beanscenemag.com.au 17Emilio Lopez Diaz is a champion of El Salvador’s coffee industry.
Through Topeca Coffee Roasters, he operates a vertically integrated
company from production and milling to roasting and retailing.
I
n 2000, Emilio Lopez Diaz had a
decision to make. A recent graduate
of an engineering management
degree at the University of Portland,
Emilio could follow his original
plan to open a microbrewery in his home
country of El Salvador, or, he could join the
family coffee business.
“At one point, my family was producing
and exporting a lot of coffee. But my
mother was one of 11 and so was my
grandmother. The land had been divided
to the point where we only owned 25
hectares,” Emilio tells BeanScene.
“About nine months before I graduated,
my dad visited me. He said we needed to
either sell or grow my mother’s business.
The coffee price was too low, and to
continue, we would need to invest in
becoming millers or exporters to add value
to the raw product.”
Emilio had his father send him 150
pounds of green coffee, the least he could
send via courier, so he could experiment
with roasting and selling it while in
the United States.
“Before I graduated, I remember
holding a program in each hand, one for
the American Brewers Guild, the other
for the Roasters Guild of the Specialty
Coffee Association of America. I chose
the Roasters Guild and joined them that
year,” Emilio says.
Emilio learnt to roast through the guild,
of which he became Chair in 2017, as well
as through networking and connecting
with other roasters. He brought this
knowledge with him when he returned
home after graduating.
“When I came back to El Salvador, I
went online and searched for the company
that could sell me the smallest and most
affordable equipment for depulping,
milling, hulling, and roasting I could do
business with,” Emilio says.
“I found a company called Pinhalense, a
Brazilian milling manufacturer of machines
that had that option. In my first year, I
only produced 100 bags of green coffee.
No-one else back then had machinery
capable of processing such a small amount
of coffee per hour or harvest. We’ve since
grown, but from the very start, we’vedone it all ourselves. It’s been a vertically
integrated company.”
Emilio sells his roasted coffee under
the brand Topeca Coffee Roasters in El
Salvador and the US. He now distributes
Pinhalense equipment in El Salvador, owns
a farm in Brazil, where he also manages
exporting operations, and sells green coffee
to buyers from more than 40 countries.
“A big challenge for most farmers is
to find the right home for their coffees,”
Emilio says.
“In my case, I have a lot of options. I
don’t sell a single bean to someone I don’t
know. I have personally visited almost
every single roastery, know the machine,
the roaster, and have been to the coffee
shops and met the baristas. We don’t roast
all of our coffee, and we have many other
customers who buy our green coffee.
Diversifying risk is the main thing I’ve
accomplished by being so spread out.”
It’s this presence in multiple facets of
the coffee industry that gives Emilio an
enhanced appreciation of the issues faced
at every level of the supply chain. Emilio
shared this perspective when he toured
Australia for Toby’s Estate’s Knowledge
Talks series in July 2019.
“I want to raise awareness of the realities
actors across the chain face on a daily
basis, not just what I and other farmers
go through at origin, but the roaster and
retailer too,” Emilio says.
“The challenges Australian cafés face
might be different to the US or Italy. For
example, by law, Italian cafés can’t sell an
espresso for more than €1. Many coffee
shops are struggling because of this.”
In the US, Emilio says many café
owners struggle to make a profit unless they
are able to open multiple outlets.
“It’s almost impossible to be competitiveor profitable in only one location. You need
to have five or more shops to compete.
Otherwise, you’re just one more shop and
someone can take over your business,”
Emilio says.
“A single café might succeed with great
food or a point of difference, but for the
most part, business is about real estate
and financing.”
For roasters around the world, Emilio
believes competition and differentiation
have become the biggest challenges.
“Countries like Australia – with only a
few major cities – are completely saturated.
How many Australian roasters have opened
up shop in other countries?” he asks.
“They go to the US, Europe, or Asia to
expand. However, Aussies do coffee in a
different way to everywhere else, so it has
worked in many other countries.”
While these issues are hitting the
consumption side of coffee, Emilio says it’s
the problems at origin that require urgent
action. This includes commodity coffee
prices declining below many farmers’
production costs.
“People selling specialty get a better
price, but 80 per cent of world’s coffee
supply depends on the C market,” he says.
“I wish all coffee was specialty, but
that’s not the case and we need to change
its perception. With wine, for example,
you have table wine, reserve, and the elite.
There’s a bit of everything. Wine has been
de-commodified, except for that much
lower quality. We have not been able to do
that for coffee yet.”
Individual producing countries
also face problems of their own. In El
Salvador, Emilio says the country’s
coffee industry is still struggling to recover
from a decline in production that started
in the 1980s.From seed to cup
KNOWLEDGE LEADER
“COFFEE ON ONE SIDE OF THE COUNTRY
IS COMPLETELY DIFFERENT TO THE OTHER.
WE’RE PUTTING EL SALVADOR OUT THERE
AND MAKING IT WORK.”
beanscenemag.com.au 17Emilio Lopez Diaz is a champion of El Salvador’s coffee industry.
Through Topeca Coffee Roasters, he operates a vertically integrated
company from production and milling to roasting and retailing.
I
n 2000,EmilioLopezDiazhada
decisionto make.A recentgraduate
of anengineeringmanagement
degreeat theUniversityof Portland,
Emiliocouldfollowhisoriginal
planto opena microbreweryin hishome
countryof ElSalvador,or,hecouldjointhe
familycoffeebusiness.
“Atonepoint,myfamilywasproducing
andexportinga lotof coffee.Butmy
motherwasoneof 11andsowasmy
grandmother.Thelandhadbeendivided
to thepointwhereweonlyowned 25
hectares,”EmiliotellsBeanScene.
“AboutninemonthsbeforeI graduated,
mydadvisitedme.Hesaidweneededto
eithersellorgrowmymother’sbusiness.
Thecoffeepricewastoolow,andto
continue,wewouldneedto investin
becomingmillersorexportersto addvalue
to therawproduct.”
Emiliohadhisfathersendhim 150
poundsof greencoffee,theleasthecould
sendviacourier,sohecouldexperiment
withroastingandsellingit whilein
theUnitedStates.
“BeforeI graduated,I remember
holdinga programin eachhand,onefor
theAmericanBrewersGuild,theother
fortheRoastersGuildof theSpecialty
CoffeeAssociationof America.I chose
theRoastersGuildandjoinedthemthat
year,”Emiliosays.
Emiliolearntto roastthroughtheguild,
of whichhebecameChairin 2017,aswell
asthroughnetworkingandconnecting
withotherroasters.Hebroughtthis
knowledgewithhimwhenhereturned
homeaftergraduating.
“WhenI camebackto ElSalvador,I
wentonlineandsearchedforthecompany
thatcouldsellmethesmallestandmost
affordableequipmentfordepulping,
milling,hulling,androastingI coulddo
businesswith,”Emiliosays.
“I founda companycalledPinhalense,a
Brazilianmillingmanufacturerof machines
thathadthatoption.Inmyfirstyear,I
onlyproduced 100 bagsof greencoffee.
No-oneelsebackthenhadmachinery
capableof processingsucha smallamount
of coffeeperhourorharvest.We’vesince
grown, but from the very start, we’ve
doneit allourselves.It’sbeena vertically
integratedcompany.”
Emiliosellshisroastedcoffeeunder
thebrandTopecaCoffeeRoastersin El
SalvadorandtheUS.Henowdistributes
Pinhalenseequipmentin ElSalvador,owns
a farmin Brazil,wherehealsomanages
exportingoperations,andsellsgreencoffee
to buyersfrommorethan 40 countries.
“Abigchallengeformostfarmersis
to findtherighthomefortheircoffees,”
Emiliosays.
“Inmycase,I havea lotof options.I
don’tsella singlebeanto someoneI don’t
know.I havepersonallyvisitedalmost
everysingleroastery,knowthemachine,
theroaster,andhavebeento thecoffee
shopsandmetthebaristas.Wedon’troast
allof ourcoffee,andwehavemanyother
customerswhobuyourgreencoffee.
Diversifyingriskis themainthingI’ve
accomplishedbybeingsospreadout.”
It’sthispresencein multiplefacetsof
thecoffeeindustrythatgivesEmilioan
enhancedappreciationof theissuesfaced
at everylevelof thesupplychain.Emilio
sharedthisperspectivewhenhetoured
AustraliaforToby’sEstate’sKnowledge
Talksseriesin July2019.
“I wantto raiseawarenessof therealities
actorsacrossthechainfaceona daily
basis,notjustwhatI andotherfarmers
gothroughat origin,buttheroasterand
retailertoo,”Emiliosays.
“ThechallengesAustraliancafésface
mightbedifferentto theUSorItaly.For
example,bylaw,Italiancaféscan’tsellan
espressoformorethan€1. Manycoffee
shopsarestrugglingbecauseof this.”
IntheUS,Emiliosaysmanycafé
ownersstruggleto makea profitunlessthey
areableto openmultipleoutlets.
“It’s almost impossible to be competitiveorprofitablein onlyonelocation.Youneed
to havefiveormoreshopsto compete.
Otherwise,you’rejustonemoreshopand
someonecantakeoveryourbusiness,”
Emiliosays.
“Asinglecafémightsucceedwithgreat
foodora pointof difference,butforthe
mostpart,businessis aboutrealestate
andfinancing.”
Forroastersaroundtheworld,Emilio
believescompetitionanddifferentiation
havebecomethebiggestchallenges.
“CountrieslikeAustralia– withonlya
fewmajorcities– arecompletelysaturated.
HowmanyAustralianroastershaveopened
upshopin othercountries?”heasks.
“Theygoto theUS,Europe,orAsiato
expand.However,Aussiesdocoffeein a
differentwayto everywhereelse,soit has
workedin manyothercountries.”
Whiletheseissuesarehittingthe
consumptionsideof coffee,Emiliosaysit’s
theproblemsat originthatrequireurgent
action.Thisincludescommoditycoffee
pricesdecliningbelowmanyfarmers’
productioncosts.
“Peoplesellingspecialtygeta better
price,but 80 percentof world’scoffee
supplydependsontheC market,”hesays.
“I wishallcoffeewasspecialty,but
that’snotthecaseandweneedto change
itsperception.Withwine,forexample,
youhavetablewine,reserve,andtheelite.
There’sa bitof everything.Winehasbeen
de-commodified,exceptforthatmuch
lowerquality.Wehavenotbeenableto do
thatforcoffeeyet.”
Individualproducingcountries
alsofaceproblemsof theirown.InEl
Salvador,Emiliosaysthecountry’s
coffeeindustryis stillstrugglingto recover
froma declineinproduction that started
inthe 1980s.From seed to cup
KNOWLEDGE LEADER
“COFFEE ON ONE SIDE OF THE COUNTRY
IS COMPLETELY DIFFERENT TO THE OTHER.
WE’RE PUTTING EL SALVADOR OUT THERE
AND MAKING IT WORK.”