The changing face of Brazil's domestic coffee market

São Paulo’s Museu do Café, which aims to preserve and promote Brazil’s coffee history | Image credit: Courtesy of Museu do Café

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It is almost impossible to discuss about Brazil without discussing coffee. The Latin American nation has been the world’s largest coffee grower for the past 150 years, producing an astonishing 58,211 60kg bags during the 2019-20 season according to the International Coffee Organization (ICO).

Yet, while coffee courses through the veins of the nation, Brazilians have traditionally appeared more ambivalent to specialty concepts such as single origin, roasting profiles and brewology, that have gained so much traction in the US, Europe and Asia.

However, over the last two decades that has been steadily changing. While the majority of Brazil’s coffee crop is destined for the commodity market, today a domestic specialty coffee movement is gaining significant momentum.

“Coffee is Brazil and Brazil is coffee – both in production and consumption. Ninety-seven-percent of the population drinks coffee, it is our number one drink after water,” says Caio Alonso Fontes, Co-founder of Café Editora and Espresso Magazine – a publishing house, e-commerce platform and major events organiser in Brazil.

While the majority of Brazil’s coffee consumption still occurs inside the home, Alonso Fontes observes specialty coffee shops driving a trend towards quality, especially in cities with established café culture, such as São Paulo.

“The increase in people drinking coffee in cafés is intrinsically linked to the specialty coffee wave in Brazil,” he says. “Yes, we have Starbucks, which has around 200 stores after being in Brazil for 10 years, but there are also far more specialised coffee shops emerging.”
 

"We are seeing coffee consumers with a much greater understanding of quality"

–  Caio Alonso Fontes, Co-founder, Café Editor

Today, Alonso Fontes estimates up to 10% of Brazil’s coffee domestic coffee comes from the specialty segment, and that trend is generating new patterns of consumption.

“We are seeing coffee consumers with a much greater understanding of quality. Consumers are becoming far more interested in origin and region.”

Looking to the future, Alonso Fontes also identifies significant potential for Brazil’s fledgling coffee subscriptions market as consumers seek to explore different coffee varieties and origins.

“They are going to be very important in educating consumers about better quality coffee, just as Nespresso did 10-12 years ago.”

Marco Suplicy is founder of Brazilian specialty coffee shop chain  Suplicy Cafés, which today operates 20 stores across the country. Establishing his business in 2003, when specialty coffee was virtually unheard of in Brazil, he also observes premium and specialty coffee gaining mainstream appeal.

“Nestlé has launched around 10 new products to cater for increased roasted ground coffee demand in Brazil over the last 2-3 years. It shows that change is really occurring,” he says.
A former coffee farmer himself, Suplicy says Brazil is at long last tapping into its colossal coffee growing capabilities for domestic consumption.

“Brazil does not allow the importation of green beans from other producing countries. That meant I could not offer diverse coffees from Costa Rica or Ethiopia when we first set up the business, but we were able to source from six different regions from within Brazil. In 2020 we bought coffee from 17 different Brazillian farms.”

Suplicy identifies huge market potential for catalysing consumer interest in higher quality and more diverse coffees, with current interest in specialty coffee merely the tip of the iceberg in Brazil’s domestic market.

A roaster at Isso e Café, São Paulo, Brazil | Image credit: Felipe Gombossy / Espresso Magazine

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“Brazil is the world’s number two consumer of coffee – in bulk tonnage we’re very close to the US. However, from the retail price point of view, Brazil is 17th. That shows what is being consumed locally is a lower grade of coffee. Today, around 60- 70% of coffee consumed in Brazil is still Robusta.”

According to Suplicy, evidence of Brazil’s increased domestic specialty consumption can be seen in an emerging micro-roasting revolution.

“Most factories making small coffee shop roasters are sold out. If you try to buy a 5kg roaster today, you will probably wait six months,” he says.

Henrique Cambraia is a fourth generation coffee grower who pivoted the family business towards domestic supermarket sales in the mid-1990s, another important channel for Brazilians to discover new coffee trends. He concurs there is plenty of growth potential in Brazil’s burgeoning specialty coffee economy.

“On a scale of zero to 10, where 10 is a mature coffee consuming country like the US or in Europe, I would say Brazil is on two.

It was in the 2000s that Cambraia observed a younger generation catalysing specialty coffee consumption in Brazil, and he says that demographic is where significant market potential still lies.
“2000-2010 is when the younger generation joined the specialty coffee movement and wanted to become baristas working in coffee shops. Just as in Europe and Japan, coffee was becoming cool.”
 

"Visiting coffee shops is becoming more important to young Brazilians"

– Henrique Cambraia, Founder Cambraia Cafés

But it is in the last decade Cambraia notes a huge shift towards quality consumption, largely driven by the growing popularity of coffee shop culture in Brazil.

“Visiting coffee shops is becoming more important to young Brazilians, and café culture is becoming much more of a feature of the Brazilian lifestyle,” he says.

But, as Cambraia notes, Brazilian coffee consumers have yet to embrace some well-established coffee trends found in other major coffee producing countries. The first major difference is sustainability.

“Consumers are concerned with roasting profile, brand and the history of the coffee but sustainable practices are not the main concern.”

Cambraia also indicates there could be an opportunity for significant cold brew growth in Brazil – but only if the product can be successfully marketed.

“Brazil is a hot country, I do not understand why cold brew has not taken off here. Cold brew could be a great way to further spread specialty coffee consumption in Brazil, but unfortunately it hasn’t taken off yet.”

Coffee has been a Brazilian institution for generations. Today there is clearly huge untapped potential to catalyse growing demand for premium and specialty coffee among a curious and increasingly sophisticated domestic audience. With Brazil’s coffee growing prowess courting a new generation of consumers, cafés and international brands, the stage has been set for a new era of higher quality and choice in Brazil’s longstanding love affair with coffee.

For more on the changing face of Brazil's coffee consuming marketing, listen to our podcast episode Spotlight on Brazil.
 

This article was first published in Issue 6 of 5THWAVE magazine.

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