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Technology-based opportunity for Brazilian soluble.

Cheap to source, simple to make and easy-to-drink is a picture still painted by many people for soluble coffee. Beverage for the masses with easy pickings is how aspiring competitors see Brazil's lion's share of world soluble production. Brazil knows what its like to be at the top of the 'coffee tree' with everyone trying to knock you down, but size with strength of purpose means you can withstand the waves.

Brazil's soluble coffee sector is built on the firm foundations of research, development and technology, and just as well given the nature of the soluble coffee market. Soluble coffee is the lifeblood of working people and when economies collapse as they did in South East Asia and Russia at the end of the '90s, markets are quick to react downwards with big producers like Brazil potentially squeezed the most.

Brazil has more persistent and pernicious problems to worry about like unfavourable exchange rates of the Real R$ against the US$ and the unfair discriminatory 9% tariff levied on Brazilian soluble coffee by the European Union (EU) as of January 1, 2006. There are other disadvantages too that are tariffs and taxes in all but name such as the high price of Conillon (Brazilian Robusta) compared with mainstream Robusta from South East Asia and West Africa. These cheaper origins are available to soluble manufacturers around the world including South American neighbors but not to those soluble manufacturers in Brazil.

Bruno Moreira Giestas at Real Cafe in Espirito Santo, which is deep within the heart of Brazil's Robusta country, digs deep to pay 50% more for Robusta green coffee, just one hour's drive from his factory, than his foreign competitors pay for Robusta on the other side of the world. This, says Bruno, is because Brazil is the only country in the world with a ban on imported coffee while even manufacturers in neighboring Colombia and Ecuador are free to import.

Ironically, low cost of Robusta from Vietnam and elsewhere does not impact Brazilian farmers who can sell virtually their entire crop at home in Brazil with its 1000+ roasters and increasing coffee consumption, now standing at around 16 million bags of which some 40-50% are Robusta. Before too long, there will be a distinct shortage of Brazilian Robusta if home consumption continues climbing says Bruno. The EU tariff, however, is biting, he continues, having lost three clients at the end of 2005 even before the levy kicked in. Brazil exported some 3.6 million bags (GBE--green bean equivalent) of soluble coffee in 2005 with reasonable expectation of 1.8 million in the first half of 2006. But the executive director of ABICS told the Brazilian press on August 1 that the actual figure was only 1.2 million bags.

With problems eating away at profits Brazil's soluble coffee industry could be forgiven for contracting and in number of manufacturers it certainly has. But the industry as a whole has continually re-grouped and restructured, recognizing more than most new untapped markets for soluble coffee particularly in Eastern Europe and Asia, and different priorities for mature ones in Western Europe and North America.

Brazilian soluble manufacturers recognize these changing needs and to their advantage and credit know there is more to soluble coffee than instantly meets the eye. High investment in top technology will package a wider range of sought after organoleptic qualities into roast-coffee colored and free flowing granules that disappear within an instant in boiling water. No more the grind of percolation and sterling silver coffee pots, but instant liberation of flavors from favorite origins in to dean china cups by simply washing over one heaped teaspoonful of soluble coffee granules with 170 ml of boiling water.

Brazil's soluble coffee industry is looking to the long term with investment now and payback later confident that taxes, tariffs, currency gyrations and new competitors in green coffee production and/or soluble manufacture cannot pull it down from top spot in volume and quality.

Resource-Based Brazil

Central to long-standing success and premier positioning in the marketplace is sheer size of Brazil's coffee growing area with diversity in climate, elevation and growing conditions. Size and spread provides Brazil with an unrivalled diversity of environment to produce a broad range of coffee types each with its own favored growing conditions. And Brazil is able to protect coffee production from natural climatic events like frost and drought using 'top climatic' studies (based on land relief and climate) when establishing coffee plantations within this wide range of geography and environment.

By whatever measure is taken whether it be production or export Brazil is the world's coffee giant. Over the five year period from 2001-05 (crop years), Brazil's share of world production in green coffee from all exporting countries (49) was unwavering at 30% rising to 40% during the peak 2002 crop year. Actual export volumes tell the same story. During June 2005 - May 2006 Brazil exported 24,536,000 bags (60 kg) of coffee, 30% of world total and over 1.5 million bags more than the combined total from Vietnam and Colombia, second and third respectively in world ranking. Vietnam's recent rise to number two coffee producer has hardly dented Brazil's share of world Robusta just 1% down from the 19% averaged in the 1990's. Vietnam's recently acquired share is at the expense of other Robusta origins.

Arabica coffee needs an elevation of at least 600 m., whereas Robusta coffee, as its name suggests, is the more resilient plant of the hot, wet and humid tropics close to or at sea level. All coffees are tropical and therefore susceptible to low temperature and frost damage, but Arabica due to its 'elevated' natural home in Ethiopia is better able to withstand the cold. That said Arabica grown at higher elevations is more likely to encounter temperatures at or below the freezing point of water.

Natural home for Coffea Arabica is on the high plateaux of Ethiopia at altitudes of 1300-1800 m. along northern latitudes of 6-9[degrees]. Total annual rainfall is about 1500 to 1800-mm and average temperature 20-24[degrees]C with extreme highs and lows of 31[degrees]C and 5[degrees]C, respectively. This is a classic high altitude climate of the tropics with contrasting seasons. Some traditional Brazilian Arabica areas like Sao Paulo and Parana States are at much lower altitudes of 600 to 800m. And apparently at less risk from low temperature and frost damage but this is more than offset by the comparatively low latitudes of these areas at 20 to 23[degrees] south of the Equator.

The Coffea Robusta originates in the lowland equatorial climates of Africa with temperatures varying little beyond 24-26[degrees]C, at least 2000-mm of rainfall spread over most of the year and air humidity approaching saturation. Robusta is equally susceptible to low temperature and drought.

Brazil's capacity to grow a wide range of coffee types is magic to the soluble sector as consumers adopt increasingly sophisticated tastes and demand wider flavor and aroma profiles from instant coffee. No other country can match Brazil's concentration and volume of Arabica coffee, but this in no way diminishes the unique Brazilian variety of Robusta called Conillon. Conillon Robusta has smaller than average beans but is superior in quality to the Robusta harvested in Vietnam and elsewhere, and of increasing importance to the soluble sector.

Bruno Giestas at Real Cafe in the state of Espirito Santo, the heart of Conillon country where over 80% of the crop is still grown, points to increasing selection of improved lines from the Conillon population to achieve increasing yields of high quality beans. Farmers in northern Espirito Santo are now picking 140-bags of Conillon per hectare, whereas the average for Brazil is just 20 bags. What's more this Robusta coffee cherry can be put through the more sophisticated semi-washed process, normally reserved for Arabicas, to produce a 'sweet' cupped coffee combining traditional Robusta body with good aromatics for wide acceptance. Conillon Robusta semi-washed and 100% pure is already impacting on the R&G market and could become a force to be reckoned with in the soluble market too says Bruno.

Soluble manufacturers invariably prefer Robusta because it contains a higher proportion of soluble solids than does Arabica, so a bag of Robusta beans naturally goes further says Luiz Alixandre, commercial manager at Cafe Mogi. And two relatively recent climatic events pushed Robusta center stage, prompting use of new technology to develop its worth for the soluble sector over and above proportion of soluble solids yielded during manufacture.

The 1994 frosts in Brazil and consequent price rise of Arabica to more than twice that of Robusta caused roasters to increase the proportion of Robusta in blends, but in most cases consumers did not even notice let alone mind. Now onto a good thing roasters maintained Robusta levels even when Arabica green coffee prices eventually fell three years later allowing soluble selling prices to be kept down with profits up.

The State of Espirito Santo is still the traditional home of Conillon, but total production did fall during the '90s from an extended drought that was thought to have been triggered by falling thick forest, which previously covered most of the state. Conillon production spread out into hitherto 'virgin' areas such as Bahia to the north on land previously occupied by cocoa and wiped out by the witches broom fungus disease. Other coffee farmers 'trekked' westwards to the Amazon State of Rondonia close to the border with neighboring Bolivia. Net result was enhanced overall status for Brazilian Robusta as a stand-alone resource for soluble coffee manufacture.

The size, spread and diversity of coffee growing in Brazil continues to provide a degree of adaptability and cushioning to the vagaries of climate and changing market demands not available to smaller and more restricted coffee producing countries and aspiring manufacturers of soluble coffee products.

Technology-Based Brazil

Computerized roasting technology has advanced to the stage where operators mix and match various types of coffee from many different origins using scores of different digital options, depending on available coffee resources and price, to produce the same high quality end result. Same transformation has happened along the entire soluble coffee production line including spray and freeze drying and especially aroma recovery and add-back, so manufacturers now get so much more in every respect from the same 'old' sack of coffee beans. Nowhere is this truer than in Brazil, where coffee is understood from field to factory: Building a state of the art soluble manufacture plant is not enough. Understanding the crop and the commodity through generations of hands on experience is essential and Brazil's soluble coffee industry certainly owns that.

Easy to take home, make and drink has always been the key to success for soluble coffee but not any more claims Bruno Giestas who firmly believes consumers are now drinking instant coffee because they like it and want to. He points to pod technology for R&G offering simple sachets with cheap machines and providing all the convenience benefits--easy to make and no mess--previously unique to soluble. Pods are a wake up call for soluble he says, and that is why we must constantly change and adopt novel technology to meet new requirements for taste, flavour and aroma quality. And move further to into ingredient opportunities for soluble coffee powders in '3 in 1' instant mixes so popular in South East Asia, ice creams, cakes, gateaux and confectionery, areas where R&G just cannot reach.

Perceived all round ease of instant coffee has led to major misconceptions about manufacturing technology, costs and quality. If a product is cheap and easy to manufacture it is generally assumed to be indeterminate in quality. However, soluble coffee is not simple or cheap to make, and as Brazilian manufacturers will tell you the exact opposite is true. Soluble manufacture requires more production steps and stages than are needed in a 'run of the mill' roast and grind operation. Analysis of samples, spray or freeze drying technique and exhaustive cupping for continual improvements in taste are just the tip of the iceberg. Operating costs for soluble coffee plants are often 10 times higher than for running a combined roasting and packaging plant.

Spray drying and freeze drying are centerpiece stages of soluble coffee manufacture and continue to be a focus for research, development and innovation. Freeze drying is the newer, more sophisticated and costly technique generally acclaimed to allow less coffee flavor and aroma to 'abscond' in the process.

Freeze drying was heralded as the gateway for manufacture of sophisticated single origin soluble coffees using higher quality and more expensive Arabica origins where preservation of the flavor and aroma signature unique to each different origin would underpin the whole manufacturing and marketing process. But dramatic improvements in spray drying are being achieved in the range and variety of flavors and aromas obtained with small but discrete changes in the process says Luiz Alixandre. And with help from new aroma recovery and encapsulation techniques spray drying has kept pace with freeze-drying.

On the other hand, continual changes in freeze drying technology over the years has widened production cost differentials with spray drying to a factor of three. The relentless rise in energy cost is not on the side of the freeze-dried process that requires temperatures of 45 to -50[degrees]C to freeze-dry the solid product from the concentrated liquid stream.

The ultimate goal for soluble coffee, which is to look like and taste like R&G, is well on the way to realization. Coffee granule product direct from freeze-drying, looking and feeling like R&G in color, particle size shape and flow characteristics is clearly a step ahead of the functional though less appealing powder from spray drying. But by tweaking the agglomeration process the spray drying manufacture process can now re-granulate steam processed powders into much larger particles with an enhanced solubility profile to look more attractive, whether on the supermarket shelf and as they flow smoothly into the cup.

'State of the art' aroma recovery techniques are capturing and encapsulating the characters of flavor and aroma to push taste profile of soluble coffee into new and more exciting frontiers. The new aroma recovery technologies are ultra efficient but highly selective as well, only adding just the right aromas in measured amounts according to the desired result. With such versatility at their fingertips, developed and operated in tandem by roasters and chemists, soluble manufacturers now have opportunities to develop and produce an almost limitless range of distinctive tasting soluble coffee products.

Giestas is without doubt one of the most passionate supporters of soluble coffee in Brazil. Bruno sees the market becoming compartmentalized with companies doing what they are good at and investing accordingly. We manufacture soluble and ship in bulk to brand owners he says so we are firmly in the 'production' market and not the 'brand' market. We do some packaging of private label brands for clients but in no way can compete with traditional roasters, brand owners and multi-nationals. Our investment priorities are in growing coffee and soluble manufacture technology, which boost production and improve quality. We must invest in technology says Bruno and if not we will 'die.'

Opportunity is Not a Threat

When it comes to new technology who better to ask than the company at the leading edge of plant and machinery design and manufacture. Much of the spray drying and freeze drying technology that has empowered soluble coffee manufacture in Brazil (the biggest country in South America) was concentrated in one of the smallest countries of Europe at Niro and Atlas in Denmark. And even more so since Niro the acknowledged spray drying technology expert acquired the freeze-drying technology of Atlas and now all under the Niro name.

Robert Z. Djernaes from the Food and Dairy Division of Niro (FODA) says Brazil should see the 9% tariff levied by the EU as an opportunity not a threat. The tax is a bitter blow but one that can be countered by Brazilian manufacturers by building further on their reputation for volume with quality. Technology is the answer says Robert as he goes through some of the technical options now open.

It is easy to forget that Brazil is a relative 'youngster' in the soluble coffee world and was established only some 30 years ago. But 10 years is a long time in soluble technology and the world has moved on rapidly, says Robert. And requiring continual re-assessment of the technical options to satisfy a more widely spread and varied customer base, as well as a more economically and environmentally demanding global market. For Brazil to remain center stage and beat off competition it must optimize every stage in the line--roasting, extraction, aroma and drying processes--to produce the required range and quality of product, with sustainable energy levels both in cost and environmental terms.

How many green beans do you need to make lkg of instant coffee asks Robert Djernaes. There is dearly no shortage of beans in Brazil but the more flavor and aroma compounds extracted from each bean then the more productive the process and wider the range of product. But that is only one side of the equation says Robert became squeezing every last ounce of flavor and whiff of aroma out from roasted beans will reduce quality and therefore a balance indeed an equilibrium must be struck.

Latest extraction plant from Niro is meticulously designed and crafted to remove the maximum possible from roasted beans without compromising quality, says Robert. For instance our 'Fast Instant Coffee Plant' automatically achieves required balance and ensures repeatability and reproducibility every time. The process extracts the aroma fraction under low temperature, distills the aromatic compounds then cools, preserves and conserves them until 'add back' time for the distillate into the extract just before the drying process.

Simultaneous achievement of desirable properties including high solubility, flavor and aroma-richness and a non-dusty formulation demands extracts be concentrated up to 50% solids at low boiling point by utilizing precise and exact control over temperature and pressure. The method, called a single pass operation avoids raising the boiling point of the extract to a high level. High boiling points and recirculation cause non-soluble particles to form. Insoluble particles must be removed and the irrecoverable losses reduce yield.

There is a lot more to the drying process than just removing water. The touch and finesse with which concentrate is dried determines a whole raft of market sensitive properties including color, bulk density and whether foam is formed when the finished product is dissolved. And there are the additional and distinct choices to be made on whether to go for freeze-dried granules, spray dried powder or agglomerated products.

Granulation comes automatically with freeze-drying. The coffee extract is frozen into hard ice which is subsequently shaped into the desired granular form. Freezing may be achieved by 'fast' freezing in thin layer on a drum or by 'slower' freezing in a thicker layer on a belt. Frozen granulated coffee is freeze dried under high vacuum at very low temperature in a freeze drier or a batch freeze drier. Either way this gentle drying process is aptly called sublimation says Robert, because the result will be truly sublime with best preservation of natural aroma in the finished products.

Spray drying is generally considered to be the 'Cinderella' drying technique, cheaper to run, providing a less sophisticated product and therefore not warranting best beans. But for many it is a more versatile and adaptable process offering 'more things to more soluble manufacturers' or to use an old horse racing expression 'horses for particular courses.'

For the utility end of the market a single-stage spray drier with nozzle atomisation is ideal for producing a fine powder product for which tip-top taste or the highest peaks of aroma are not prevailing requirements. Further up the scale a two-stage spray dryer operating at low temperature will give enhanced taste and aroma as well as a slightly agglomerated powder all to the liking of many consumers.

And all is not lost for spray drying when it comes to a better look, chunkier feel and more mouth-watering anticipation associated with granules. 'Leading edge' agglomeration techniques preserve taste, aroma and refine appearance profile of the spray-dried product. The agglomeration technique designed by Niro eliminates the need for powder to be pre-ground, since this may adversely affect ultimate product quality says Robert Djernaes. Soluble coffee powder is simply re-wetted and then agglomerated under carefully controlled conditions, passed through a sieve where fines are returned for further agglomeration before finally moving onto a Virio Fluidizer for drying and cooling.

Market 'Savvy' Brazil

When exporting massive amounts of coffee like Brazil whether green coffee (20+ million bags) or soluble coffee (3.5 million bags GBE), fruits of your endeavous will invariably reach every corner of the coffee manufacturing industry and stimulate the taste buds of virtually every coffee consumer throughout the world. X-Cafe in Massachusetts and manufacturer of high quality liquid coffee extracts use Brazilian coffee in numerous blends. We use both washed and natural Brazilian Green and always try to use only the very best 'prep' green for our extracts says president Paul Kalenian.

Markets such as the U.K. are often referred to as mature but this is misleading because mature infers static. Soluble coffee consumption may not be changing in volume but in trend it most certainly is with new thirst for soluble cappuccino in Germany as the prime example. Some have suggested that new markets in Eastern Europe and Asia are more adaptable and therefore easier to mold into instant coffee drinkers, but wiser heads in Brazil prevail.

China with at least half a billion potential coffee drinkers at stake is a prime example. There are many different gateways into China says Luiz Alixandre including Singapore, Hong Kong and Taiwan and the new market is dynamic with everybody pushing hard and the jury still out. Pure instant is predominant but instant mixes from Singapore are making inroads and Starbucks is promoting R&G.

Bruno Giestas sees China as the ideal opportunity to bring hitherto undreamed of numbers of new instant drinkers into the fold, but only if they are given what they like and want. He believes the 3 in 1 instant mixes comprising exact proportions of creamer, sugar and instant coffee powder packaged as one sachet per cup may eventually prove to be the favorite with Chinese consumers. This will mean increasing demand for soluble coffee at the budget end of the market, the full body of pure Robusta pushing through other ingredients in the instant mixture.

New markets like China, South East Asia and Russia will clearly adapt more rapidly and readily to change and in doing so may skip several generations of utility instant coffee drinking for new experiences. But the message from Brazil is they must be allowed to do it and develop on their own terms.

Much is made of mature markets and new ones but there are 180 million Brazilians drinking coffee in a market that is mature with new dimensions and showing consistent healthy increases in the consumption of home-grown and manufactured coffee, the only option open to Brazilians in Brazil. The market is diverse too says Bruno Giestas with different states as big if not bigger than most other countries, each with its own culture including coffee drinking. In 2005 Brazil consumed around 16 million bags of its own coffee, 15 million R&G and another one million bags of soluble. But more important is that figures for both R&G and soluble have been rising at around 10% or more per annum since the new millennium. Irrespective of what happens in the outside world Brazil could well drink its own way to instant coffee success.
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Title Annotation:Soluble Coffee
Author:Mabbett, Terry
Publication:Tea & Coffee Trade Journal
Geographic Code:3BRAZ
Date:Oct 1, 2006
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