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A Brief History of Coffee in Mexico

from The Eye Huatulco, May 2021

Those who live in Huatulco know that great coffee is grown in the region, but most of the world has no clue. Mexico's history with coffee goes back three centuries; like many commodities, coffee has fluctuated from a highly lucrative enterprise to economic failure. Currently, at least for some, there is good news on the horizon.

During the latter part of the eighteenth century, wealthy Europeans saw the potential of Mexico's perfect climate to grow coffee. They were granted huge tracts of land and took advantage of cheap indigenous labor to establish profitable fincas (coffee farms) where they grew high-quality, shade grown arabica coffee.

Revolutions in Mexican Coffee Production

But everything changed radically after the Mexican Revolution (1910-20). Land reform was a major outcome of the Revolution; coffee plantations were divided and peasants who had worked the land were allotted small plots. Currently, there are about 515,000 independent fincas, of which 95% are smaller than three hectares (7.4 acres, or a little more than 5½ football fields).

In 1973, the government saw an opportunity to increase Mexico's cash flow by forming the Mexican Coffee Institute (Instituto Méxicano del Cafe, or INMECAFE). This organization helped independent farmers to market collectively on an international level, and within ten years, it became Mexico's most valuable export crop. Coffee represented 35% of all agricultural output, and by 1990 production peaked at 440,000 tons.

It seems that nothing good lasts forever, though, and the Mexican coffee industry was dealt a double whammy in 1989. First, as a result of the decade-plus long Latin American debt crisis – Mexico had basically declared bankruptcy in 1982 when it said it could no longer service its debt to foreign banks – Mexico was subject to restructuring measures demanded by the World Bank and other financial institutions to which they owed massive amounts. By 1989, then-president Carlos Salinas de Gortari agreed to relinquish internal control of Mexico's coffee market. INMECAFE disintegrated and Mexican coffee farmers were left to compete in the international coffee market.

The international coffee market had been regulated by the International Coffee Agreement (ICA), a treaty that was renewable at five-year intervals; 1989 was the year no one could agree on the terms, so the ICA was not renewed. With neither country-level nor international regulations in place, small finqueros (coffee farmers) were devastated by wild volatility in coffee prices. Before the collapse of the ICA, finqueros had been receiving relatively stable prices, between $1 and $1.50 USD per pound. By 1992, the price per pound had plummeted to a meager $0.49 USD.

With a selling price below production cost, many independent growers were ruined. A drop of up to 70% in revenue caused many farmers to abandon their plots and migrate to somewhere they could earn wages. Others cleared their land for more profitable crops, including drugs. Childhood malnutrition and other social issues spread across rural Mexico like a plague of locusts.

Other Pressures on Mexican Coffee Production

Looking more closely at the crushing collapse in coffee prices, we find the explanation more complicated than just removing the Mexican and international price regulations. Forced economic restructuring was indeed a major factor, but there have been other pressures as well. World development banks – the World Bank, the International Monetary Fund, and other international institutions – look for ways to relieve poverty in underdeveloped nations. The coffee industry had done wonders for countries like Mexico, so they funded increased production in several Asian countries. Vietnam became a perfect success story for the World Bank; by 1991, it had increased production by 1100%. Unfortunately, with so much of the commodity flooding the free market, prices were bound to plummet.

Major multinational corporations – think Nestlé, Procter & Gamble, the Kraft Heinz Company encouraged increased production of coffee, in particular Robusta (Coffea canephora) beans. In comparison with Coffea arabica, Robusta produces a high-caffeine, low-sugar, and thus more bitter, bean that is more disease- and pest-resistant and thus cheaper to produce. Historically, Robusta beans were only used in cheap brands or as a filler.

New technology, however, allowed companies to process green Robusta beans into a more palatable product. This meant that big business could significantly increase the amount of cheaper beans in their blends. The clever marketing of flavored coffee also helped mask the bitter taste of Robusta beans.

With a diminished demand for the higher quality arabica coffee, the price throughout Latin America dropped like a stone; and, as the supply of Robusta swelled, that market price also shrank. These corporations made enormous profits on coffee, but for producing countries, profits tumbled from 30% to a mere 8% over a ten-year period.

For consumers of Folgers Coffee, actually owned by the jam conglomerate J.M. Smucker, it may be of interest that the majority of beans are not harvested by Juan Valdes, more likely by someone whose last name is Nguyen. And there is no adorable Latin American burro carrying product to market. Other popular brands who buy beans from Vietnam include Maxwell House (Kraft Heinz), Nescafé, and Nescafé Tasters Choice (Nestlé). In fairness, though, most commercial coffees are blends consisting mostly of Robusta.

Mexican Coffee (Agri)culture)

Most of Mexico's 711,000 hectares of coffee plantations are located in the mountains of Chiapas, Veracruz, and Oaxaca, where the high altitude and cooler temperatures produce the best arabica beverage. The rise of the coffee culture has given the industry a huge boost and many of those who held on are reaping the benefits.

There have always been connoisseurs of coffee, but the phenomenon is expanding. Varieties of coffee are being described in the same terms as fine wines. One small producer from Chiapas won an award that enabled him to sell his crop for $35.40 USD per pound. The judge's comments included, “Notes of jasmine, bergamot, lemongrass, and vanilla, and an overall sweetness with a buttery mouthfeel.”

Edy Hidalgo Espinosa, who is coordinator for grower education and sustainability at Caravela, a green bean wholesaler, says, “Mexican coffees tend to be lighter bodied and mild, with subtle flavors.” Hidalgo Espinosa offers these descriptions of Mexico's three main coffee growing regions.

Chiapas: “Notes of chocolate, bitters, nuts, citrus, and lemon, along with a round and lasting body.”

Veracruz: “Light red fruits, blueberries, caramel, panela, delicate with a bright acidity, and very juicy with a sweet and sour aftertaste.”

Oaxaca: “Tends to be sweet with caramel overtones, notes of yellow fruits, orange acidity, a creamy body, and floral hints.”

My palate is insufficiently developed to detect any of those subtle “notes,” but I can attest that coffee from each of these states has its own distinctive flavor.

Currently, Mexico exports about 172,000 tons of coffee annually. This is only about 1% of world coffee exports, but savvy growers in this country are developing a niche market. Mexico is now one of the world's largest exporters of organic certified coffee, which garners a premium price per pound.

Twenty years ago, it was hard to get a good cup of coffee in Mexico. If you ordered café con leche, they brought a glass of warm milk and a jar of instant Nescafé. Today baristas are everywhere, and many specialize in nationally grown varieties. The sophisticated Mexican population have become discerning coffee drinkers and are consuming more of it.

Before we moved to Mexico in 1999, I sold an expensive Italian cappuccino machine because I did not expect to find quality coffee in our new home. Who knew!


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