Origin Update: Panama
Coffee from $21 to $1,029 in 15 Years: Panama Geisha and the Luxury Coffee Industry
From the fertile footholds of the infamous Barú Volcano, Panama Geisha over the past 15 years has made a name for itself as the most luxurious coffee on the planet. Making international tabloids just a couple of months ago for fetching $803 USD per pound at auction for last year’s winning lot at the Best of Panama, the extraordinary prices continue to eclipse untouched heights as a new record of $1,029 USD per pound was just set at the 2019 auction.
Along with many people, the first question that comes to mind is, what would entice someone to pay over $1,000 USD for a single pound of coffee?
To try and understand this, let’s look at Panama as an origin, the Geisha varietal and the Best of Panama Competition.
Since 2004 and the re-discovery of the most famous varietal in the world, Geisha, Panama has led the way in advancing specialty into luxury coffee production. The term luxury coffee is a relatively new one but is given to those coffees that demand the title of the most expensive coffees in the world. So, why is the small Central American country at the forefront of this movement?
One of the smaller coffee origins, Panama currently only produce approximately 100,000 60Kg bags of coffee per year with less than half of that as exports. Nonetheless a significant number of producers have primary focuses on quality over quantity. This can be largely attributable to the sublime natural climate for high quality coffee cultivation surrounding the Barú Volcano.
At the very base of the volcano lie the townships of Volcán (to the east) and Boquete (to the west) which have been the centre of Panamanian agriculture for over 100 years. Today they are now the leading locales for the illustrious Geisha varietal worldwide, not only due to the climactic conditions but also a widely adopted attitude for innovative processing to extrapolate new and exciting exotic flavours not previously experienced in a of cup coffee. With altitudes between 1,200 and 2,100 metres above sea level, the fertile soils as well as an array of micro-climates influenced by rain clouds originating in both the Pacific and Atlantic oceans create cool pristine environments ideal for slower growing, higher density coffee.
In the past 15 years Geisha has become somewhat of a buzz word in the industry, usually signifying the best quality coffee one can get their hands on. The origins of the varietal stem from the region of Gesha in Ethiopia where genetic studies show that similar native varietals still grow there today. Through research centres across the globe and several decades since its initial discovery, a strain made it to Central America and consequently Panama. In 2004, The Peterson family of Hacienda La Esmeralda first separated their experimental variety lots and the Geisha grown in higher altitudes was the most outstanding. This subsequently led to it being entered into the Best of Panama 2004 where it won and set the then current record of $21 USD per pound at auction. A far cry from the 1,029 USD that a Geisha lot earned in 2019.
Despite the fact that amazing coffees are being grown across the globe, none quite seem to claim the astronomical prices of the Geisha varietal. So, what exactly is the driving force behind this? As mentioned earlier Geisha prefers cooler temperatures, of which higher altitude is a decent indicator, already eliminating significant growing regions worldwide. Furthermore, the tree is renowned for needing considerably more time before first harvest, lower yields and requiring more inputs per hectare than other varietals in more monoculture and warmer conditions. This has a direct correlation upon prices as the lower volume, higher costs must be compensated somehow. In most cases this is alleviated where good agricultural practices are in place as the quality and profile in the cup remains unique to the varietal, demanding enough of a premium to bring production into a profitable position.
Yet, the main impetus for such value seeking producers remains the annual Best of Panama Competition and eAuction. The competition has been held in Boquete every year since 1996 where several rounds of national and international blind judging and deliberation leads to a single coffee from several different categories being crowned as the best Panamanian coffee of the year. This year had 5 categories with a total of 174 lots being entered; Traditional Washed, Traditional Natural / Special Process, Pacamara, Geisha Washed and Geisha Natural / Special Process.
Of those 174 lots only the 49 highest scoring lots, as determined by the international panel, made the auction. It was held on the 16th of July which saw bidders from across the globe fiercely compete against one another, eventually pricing out every other suitor to claim their desired lots. This included two record setting Geishas which both took the top honour in their separate categories. 95 for the Washed and 95.25 for the Natural / Special Process on the international SCA standard scale. Not surprisingly these two were the most expensive lots at auction, fetching $331 USD and the record setting $1,029 USD per pound respectively. It is the inherent competitive environment that sees such volatility in prices which made breaking $1,000 USD per pound barrier possible, all in a quest to claim rights over arguably the most luxurious coffee in the world.
Taking everything into consideration it still may seem a little farfetched that coffee can sell at such lofty prices, yet it all comes back to the famous saying, ‘something is only worth what someone is willing to pay for it’. As long as Panamanian coffee continues progressing the luxury coffee industry and competitive buyers are willing to fight for the title of most luxurious coffee in the world, who knows what the ceiling price of a single pound of coffee could be.