#023 - Terroir Over Trademarks: Moving past the industrial "blend" to showcase the chocolatey naturals of Sul de Minas

The next harvest is almost here. And it will be a special one. For the first time, we will directly export to some of Europe's most sophisticated consumers. 

Once you go through this process of sourcing, milling and exporting specialty coffee, you understand the bottlenecks and opportunities. You simply start asking different questions:

• Why aren't there more of Brazil's 86+ SCA points? These are the ones you buy at regular coffee shops in our town.

• What would be done differently if a French (or Italian) wine cooperative controlled the supply chain? These are the masters of valuing their production. 

​We have been taught to compare coffee with wine. Actually, our farm infrastructure was entirely built by Italian immigrants who brought best practices from wine production in the Veneto region. That is our family history. But somewhe​n along the way, it was lost. Coffee growers were incentivized to produce commercial coffee and sell it to co-ops. Co-ops sold to local traders, who sold to international traders, who then sold to Nestle, which produced Nescafé - perhaps Maxwell, JDE Peet's, L'or or Starbucks. Industrial farming and processing damaged the entire supply chain.

Since the 2010s, there has been a strong redirection toward specialty coffee. This movement has been huge. But we still see many small producers struggling. And we want to change it.

So, what can we learn from the wine industry? 

​In wine​, this premiumization process ​started much ​e​arlier.

​In coffee, that invisibility was not an accident. It was engineered.

The supply chain for ​premium wine is, at its core, a story of identity preservation. The grape leaves a specific plot of land — defined down to the square meter — passes through the hands of a known winemaker, is aged in documented cellars, and arrives at your glass carrying a narrative dense with geography, craft, and provenance. Every link in that chain has an incentive to protect and amplify the identity of the product. 

The supply chain of Brazilian coffee, for most of the past century, worked in precisely the opposite direction. Beans left the farms and were handed to regional cooperatives — many of which were poorly governed, bureaucratically bloated, and structurally aligned with the interests of volume, not quality. The cooperatives aggregated everything together: the exceptional lot from ​a producer ​handpicked in a small farm alongside the mediocre lot from the farm that prioritized yield.​ There was no market for identity, which dissolved.

From the cooperatives, the coffee passed to international trading houses ​- enormous commodity merchants for whom the product's origin was an operational detail, not a selling point. Their business model depended on interchangeability. A bushel of coffee futures on the New York "C" market carries no name, no farm, no processing method. It is priced by the pound, traded by the contract, and hedged against macroeconomic noise that has nothing to do with the quality in the cup. For these intermediaries, a coffee that tasted unmistakably like itself was actually a problem.

The farmer, at the bottom of this chain, received price signals that actively punished differentiation. Why invest in selective picking, natural processing, or post-harvest precision when a mediocre neighbor received the same price per sack? The incentive structure was a machine designed to produce sameness, and for decades, it succeeded magnificently.

Do you see the problem? It's not about cutting intermediaries. It is about bringing the right governance and attracting the right intermediaries.

These governance issues still affect the coffee processing machinery. Large cooperatives control these, following their economic logic. A ​large machine ​is designed ​to justify its capital cost. That imperative drives aggregation, which drives the annihilation of lot identity, which drives commoditization. 

​Again, what is the comparison between coffee and wine?

​Out of curiosity, the producers of Andradas ​(our land in Minas Gerais) and the vignerons of Burgundy ​(in France) are remarkably similar in farm scale ​(averages 6.5 hectares per domaine)​ and labor intensity, as well as in their proximity to and dependence on the land. Yet for generations, the Burgundian was rewarded with precise tools of identity — appellation protection, single-vineyard classification, estate-bottling rights — while the coffee farmer in Sul de Minas was rewarded with the opposite: tools designed to erase whatever made their specific lot exceptional, before handing the anonymized result to a commodity market that priced it against Vietnamese robusta.

​What are the consequences​? 

Decades of commoditization drove Brazilian coffee toward a race to the bottom on quality and, paradoxically, toward chronic vulnerability on price. When your product is interchangeable, your only lever is cost. Entire generations of producers optimized for volume and survival rather than craft and recognition. The rich cup potential of Brazilian terroir ​- the chocolatey naturals of Sul de Minas​ ​- was largely invisible to the world, buried under layers of anonymous blending.

Then, why are we optimistic?​

The Decommoditization Has Begun

Something is shifting​ in the food economy, and it is one of the most consequential changes ​i​n decades. The specialty coffee movement​, and its cultural engine, the third wave​, ​i​s restoring identity to the product and reconnecting producers with ​c​onsumers.

Third-wave roasters visit farms. They publish processing details, altitude, and variety on their bags. They pay prices that reflect quality rather than commodity indices. Consumers are learning to ask not just for "a coffee" but for a washed Ethiopian Yirgacheffe, a natural from Carmo de Minas, a honey-processed Catuaí from a named farm. ​This movement also demands different infrastructure: the specialty importer who buys 10 bags from a single Andradas producer needs ​something different. 

For Brazilian producers willing to invest in quality, this is a historic opening. ​After generations of producing anonymous bulk coffee​, Brazil is now home to some of the most celebrated lots in the world. The cooperative model is not dead, but the best cooperatives are reinventing themselves around traceability and quality premiums. The trading house is not gone, but specialty importers with direct relationships are capturing an ever-larger share of the conversation.

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​Highlights:

• Coffee Futures KC Price in NY: -2.93% weekly, closing at 281.25 cents/lb.  

• Coffee Price in Brazil's B3 in USD: -2.89% weekly, closing at 367.65 USD per 60kg bag.

• BRL/USD fx rate: -1.18% weekly (BRL weakened against USD).

• Proxy of 20' container freight prices from Santos to Rotterdam: down ~3.5% weekly.

• Strategic Shift: Major coffee retailers are increasingly adopting AI-driven supply chain forecasting to mitigate volatility caused by the intensifying El Niño patterns affecting Southeast Asian Robusta crops.

• M&A Activity: JDE Peet’s finalized its acquisition of a prominent Brazilian specialty roaster, signaling a strategic push to capture a larger share of the growing premium domestic market in Latin America.

• Consumer Habits: A new market report indicates a 12% rise in "ready-to-drink" (RTD) cold brew consumption among Gen Z, outpacing traditional hot coffee sales for the fourth consecutive quarter.

• Governmental Rule: The EU clarified new compliance deadlines for its Deforestation Regulation (EUDR), forcing major importers to accelerate the mapping of smallholder farm plots in Ethiopia and Vietnam.

• Strategic Decision: Starbucks announced a move to streamline its global menu, focusing on "core beverage excellence" to reduce operational complexity and improve drive-thru service speeds.

• Consuming Habits: Research published this week highlights a surge in "functional coffee" demand, with consumers increasingly seeking blends fortified with adaptogens and mushrooms for cognitive benefits.

• Supply Chain: Port congestion in Santos showed signs of easing following a temporary labor resolution, though container availability for European routes remains below 2025 levels.

• Sustainability: A coalition of Central American producers launched a "Climate-Resilient Coffee" certification to command higher premiums for beans grown using regenerative agricultural practices.

• Market Entry: Luckin Coffee confirmed plans for a massive expansion into the Middle Eastern market, targeting 500 new store openings across the GCC region by the end of 2027.

• Production Forecast: Brazil's 2026/27 crop expectations remain high, with private analysts maintaining a "bumper year" outlook despite localized concerns over erratic rainfall in Minas Gerais.