Gourmet Coffees

The country supplies one-third of the world`s coffee, with exports totaling 26.4 million 60-kilo bags worth $2 billion last year -- twice as much as its nearest rival, Vietnam. But nearly 90% of Brazil`s coffee is exported as green beans, while much of the rest is processed into instant coffee. Neither is much known for its quality. "Brazil has always been an exporter of quantity rather than quality," says Glauco Carvalho of Embrapa, an agricultural research company in Campinas. That`s starting to change. The first step was the abolition in 1992 of a government agency that bought up farmers` coffee beans regardless of how they tasted. Since then, Brazilian producers have competed in the open market, forcing them to pay more attention to quality.

Nowadays, specialty Brazilian coffees sold at online auctions can fetch more than $1`000 a bag, compared with a Brazilian average of $100. Ipanema Coffees, a small specialty producer, sells its Brazil Ipanema Bourbon brand coffee through Starbucks Corp.`s chain. By roasting and blending coffee rather than exporting it raw, these companies keep for themselves the added value that usually goes to foreign roasters. They are still a tiny part of the industry, but they are growing year by year.

Café Bom Dia is one of the few Brazilian companies active in every stage of the production chain, from growing to roasting, blending, and packing. The company says exports of roast coffee are set to reach $20 million this year -- a four-fold increase over 2004. The company supplies Royal Ahold and Carrefour, among others. Café Bom Dia is quickly building a following stateside. Its exports to the U.S. are now running as high as $2 million per month. The company sells its Marques de Paiva brand of coffees, including an organic variety, through Wal-Mart Stores Inc.`s Sam`s Club chain and other retailers.