Financial analysis of speciality and conventional coffee production

Brazil is the world's largest producer, with an average production of 28 million bags a year over the last ten years. Around 10 per cent of the world coffee trade is made up of speciality coffees. Speciality coffee is any coffee that has some kind of differentiation, standing out in the market and leaving the commodity characteristic behind. Various authors have demonstrated the advantages of producing speciality coffee, as well as the investments required to obtain this product. However, producers generally don't know precisely whether these investments offer the desired financial return, since conventional coffee production offers lower total costs and smaller investments, and it is also known that only a portion of coffee production is classified as speciality coffee. This study therefore seeks to investigate whether the production of speciality coffee offers attractive financial returns to producers of both types of coffee in Brazil.