Appendix 1 Organization Chart
Members (125) (of whom 75 farmers) Cooperative Santa Elena R.L.
Consejo Admistrativo (7/9)
• President
• Vice-president
• Secretary Comité de
Vigilancia (3)
• President
• Secretary
Education Committee (3)
• President
• Secretary Chosen each year at the annual report
Manager:
G. Vargas
Administration (3) (Santa Elena)
• Accountant
• Administration assistents (2)
Supermarket (2) (Monteverde)
Coffee tour
Coffee Department manager:
D. Santamaria
Coffee Mill &
Roaster (2) (San Luis)
Coffee Shop (3 ½)
(Monteverde) Sales & Distri- bution on local market (½) Department manager:
R. Vargas Department manager:
V. Ranirez Department manager:
P. Englander & Y. Vega Contracted out
for 3 years dec 02 - dec 05
• Consejo Administrativo (7/9): The Consejo Administrativo has nine members which work like a board of directors. Seven members have the right to vote. The other 2 members don’t have the right to vote they are only allowed to advice the other members when they have to make a decision. If one or two members with the right to vote are not present at a meeting the votes will go to the members without a vote. The Consejo Administrativo has one president and one vice-president. If the president is not present the vice-president takes his place over. The vote of the president counts double if there is equality of votes. The Consejo Administrativo has also a secretary. The members will be chosen each year again by the annual report.
• Comité de Vigilancia (3): The comité de Vigilancia is the organ that supervise the Cooperative. The comité will look of the cooperation observe the internal and external rules.
For example: Observing the rules for Cooperative in Costa Rica, Observing the law, observing the decisions of the Consejo Administrativo etcetera. The Comité exist out of a president, a secretary and a member. The comité is also chosen each year by the annual report.
• Education Committee (3): This organ advices the farmers on all there activities. For example: when to plant new plant, how to plant, which kind of chemicals must be used by diseases etcetera. This organ exists also out of a president, a secretary and a member and is also chosen each year by the annual report.
• Manager (1): Responsible for the daily business.
• Administration (3): The Administration is responsible for the administration of the supermarket, the coffee Mill & Roaster and the coffee shop. Besides that they are responsible for the wage of all the employees.
• Coffee Tour: The tour is organized for the tourists. Brings them to the coffee fields, Coffee Mill & Roaster and the coffee shop. This tour is owned by the cooperative but it is contract out to another organization for 3 years (December 2002 till December 2005).
• Supermarket (2): The supermarket is the only supermarket of the place Monteverde. The supermarket is an ownership of the cooperative. This supermarket is only activity of the cooperative that nothing has to do with the coffee.
• Coffee Mill & Roaster (2): The Coffee Mill is the place were the farmers bring their coffee.
Here is the first control of the coffee. The first process of the coffee finds place at the coffee mill also. The coffee for the local market is roasted at the roaster by the coffee mill.
• Coffee Shop (3 ½): This is the place were the tourists come in touch with Café Monteverde.
The shop sells besides the coffee all kinds of products which are more or less related to coffee.
• Sales & Distribution on local market (½): The sales and distribution to the local market is done by R. Vargas. He is responsible for the delivery of all customers (the supermarkets and hotels) in the Monteverde area. Besides that he is responsible for the relations with the local customers and tries to attract new customers for CoopeSanta Elena R.L.
Appendix 2 Coffee Information
History of Coffee
For us Westerners coffee is three hundred years old, but in the East it was widespread as a beverage, in every level of society, since earlier times. The first definite dates go back to 800 bc.; but already Homer, and many Arabian legends, tell the story of a mysterious black and bitter beverage with powers of stimulation. In the year 1000 about, Avicenna was administering coffee as a medicine. And there is a strange story, dating from 1400, of a Yemeni shepherd who, having observed some goats cropping reddish berries from a bush, and subsequently becoming restless and excited, reported the incident to a monk. The latter boiled the berries, and then distilled a bitter beverage, rich in strength, and capable of dispersing sleep and weariness.
However the discovery occurred, the fact remains that the coffee plant was born in Africa in an Ethiopian region (Kaffa). From there it spread to Yemen, Arabia and Egypt, where it developed enormously, and entered popular daily life (Sovrana, 26 January 2004). It is not clear when and how coffee cultivation and drinking spread, but there is evidence that the bush was grown in Islamic Monasteries in Yemen about 1,000 years ago. Commercial cultivation was reported in the 15th century in Ethiopia. Coffee drinking spread to the Middle East by the middle of the 16th century.
The first shipment of coffee to reach Europe is said to have arrived in Venice from Turkey in 1615. The first ‘café’ was opened there in 1645. Coffee drinking spread quickly into the rest of Europe (Ponte 200). Noted for its aroma, taste and quality, Arabica coffee had become a popular drink in the UK by 1650 (May 2001). But the increasing needs of a growing market, improved botanical knowledge of the coffee plant, and high taxes imposed at the ports of shipment, led dealers and scientists to try transplanting coffee in other countries. The Dutch in their overseas colonies (Batavia and Java), the French in 1723 in Martinique, and later on in the Antilles, and then the English, Spanish and Portuguese, started to invade the tropical belts of Asia and America.
In 1727 coffee growing was started in North Brazil, but the poor climatic conditions gradually shifted the crops, first to Rio de Janeiro and finally (1800-1850) to the States of San Paolo and Minas, where coffee found its ideal environment. Coffee growing began to develop here, until it became the most important economic resource of Brazil. It was precisely in the period 1740- 1805 that coffee growing reached its top spread, in Central and South America.
Although coffee was born in Africa, plantations and home consumption are comparatively recent introductions. Actually it was Europeans who introduced it again, into their colonies, where, thanks to favourable land and climatic conditions, it was able to thrive (Sovrana, 26 January 2004). Now, is production is spread throughout the world, and is carried out in Latin America, in east and central Africa and India. Brazil and Colombia account for almost half the world’s Arabica production and exports (May 2001).
Different types and quality of coffee
The coffee tree requires a warm climate without sudden temperature shifts, does not tolerate frost, and needs plenty of seasonal rains. It is primarily grown in rich volcanic soils that are well drained. These conditions are normally met between the tropics of Cancer and Capricorn. Two coffee species are commercially relevant: Coffea Arabica (hereafter ‘Arabica’) and Coffea Canephora, also known as ‘Robusta’. Both species produce ‘cherries’ that enclose two flat seeds (the ‘bean’). Arabica coffee is susceptible to attacks by pests and diseases. Its best growing conditions are found in warmer temperate zones or in highlands of tropical zones. Robusta coffee is more resistant and can be grown between sea-level and 800 metres. Robusta coffee grows at lower altitudes, chiefly in Vietnam, the largest producer, West Africa and Indonesia. The first harvest for a newly-planted coffee tree usually takes place after two years, and optimal yields
are reached two to three years later. The ripening period of the cherries depends on climate and soil fertility -- usually 6-8 months for Arabica and 9-11 months for Robusta. Production of high quality beans can continue for 20 years, followed by another 20 years of declining quality production. Used for blended and instant coffees, Robustas fetch approximately half the price of Arabicas on world markets (Van Dijk et al 1998; cited by May 2001).
Most coffee in Costa Rica can be classified as high and strictly high grown coffee. This corresponds to coffee grown above 800 meters. Coffees grown between 800-1,200 meters are usually classified as hard bean (HB) and above 1,200 meters are usually classified as strictly hard bean (SHB) and often command significant premiums in the market. In the table below shows the share of coffee in Costa Rica that comes from higher altitude. Costa Rican coffees usually command significant premiums for quality coffee (Varangis et al).
Table 1 Share of Coffee Classified as High and Strictly High Grown
SHB HB SHB plus HB
Costa Rica 39% 24% 63%
Source: estimates using data from IDB country reports cited by Varangis et al
“Sustainable Coffees”
Sustainable coffees are grown in relation to criteria of environmental protection and socio- economic fairness. These are known as certified “organic”, “shade-grown”, and “fair trade”
coffees (Ponte 2002).
Organic Coffee
Organic agriculture is a production management system promoting and enhancing biodiversity and soil activity. It is based on minimal use of off-farm and on management practices that restore, maintain and enhance ecological harmony. A grower or processor of organic coffee may be certified by a public or private certification company if, among others, the following standards and procedures are met: (1) the coffee has to be grown without any use of synthetic agro- chemicals for three years prior to certification; (2) farmers and processors must keep detailed records of methods and materials used in coffee production; (3) a third-party certifier annually inspects all methods and materials; and (4) all farmers and handlers are required to maintain written organic plans detailing management practices (Ponte 2002).
Shade Grown coffee
In shade grown coffee production, the coffee trees are grown under the shade of trees to retain moisture and soil nutrients, and to moderate the heat and light reaching the coffee plants.
Coffee is an understory plant in wild, and grows well on farms that mimic forest conditions.
Shade-grown systems provide habitats for natural enemies from reduction of light, or from naturally occurring chemicals leaching from the trees or their litter.
Production at a shade-grown estate is almost 1/3 of a non-shaded farm (Sorby 2002). To maximize profit there is a trend towards organized shade fields with new hybrid shade trees.
However, with a diverse production system that includes several crops as well as forest trees, the farmer reduces the risk of relying on one crop, and get added value from forest products.
Shade trees also present habitats for a large range of flora and fauna. Many roasters have noted that shade grown coffee has better taste due to a similar effect as growing coffee at high altitudes (Coffee Research Institute 2001; cited by Sorby 2002). The slow growth results in more production of sugars and chemicals that enhance the taste. Coffee grown under shade trees generally has good taste characteristics due to the pattern of ripening, which means that in practice many certified coffees are also designated toward the specialty and gourmet market (Sorby 2002).
Shade-grown coffee under the Smithsonian “Bird friendly” certificate (minimum of 40% shade cover) is connected with the organic certification since that is one of the criteria for the program (Smithsonian Migratory Bird Center 2001; cited by Sorby 2002).
Fair Trade Coffee
Fair Trade (FT) in the coffee sector was pioneered by the Max Havelaar Foundation in the Netherlands in the 1980s. Fair trade is based on partnerships between so-called Alternative Trade Organizations (ATOs) – such as Twin Trading, Oxfam Trading, Equal Exchange – and producers. This partnership is defined as “trading relationship between stakeholders that have both market-based and ethical elements and that aims to be sustainable in the long term”.
Fair Trade coffee can be bought only from small farmers’ organizations. To sell coffee in the fair trade market these organizations need to qualify for registration in the FTO register (Ponte 2002). Fair Trade aims to alleviate poverty in the South by providing disadvantaged producers of Africa, Asia, and Latin America with fair opportunities to access Northern markets. It aims to build sustainable direct relationships between these producers in the South and consumers in the rich parts of the world.
Because Fair Trade began as a decentralized movement, it is inevitable that there are a variety of definitions of Fair Trade. The following definition was adopted in April 1999 by FINE, an informal umbrella group of the four main international Fair Trade networks.
Fair Trade is an alternative approach to conventional international trade. It is a trading partnership which aims for sustainable development of excluded and disadvantaged producers.
It seeks to do this by providing better trading conditions, by awareness raising and campaigning (EFTA report 2001; cited by CoopeSanta Elena 2001).
The Fair trade movements around the world work together through the Fair Trade Federation (FTF) which has stipulated seven principles of Fair Trade.
1. Fair wages – paying fair wages to the workers is the base of Fair trade. Through bypassing exploitative middlemen, the producers get a greater percentage of the retail price.
2. Cooperative workplaces – Fair trade organizations work mainly with small businesses, worker cooperatives and associations which bring benefits to their community.
3. Consumer education – Fair trade organizations create consumer awareness for the importance of prioritizing fairly traded products
4. Environmental sustainability – environmentally sustainable practices are encouraged.
5. Financial and Technical support – Fair trade organizations often provide financial assistance through direct loans, prepayment of by linking producers with markets is encouraged
6. Respect for cultural identity – the use of producers’ cultural traditions in production and/or development of new products for the western markets in encouraged.
7. Public accountability – Members of the FTF have their finances, management policies and business practices open to the public and are monitored by the FTF (TransFair 2002; cited by Sorby 2002).
Overlap and prices
In practice, it is generally true that most Fair Trade coffee is organic, and that most organic coffee is also shade-grown, but neither of these points are true the other way around. Much of the fair trade coffee is also sold as organic (36 percent of the total of 2000) (Ponte 2002). And, according to Scott Patterson of Peace Coffee, most organic coffee is shade grown because organic coffee does not use pesticides or off-farm fertilizers. It still needs its nutrients to come from somewhere; the best resource is from the biodiversity surrounding the crop. However, not all shade-grown coffee is organic or Fair Trade and not all organic coffee is Fair Trade (Commission for environmental Cooperation, 2002).
Sustainable coffee gives a considerable price premium to the farmer (Sorby 2002).
Organic Premiums (2001) 18%-62.5% overprice
Shade-Grown (Shade-grown, Organic & Fair trade certified) (2001) 108% overprice Fair Trade Prices (FOB) (2001)
Regular washed Arabicas 111% overprice
Certified organic washed Arabica 137% overprice
Regular washed robusta 340% overprice
Certified organic washed robusta 399% overprice
Fair Trade coffee guarantees a minimum price of $1.26/pound. For coffee that is both Fair trade and organic certified, the producers will receive $1.41/pound. If world prices rise over the floor price, farmers will receive a small premium of $0.05/pound, or for organic $0.15/pound, above market price (Sustainable Harvest 2001; cited by Sorby 2002).
Super Labels
The specialty industry is also starting efforts to conceive a “super label” combining organic, fair trade and shade-grown criteria. Although there is still no sectoral agreement on such a sustainability label, two initiatives have attempted to combine some elements of the three sustainability “traditions”. One is the Eco-OK certification, developed by the Rainforest Alliance, which covers several aspects of the farming system, agro-chemical use, soil and water management, and labor conditions. Another is the Utz Kapeh code of conduct. Utz Kapeh is the name of a foundation based in Guatemala and the Netherlands. It has developed a code of conduct for growing sustainable coffee on the basis of the “good agricultural practices” of the European Retailer Group (EUREP). This code contains criteria on soil management, fertilizer use, integrated pest management, waste pollution management, worker health, safety and welfare, and other socio-economic and cultural aspects. Utz Kapeh’s goals are to guarantee access to basic social services, guide producers to match standards for growing sustainable coffee, and provide assistance in implementing these standards. Both have lower environmental and shade standards than organic and Smithsonian shade-grown certification. Finally, non of the two guarantees a floor-price (like fair trade does) or a living wage (just payments according to national laws). This has prompted criticism from advocates of “traditional” certifications, who fear that environmental and fair trade principles are being watered down and that the multiplication of labels is confusing consumers (Ponte 2002).
Appendix 3 Macro Environment
A company’s macro-environment is generally defined as the political, legal, economic, ecological, social, cultural and technological dimensions of the universe in which the operating environment of the firm is embedded. Whereas the macro-environment of a company strongly influences the structure and state of its operating environment, individual members of the operating are restricted in their influence on the development of the macro-environment (Mühlbacher et al 1999, p.50).
The factors used are the DESTEP factors, demographic, economic, social-cultural, technologic, ecologic, and political-legal factors.
Demographic factors
Demography means literally “description of the population”, so the analysis goes about the characteristics about the population (Alsem 2001, p.129).
Population
Costa Rica had 4.088.773 million inhabitants in 2003 (Websiec, 19 April 2004). More than 30%
of the population is in the age category 0-14 years, the category 15-64 year represents 64%, and the people older than 65 year represents about 6% of the population. The growth rate is 1.6% (2003). A large part of the population growth comes to the account of the immigrants out of mainly Nicaragua. One third of the population lives in the Gran Metropolean Area in and around San José. The population density is 78.9 per km². The average life expectancy in Costa Rica is with 76.43 years very high. The population is for a great part homogeneous, and has no influential indigenous culture (EVD, 14 April 2004). The great majority of the population, about 80%, is Roman Catholic. The official language is Spanish. But besides that people in tourist areas speak relatively a lot English. And in the area around Puerto Limon, on the Caribbean coast, a lot of people speak English (Nethemb, 14 April 2004).
Education
The Costa Rican government attaches high importance to education and spends 20 percent of the government budget at education. This has lead to the high rate of literacy of 96 percent and a high average education level of the population. The legal compulsory education is until the third year of secondary school. The high education level of the population is one of the strong points of Costa Rica by attracting new foreign investors (EVD, 14 April 2004). Moreover, public education is free until finishing the fifth and last year of the secondary school. The universities are divided in public and private universities (Nethemb, 14 April 2004).
Economic factors
Economic factors are of importance because these variables influence the probability that consumers buy certain products (Alsem 2001, p.130).
National Product
Costa Rica is the most stable and wealthiest country in the region. The economic growth was a couple of years ago 5.5, but is now due to declining foreign investments about 2.2% (2002).
The largest growth sector is tourism.Due to governmental regulations agriculture is not longer the most important economic factor. Services and industry are the dominant sectors (Minbuza, 14 April 2004). The Gross National Product (GNP) was US$ 16.9 billion in 2002 and are estimated on US$ 17.5 billion in 2003 (EVD, 14 April 2004). The Gross Domestic Product (GDP) per capita was US$ 3.914 in 2002. The inflation rate in 2002 was 9.8 percent and will remain at this level the next years (Websiec May 2003; cited by nethemb, 14 April 2004). The prices for the consumers have raised 9.2 percent in 2003 with regard to 2002 (EVD, 14 April 2004). The national currency, the Colón, is deliberately overrated, that’s the reason that the price level in Costa Rica is relatively high (Nethemb, 14 April 2004). The foreign debt was US$ 4.8 billion dollars (2002). The deficit in the trade balance is US$ 328.9 million (2001). This is the biggest problem for the Costa Rican government (Minbuza, 14 April 2004).
The average wage in Costa Rica is 152.073 colones per month (Websiec, 19 April 2004). In Costa Rica there are large income differences between the highest and lowest social classes.
Costa Rica has a relatively large middle class. One fifth of the population lives below poverty level (Nethemb, 14 April 2004). The unemployment rate in 2003 was 6.7 percent and involved 117.2 thousands of persons (Websiec, 19 April 2004).
Coffee sector
The Costa Rican coffee industry suffers strongly under the low world market prices. Coffee production finds place in small and middle sized corporations. In comparison with other Central American countries the production costs in Costa Rica are relatively high (EVD, 14 April 2004).
In Costa Rica one is thinking how to stimulate the agriculture through diversification and specialization. There are plans to diversify the coffee production into special coffee species and special growing methods, such as high quality and sustainable. In this way Costa Rica hopes to create a niche in the coffee market to meet customers at the high end of the market (Nethemb, 14 April 2004).
In Costa Rica the summer holidays of children are in the picking season of the coffee. Although child labour is forbidden, children do work on the coffee plantations for a couple of hours a day.
The objective is to teach the children how to work with the land and to respect the land.
To get a living out of coffee growing a coffee plantation has to have a size of 5 hectares. Most coffee farmers connected with Cooperative Santa Elena have only one hectare. They have to develop additional activities to make a living. Farmers with such a small farm do not hire people to help picking the coffee. If their family is big enough they can handle it. The bigger farms, with 5 hectare or more, hire people to work on the land. Most of this people come from Nicaragua.
The people from Costa Rica don’t want to work on the land to pick coffee. The economic and social situation of Costa Rica give the people more opportunities to work in activities different than coffee. Another factor is that the people have more opportunities to study. So, each year a lot of Nicaraguans enter the country for a couple of months. The situation in Nicaragua is pushing the people to look for better economic options in Costa Rica. They are cheap labour forces.
Tourism
Tourism is one of the most important and most dynamic sectors of the Costa Rican economy.
The sector is by far the most important sector of foreign devices for the country. Costa Rica profiled himself on the area of ecotourism. This is based on the enormous biodiversity in the country in the form of rain forests, coral reefs, volcanoes and a great amount of national parks.
The greatest part of the visitors traditional comes from the Unite States, but since 1999 there is an increasing amount of tourists from South-America. The Costa Rican government has developed different instruments as a compensation for the investors in the tourist sector (Nethemb, 14 April 2004).
Foreign Trade
The total export of Costa Rica in 2002 amounted US$ 5,259.3 million (FOB worth) and in 2003 US$ 6,131.8 million (FOB worth) (Websiec, 19 April 2004). Because of the increasing international competition of traditional export products, the Costa Rican government defined a new strategy at the end of the eighties of the last century to improve the composition of the trade balance. To reach this objective the government stimulated the industrial as well as the agricultural sector to produce non traditional goods (Nethemb, 14 April 2004). The most important export products are manufactures and industrial goods, bananas, and coffee (Minbuza, 14 April 2004). In 2003 the total export of coffee amounted 2,694.8 thousand of bags each weighing 46 kilograms. The amount received was 195.4 million US dollar. The price per bag was 72.5 US dollar. The prices dropped last years. In 1995 the price received for one bag of 46 kilogram was 149.4 US dollar (websiec, 19 April 2004). The most important partners for export in 2002 were the United States (50.2%), Central America (13.1%), the Netherlands (5.9%), Puerto Rico (3.0%), and Malaysia (2.3%) (European Intelligence Unit; cited by EVD, 14 April 2004).
Source: www.nethebm.or.cr, date 14 April 2004 (Tico paper)
Figure 1: Production traditional and non traditional products in Costa Rica
Figure 2: total export Costa Rica Source: www.nethebm.or.cr, date 14 April 2004 (Tico paper)
The total amount of import was US$ 6,534.6 million (FOB worth) and in 2003 US$ 7,245.4 million (Websiec, 19 April 2004). The most important import products are raw materials, consumption goods, and capital goods (Minbuza, 14 April 2004). The most important partners for import are the United States (53.1%), Mexico (5.1%), Venezuela (4.2%), Japan (5.8%), and Colombia (2.3%) (European Intelligence Unit; cited by EVD, 14 April 2004).
According to a study of UNCTAD Costa Rica belongs to the six most successful countries worldwide if it goes about attracting foreign investment in the past five years. The regulation of the Zona Franca is the most important instrument that the Costa Rican government developed to attract new foreign investments. Companies settled in a Zona France are getting tax advantages; so it is very attractive to settle in a Zona Franca. The foreign direct investment increased in 2001 from 409 to 448 million US dollar. Most part of these investments is coming from the United States. In 2001, 52 percent of the investments are done in the industrial sector and 27 percent in tourism (Nethemb, 14 April 2004). Some very big multinationals have build production locations in Costa Rica (EVD, 14 April 2004). The most important investor in the past year was Intel (Nethemb, 14 April 2004).
Social-Cultural factors
Social cultural factors are factors like life style, opinions and norms within a society (Alsem 2001, p.131). These factors are included in the demographic and the ecological factors.
Technological factors
Technological factors can have significant consequences. For marketing applications one can say that a new technological development (technological push) is only interesting when this goes together with enough interest from the market (market pull) (Alsem 2001, p.134).
Energy
Traditional products Non Traditional products
Total export 1991-2001 in million US$
The energy supply of Costa Rica exists for 83 percent out of environmentally friendly energy, generated through hydroelectric power plants. Besides that, 10 percent is generated out of other alternative energy supplies, such as thermal energy, sun energy, and wind energy. Costa Rica imports each year for 400 million USD on petrol and oil. The Costa Rican Institute for Electricity (ICE) has a monopoly position in electricity and telecommunication facilities (Nethemb, 14 April 2004).
Infrastructure
The Costa Rican government has stated that the coming years an improvement and extension of the infrastructure of the country has priority. Because of the new agreement with the United States, Costa Rica has to become more competitive and an extension of the capacity of harbour, roads and airports is of great importance. The importance of the tourist sector for the country demands an adaptation of the infrastructure as well.
Costa Rica has four major harbors: Puerto Limón, Moín, Puntarenas and Caldera. There are 2 international airports of which airport Juan Santamaría in Alajuela is the most important one.
The roads in the Central Valley can be called good. A disadvantage is that all roads go via San Jose, which makes transportation between two cities barely possible without passing San Jose (EVD, 14 April 2004). In other parts of the country the roads are unpaved, which makes a four wheel drive car necessary. The quality of the roads is not optimal, often there are holes in the road, which makes transportation slow (Nethemb, 14 April 2004).
Communication
As stated above ICE has a monopoly on the telecommunication facilities. Internet is well spread over the country through the local company RACSA. Because in Costa Rica high importance is attached to education and development, new developments are easily accepted. Costa Rica has the potential to be one of the leading countries in E-commerce in Latin America. Research of KPMG indicates that a considerable amount of companies in Costa Rica uses internet as a marketing- and sales tool. But there still remains a need for specific assessment at this field, e.g. to use internet sites as a tool for export (Nethemb, 14 April 2004).
Ecological factors Geography
Costa Rica surfaces 51.100 km2. The capital is San José. Costa Rica is bounded by Nicaragua in the North and Panama in the South. The west boarder is the Pacific Ocean, the east border the Caribbean Sea (EVD, 14 April 2004). The geographical position of Costa Rica makes it a link between North- and South America (Nethemb, 14 April 2004).
The country knows considerable altitude differences and is divided in seven provinces: San José, Heredia, Alajuela, Cartago, Puntarenas, Guanacaste, and Limón. One third of the population lives in or in the area of the capital San José (Nethemb, 14 April 2004).
Climate
Because of the altitude differences there are eight different climate zones in Costa Rica. In general, one can say that the climate is tropical until subtropical, with a dry season (December until April) that is called verano (summer) and a rainy season (May until November) that is called invierno (winter). The Caribbean coast has the whole year rainy weather (Nethemb, 14 April 2004).
Temperature is during the whole year relatively constant. Not the season, but the altitude defines the temperature. Around San José the temperature is between the 15 and 26 degrees Celsius. At the Caribbean coast the temperature is between the 21 and 30 degrees Celsius, and on the Pacific side the temperature is even a few degrees higher (Nethemb 14 April 2004).
Environment
Costa Rica has a reputation where it goes about protecting the environment. Political desire, legislation, and education has contributed to this. Next to the heavy industry, this topic is high
on the agenda of some specific industries. These are for example the coffee- and banana sector, which were traditionally very polluting industries, and tourism (EVD, 14 April 2004).
Water is in Costa Rica long seen as an inexhaustible source, which can be used freely in most cases. The result of this attitude is that the rivers in the country are heavily polluted through dumping waste, and waste products. Particularly the coffee industry distinct itself as a great polluter (EVD, 14 April 2004).
Political-Legal factors
The political system is characterized by the form of government. The legal environment of a company is the set of laws and systems which enforce those laws, established by a society to govern its members’ behaviour (Mühlbacher et al 1999, p.149).
Politicical system
The political history of Costa Rica in the twentieth century is characterized by a high degree of stability and peace, especially compared with other Central-American countries. By the new constitution of 1948 the army was disbanded. The fact that Costa Rica has not got an army until this day, is by many people experienced as one of the factors of the current political stability (Nethemb, 14 April 2004).
Costa Rican system of government is very similar to that of the United States of America. There are three branches of government: Executive, which consists of the president, two vice presidents and cabinet; the Legislative Assembly, with 57 individually elected deputies; and, the Judicial Branch, which consists of civil, criminal, appellate and constitutional courts. The President and members of the Legislative Assembly are elected for four-year terms and the president can't run for re-election. The President is since 8 May 2002 Mr. Abel Pacheco (visitcostarica, 12 May 2004).
Abel Pacheco presents himself as the man of the dialogue, trying to win the people at this way.
The spearheads of his policy are: stimulating foreign investment in Costa Rica, ordering the government finances, and an active role with regard to the economic integration with the other Central-American countries and the economical free trade agreement with the United States (EVD, 14 April 2004).
Foreign policy
Below will follow a description of the relationship of Costa Rica with other countries.
Relation Central America countries
The Central-America region exists from North to South out of Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica. The five countries together form a market union, the Mercado Común Centroamericano (MCCA), in which countries don’t pay import- and export rights over goods and services that are produced in these countries, with some exceptions. There are common import rights for import out of third countries. This common market in five countries has approximately 33 million inhabitants and the population is growing fast. For the next 25 years a doubling of the population to 65 million people is expected. The region has with an average economic growth of 3.5 percent reached a higher and more constant growth than the South American neighbours.
These results are primarily owed to the United States. About 50 percent of the in- and export comes and goes to the United States.
The past ten years a new form of integration is visible which must result in a Custom-Union at the end of December 2003. This Union will have a common agricultural policy, custom administration, external trade policy, and free traffic of goods. This integration is supported by international donors and trade partners. The United States and the European Union even have made this point a condition for a possible free trade agreement with these countries. The high level of regional economic integration is translated into 11 percent increase in the trade between one another in 2001.The moulding of the customs-union and the achievement of the free trade agreement with the United States will enable the Central American countries as a favourable production location for the American imports. The Central American area is strong dollarized,
more than 60 percent of the balances, debts and transactions are in dollars (Nethemb, 14 April 2004).
United States
Traditional Costa Rica maintains close contact with the United States (Minbuza, 14 April 2004).
Costa Rica has reached an agreement with the United States about a free trade agreement on 25 January 2004. El Salvador, Guatemala, Honduras and Nicaragua reached the agreement with the United States on 17 December 2003. It is expected that the agreement will be effective on 1 January 2005 (EVD, 14 April 2004).
Europe
The relationship between the European Union and Costa Rica are formalized via the collaboration agreement EU/Central America. The European Union is after the United States the second target region for Costa Rica. More than 20 percent of the total export goes to Europe (mostly bananas and coffee) (Minbuza, 14 April 2004). In 2003 the European Union and the Central American countries reached an agreement for political dialogue and collaboration. In the future a free trade agreement might be possible (EVD, 14 April 2004).
Other agreements
As part of the MCCA Costa Rica has a free trade agreement with the Dominican Republic, Chilli and Panama. Next to that Costa Rica has a bilateral free trade agreement with Mexico and Canada (EVD, 14 April 2004).
Environmental policy
Since the 1960’s the Costa Rican government developed several laws, projects and regulations and signed a few international treaties for protecting the environment. The government tries with an active environment policy to prevent deforestation: 23.8 percent of the country is protected area. Policies regarding the “brown environment” can be better (Minbuza, 14 April 2004).
Export and import policy
When importing goods into Costa Rica it is obliged to hire a custom officer. These persons are as only one authorized to handle custom formalities. Most products can be imported without permit; only for some products permits are obliged. When importing goods one has to pay import duty or the ‘Derechos Arancelarios a la Importación’ (DAI) and amount between 1 and 15 percent over the CIF worth of the products. Products from the MCAA countries can be imported freely and for some other countries, were Costa Rica has a free trade agreement with, pay less import duties. Other taxes that have to paid are VAT tariff of 13 percent and ‘Ley 6946’ of 1 percent. For half of the imported products one has to pay consumption-tax of which the tariff varies between the 5 and 75 percent (EVD, 14 April 2004).
Civil Society
There are a lot of pressure groups in Costa Rica which have the possibility to influence the government. In the year 2000 there were 16.838 NGOs registered in the form of syndicates, cooperatives, trade unions, development organizations and other civil initiatives. In reality the influence of these groups is limited (Nethemb, 14 April 2004).
Appendix 4 History Monteverde Region
Before being settled the Monteverde area was inhabited by the Corobicí Indians. The first outside settlers found evidence of these Native Americans, who used the high lands as hunting grounds.
Later the Monteverde area was settled in 1918 by Costa Rican families who homesteaded on the three-covered mountain top. Ramon Leitón and Florencia Méndez settled in the San Luis Valley bellow Monteverde around 1920. José Mendez first named the whole area, “Cerro Plano” when coming up from San Luis on a hunting expedition.
Nine Quaker families who left the United States because of the obligatory peacetime draft founded the original Monteverde Community. They moved to Costa Rica searching for a place they could live a peaceful life style. One reason they chose Costa Rica was that the army had been abolished in 1948. After searching the country for six months the Quakers visited that “flat hill” called Cerro Plano on April 19, 1951. They purchased 1,400 hectares, around 3,000 acres, on part of that hill and settled here. They named their new home Monteverde, which translated to Green Mountain. The area that was originally named Cerro Plano included what is now
Monteverde, Cerro Plano and a good part of Santa Elena. There was a church in Cerro Plano, and also a small school that taught two grades every year.
The Santa Elena region was originally founded as Espinero, around the 1920’s. When the Quakers arrived the name had already been changed to Santa Elena and the town was a small pueblo, consisting of a school with two grades, and an open air meat shop that sold meat once a month. With the time a Church and Cantina were built, and the town slowly started to grow. The area named Cerro Plano still exists, being the area between Monteverde and Santa Elena.
The area was very remote, having practically no roads. Everyone in the area, Quakers and Costa Ricans, had to rely on each other. The original Costa Rican settlers had a saw mill and a trapiche (suger processing mill) and had cleared land for garden plots and cattle grazing. Two years after arriving, the Quakers founded the Monteverde Cheese Factory. This was the first company in the area and quickly became the economic base for the community.
Over the years the area has developed and grown. Monteverde is now the political district for the whole area and has a population between the 5,000 and 7,000 people. Two large private reserves protect a combined area of more than 27,000 hectares. New organizations and businesses have opened up along side the Cheese Factory. Tourism has become an important activity along with the cheese plant and conservation. The area has become the home to many people of different ethnic, cultural and social backgrounds: biologists, artists, musicians and educators among others (Cámera de Turismo de Monteverde, p.4-5).
Appendix 5
Question 37 Questionnaire Locals: Comments
• Que es un excelente cafe con un delicioso sabor muy propio de monteverde. Pieso que es e mejor cafe de zona
• El cafe es muy delsioso y respecto al cuestionario esta muy bien
• Que al igual como se preoccupan por saber sabee la calidad del cafe, se deberia insentivar con un mejor precio para el consumidor local lo utilice, lusentivar mejor al productar de café
• Ella oping que la entrevista es importante para los productores de cafe monteverde, sobre la importanera del cafe que producen. Tambien es importante porque le do a la persona una no onde de la calidad del producto.
• El cuestionario esta bien, porque dice el cafe monteverde es bueno
• Recomiendo tenes nuestro de cafe monteverde en hotels yo que en mi cors siempre recemiendolo este cafe a turiston
• Muy bueno
• Que el cafe es muy bueno y que lo promuevn en la comunidad. Que la cooperativa fortlezca al agricultpr para que no desoparesca este buen café
• Que el producto es bueno, ya que se produce en la zona
• El cafe me encante y me gusta pero en 4 occaciones le tenido que votarilo, por mal olor y sabor
• Que no vaya a perder el cafe y la calidad
• Al princio mantenia una calidad que me gustaba pero despues cambio
• Cuestionnario / encuesta mal formulante, tenioso para hacer
• Muy bueno la iniciativa de hacer la encuesta
• Que seria expandar al marcado del cafe hacia al rasto del pais
• Ma parece bien porque asi se tiene una opinion sobre el café
• Que es bueno el heho de que hagan este cuestionario
• Que el cafe monteverde es bueno
• Que es importante que los caficultores sigun con el cafe ya es de la zona
• Lo usan cafe monteverde porque les gusta y con respecto al cuestionario esta bien
• Que los preguntas relaciones con el sentimiento son muy dificilas
• Que el cafe es muy bueno y rico
• Le parace muy bien la encuesta
• Le parece bien la iniciativa
• Que esta bien el cafe monteverde es un buen café
• Que el cafe es de muy buena calidad, en donde no se esta consumiendo algun quimico, un cafe muy bueno
• Que ojale el cafe se mantenga en la zona porque es muy bueno
• El cafe monteverde is muy bueno
• Que el cafe es un producto muy bueno
• El cafe le hace talto propaganda y mercado
• Que sigan adelante con la produccion de café
• Que esta bueno que hagan la encuesta
• Si! Es muy bueno ya q' mis amigo q' no viven en la zona vienen aqui a mv y lo compran para llevarlo a sus lugares
• Que esta bien el cafe
• Que es un excelente café
• Es de buena calidad
• La propaganda del cafe su forma de obtencion debaia mejorarse un poco
• Ninguno, que sigon con el mercado estoy segura del apoyo del pueblo
• Utilizamente siento que hay cambios en el tostada principalmente oscuro sabe a cafe quenzde algo esta pasando con los tostadores
• Compuenden los personas vivir sin cafe monteverde….los que no pueden comprarlo
• La gastaria saber como poder almacenar al cafe para que no pierdo el sabor y aroma
• La gusta porque de todos los cafes puros os el que mas le ha gustado
• Que es el mejor cafe de zona
• Que el cafe es bueno, y que siempre se mantenga la calidad
• Tiene un sabor muy rico y espero que la gente que viene a esta zona. Lo pruebe y se queste con este delicioso cafe de altura
• Que lo unico bueno que ha hecho la cooperativa porque o demas ha dejado muelio que desear
• La pareca muy bueno que la opinion de la gente para que ojala nunca dejan de producirlo
• Todo esta bien, que si al cuestionario las cyude para mejorar la calidad esta bien
• Que el cafe es muy bueno, con buen sabor, y que oljaloi no voya a desarecer.
• Que es muy rico
• En mi negocio se vende bastante mas que otra marca pero personalmente necesita mas calidad padria ser mejor
• Que para ella es el mejor café
• Solo que es el mejor café
• Que es un muy buen café
• Es muy buen cafe, mas porque es organico
• Es buen cafe de altura para gente de altura. No es cafe de color pero es de sabor. Tiene mas que mejorar el empajue para abrir la bolsa hacer la una forma mas practicion y cencilla para basear
• No, que luchen pro segur adelante con el proyecto de cafe monteverde, qi es muy bueno de sabor, en pone muy en alto a monteverde
• El cafe es muy bueno
• Les felicito por esta encuesta val la pena por lo sobioso quires cafe monteverde, gracias
• Me parece muy importante la encuesta, a mi en lo personal esta producto es muy especial
• El cafe es exelente, y deverian usar codigo de barra
• Que el cafe es muy rico y que lo recmicudo a todos
• El cafe monteverde es muy bueno y puro, esto hace que no le cafe el estimago
• El cafe es muy bueno, de primera calidad
• Pienso que cafe monteverde, debe de apoyor mucho mas alo comunidad y sobre todo a los productores que son sus verdaderos duenos, falto incentivar mas olos que reidodeiromente trabajon y no solo a unos cuontos, que no produce niun grano
• El cafe monteverde es muy, muy bueno pero tiene un precio algo elevado para lacomunidad
• Un poco largo. El cafe es buena no niego es un poquito caro pero bueno. Tal vez me parece sacar hinstananeo no en listo
• Poque no se vende cafe monteverde en san jose? Y porque el la diferencia de precios entre el cafe en una tiende de souvenirs a el supermercado
• Preoccuacion por la contaminacion del rio san luis. Hacer un pequeno cafe tal entre casem y la cooperativa donde esta el corredor del cafe y en la partre delicious con matas de banano
• El cafe es bueno, y que es el mejora
• Que es un cafe preferido pura la tamir lia y uno amigos, y qui sin o hay esal marca no tomanios otra
• Me encantan las tardes cuando voy a la cafetaria de la cooperativa com mis amigos por un cafe, la atencion es muy bueno, el cafe riquisimo modifiguen la reposteria, solamente… el resto toso es exellente
• El cafe monteverde es uno de los mejores de cr y ella siempre lo recomiendan
• Es muy buena calidad
• es un cafe muy bueno
• Debio ser revisado antes de hacerlo
• Se mantenga la calidad de cafe y su pureza
• La calidad del cafe es muy bueno
• La calidad del cafe es muy bueno
• Pienso que el cafe el bueno. Lo que pasa les que como todo aqui en monteverde. Es muy caro para los locales. Se trata al local igual que al turista
• Es un cafe muy rico puro se sabe del maneso de desechos o yo haccu corum para iutercambios de ideas o preguntas
• Es muy bueno
Appendix 5
Question 40 Questionnaire Tourists: Comments
• Enjoyed going to the old farm & processing plant
• The guide rosa was very good
• The tour was very informative
• Smaken verschillen
• Ik vind het heerlijk
• Very reasonable prices as compared with the US coffee shops. My parents would probably enjoy the selection much more than me and if they come to costa rica i would recommend this cafe for them
• In the US it is not often possible to buy coffee from a specific producer, even in fine coffee shops, coffees are often labelled by region (Kona, Costa Rica, Kenyan, Guatemalan).
Because of this it is usually not possible to specify organic or fair trade coffee , more promotion of the quality of organic and faire trade coffee is needed
• As i am backpacking, taking with me your coffee take to much room in my bag. The possibility to order coffee from you when i am back home is superb.
• I learned yesterday that organic doesn't necessarily mean sustainable from Guillermo Vargas, May 19 2004. I now am interested in sustainable coffee more than organic.
• The questionnaire is a bit to large and the questions about "feelings" is a bit far from my bed. Success with your thesis.
• Good luck. Push export opportunities to tourists?
• Can I have Cafe Monteverde shipped to my home address?
• Staff at the coop is very pleasant and friendly
• I would suggest more obvious information on the real benefits of Cafe Monteverde on the community and its true benefits regarding the environment and how the coffee is produced in a manner that is better for the environment.
• This is really long
• Very funny
• Fair trade products are excellent. Everybody should use only fair traded goods
• Too long of a questionnaire!!
• Too long
• Wonderful tour - wonderful project1 thank you for letting us see it!
• A good questionnaire, a few grammatical errors
• I appreciate the effort that Cafe Monteverde makes to be socially aware and
environmentally active. The staff here were extremely friendly, knowledgeable and helpful.
Thank you for the great coffee and great times. Mark, canada
• You have a great coffee both here in Cafe Monteverde and also in Costa Rica in general. I appreciate this experience to taste new coffee and learn more about how it’s grown and processed. Thank you for this experience, great coffee, and for having friendly and knowledgeable workers.
• Great coffee!
• Very nice coffee. Fun to see the coffee being made and grown on the hills around here
• Very good coffee like the atmosphere of shop and seeing the roasting/bagging
• Great coffee, great service, great prices, i appreciate the samples. Thanks!
• Delicious coffee
• Great
• We don’t know if we are able to buy Cafe Monteverde in our town, but we plan to buy fair trade coffee from now on
• Very detailed survey, the tour has also definitely impacted my impression of Monteverde coffee and coffee in general in a positive way
• It has been a fun and enjoyable experience her at the cafe. I feel warm relationships with the others in the cafe (friends and working staff)
• Cafe Monteverde is excellent coffee - high quality and fairly traded. I drank it everyday while I lived here.
• Nice place here, tank you, I'm thrilled that it is fair trade
• I encourage and applaud your efforts at social environmental positive action in a business model
• Cab you purchase it in USA if so what stores carry Monteverde?
• Me gusta la idea de Cafe Monteverde pero creo que hacen el cafe demadiade al sabor americano, debe ser mas fuerte
• Thanks! I enjoyed the coffee and will consider buying it the next time i get coffee. Im happy to see positive environmental and community impacts by businesses.
• Friendly + helpful staff
• I live for coffee
• Debe servivio mas caliente - es un poco tibio. Dark roast is very good. Light roast is not my liking
• Do you export your coffee to the us
• This coffee is much better than we had in several hotels. Thanks for the explanation
• Website is great idea
• Fair trade coffee is available in Sweden, but only in special shops and it is very expensive and not always so tasty. We seldom buy it although we feel that we should support fair trade coffee.
• Bigger packets would be nice
• Debir de tener una machina espresso para sacar el sabor maxima de la café
• Q.26 as an ecologist I cannot answer this question because it does not give me a
comparison. Compared to other coffee systems, to banana plantations etc. Monteverde is a brand I see as a positive ecological move. But compared to a cloud forest any agricultural system is negative (smiling)
• We have seen a negative program on television about fair trade so I doubt them. I do support a fair trade in a liberal way.
• This is a very good questionnaire and many of the questions asked brought up good ideas and arguments. I do not know much about how coffee is grown. I do enjoy your coffee very much and is much better than what I drink in the United States
• Thank you for your generous cup of free coffee. Environmental interest is very important in the perception of a business we enjoyed our time. Do you have internet, web site or capability to ship…
• Your store is terrific. The aroma hit me when i entered. I had to get my wife so we could enjoy a cup. Thanks
• Es un cafe para la lluvia
• The cafe rainforest isn't very good but their cafetaria secure to be a better room
• Do you have a website? Can we purchase cafe online
• Market the fact that it is fair trade + helping the environment. Those are good selling points
• The man at the counter was very helpful and well informed. I am only not planning on buying the coffee because the taste is not quite to my liking
• The woman who sold the coffee is very friendly and polite and the most beautiful i have seen in Costa Rica
• The coffee machine is clean and the coffee stuff is organized
• I think coffee should be enjoyed occassinaly at spread times
• I think the question need to be more specific to obtain the specific information you are looking for. The coffee was very good
• We do not know if we can buy Cafe Monteverde in our state of Colorado. Who do you sell your coffee to?
Appendix 5 Questionnaires
• Questionnaire Locals English
• Questionnaire Locals Spanish
• SPSS data questionnaire Locals
• Description questions not in SPSS Locals
• Questionnaire Tourists English
• Questionnaire Tourists Spanish
• SPSS data questionnaire Tourists
• Description questions not in SPSS Tourists
COOPESANTA ELENA SURVEY ABOUT THE PERCEIVED QUALITY OF CAFÉ MONTEVERDE
CUSTOMER QUESTIONNAIRE 2004
In order get a better picture of the consumer market of coffee in the Monteverde Region we developed a questionnaire. We are interested in your opinions, as a member of the local community, about our coffee. When spoken about Café Monteverde we mean the Consumer Nacional. With the outcome of this questionnaire we have better insight in the perceived quality of our coffee. This questionnaire will only take you 5 -10 minutes to answer the questions. We want to assure you that all your responses are treated with strict confidence.
Thank you for taking the time to help us.
Laura Rodrigues Coopesanta Elena
Santa Elena de Monteverde Puntarenas
Monteverde
1. What is your age?
…………years 2. What is your family size?
…………persons
3. Which comparable brands of Café Monteverde do you know more?
……….
………
………
4. How many cups of coffee do you normally drink on one day?
…………cups of coffee
5. How many cups of coffee you drink on one day is Café Monteverde?
…………cups of coffee
6. In which occasions do you drink coffee?
……….
………
………
7. In which occasions do you drink Café Monteverde?
……….
………
………
The following questions are statements about which objective characteristics of coffee you think are important
8. It is important to me that I buy coffee that is Fair Trade totally agree / totally disagree 1 2 3 4 5
9. It is important to me that I buy coffee that is organic totally agree / totally disagree 1 2 3 4 5
