From Bean to Cup: StoneX Global Coffee

Video transcript

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Thank you. So we're in Guatemala City, getting ready to get into the truck and drive up five hours to our coffee farm, Finca Santa Paula, in the region of Coban.

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Four generations ago, it started in Guatemala from our father's side and in El Salvador from our mother's side, and we've basically grown up on the farms since our grandparents. In the last 10 years, I've invested in farms in both countries.

I always kind of had the sense that I wanted to go back to the farms, but we went to the U.S. and ended up taking agricultural economics and agronomy as a major at the university, thinking that I was going to go back. So, it took a few more years for us to get back, but yeah, it was always in me that I wanted to be in coffee. The alternative to that in Miami was to trade coffee futures on the exchanges. 

Arriving in Santa Paula at 6:30 in the morning, typical weather—misty—this is what gives us the characteristics of the coffee. We're going to pull up here at the wet mill to get the day's activities started. 

Growing up in a coffee family, having the experiences when I was a little kid, going with my dad to his farms, I think I was born with it. The thing is, it doesn't get out of your blood. The reason why I ended up going from school to trading coffee futures and managing risk is what I kind of understood, and 30 years later, that's what I'm still doing. So, I really love being in coffee. 

This tree is looking really healthy; it's already been picked a few times this year. We still have immature green cherries that are ready to go, but the interesting thing about this particular tree is that it's ready for next year. All of this is going to produce next year, and every branch as it's coming out is just showing us that the farm has future and is well-fed. 

As we move through the value chain, and I visit a coffee plantation anywhere in the world, at least from the experiences I get at my own farms and the tradition of the four generations, I know what I'm looking at. I'm more educated than what's called the competition. I can bring that knowledge up to a roaster or an importer to try to discover new consumption trends. It is much more difficult understanding consumption than it is production. In production, we come out here, see these fields, and if they look good, we know there's going to be something back there. That's gorgeous, look at that. But then when we connect production and consumption, we can add value to our customers in a greater detail. 

In my case, it was a little bit different. I did follow him to the same university, but I was more intrigued by finance and all things having to do with markets. So, I technically haven't stayed on the farm level, but I really enjoy everything that we learned through these generations, in the things that we learned way back when as children at the farms. It was just an amazing experience to have been able to have that background. 

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Here are beans that you wouldn't want in there. These beans are too green and would make the machine get stuck, so they have to pull all these out. It's not that they picked them incorrectly; it's that when they're picking so fast, some of these get in the way. So when they get here, the process is to take them out and make sure that only the cleanest berries go into the system. 

We have a team right now, boots on the ground, in Brazil. They're doing similar things to what we're doing here, but they're actually doing a macro view with a tour of the Brazilian robusta area and the arabica area, driving thousands of kilometers. They're coming back and bringing all that knowledge. Just imagine multiplying this one farm by thousands—that allows us to have so much more information. We then take that information from the market intelligence teams and transfer it over to the brokers. The brokers then use their knowledge of the money flow going across their desks, and when you put it all together, there’s just nothing out there with the market depth and breadth we have. I try to be on the farm on average every six weeks, but that's just these farms. As part of my job, I’m in farms or roasting operations or some coffee business twice a month at least. When I go down to Brazil, I'm in Brazil for at least 10 days, driving around. Our trips as a company are between four to six thousand kilometers, so we really understand and learn from them to help our customers around the world. 

The guys are bringing in the coffee from the washing from yesterday. This is a greenhouse that'll be around 85 degrees, and this coffee is going to sit here for about five to six days. If it stays misty like it is now, it can extend to about 12 days. They’re basically just flipping it over, turning it over, so we get the same temperature on all the coffee itself. 

We have an office in Miami that oversees all of Latin America except Brazil, then we have an office in Brazil that takes care of the largest coffee-producing country in the world. Out of London, we look at Europe and Africa, and now with the new regulations out of Singapore, we have people there in touch with all of Asia, which is also a very important producer in the world. All those coffees are going to come up to the consuming countries. Consumption is more difficult to identify, but then we go to the importers, travel, and visit roasters to see how their trends are evolving—what new trends are around, what new qualities of coffee are being demanded by the marketplace. When you put those two together, that is basically the whole value chain, and then we can make a difference for our customers in the big picture. 

So we're now in the finished product warehouse, getting ready to send this out to our dry mill, which is a friend of ours out in Antigua. They’ll handle that for us to prepare for export. 

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Working with a mill owner, specifically with someone trusted for a long time, means we can sit here and, because of the size of the operation, talk about the qualities of what is looking good for that particular season. He’s going to have coffees in this mill of every single process. He’ll have arabicas, high-end coffees, specialty coffees, robustas, and natural processes like the ones we've seen today. So, we can basically get a snapshot of the entire country’s quality and volumes because he's in tune with not only a few producers but the whole country itself. All this information we get from someone like Mauricio allows us to manage the risk and talk to a buyer or a roaster outside of the producing countries to establish what coffees they’ll use in a particular blend. 

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While I may have a finance degree, I think that the process of learning from the land and everything it has to offer and working with all these different people allows me to analyze a product in a different way. It doesn't matter if it's coffee, cocoa, sugar, metals, or even currencies; the fact that you already know what people go through—the processes, the difficulty in creating just the base commodity that goes into other things like candy and converting grains into ethanol—is a huge step up. You don't learn that at school; it's something you learn hands-on with the people from the land so you can bring it all together. 

Our customers benefit from knowing that we are out here in the fields, ours or our other customers’, but at the end of the day, they realize that we understand what everybody else is going through. Having that ability to talk about something from the heart is what our customers really appreciate, and that is why they are with us. 

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