Newslettter: Why we work in Ecuador

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Red Fox was in Ecuador last month for a brief visit at start of the harvest season. We went to check in with the farmers and partners we work with, to talk through what went well and what didn’t with last season’s shipments, to ask how farms weathered El Niño, to hear how families & businesses were affected when the earthquake hit the coast in April. We also went with some existential questions for ourselves about Red Fox’s place in Ecuador, about whether working there makes sense for us in the big picture. Ecuador has been part of Red Fox’s portfolio since the beginning, and we have longstanding relationships there that mean a lot to us. But it’s also a challenging origin for us, in that Ecuadorian coffee is very expensive, and expensive coffee is hard to sell.

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We pay more for coffee in Ecuador than we do in any other origin except Kenya. It’s crazy. It’s hard to justify paying so much for South American coffee, especially when there’s a wealth of great coffee to be had for a fraction of the price in neighboring Colombia or Peru. And it’s a challenge to make the case to customers that Ecuadorian coffee is worth the price, even when we’re offering beautiful, unique, and excellently prepared coffees from dedicated producers and inspiring farms.

So why is coffee so expensive in Ecuador? One factor at play is simple supply and demand. Compared to its Andean neighbors, Ecuador’s share of coffee production is tiny. Total production in Ecuador, according to the ICO’s stats, was 700,000 bags in 2015, compared with 13,500,000 bags in Colombia and 3,200,000 in Peru. Take out the robusta, commodity-grade arabica, and what’s going to the soluble market from those numbers, and the slice that is specialty coffee is tinier still. Competition for that small slice is strong and growing. Ecuador’s precarious, oil-dependent economic climate has stifled investment in farms and hurt overall yields for the past few years. Put those things together and you get a recipe for escalating coffee prices.

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But another piece of the puzzle in Ecuador is the cost of producing coffee there. Coffee farmers everywhere struggle with the cost of production, with access to credit and seasonal cash flow, but the particular economic and political realities in Ecuador make it a special case. Ecuador switched its currency to the US dollar in 2000, after hyperinflation and a banking crisis left the economy reeling. In recent years, the strong dollar has made Ecuadorian exports more expensive. That, plus the collapse of oil prices, on which Ecuador’s economy has depended since the 70s, has contributed to a decline in export revenues to which President Correa’s government has responded by restricting imports and raising taxes & tariffs on foreign goods. This matters to coffee producers and to the price of coffee because every truck, jeep, bag of fertilizer, and piece of machinery or farm equipment that has to be imported comes with an an additional premium that drives up production costs.

The cost of labor is also much higher in Ecuador than in other coffee-producing countries. Minimum wage has more than doubled since Correa was first elected, from $170/month in 2007 to $354/month in 2015, and benefits like vacation, bonus payments, and contributions to health care and social security are mandated by law and enforced. For coffee producers in Las Tolas, the total cost of wages & benefits for a full-time farm employee is around $22/day. Compare that to labor costs in Colombia, for instance, where wages can be as low as $4/day — you can’t, really. It’s a whole different world.

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We left Quito feeling strongly that Red Fox still belongs in Ecuador, that we have a role to play in the coffee industry there. If we’re serious about wanting to build a resilient supply chain that benefits everyone in it, how can we write off Ecuadorian coffee as too expensive when those high prices reflect a labor market in which farm workers are receiving more? Part of why we do what we do is because of our belief that there is a model out there in which coffee production can support and sustain individuals, families, communities, and perhaps even economies as a whole. If Ecuador is a test case, then we’re up to the challenge. Our first step is to better understand what the the true costs of coffee production look like, and to attempt to accurately represent those realities to customers and consumers alike.

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What does the future of speciality coffee look like in Ecuador? We don’t know for sure, but know we want to be a part of it because we find so much inspiration there. The talented producers and their commitment to helping their communities and the coffee industry grow; the incredible biodiversity; the ideal coffee storage conditions in Quito; the exciting varieties, from Sidra lot separations at La Yumbada to the Pacamara and Java that taste better grown in Las Tolas than anywhere else on the planet; the deep agronomic know-how of Arnaud Causse and his beautiful farms in Las Tolas and Guayllabamba, where something amazing— from experimental organic fertilizers and shade trees, to essential oil distillation for herbal insecticides, to beehives full of coffee blossom honey — is around every corner… all of it reminds us of why this is work we love.

Here’s to the season ahead.

Cheers,

Julia

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NEWSLETTER: ECUADOR LAS TOLAS VARIETAL COMPILATION 2015

Back to the land of Los Yumbos and to one of the more thorough varietal case studies in our world. Some of you will remember last year’s Las Tolas offering and our comparison of these talented coffee producers to Beaujolais’ fabled Gang of Four. Last season’s coffees were phenomenal. Arnaud’s Java was simply exquisite with its floral aromatics bursting off the burrs with every roast we cupped. Gilda & Mateo’s Pacamara changed my mind about the true potential of the varietal with its succulent, ripe-fruit sweetness. Hernan’s Caturra was a dark horse candidate for top coffee with a white grape purity that I rarely taste anywhere outside of Kochere.But we didn’t have Christian and Rommy’s coffee yet. We loved these farms and their offerings with equal affection, but we didn’t have Christian and Rommy’s coffee. So we waited. My father has told me for the past 30-something years that patience is a virtue. Those of you who know me are chuckling right now — patience isn’t necessarily the top virtue in my repertoire. But we waited. We drank our way through last year’s deliveries from the rest of the gang and moved on to beauties rolling in from Peru and Colombia. Eventually Ethiopia season began anew and we left these sweet, nectarous Las Tolas coffees to our dreams.

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The samples we cupped from Christian and Rommy’s farm, La Yumbada, stayed with me though. They were absolutely mesmerizing. The only thing I can think to compare their Sidra to is that first bite of the most crisp, drippingly sweet Hosui Pear. Flavor so pure and unadulterated that it’s an experience I can still remember distinctly. And the Caturra stood right there with it. Sidra gives a floral character like honeysuckle and wildflower honey itself. Yumbada Caturra has its own unique floral identity with a gentle touch of orange blossom that permeated well through the cup. La Yumbada is home to extraordinary coffees and I couldn’t wait to get them on our list.

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Flash forward 12 months and we finally have them. Our coffee version of the Gang of Four is finally realized. We have our first, albeit small, offering from La Yumbada, and it’s their entire production. We have Arnaud’s entire US allocation, as well as the entire production from Gilda & Mateo and Hernan, too. As a man who usually has no problem picking favorites, I consider picking a favorite from this group like choosing a favorite child: it’s just not possible. Each one of these lots brings a dynamism in the cup that is far too unique and interesting. They are their own creatures with their own very distinct and personal expression. Try a couple different lots if you can, or go back to a favorite from last season. These are quite possibly the most unique coffees we offer and they are in prime condition — they’ve just stripped into the Annex in San Leandro.

NOTE: Quito, similar to Addis in this regard, offers ideal storage conditions for green coffee. High altitude and cool, dry climate are the standard for virtually all of the year. Think of these coffees as you would top Guatemalan lots. They’re stable and will last well through winter, should you be looking for a long-term addition to your menu.

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Newsletter: Ecuador Offer & Update

It’s been just fourteen months since we started Red Fox Coffee Merchants and we’re thankful and proud to be where we currently stand at the moment. If this industry is as tall as Aconcagua, I figure we’ve at least arrived to shore and left our vessel for more stable ground. We have a long trek ahead of us yet and very much look forward to it. Building the business around South American and East African coffees has proven to be unique and valuable to our customers. Without question Colombia, Peru and Ethiopia have made up the core of our business to date; we would still be adrift at sea without those origins. It has yet to be determined, however, where exactly our heart lies. After all, it’s the intrigue and passion for something new, something better, that gives us our pulse as coffee sourcers in the first place.

Ecuador is tiny in geographical stature compared to its neighbors, and it’s tiny in its total coffee production as well. Loja, Zamora, and the southern corridor bordering Peru are the epicenter of Arabica coffee production in the country. Certain pockets within the departments of Carchi, Imbabura, and Pichichincha represent a very small portion of the country’s total coffee exports. The commodity coffees of Guayaquil, both Robusta and Arabica, are still what Ecuador is known for, along with the rubbish that gets traded as Galapagos. Even with the traction it has gained in the specialty marketplace in the past decade, Ecuador is still not an origin of much importance. It’s likely that it will continue to struggle to be a vocal player.

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But slowly and surely, in our small way, we aim to change that — at least by providing the microphone. There is something about the farmers we work with in the small valley in Pichincha, the dry climates and high altitudes outside Catamayo that absolutely intrigues us. We’ve found incredible coffee varietals all over the country — Tekisik from El Salvador, Guatemala-style Bourbon, versions of Typica reminiscent of Villalobos, distinctly Ethiopian-style varietals, Caturra and more. For a guy who’s spent more than a decade traveling the world in search of its finest coffees, Ecuador is a paradise of potential. Throw in the fact that all of our coffee gets stored, milled, and packaged at 8,000 feet, and we have something special here. Colombia, Peru and Ethiopia are the foundation of the home we’ve built, but Ecuador just may be the hearth that fuels the future.

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We’ve held back two of our arrivals that we’re offering through the newsletter today. They’re beautiful, complete coffees. They both have a nougat-like sweetness and creme fraiche flavors and mouthfeel. These are the Guatemalan coffees of the Southern Hemisphere.

Newsletter: Ecuador Las Tolas Offerings 2014

Las Tolas is an extraordinary place. The history alone is captivating. Tasting the coffees is a revelation. This producing region is located just a couple hours north of Quito in the department of Pichincha, a heavily forested area with epic Andean views. Las Tolas is located in a small valley just off of Highway 1. For the indigenous Yumbos, who based their year on a lunar calendar, Las Tolas proved to be the only valley with enough of a break in the clouds to provide a clear view of the moon. It is a sacred area with ruins still scattered across its forests.

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Arnaud Causse was drawn to Las Tolas for a similar reason. Most of Northern Ecuador lacks proper levels of sunlight for optimum coffee production, but the break in the clouds in Las Tolas provides much needed light for coffee trees. The perfect amount of light, according to Arnaud. In addition to favorable sunlight, Las Tolas has outstanding altitude (1800-2100 masl), fertile soils, and receives an annual average of 1700mm of rainfall. Arnaud planted a couple dozen hectares over 10 years ago with some very exciting varietals that he brought from El Salvador: Tekisik Bourbon (my all-time favorite varietal), Caturra, and Pacamara.

Arnaud has an interesting story himself. He grew up in France in the mountains outside of Provence. After declining mandatory military service, Arnaud was shipped off to work on a Robusta plantation in Gabon, his first ever experience with coffee production. When his service was up, his interest in coffee was just taking off. Arnaud spent many years working on coffee projects in Ethiopia and Rwanda before finding himself in the Dominican Republic. From there he moved to El Salvador, then to Costa Rica, and eventually landed in Ecuador. Arnaud’s extensive agronomy experience is unique. He has worked in more facets of coffee production than anyone I’ve come across in the past 12 years.

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Arnaud is an active leader in Las Tolas-based coffee production. He’s shared his varietals with three other farmers in the area: Gilda Carrascal, Hernan Zuniga, and Christian Marlin. In addition to the Bourbon, Caturra, Pacamara, and Java from Arnaud’s farm, Las Tolas, we are also offering both Bourbon and Pacamara from Gilda’s farm, as well as Caturra from Hernan Zuniga. This is the first production from Gilda and Hernan; Christian Marlin will be producing his first exportable volume in 2015. This modern day gang of four reminds me of the Cru Beaujolais Gang of Four: Marcel Lapierre, Jean Foillard, Jean-Paul Thevenet and Guy Breton. Arnaud fits somewhere in there as a member and a mentor, à la Jules Chauvet. He has helped each of these farms get off the ground by providing the proper varietals and coaching them through production. The coffees from this season are delicious and we expect them to improve annually for the foreseeable future. This is something special, folks.

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