#29 The Exchange: Speaking of Origin with Byron Holcomb in Guatemala

The Exchange Green Coffee Podcast Season 3 Episode 4
Posted in: Relationships
By Olam Specialty Coffee
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#29 The Exchange: Speaking of Origin with Byron Holcomb in Guatemala

#29 The Exchange: Speaking of Origin with Byron Holcomb in Guatemala

Byron Holcomb, specialty coffee manager in Guatemala joins us to talk about coffee origin issues and what makes a good green coffee buyer.

Mike: [00:00:17] Welcome to Season 3 Episode 4 of The Exchange, a coffee podcast where coffee people talk to coffee people about coffee and/or things coffee adjacent. I'm Mike Ferguson. For this episode, we'll be talking about coffee origin issues. Note that our guest is calling all the way from Guatemala and at times you can hear the gremlins playing jump rope with the telephone lines. So I apologize if the sound quality is a little challenging here and there. Today, our guest is...


Byron: [00:00:45] Byron Holcomb. My first job in coffee was that of a Peace Corps volunteer in the Dominican Republic. I was there for two years working in a remote community called Los Frios. From there I came back to the US where I kind of realized that I wanted to work in coffee as a career, and so I got a job at Batdorf & Bronson sweeping the floor. It was offered to me as a production assistant. Later, work in retail. Later became a roasted bean sales rep for Counterculture coffee. And then from there, I went on to do some consulting for a little while. And in 2007, I purchased my own little coffee farm in the Dominican Republic, five hectares where I was a Peace Corps volunteer. And so I knew the community. I knew the region and wanted to bring specialty coffee to that region. We kind of kept it going as a cell phone farmer from the US. I learned a lot about processing through that experience. And then I became a coffee buyer at Dallas Brothers Coffee in New York City from 2010 to 2013. In 2013, I was given the opportunity to move to Brazil and run two medium-sized specialty farms for multinationals. That company today is known as Nobletree Coffee in New York City. And then in 2019, I moved to become the regional specialty manager for Olam in Guatemala. I'm based in Guatemala, and I work with a few different origins that we have operations in, like Mexico, Honduras, Peru, and Colombia to support the specialty business.


Mike: [00:02:29] And that's what you're doing now.


Byron: [00:02:31] And that's what I do now. Yeah. I'm currently in Guatemala City.


Mike: [00:02:35] And so how long? How long in coffee total.


Byron: [00:02:37] So if you count my Peace Corps years when I did work with agroforestry stuff and tree nurseries with avocado and coffee and lime, that was 2003 and so 2003 until now. So I guess that's quite a few years.


Mike: [00:02:52] Coming up on 20.


Byron: [00:02:53] That's crazy.


Mike: [00:02:54] So in your current role, just to get some idea of what you do, what's the day in the life like for you these days?


Byron: [00:03:01] It's nice because every day is different. Usually, I get up pretty early because my daughter goes to school at 6:30, so we have to get her on the bus. But from there it's usually a combination of either field trips or days in the office with lots of meetings and follow-ups and where I kind of have two focuses. One is, of course, trading coffee. So if Todd Mackey calls me, and says, "Hey, Byron, I want a container of Jabiru," or, "Hey, what's up in Mexico right now? I want this kind of supply." And so there's coffee trading. So that's kind of a constant back and forth negotiating with traders and farmers. And then the other part is kind of more the administrative side of managing operations and different origins as well as Guatemala. And so that's where you get lots of meetings and lots of spreadsheets and lots of reports to review. There's definitely time in the field, and that's always nice to go out and visit farms and visit our own cherry mill in Ayarza and visit our operations in Huehuetenango. Not every day, but definitely part of what I do. And then outside of work, I ride my bike a lot and my wife and daughter are here and we have pretty a normal family life with friends.


Mike: [00:04:13] And yeah, there are some things that you get to do that might be unique compared to other specialty coffee managers. There are some things around innovation in processing. Can you talk about that a little bit?


Byron: [00:04:26] Sure. And with some of the kind of the approach from Olam to really try to find opportunities for adding flavor, for adding value to a coffee, we've done a lot with innovation, and so we have this incredible food scientist named Siva. And he and I have collaborated quite a bit to create the processing pdf, the flowchart that classifies all the different types of processing into one document. In Mexico, we've done a starter culture, and we've improved cup quality of both washed and natural process coffees. Those are really exciting because you're taking a pretty normal coffee, kind of a normal SHG Mexico, and then you've made it a really kind of fantastic specialty offer. Also in Peru, we're working on cascara. And so some of that is starting to yield fruit. As you could say. Those products are coming to market now as well. And then here in Guatemala, I wouldn't... You could call it innovation, but when I first came here in 2019, when we saw that we had a cherry mill and we wanted to do some specialty processes, we started doing Naturals and Honeys, and now we're doing carbonic maceration here in Guatemala. And, you know, the farmers and the people around me said, "You can't do that. This is Guatemala. That process doesn't work." And then, you know, three or four years later, we're selling a couple of containers of it and it's really good coffee and it's working. And so innovation has been kind of for me, I would almost call it a passion project. I would do that if it wasn't even part of my job because it's just really exciting to add value and add flavor to coffee.


Mike: [00:06:16] Some of our listeners are new to coffee, just starting out. Could you explain what cascara is?


Byron: [00:06:22] Sure. Cascara is when you take a coffee cherry, as you know, the cherry on a tree, the bean is inside it. And so when you de pulp that you've removed the skin and a little bit of fruit kind of goes with the skin when we de pulp it to make a washed coffee. And so when you separate that bean from the cherry skin, that cherry skin in Spanish is called cascara. And so that skin or peel, when you dry it properly, you can make tea out of it. And that's actually kind of one of the original coffee products from Yemen is they actually... And I think today if I'm not mistaken, they call it... I'm not exactly sure the name, but I still drink it. And it's kind of a tannic, caffeinated tea beverage that you can make from coffee that's not coffee.


Mike: [00:07:15] What are some of the other things we're doing with the cascara? I know tea is sort of the traditional use.


Byron: [00:07:22] There's tea, there's cascara flower. There are other kinds of energetic extracts from it. I mean, one of the especially for those people who are new to coffee caffeine is we, of course, in small doses, drink it and enjoy the benefits of being able to wake up in the morning. But for an insect, that's a pretty kind of bitter poison. And so I think there's from that perspective, the whole coffee tree has a lot of potential. I mean, you can make tea out of the leaves. I remember my coffee farmer friends in the Dominican Republic when they would tell me they would go out and travel to visit their farm and they would forget the coffee. They would actually make coffee tea out of the leaves of the tree so they wouldn't have a headache in the morning.


Mike: [00:08:12] It's exciting because just in terms of net waste and finding uses for the cascara cuts down so much.


Byron: [00:08:20] Absolutely. Absolutely. And also, I mean, if you look at the carbon footprint of coffee, a large percentage of that carbon footprint, probably 30%, maybe more, is actually from the crop residue management. And so you're managing your waste products, your wastewater, your cascara. So if we can find uses for that, it has kind of an amplifying effect in the sense that you decrease the carbon footprint of the coffee, you've added value to that coffee, and you've also decreased the waste.


Mike: [00:08:53] So bigger picture. First, in Guatemala, which is your primary concern, you're involved with other origins as well. What are some of the biggest challenges that you're seeing for Guatemala specifically, which is a favorite specialty origin for a lot of roasters, but other origins as well in general throughout Central and South America? And then some of the success stories, what things are working right now?


Byron: [00:09:20] The biggest concern or biggest challenge you could say that both Guatemala and especially Guatemala and Honduras are facing is basically migration. There are fewer pickers and coffee is incredibly labor-intensive. It's not the kind of thing where you visit the farm a couple of times a year and you go in there and pick it. No, it's like you have to do the pruning. You have to do the weeding, you have to fertilize, you have to pick. And the biggest impact that we see during the crop year or the crop cycle is during harvest. You need a ton of pickers, like lots and lots and lots of people to pick coffee well, and this last crop, what we've seen is that there are fewer pickers. A lot of people are just not there. And so the farm owners are having to do more with fewer people. I've heard of coffee farms not being even able to finish their harvest because they just couldn't get people to the trees in time. That's a pretty, pretty big challenge. I mean, the other challenge that I hear and see in the field is just fertilizer costs increase. It's gone up 100%. It's twofold. So, again, coffee is an agricultural crop. No food, no harvest. And so if you really start to pull back on your fertilizer applications because it's so much more expensive now, you might not see it immediately, but over the next couple of years, you'll see a pretty drastic decrease in your production. So those are the two kinds of... It's not a perfect storm quite yet, but it's getting there. Lack of labor and fertilizer cost increase are some of the those are the biggest cost elements in your cost of production. It's tough. These are definitely choppy waters, I would say.


Mike: [00:11:08] Sort of on the other side of the coin, success stories, maybe in the midst of all these challenges.


Byron: [00:11:15] Well, sure. I think some of the success stories are things like on the other side of that labor equation, if you look at who is now running the farms, a lot of these are women. Women who have their husbands have left and gone to the US and the women are there producing coffee and they're part of the program called Cafe Delas. So this is a regional LatAm product that started in Brazil, and now we've brought it to the whole region. And so we have women producers who are producing fine coffee, receiving trainings from us, and then some of the best lots of those are being sold to people like you in the US and others that are keen to support the program. And so that's definitely, I think, a huge success story. The other is some of these kind of digital initiatives that we've been rolling out, especially in Guatemala called Olam Direct, which is where we're able to have full farmer traceability in regions where that's usually pretty difficult. And so if you look at a region like Huehuetenango with a lot of smallholders selling in dry parchment, it's hard to find really fantastic lots that are farmer traceable. And yet we're able to offer tiny lots like the Jorge Luis Sanchez lot that we just sold to your team, Mike. It's a beautiful coffee that comes from a small region called Santa Barbara in Huehuetenango. It's not very well known. He has this incredible system where he raises like he produces peach as kind of a shade tree and then coffee below it. And so he's always harvesting one or the other. And it's through programs like Olam Direct that we can discover these kind of these micro-lots that are both really tasty and really exciting.


Mike: [00:12:53] Yeah. I'm fascinated by Olam Direct. Can you talk about what Olam Direct looks like on the ground just logistically and in very practical terms, what that program looks like?


Byron: [00:13:03] For a farmer to have their needs when the harvest comes in, they've been spending money and investing in their crop the whole year and maybe it's not their only product. Maybe they have broccoli or cabbage, especially in Huehue, there are regions the farmers can do both like a cabbage or broccoli or sweet peas or snow peas and coffee. But the coffee crop is invested in all year long and then the harvest comes in and they need to sell it. You want a healthy market. You want the farmer to have options, but you also want the farmer to have a certain level of market intelligence. And so that market intelligence comes from a real price, from a real buyer, not just these intermediaries who happen to have a pickup truck and are paying the same price for different qualities and trying to blend coffee to make their money. With Olam Direct, it's a simple system. And so we have small farmers who are like leaders in their communities buying coffee from their neighbors. And it's completely price transparent. And I think for me, that's one of the most powerful elements. So the small farmer, who is this guy's neighbor, gets to see the price as well as the guy who's buying the coffee. So he's kind of like our mini kind of receiving agent. So he'll receive the coffee in his house when he has, I don't know, a truckload or a pickup load, he'll deliver it to us. We double-check the quality and we provide the capital, we provide the digital infrastructure, and we provide the tools so that farmer who is receiving the coffee, we call him the farmer leader, actually does the analysis on the coffee, and if the coffee is better than expected, then the farmer immediately gets a premium paid to him or her. And so it's an immediate feedback loop. It's farmer prices that are real because I think we spend a lot of time in origin and you tell a farmer like, "Hey, the C market is $2.30" He says, "What does that mean to me? I don't buy in dollars. I buy my food in... Colombian pesos or Mexican pesos." So he needs to know what that's relevant to him. He doesn't sell something to the board in New York. So it's a C market plus a differential plus quality involved. And so when he receives every single morning a price for his coffee or her coffee, that's really empowering. It's like, "Okay, I like the price today. I'll seel." Or "I don't like the price today. I'm going to wait." That's really cool.


Mike: [00:15:39] At the level of the farmer that transparency happens with smartphones, right?


Byron: [00:15:43] Correct. But it doesn't have to be a smartphone. Like the farmer leader has to have a smartphone. Because you have to have the Olam Direct app. And he has to upload all of the details of the farmer of the quality. But the farmer, the term here we use for the little cell phones, like a little old Nokia that are not smartphones, they call them frijolitos, which means like little beans because they look like little beans. And so those phones receive text messages all over the country. And so we send out thousands of text messages a day during harvest, giving prices out to everybody. I think that's a pretty... So you don't have to have a smartphone.


Mike: [00:16:24] Right. Sort of beyond coffee, coffee quality. What are some of the origin issues that you're either observing or involved with that don't necessarily have anything to do directly with the physical coffee itself, but you and/or us as an organization are involved with?


Byron: [00:16:40] Sure. I get very involved in sustainability efforts. In Guatemala, I'm heavily involved with a few different projects. One is the reduction of carbon footprint of the coffee through doing soil analyses and providing fertilizer to farmers. There's a water reduction project with larger farmers to reduce the water consumption in their wet mill, where we've shown up to like 80% reduction in the water usage, which is pretty significant. And we also have some very large kinds of multi-year projects. One of them is called MOCCA, which is a combination of funding from the USDA and TechnoServe and MOCCA. And we're one of their bigger partners here in Guatemala in Huehuetenango, providing training to over almost 5,000 farmers in a three-year cycle. And so it's like training literally from like how you plant the seed, to how you pick the coffee, to how you wash the coffee, to how you treat your farm like a little business. How do you prune the coffee when that time comes? That's pretty powerful to see when you have 18 agronomists in the field every single day giving out trainings, and the amount of trainings and support we can give to farmers is pretty incredible. And then there's also a lot of small projects that I end up doing through support from some of our specialty offices, like the ones in Europe, like you guys in the US. We've done some really cool projects, lots of small pilots, I would say. You know, sometimes that means a methanogenic processing bladder to produce methane and also process some of the wastewater in our cherry mill, which has been very successful. We have done water filter distribution and at a ta plan for that coffee Chochajau, which the US team sells quite a bit of. We were able to support that community and provide some water filters and also saplings. So we bought the seeds and we bought the bags and then they did the manual labor on kind of filling the bags and preparing the saplings. There are just lots of these really small, very cool projects that we're using to try to have a very targeted impact. On Friday, we're going to a school in Ayarza, near our cherry mill, where we're inaugurating a kitchen. So this school had expressed the need to us that they want a better kitchen, because with 330 students and a tiny little footprint, I mean, this kitchen was like, there's no way you could prepare food for the 330 students in this kitchen. And so they asked for... They made a budget. The fathers, the parents of the kids did all the labor, 100% of the labor, all of the cement mixing, the pouring, the tying up the rebar, everything. And then we had a roaster partner who wanted to fund it. And so he supported the kitchen. And so on Friday, they have invited us to go have the first meal in the kitchen. And we're providing a much better environment for these kids to have good food. And I'm just super cool. So I get, those for me, like some of these different passion projects that have a very targeted impact and sustainability. But we also have a huge project, like I said, a three-year program with MOCCA.


Mike: [00:20:10] A lot of our listeners are, as I said, new coffee buyers. A lot of them have never been to Origin but hope to go one day. What's some advice you have to a green coffee buyer/roaster who's on their first trip to Origin?


Byron: [00:20:24] Great question. And honestly, I've had a lot of visitors over the years in Origin, between my time in Brazil... I was a coffee buyer, so I've been kind of that coffee buyer visiting Origin and also here in Guatemala and in other countries. My advice for the first-time buyer is like, you are there to learn, you are there not to show what you know, but you're there to understand that coffee in that context. Every coffee origin is its own island. I like to say its own island and when I say that I mean it's, it's its own language, in terms of how they talk about coffee. It's its own challenges in terms of labor, in terms of what are the different diseases that are affecting the coffee, the climate, and how that coffee is traded. And so, I mean, you're there to try to understand that coffee in that context. And you can only do that if you show up and start asking a lot of questions and questions that you probably know the answer to. I always tell first-time buyers, I'm like, "Yeah, you know what fermented coffee is, but ask them how they ferment. Ask them how they dry their coffee. Yeah, you can see the coffee on the patio, but ask them what is their process? How do they wash the coffee? How do they get it clean? How do they transport it? Is it a mule? Is it a truck? Is it on their back?" I mean, we've seen everything. Sometimes it's a tractor, sometimes it's a mule. Sometimes it's on somebody's back, sometimes it's on a motorcycle. I mean, you know, coffee moves in all kinds of ways. So as a first-time buyer, it's really important to ask a ton of questions. You're not there to tell a farmer how to farm coffee. You're there to ask those questions and build that relationship.


Mike: [00:22:11] Yeah. I think whether it's your first time in Origin or your 15th time or your 50th time, you can't lose by approaching that trip with a beginner's mind.


Byron: [00:22:19] I completely agree.


Mike: [00:22:20] You've been around and observing the coffee industry now for almost 20 years. When it comes to green coffee buyers, what are some of the things that successful green coffee buyers have in common?


Byron: [00:22:33] Good question. I mean, how do you define a successful green coffee buyer? That's a great question. I think what I see in common in the companies and in the green buyers that I've met that kind of impress me, or I can see that the company has been around for as long as I have in coffee or something that they're all about the numbers. They know exactly how many bags of what quality they need to buy and they're very disciplined. I think part one is they know their numbers. Part two is they're disciplined in their buying. It's like, "Oh, I need to buy a microlot. Oh, this microlot is 15 bags. Oh, it's beautiful. I love it." But you only need ten. Don't buy 15. And so you have to have that discipline to be like, you know, it's not a microlot when it's been sitting in my inventory for two years because I couldn't sell it. So I didn't need to buy ten. And so it's like that discipline and knowing your numbers is what I see with separating some of these more successful companies and green buyers than the people who are kind of maybe not quite as number savvy and they just show up and kind of follow their heart because it's a business at the end of the day. You've got to know your numbers.


Mike: [00:23:56] Yeah, I not to answer my own question, but the most successful green buyers that I know are just as comfortable with a spreadsheet as they are at the cupping table.


Byron: [00:24:06] Absolutely.


Mike: [00:24:07] The other thing that I tend to find is when green coffee is pulling up to the dock, no matter how long they've been a buyer or roaster, they're still excited to go meet that coffee on the dock. If you're so burnt out that you're not interested in what's coming in, it might be time to refresh.


Byron: [00:24:29] Yes. Yeah. I mean, any kind of business, like any kind of business, and I think coffee, in particular, it's a marathon. Generally speaking, you can see like three or four years of bad years with a farmer with a low seed market. And now you're seeing better years for the farmer with a higher seed market, of course, challenges of labor and fertilizer. But these are hard years for a roaster. I mean, I remember in 2010 when I became a coffee buyer, the first purchase I made was a C market level of $1.68. And then the market rallied to $2.80 to $2.90. It even broke $3. And when you're a roaster and you're looking at your numbers and your spreadsheet, you're like, "Oh my gosh, I don't know if we can make it." And so again, that's just like you said, you've got to be disciplined, but you've also got to keep the... I mean, it's a meaningful business. I mean, you're dealing with some of the most remote and sometimes even the poorest and difficult places to reach in the world. And you're able to serve their product. That's super cool.


Mike: [00:25:28] Okay. So as we're coming to a close, my last question is, if you could go back in time to 2003 and talk to Byron who's just started, was it sweeping the floor at Batdorf & Bronson, let's say? What would be your advice to that, Byron?


Byron: [00:25:48] I don't know. That's a really good question. I hate to go back and repeat what I just said. But I think it's, again, kind of a focus on the numbers. And I think the only other thing I would kind of focus on, and this might sound kind of dry and stale, but the focus on the sales. I mean, really, what's going to keep any kind of business going is focusing on the sales. And I think when I go when I look back at my roster days and I see that we have the days that you're waking up at 4:30 in the morning and you're getting to the roastery at 5:30 and you're weighing green and roasting 18, 20, 25 batches, like, okay, you're using the capacity in your roaster, but if you all of a sudden start having days where you're like, "Okay, I can roll in at seven. I don't have to do very many roasts today." You need to start looking at your sales because it's like I mean, in a lot of ways it's going to be easy to buy coffee. You can get coffee in your warehouse, but getting it out is the point. When you can turn it over and give your employees health insurance and support them and support your farmers more, that's not coming from really the buying side. Of course, that's important, but you've got to sell it. And I would say I would go back to the Byron 20 years ago and say, "Hey, man, you need to know how to sell." And that's really what keeps everything afloat. It's not the cost going out. It's the invoices that you're sending out and collecting.


Mike: [00:27:22] Yeah. Coffee's like anything else. Production minus sales equals scrap.


Byron: [00:27:27] {laughter} Exactly. And there's a lot of scrap in coffee. Roasters that are committed to quality... I mean, how many hundreds of pounds are they turning out at the end of on Sunday when it times out? There's a lot of scrap. And so there are opportunities there to optimize. But you can't optimize more than great sales and great service and serving your customers. I mean, you don't get sales just by like knocking on doors and being obnoxious. You get it by serving your customers. And I think that's the trick. Know your customers, serve your customers, make those sales, and deliver on it. It's no different for me, as a trader sitting at Origin and trying to support both the farmers, but also my clients. I try to provide service to both.


Mike: [00:28:15] Well, Byron, I really appreciate you taking the time to sit with us today.


Byron: [00:28:19] Sure thing, Mike. Great talking to you, as always.


Mike: [00:28:20] Okay. Take care.


Byron: [00:28:22] Cheers.


Mike: [00:28:31] You've been listening to The Exchange, coming to you from our coffee podcast studio in beautiful downtown Providence, Rhode Island. The Exchange is produced and edited by me, Mike Ferguson. Our opening theme was A Cup of Coffee and A Piece of Pie by the Ribeye Brothers. Our closing theme is Coffee Morning by Olga Scotland. All music is used under Creative Commons. You can reach us now using electronic mail on a computer at CoffeeTheExchange@gmail.com. And now your postscript.


Byron: [00:29:00] My name is Ding Dong. I work in the wine industry and I have four legs.


5 months ago
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