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An Interview with Fidel Paz Sabillón

Fidel Paz

At the end of May 2022, Marcos Iglesias and Dillon Edwards traveled to Peña Blanca to speak with Fidel Paz, founder of Beneficio San Vicente. This interview was conducted in Fidel’s office, behind the countless stacks of coffee in his mill and exporting operation, amid photographs of farmers, colleagues, and loved ones. It has been edited for length and clarity.

 

Conducted by Marcos Iglesias
Translated by Enrique Caicedo

 

Marcos

You’ve been working with Parlor for several years, so we know how well your business is doing, but we’d love to hear more about the vision behind it. Where does the San Vicente story begin?

Fidel

Yes, it’s easy to appreciate things like this when they’re already done, but it’s much more complex and interesting to learn how they were built. What you’re seeing here is my father’s dream. He made it a reality, and it’s been my main motivation to keep that dream alive. 

Marcos

Can you tell us more about your father and his motivations?

Fidel

His name was Catalicio Paz. He came from the hamlet of San Miguel in Santa Bárbara.

He was a farmer, born without any resources at all—he was only in school for three months. But he had great vision. When he started cultivating coffee, cooperatives didn’t exist in Honduras. The idea to create one came from a trip he took to Costa Rica in the fifties with the professor Pompilio Ortega, who was a leader in coffee thinking in those days.2 

Marcos

And these photos on your office walls are from those early years?

Fidel

Yes. Here’s a picture from an ICO3 meeting in Guatemala, where my father was representing Honduras. He also co-founded the country’s first coffee producers’ association, Ahprocafe.4 Here’s a photo from Costa Rica. And here’s one from when he started building the road from Pulhapanzak, in San Buenaventura, to San Vicente. Thirteen kilometers. Today it’s a state highway.

Marcos

He started building it himself?

Fidel

Yes, he built it for himself, but for the community too. For him, I think, working to represent our family was no different from representing the whole country. 

Dillon and Marcos your a farm in the early morning fog

It was the same thing with the idea of the cooperative. In many countries, coffee growers’ organizations take advantage of producers. Here they would invest the producers’ contributions in construction rather than in the producers themselves, and my father felt that was wrong. He withdrew from those organizations because of that. He always thought producers could export coffee themselves, so he set about building the infrastructure for it. The vision was to have a policy where the producer can see exactly how his coffee is being sold—including how much the exporter charges and earns.

Marcos

And you’ve devoted your life to this vision too.

Fidel

Yes. I could have done other things, but I didn’t dare to. I could only see myself working with coffee. I started working for my father when I was eight years old. My brothers worked with him too, but I’m the youngest, and when they started to leave the house I stayed. I was the one who washed the coffee, who weighed it on the farm, who spread it out on the patio. And when my father couldn’t work anymore, I kept thinking his way, and started working to achieve what he hadn’t been able to.

Marcos

How did you begin realizing that goal?

Fidel

Around 1972, when I was nineteen, a relative sent me to Germany to work with the Rothfos Corporation, the company that owned the largest exporter here in Honduras.5 I spent six months working in a factory, then went back the following year to do another six months in a laboratory. I went alone, not knowing German or English. It was a challenging experience, but I grew as a person, and I was able to save money, because Rothfos was paying me to learn by working. So instead of costing my father money, I brought him money.

Marcos

And you brought back experience.

Fidel

Correct. But shortly after that the economic recession came. I was twenty-two or twenty-three. I couldn’t continue studying and I couldn’t go to college. The most difficult years were from 1975 to 1980. My father retired due to health problems around this time, but I kept going. That’s when I started peddling coffee on the streets of Peña Blanca. I did that for twelve years. One day one of my clients showed me a room like this one—maybe twice the size—and said, “Fidel, move in here and buy from here.” I started out with one little truck, and I grew it to fourteen or fifteen over the years. In 1992 I built my own warehouse downtown, and Arturo sells fertilizer there now.6

A moisture meter and green coffee samples

Finally, in 1997 and 1998, Honduras began to grow a lot of coffee.7 Production was so great that exporters didn’t have the capacity to handle the whole harvest. I contacted an exporter that had become inactive and rented their coffee mill, with a warehouse and dryers. Having access to the mill allowed me to export independently, without relying on middlemen.

Marcos

You were foreseeing the future of your father’s dream.

Fidel

Right. At first I felt lost. I didn’t know where to sell the coffee. I was selling at a lower price because I was using the inactive exporter’s name—coffee is a business of trust, and it’s tough to break into the market if you haven’t made a name for yourself. But we had some modest success, and there was plenty of coffee until 1998, when Hurricane Mitch hit.8 It took two years to rebuild, but when we did we were able to start exporting under our own name, San Vicente.

Marcos

That’s so impressive. I’m thinking about how when a disaster occurs, like a hurricane or a pandemic, the people who are really invested in the community always find a way to move on. And how so often that becomes an opportunity for them to find their own place.

Fidel

Definitely. In my case, the opportunity was the increasing volume of coffee production and my friendship with the exporter who was closing his business.

Marcos

And thanks to your experience, you knew you had to take advantage of it.

Fidel

Yes, and to be persistent. You can’t achieve anything without effort. It’s never easy. But working with coffee is fun for me. Working on what you like is a reward, not a punishment. 

Marcos

Most businesses that open nowadays don’t last for generations, because they don’t have that great vision.

Fidel

That’s something I try to teach the younger people I work with: how to take the long view. To think of it as a marathon, but also a relay race with their families. There’s no absolute me—just an us, a joint effort and a joint benefit. That’s what we learned from my parents.

Fidel Paz at his exporting warehouse  

Marcos

What does it take to produce coffee of real quality? How has the approach changed?

Fidel

We’ve had extraordinary growth in terms of quality management. We’ve learned so much and found so many things to improve. One problem we have here is the humidity. At first, when we stored the coffee, the flavor quality would fade after export because it was hard to control for moisture. We started using plastic bags to reduce the impact of the humidity, which has helped, but it’s been a whole process. That’s very important for the quantities we’re managing now. We produce double or triple what we used to. And loss of quality is a big problem with coffee: a freshly processed coffee will taste great, but two months later the quality will degrade if it hasn’t been dried and stored properly.

Marcos

How can producers improve quality?

Fidel

It’s a question of outlook and commitment. To produce specialty coffee it’s necessary to be fully involved and hands-on. For example, producers who can consistently produce specialty coffee make the effort to separate the lots on their farms according to altitude and variety. The ones who do this type of work see results right away, fetching 25 or 30 percent more than those who are content to stick with commodity coffee standards.

Marcos

How much does it cost to produce a sack of coffee here in Santa Bárbara?

Fidel

Almost 50 percent of the coffee’s value—though that’s a misleading figure at the moment, because the producers claim all their expenses have increased. We need to reset the system again. For example, the price of fertilizer recently doubled, from 500 to 1,000 Lempiras.9 That’s a factor we couldn’t calculate until now, which is worrisome. But generally the highest cost in specialty coffee is the labor involved in pruning and handpicking, which is 35 percent more than it is for commodity coffee.10 Labor is a problem for volume growth; a farm without local pickers will have to pay more, or bring people in and take them back to the mountain each day.

A picker selects ripe coffee cherry

Many producers don’t spend enough time thinking through these financial considerations, and that can be problematic. You ask one how much coffee he thinks he’ll get this year and he’ll say, “I don't know, x quintals.”11 And how did he do in sales last year? “I don't remember.” Too few producers manage costs. Sometimes they leave that part to me as homework. 

Marcos

So what does success look like for a farm in this region?

Fidel

A farm is good if the farmer is good. Even a successful, profitable farm is useless if the administration is bad. You have to do your accounts, calculate costs, anticipate how much you’re going to sell and how much you’re going to pay and be sure that it’s going to be profitable. In the last two years we’ve been teaching foundational administration and business practices—not only to specialty producers, but to commodity producers too.

But ultimately the determining factor for price is the quality of the coffee. When people do a good job, it’s fair that they earn more. And doing good work, as I said, requires knowledge and skills, but also commitment. Those who have a little more ability learn from their own work—including their failures.

Marcos

Information can be obtained from someone with knowledge, but also by working.

Fidel

You learn by doing. And many producers have shown incredible improvement. It’s also noticeable that with major production growth, quality may start to decline—you lose control of the process. If producers know this, they know how far they can expand.

Another thing to bear in mind is that not all zones are for specialty coffee. Specialty coffee areas are already cultivated, and there’s more protection of the mountainous areas. Environment is decisive for the quality of the coffee.

Marcos

Who controls environmental regulations here?

Fidel

A state organization does, but we’ve been doing awareness work. There’s a better understanding of the significance of the environment now. For example, people used to cut down the shade trees on the mountain because it was so cold that the coffee didn't grow. But today the shade is necessary because it’s very hot. So at some point climate change may affect the quality of the coffee. Every year we have to do our own experiments, because the temperature is no longer the same, and that's crucial for us in terms of adaptation.

Marcos

How has all of this affected production over the last twenty years?

Fidel

In the area we manage, specialty coffees have increased year after year. Last year we had the highest yield, but we reached a ceiling, I think. Maybe production has gone up so much due to the volume of coffee grown, because many new producers joined the project. Not because they planted more, but because other producers who didn’t participate before are now doing specialty coffee.

Bags of coffee stacked in San Vicente's warehouse

Marcos

And has climate impacted the crops already?

Fidel

Definitely. Take the coffee berry borer beetle. Before there were none above 1,400 meters, because they need a certain temperature to live. But now we have coffee berry borers up to 1,600 meters. One year there was a major infestation—we discovered it in time, thank God. But it’s here to stay, whereas back when the weather was colder the problem didn’t exist.

Marcos

Has the weather itself changed much in the last twenty years?

Fidel

It’s much drier now. The last two years have had enough rain, but in general it’s been steadily decreasing. So have water resources: the rivers and streams get smaller every day. We just have to wait to see how far it goes. We don't know how much the temperature will rise, but there will come a time when these changes affect all of us.

Marcos

And of course there have been major hurricanes.

Fidel

It’s been terrible. One area of the mountain was totally cut off. Communication routes were closed and we spent most of the harvest transporting coffee over enormous distances on small unpaved roads. That was mostly in the commodity coffee areas—in the specialty areas access roads were damaged, but communities in the commodity coffee areas lost entire farms.

Marcos

Is there anything you can do in the future to mitigate this problem?  

Fidel

It’s complicated. It’s the institutions that should be working on that question, because producers can’t handle major problems like hurricanes or highways. Organizations like ICAFE12 use funds from coffee producers to fix roads, but prevention programs are practically impossible.

Marcos

Because there’s not enough money?

Fidel

No, because of the different types of land. For example, Iota did damage but Mitch didn’t.13 It’s difficult to anticipate where a hurricane and its impact will be concentrated. The village you see in this photo is gone now—the stones liquefied and swallowed the houses. People fled as fast as they could. It was an unbelievable mess. 

Traversing the hills of Santa Bárbara.

Marcos

What will this region look like in another twenty years?

Fidel

This area is privileged. It’s always green—the summers never dry out the grass or the environment. I believe that if we provide proper maintenance and care we’ll have good coffee for years. There’s a lot of awareness and a lot of work has been done, but it’s necessary for certain farms to stay at their current size. Farms at the highest altitudes can’t continue to expand, because we have protected areas that need to be preserved for our ecosystem to thrive.

Marcos

And what happens if more farms convert from commodity to specialty coffee? Can you continue to grow in this way?

Fidel

Yes, but the prices will change. Coffees below 85 points14 won’t be paid the same, so the work won’t be the same. It's no longer profitable.

Marcos

Why can’t producers improve the quality beyond 85 points?

Fidel

It’s the microclimate that makes the coffee good. The geography is what gives it those special flavors and aromas. You can't go elsewhere and get the same coffee.

An early morning in Peña Blanca 

Marcos

Can you think of a specific coffee that’s had a major impact on your life?

Fidel

Well, there’s the coffee that won us our first Cup of Excellence.15 We were just starting out, and one day Arturo said, “Uncle, there's a man way up there who has a coffee that I think is good—I think we can compete in the Cup of Excellence with it.” It was actually a woman named Natividad Benitez who grew it. So I bought the coffee and set it aside, and eventually we forgot about it. The building we’re in right now didn’t exist yet—we were in the other one. Then one day I remembered that we had it, and when we finally tasted it we were blown away by the quality. We couldn’t wrap our heads around it—how could this coffee have such unique flavors? We made up a funny story to explain its mysterious origins: that there was a dog who used to pee where the coffee was growing, and that the taste of the dog's piss was what won us the Cup of Excellence.

Marcos

Very special coffee!

Fidel

Very special indeed, and maybe one of the best in terms of taste. Arturo described it as a “fruit bomb,” with complex tropical flavors and a jammy body—a great representation of Santa Bárbara coffees. Personally, I’m not a fan of coffees from very high altitudes because they have higher levels of acidity; for a cup this size, my taste is for a softer coffee. But there are no bad coffees, just different coffees.

Marcos

Beautifully put! We were talking before about your father’s vision and its impact on the company so far. How do you think that vision will change in the future? Will something new, maybe something we can’t imagine yet, become the focus? Or do you think the business is solid as it is?

Fidel

I think it’s solid as it is. For me, unless something forces us to change, political or otherwise, this business will remain the same, just hopefully improve.

Marcos

Obviously this company is the collective effort of a family over three generations. At the same time, your son Benjamin has a great reputation in the United States—whenever you hear about Honduran coffee, you hear the name Benjamin Paz. What’s it like to have a son who’s so well known in the specialty coffee industry?

Fidel

It’s wonderful. He has a special way of being, a charisma. When I told him to come to the laboratory and learn to taste coffee—when I told him to get involved—he got involved 100 percent. To me that’s beautiful, because thank God, I’ve always said you don’t expect your children to be the world’s best businessmen, but you expect them to be good people. 

My dad was a fan of two things: work and honesty. And coffee is a business that still runs on honesty, on responsibility. It’s a business where you make a call and set a price and you send papers and they get signed. It’s very rewarding to me to see that keeping your word is still so important. 

Workers weigh a bag of parchment.

Marcos

I think your dad would be proud of how you’ve both carried on his vision. 

Fidel

I think so too. My family and I are doing our best to honor him. People like him never die, because they leave a legacy. They mark the way forward, the path to follow, and I believe this path has been a success. I’m proud of what we’ve achieved. I trust this next generation 100 percent, and I know they’ll follow the path as well.

But we’ve also had the support of many people, like you guys. Without people talking about our company and our work, no one would know.

Marcos

That's the purpose of this interview, to give you an opportunity to tell your story so we can continue relaying it to others, so we can keep showing the beautiful things happening in Santa Bárbara and the wonderful work you guys are doing. To conclude, how do you think Benjamin will continue the family legacy?

Fidel

I think by knowing not to try to grow too big, not to grow in a way we can't grow. In other words, avoiding the vanity and the ambition that say we should do more just because we can. Knowing that things are working well as long as we’re meeting the needs of the company and the producers, and the buyers and the people. 

It’s a bit philosophical, but I believe some wealth is intangible. There’s wealth you can’t see or feel—for example, the pleasure I get today from knowing there are so many people who trust us, and trust my children and my family. To me, that’s the greatest wealth. Money is an important part of any business, of course, but when you look at businesses that have lasted more than a generation, there has to be something else—something that motivates the company. That’s why I appreciate having all these physical reminders of my father’s vision, of how much time passed before it all became a reality. They’re reminders of the company’s future too. I believe we’re all obliged to leave a little more than we received. That’s the right thing to do, to leave a little bit more. Otherwise we don’t grow.

 

Note 2: Pompilio Ortega Hernández (1890-1959) was a Honduran agricultural engineer and author who studied Honduran agriculture and its traditions.
Note 3: International Coffee Organization.
Note 4: Ahprocafe, founded in 1967, is Honduras's largest coffee organization, with over 110,000 proucers.
Note 5: Rothfos is now part of Neumann Kaffee Gruppe, one of the world's largest coffee buyers and traders.
Note 6: Arturo Paz is Fidel's nephew and the chief agronomist at San Vicente. He also operated the celebrated specialty coffee farm La Colmena until 2021, when he sold it to his cousins Benjamin Paz and David Muñoz.
Note 7: Coffee production in Honduras grew 28 percent between the 1996-97 and 1997-98 harvests. As of this year, Honduras was the largest coffee exporter in Central America and the fifth globally.
Note 8: Hurricane Mitch, the Category 5 storm that struck Central America in 1998, is the second deadliest Atlantic hurricane on record, causing approximately seven thousand fatalities in Honduras alone. Crop exports dropped 9.4 percent in 1999, largely due to the storm.
Note 9: At publication time, $1 USD was equivalent to roughly 15 Honduran Lempiras. 
Note 10: Fidel puts the price of a one-quintal bucket of commodity coffee around 40 Lempiras, while specialty coffee will fetch 60 or 70 Lempiras.
Note 11: A quintal as used in Honduras is equivalent to about one hundred pounds of green coffee.
Note 12: An independent, producer-created organization that manages and maintains infrastructure, regulates exports and national competitions, and promotes Honduran coffee internationally.
Note 13: In 2020, Hurricanes Eta and Iota hit Honduras within two weeks of each other. Analysts estimated that their combined impact caused over $10 billion in damages. Little foreign aid was made available due to pandemic-related economic conditions. Hurricane Mitch, though it caused far greater loss of life, cost closer to $4 billion.
Note 14: The Specialty Coffee Association uses a 100-point scale. Scores above 90 points are deemed outstanding specialty coffees; above 85 points is excellent, above 80 very good. Coffees scored below 80 points are not considered specialty-grade.
Note 15: The Cup of Excellence is a coffee competition and auction that rewards exceptional coffee farmers with higher prices and international recognition. Both Arturo and Benjamin Paz have taken home the top prize in Honduras, as have many other farmers represented by San Vicente.