Specialty coffees to grow more common, less costly

PEDREGULHO, Brazil (Reuters) - High-quality and premium coffees that today command better prices and seduce consumers with their exotic image will eventually become an everyday commodity as demand for them rises, a Brazilian specialty coffee producers said this week.

Joao Guilherme Pires Martins, executive director at Octavio Cafes, which has a vast 6 million-tree coffee plantation in the 1,000 meter altitude Mogiana region, said even very cost-conscious consumers were seeking more flavorful drinks.

"The only way to go is to produce specialty or fine cup coffees. People are looking for them. They don't want to drink bad coffees with poor taste. Even poor people are looking for good tastes and good prices," he said.

Martins said prices for specialty coffees were kept high by the fast-growing world demand of about 15 percent per year. But he said that as supply grows, prices eventually would fluctuate in the same way as regular coffees do.

"In my opinion, in 10 or 20 years we won't have a premium for specialty coffees, just preferences (between types)," he said in an interview at the company's farm, which is installing its own bean roasting equipment at its newly-built premises.

He said Brazil currently produced around 1.2 million bags of specialty coffee on average per year and estimated that could rise to around 2 million by 2015.

But the slowing economy in the United States, the world's largest coffee consumer, could slow premium coffee growth. The specialty sector accounts for 17 percent of U.S. coffee sales.

Ric Reinhart, director of the Specialty Coffee Association, told Reuters at a coffee conference in Nicaragua this week that some U.S. buyers had begun cutting back on more expensive espressos in favor of drip-brewed coffee to save money.

COFFEE CONTESTS

Harvesting is beginning to draw to a close for this year in Brazil, the world's top coffee producer. Billboard advertisements have appeared in main coffee towns beckoning growers to enter their best produce into quality contests.

The country's best beans are snapped up for a hefty premium, as much as $100 per lb, by buyers who travel from as far as Japan to purchase sought-after beans from regions with good climatic conditions, altitude and skilled growers.

Although Brazil's image as a coffee grower was hampered by the sheer volume of its production, Martins said its vast territory left it well poised to claim a slice of the growing market -- starting with its own coffee-loving population.

"Brazil has almost all the (coffee) qualities you can find anywhere in the world ... We've been developing specialty coffee in Brazil for 15 years. We have the biggest potential to produce a huge volume of specialty coffee," he said.

Martins said consumers are increasingly educated about coffee, discerning between floral aromas, subtle chocolate or strawberry or nutty flavors and consistency or body, sometimes choosing it with the same care as fine wines.

But he said other buyers mistakenly equated certified coffee, produced according to higher environmental and social standards, with specialty coffee which must be grown in specific climatic conditions and have certain taste attributes.

"We have a big slice of the market which is the biggest one which are people looking for certification but they don't know what the specialty coffee is," he said.

"They just think I need to help the producer in Africa or Santos (Brazil) and they pay for that even though it is not good quality coffee. We have to teach these consumers what specialty coffee and what certified coffee is," he said.

(editing by Reese Ewing and David Gregorio)