Blue Mountain Coffee Ventures Limited, BMCV, is weighing a richer blend of tourism and coffee, with plans to add a hospitality component to its rural St Andrew operation as it looks for ways to grow the business.
The company has indicated, however, that it’s treading softly on its capital-spending plans, for now, citing uncertainty around the handling of exports, which it says is beyond its control.
“We are reviewing our expansion plans at this time,” said Managing Director Stephen Dunkley.
They include the expansion into the roasting of coffee, a function that is now outsourced to an unidentified JACRA licensee. And: “We are working towards a tourism-related attraction,” Dunkley added, without elaboration.
For now, BMCV is more concerned with the cash flow problems related to delays in shipment of its green beans to overseas markets.
And those delays, he suggested, emanate from the lock that sector regulator JACRA has on coffee exports, specifically, its stipulation that processors cannot ship their beans individually.
By law, large coffee exports can only be done through JACRA, “which destroys our working capital and increases our costs,” said Dunkley in criticism of what he sees as an ad hoc shipping schedule by the Jamaica Agricultural Commodities Regulatory Authority.
“There should be greater collaboration between licensees and JACRA, playing a facilitation role, to build and service markets,” he said.
Jamaican companies mostly export their coffee beans, but processors and traders also supply the hotel and retail markets with roasted and grounded coffee.
However, it irks Dunkley that the pure Jamaican coffee, which is ranked among the world’s best, is being sullied by inadequate market positioning.
Not only do tourism entities not distinguish the unique Jamaican premium coffee from the blends to their guests, he suggested, consumers generally can’t differentiate between the pure Blue Mountain coffee and blends.
“The best marketing is for the consumer to be given carefully prepared, high-quality, 100 per cent Jamaica Blue Mountain coffee or 100 per cent Jamaica gourmet coffee every single time. Low and poor-quality coffee pretending to be Jamaica Blue Mountain must be removed from the shelves,” the coffee processor demanded.
As for the accommodation sector, he added, hotels and villas are lax in their description of what precisely is being served to guests.
“Hotels should serve two types of coffee: the cheap on tap included in the room rate, which is typically a blend; and an option for those who prefer the real, 100 per cent Jamaican coffee and are willing to pay a premium,” he said in an interview with the Financial Gleaner via email.
Dunkley hasn’t said much about his plan to add a tourism component to the coffee farming and processing operation, but it aligns with the ongoing push by the Ministry of Tourism to create exposure for the estates and the premium Jamaican coffee they produce through what is now the annual Jamaica Blue Mountain Coffee Festival.
Around four million tourists visit Jamaica annually, and that number is projected to hit five million in a few years. Dunkley adds to that the three million Jamaicans in the diaspora as prospective markets.
BMCV is a second-generation company, which was founded in 1999 by two brothers – Stephen’s father Carlyle Dunkley and Keith Gardener. Its operating base is in the rural St Andrew community of Flamstead.
The company is both a producer and buyer of Jamaica Blue Mountain, or JBM, coffee with its own farm located 3,300 feet above sea level, home to the Arabica Typica variety of coffee. It opened its own pulpery in year 2000, and in 2005 added a dry mill operation.
Currently, BMCV handles drying, storing, processing, hand sorting and packaging of coffee for export. When in full production, the farm employs 17 workers and the factory another 40. But as to the company’s output, Dunkley declined to comment, saying it was sensitive, competitive information that the company does not share publicly.
“By definition, our volumes will vary, sometimes very significantly, from crop to crop due to weather and other factors,” he said.
“We primarily grow the Typica variety of coffee which gives a superior cup quality but is very hard to grow, suffering from biannual production and susceptibility to various diseases,” Dunkley added.
Like the problems faced by other coffee operators, he ran through the usual complaints of a poor farm road network and concurrent high vehicle repair and maintenance bills, inadequate labour supply, the negative impact of climate change, and disease on crop yields; but he also noted that the traditional purchasing practices were risky for the trade, saying there the “reckless use of cash to acquire coffee cherries” continued, “resulting in high risk in procurement activities and an incentive for theft”.
Additionally, the sector is often starved of working capital, which Dunkley blames on a myopic banking sector.
“If it’s easier to get a car loan rather than an agricultural loan, then it indicates a low understanding within financial institutions about financing agricultural operations,” he said.
To minimise the challenges, Dunkley says he coordinates with other farms where practicable.
“We tackle these by mobilising internal resources along with those of our neighbours, and by reducing our expansion plans to fit available labour and capital,” he said.
BMCV’s pure Blue Mountain coffee is sold in Europe, Japan, Korea and North America, and the Caribbean, with its marketing partners identified as Edgar Munn in Atlanta; Wataru & Company in Japan; and Edmonds Group Limited in Europe. Asked which markets have performed best in the past two years, and by what margin, he again said the information was too sensitive to share.
BMCV also packages and distributes Perk Up, a retail brand of roast and ground coffee it launched last year. Perk Up is sold on Amazon, in some local hotels, and retail shops in Kingston, Montego Bay Ocho Rios and Negril “with plans to expand islandwide,” Dunkely said.
