Key Success Factors in the Brazilian Coffee Agrichain: Present and Future Challenges

Abstract

Coffee production has grown 100% in volume over the past 30 years, with 30 million bags of coffee consumed every year in the
world. Brazil is responsible for 35% of this production, followed by Vietnam (16%), Indonesia (7%), Colombia (5%), and Ethiopia
(5%). At this pace, consumption has expanded not only in traditional markets such as the United States of America (4.2 kg/year),
Germany (6.9 kg/year) and France (5.7 kg/year), but also in tea‐driven markets such as Japan, Korea, Russia and China (CECAFE
2013). In 2013, Brazil harvested 49.15 million 60 kg bags of processed coffee, 38.29 million of which were of Arabica coffee and
10.86 million of Conilon species (CONAB 2014). The planted area in Brazil is 2.3 million hectares and there are about 287,000
producers, predominantly mini and small farmers. Having continental dimensions, the country presents a variety of climates,
reliefs, altitudes and latitudes that allow the production of a wide range of types and qualities of coffee (MAPA 2014). This research
aimed to clarify present and future challenges for the Brazilian coffee agrichain, considering the growing demand and also
competitiveness between the coffee countries’ producers. To capture the vivid perception of the actors in the coffee chain, a
qualitative approach was employed. The research was conducted in three phases. In the first phase, 10 coffee specialists were
interviewed using the snowball technique with the saturation premise, to identify the coffee sector’s main milestones for Brazil
over the next 30 years. In the second phase, desk research was conducted to collect data and bibliographical information. This
culminated in eight key success factors for coffee farming management. Finally, in the third phase, the results of phase two were
submitted for analysis by 39 coffee farmers through three discussion panels held in the major producing regions: Sul de Minas
(corresponding to 60% of the national production), Cerrado Mineiro (with 20%), and Matas de Minas (with 15%) (CECAFE 2012).
The first outcome was a comparative analysis of the three regions using the lens of the key success factors and, secondly, the main
future challenges faced by each region. Added to those results, the panels provided insights for public policies and private
strategies. The study consolidated new drivers of change that directly impact corporate strategies and public policies, namely: a)
increasing complexity in coffee farming, b) farm succession, c) mechanization, d) increased use of pesticides, d) climate change, e)
consumer behavior, and e) risk management in the coffee agrichain. Given these drivers of change, companies in the Brazilian
coffee agrichain may move forward with relevant strategic focus on important issues, leading to: i) loyalty from the farmer to
guarantee high quality coffee supply, ii) increase in entry barriers to ensure the maintenance of leadership in world coffee
production and exportation, iii) operational risk minimization for companies as well as coffee farmers, iv) encourage and participate
in the farmers´ actions to make coffee activity more environmental friendly, and finally, v) designing marketing plans connected
with the coffee consumers’ habits and desires, current and future.