22 May 2019

  • Impact & Sustainability
  • eco.business Fund

From seed to cup: a story of sustainable growth

Tejemet Coffee - El Salvador

One fine day in 1870, Jose Rosa Pacas acquired land at the foot of the Santa Ana volcano, right by the Apaneca Lamatepec range in the western part of El Salvador. The Salvadoran government was promoting coffee as the export crop and encouraging entrepreneurs like Jose to take up farming. He took his savings – and a leap – and purchased 87 hectares (just under 215 acres).

“I can imagine him looking over his budding plantation, full of optimism about his new life as a grower,” muses his great-great-great-grandson, Federico Pacas Diaz. Today, five generations later, the family business has become Tejemet: with annual revenues of more than USD 3 million and 350 employees at peak season tending to 280 hectares across eight coffee farms. “He would be proud.”

The Pacas family’s way of seeing growth as a result of quality and sensible management, and not as goal in itself, has always been one of its strengths. It was seriously tested in 2011, when 60% of the country’s crop was lost to coffee leaf rust, a fungal plant disease. It took more than two years to recover. 

It was just a couple years later in 2016 that Tejemet’s longstanding bank, Banco Hipotecario, began its partnership with the eco.business Fund. The eco.business Fund is an impact investment fund co-initiated, and advised, by Finance in Motion with a threefold aim: to promote the conservation of biodiversity, advance the sustainable use of natural resources, and mitigate climate change and adapt to its effects. In Banco Hipotecario, the fund had found one of the few agriculture-focused institutions in El Salvador with expertise in providing financing to coffee growers, and which shared the eco.business Fund’s vision of spreading sustainable practices among farmers and producers.

Tejemet is one of those producers. Even back in Jose’s day, the Pacas have always stayed true to the principle of treating with respect the land that ensures their livelihood, adopting best practices for sustainability long before it became a hot topic. As the business grew to cover a larger territory, Tejemet invested in protecting water sources and establishing forest reserves. “For example, we treat our water by deploying microorganisms and use coffee husks to produce biogas energy,” explains Federico. “And we convert waste into organic fertilizer for our plantations and sell any surplus to neighboring farms.”

In addition, all of El Salvador’s coffee production, including Tejemet’s, is shade-grown. This not only ensures quality coffee, but also protects primary forests and conserves biodiversity. “This way, we help mitigate the effects of climate change. Truly, everybody wins,” says Federico.

Now, after weathering the coffee leaf rust crisis, an even greater threat was looming for Tejemet: aging coffee plants, which meant lower yields and greater vulnerability to pests and diseases. Close to 40% of the country’s coffee plantations were affected, including Tejemet’s. If the problem wasn’t addressed soon, the farm would wither and die. And Jose’s legacy along with it.

“We had to renew our coffee plantations. Extensively. And that called for an investment we simply couldn’t shoulder on our own,” remembers Federico.

Thanks to financing from Banco Hipotecario and the eco.business Fund, Tejemet will now be planting 250,000 new leaf-rust-resistant coffee plants of different varieties over the next five years. 

Today, the Pacas family runs a fully integrated coffee business from seed to cup under the Café Tuxpal brand: farms, mill, export company, roastery, and cafés (four so far, and set to expand internationally.) Their coffees are among El Salvador’s finest and exported to quality-conscious roasters around the world. All of Tejemet’s facilities are Rainforest Alliance certified, testifying to the chain of custody.