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Puerto Rico venture geared to gourmet market.

Puerto Rico venture geared to gourmet market

Three major coffee growers and one of Puerto Rico's biggest coffee processors are teaming up to export gourmet-quality Arabica coffee beans to roasters in the U.S., Western Europe and Japan - and to help the island recapture its 19th-century fame as source of the world's finest coffee.

The processor, Cafe Rico, and the growers - Ignacio Pintado of Cafe Luri, Miguel Lopez of Cafe Hayuya and independent businessman Roberto Atienza - have decided to pool their facilities and expertise to market Yauco Selecto to gourmet markets around the globe.

Jaime R. Fortuno, president of Escogido S.E. and agent for the new brand, says "our goal is to have $1.5 million in sales during the first year. So far, we've exported 1,000 quintales within the last six months."

Fortuno was interviewed recently at the headquarters of another major coffee processor, Cafe Yaucono, which had been part of the venture initially, but no longer is. He said the venture had already exported Yauco Selecto to Spain, France, Germany, Italy the US. mainland and Japan.

Fortuno explained that Puerto Rican gourmet coffee has traditionally enjoyed a better following in Western Europe than in the U.S., despite Puerto Rico's political status as a U.S. Commonwealth. Fortuno said he exports his ventures' 3,000 quintales a year.

The only gourmet coffee currently produced in the Caribbean is Jamaica's Blue Mountain coffee. Fortuno says the real competition comes not so much from Jamaica, but from Hawaii, home of Kona Coffee.

"The U.S. gourmet market, worth about $700 million, takes awhile to differentiate between one type of coffee and another,' says Fortuno. "Our image in Europe has been established for 150 years, but Americans don't know as much about the quality of Puerto Rican coffee. They certainly do know the quality of our rum."

In fiscal 1990, coffee brought Puerto Rico $50.6 million in revenues. According to Fortuno, the current price paid by the Commonwealth government to growers is around $200 a quintal, or $176.50 for second class coffee. At the retail level, one pound of local coffee sells for $3.12.

Julio A. Torres - treasurer of Yauco Selecto, vice-president of Cafe Rico and vice-president of finance for Cafe Yaucono - says the new brand should retail for between $16 and $22/lb., though the F.O.B. price for San Juan remains a constant $15/lb.

To familiarize mainland Americans with Yauco Selecto, the group has hired Leo Burnett as its public relations agency. He added that gourmet coffee now represents 10% of the total worldwide market, and is the only segment of that market which is growing. "The reputation of Puerto Rican coffee is its name," he said. "It's known worldwide as a quality coffee."

Puerto Rico stopped exporting to the world in 1969, though it had always been recognized as having the best coffee,: he explained. "The real golden years of Puerto Rican coffee were in the second half of the 19th century, before the Spanish-American War. In 1896, Puerto Rico exported 600,000 quintales, which is twice the total crop this year;"

After 1896, Puerto Rican coffee exports dropped dramatically, the result of a disastrous hurricanes and the Spanish - American War, two years later. Following the war, Puerto Rico became an American possession, and its traditional European markets were subjected to U.S. Tariffs and taxes for the first time.

In more recent years, the island's adherence to federal minimum wage laws has also made labor expensive, with the result that Puerto Rican gourmet coffee has virtually priced itself out of the market. Puerto Rico's 13,000 coffee workers earn the minimum $4.65 an hour, compared to $2 or $3 a day in the neighboring Dominican Republic.

In fact up until a few years ago, the island was importing coffee from Colombia and the Dominican Republic to meet its annual consumption of 340,000 quintales. Today, Puerto Rico had achieved, though only barely, a measure of self sufficiency in coffee production.

Though the Yauco Selecto is ambitious, it isn't the first attempt to capitalize on Puerto Rico's unique combination of high elevations and tropical climate to produce gourmet coffee.

One unrelated venture, begun last year by Nipuspan International, is now exporting an undetermined amount of Puerto Rican coffee to Ueshima Coffee Co., for sale to retail gourmet coffee store.

Fortuno said all coffee exported under the name Yauco Selecto is picked in the Southwest region of Puerto Rico near the town of Yauco.

"In processing, we use only Arabica beans. The southwest region of the island has malaya and alonzo arcilloso soils, at an altitude of 3,000 feet," he said. "Also you have to process the coffee immediately. You can not allow it to dry on it's own. It has to be hand washed. You have to take out all impurities and broken beans." He added that "gourmet coffee is like wine. We have been careful to pick two independent labs to run tests on each and every lot that goes through, and to pick people involved in the coffee business for generations.

Larry Luxner is a freelance journalist based in San Juan, Puerto Rico.

PHOTO : View of the Yauco Selecto fields
COPYRIGHT 1991 Lockwood Trade Journal Co., Inc.
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Title Annotation:Puerto Rican coffee firms form marketing venture, Yauco Selecto coffee brand
Author:Luxner, Larry
Publication:Tea & Coffee Trade Journal
Date:Jul 1, 1991
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