokingly told me that there are only three consumer items that are recession-proof: alcohol, tobacco and coffee. Although not entirely accurate, we have fortunately found the coffee market to be quite resilient in times of economic hardship. In most cases the consumer is prepared to continue to buy their preferred brand of coffee during these tough times. It seems that the value associated with a good coffee experience can outweigh the financial cost,” he says.

Technology has been the catalyst for change in the industry.

“Aided by the advance in technology and greatly improved supply chains, more people want a good coffee experience, and now have access to it. This has all seen many new entrants to the market in its various sectors, further accelerating the industry’s growth, value and reach, especially over the last 10 years,” he says.

Ryler Masterton of Masterton’s Coffee and Tea Specialists. (Photo supplied)

Despite the new technology, Masterton’s continues to roast Arabica coffee using the same process his grandfather used almost 100 years ago.

“We use sight, sound and smell to bring out the best characteristics of every coffee bean, for our customers’ ultimate enjoyment. However, sourcing superior quality green beans is a big part of it. But it’s the roasting process itself that has the biggest impact on the end product, and where experience really comes into play,” says Masterton.

They import green coffee beans using brokers. Currently, Masterton’s has two stores in Port Elizabeth – a roastery and a coffee equipment store, which they also use as a barista training center. Masterton’s has 38 employees and they plan to expand.

Masterton believes the quality of African coffee has improved as the market has increased.

“There most definitely is significant growth potential on the African continent for the many sectors of the coffee industry. We’ve seen an increase in the volumes of green coffee being grown and exported from many African countries, but most importantly here, we’ve also noted an increase in the quality of this coffee,” he says.

“The global development of a coffee culture, with a greater demand for higher quality coffees, has trickled down to the source, with farmers, co-operations and others involved in the supply chain realizing that a quality focused approach can only be beneficial, both financially and reputational, while also boosting their respective countries’ coffee industries, Growth Domestic Production (GDP) and foreign investments received.”

In Africa, there is a growing appetite for good quality coffee.

“This is especially evident in the younger generations and the upwardly mobile, who are viewing a quality coffee experience, high-end coffee shops and boutique retailers as points of interest and social hubs respectively. Organizations, such as the Specialty Coffee Association of Southern Africa, the African Fine Coffees Association, and the East African Fine Coffees Association, are all playing their part in developing the industry, making it more accessible to new entrants and the consumer alike, while inspiring passion within those already involved in the industry. Although there may be the occasional wobble in the market, the trend is positive and Africa has much to look forward to when it comes to great coffee,” he says.

Africa’s coffee exports increased 1.5%, to 22.3 million 60-kilogram bags in 2016 from 22 million bags in 2015, according to Gilberto Biacuana, Research Analyst: Commodities at the Land & Agricultural Development Bank of South Africa.

In 2016, the major African exporters by volume were Uganda (15.9%), Ethiopia (13.5%), Ivory Coast (6.7%), Tanzania (4.1%) and Kenya (3.3%). Uganda exported $371.7 million in roasted or decaffeinated coffee husks and skins, and coffee substitutes. Ethiopia exported $725.4 million.

“The global production of coffee comprises of Arabica and Robusta coffees, which include Colombian milds, Brazilian naturals and other milds. Global coffee production is dominated by Arabica, which accounts for 63% of total global coffee production in 2016/17,” says Biacuana.

Brazil, with 28.8% of volume, and Vietnam, with 23% of volume, were the major global exporters last year. Coffee prices are expected to remain under pressure due to increased output from the two countries.

“Global coffee prices have seen a sustained downward trend since November 2016, influenced by abundant global supplies. With the exception of Robusta coffee, global coffee prices were generally lower compared to a year ago,” says Biacuana.

Coffee production is sensitive to weather patterns, such as drought and frost, which affects the amount and quality of beans produced.

“The 2104 drought in Brazil led to a global shortage 6.4 million 60kg bags, which caused the Arabica futures in the New York Stock Exchange to increase by approximately 50%,” he says.

Consumption however has been rising in countries such as India, China, Latin America and Africa due to the rapid growth of the middle class and the high pace of urbanization.

The International Coffee Organization estimates that the global demand for coffee will increase by 175 million 60kg bags of coffee by 2020.

The next time you are enjoying a cup of coffee, remember that it is a commodity driving growth in Africa.

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Related Topics: #arabica, #Beaver Creek Coffee Estate, #Coffee, #Economy, #Masterton’s Coffee and Tea Specialists.