Q&A with New Colombian Coffee Growers Federation CEO Roberto Vélez Vallejo

FNC CEO Roberto Vélez Vallejo. Photo courtesy of the FNC.

Following a rigorous election process that began after the resignation of Luis G. Muñoz in May, the Federación Nacional de Cafeteros de Colombia (FNC) earlier this month appointed Roberto Vélez Vallejo as CEO, the organization’s top leadership position.

A child of coffee farmers, Vélez Vallejo was most recently Colombia’s ambassador to Japan, and has also served as ambassador to the United Arab Emirates and Malaysia. Following an education in economics that included post-graduate work at the University of Brighton (UK) and New York University, Vélez Vallejo joined the FNC in 1985, working in numerous capacities, including as the organization’s director for Asia. By the time he left the FNC in 2008, Vélez Vellejo was the organization’s chief commercial officer, and was responsible for the conception and implementation of the FNC specialty coffee program.

These are dynamic and challenging times in Colombian coffee, and the FNC is widely regarded as the world’s most highly organized and powerful nonprofit development organization in the coffee sector. Just prior to his appointment, we were able to reach Vélez Vallejo by email, where he responded in writing to a number of questions regarding Colombian coffee and the direction of the FNC.

In general, what are some of the biggest political hurdles — either domestically or internationally — the FNC is currently dealing with? Where are the organization’s greatest efforts currently going, and will that direction be changing under your leadership?

Domestically, I think it was imperative that the new CEO can rely upon the full support of all coffee growers of Colombia. The fact that my election was unanimous was indeed a very good first step in continuing to create the necessary consensus to implement a wide variety of programs for the benefit of more than half a million growers.

From the international perspective, we want to continue exercising an innovative leadership style on a number of topics. Of course, we want to continue to be the leaders in producing high-quality, specialty grade coffees. We also want to become innovation leaders, and at the same time develop a more comprehensive sustainability concept, in which growers’ interests are seriously taken into account. In sum, we want to create value for all coffee industry stakeholders, including of course coffee growers themselves.

To achieve this we obviously have to evolve; improve upon what we are doing, modernize our structure and be closer to the coffee growers in their farms and communities.

How is the FNC responding to the Misión Cafetera’s recent reform recommendations, particularly in regard to suggestions for deregulation?

We are open to ideas and anything that can improve the Colombian growers’ well-being. We are aware that we need to continue modernizing and improving our governance policies. In sum, there are some recommendations which we agree upon, some others that I would like to review in more detail, and some that we believe are not in the best interest of the high-quality coffee growers that make up our industry. The FNC purchase guarantee policy and our quality differentiation strategy are some of the programs we believe are crucial to uphold.

Are there any new or forthcoming FNC programs or marketing initiatives that are of particular priority right now?

We will be reviewing our commercial strategy in a systematic and responsible manner. There is no need to rush things. At the same time, our clients can rest assured that Colombia and the FNC want to continue being their partners that want to create value, reacting to new consumer demands on quality and information. Because only by doing this can we transfer value back to growers.

Obviously, total production in Colombia has been strong and growing over the past several years, despite some climatic and other natural challenges. Are production numbers where you expect them? And what do you expect in the coming years?

My predecessor, Luis Muñoz, did a great job by recuperating Colombia’s crop and productivity numbers after very difficult years when we had a coffee leaf rust crisis. This work, however, is never considered done and finalized. We need to continue improving productivity and generating value to ensure profitability and sustainability. My focus in bringing profitability is based not only on productivity but also on differentiation and sustainability information that adds value. That is another priority — to ensure Colombia continues to be the leader in high-quality mild Arabica coffees.

As the high-end specialty segment grows, what else do you see the FNC doing in terms of advancing quality? And can you highlight some of your efforts in creating market incentives for quality?

We have a very strong research team at Cenicafe working on the next generation of varieties. Our 1,500-strong extension service is working on modernizing and bringing more relevant and detailed information for individual farmers. We are helping growers to sell their own coffee directly, and even providing export services when they need them. We have numerous regional quality contests. All these strategies and many more need to be developed. More importantly, as you point out, premiums and prices need to reflect all these efforts. Transparent prices to growers are crucial to make this vision a reality, so that the value does not stay in the intermediaries.

What are some of the most pressing issues currently facing smallholder producers in Colombia? And where are your priorities in addressing them?

The FNC Strategic Plan 2015-2020 has a number of wide-reaching programs in education, productivity and cost control. Some of the growers’ concerns I heard during the election process are the need to optimize fertilization, to reduce unit costs by increasing productivity and to be able to attract labor by increasing their own productivity. Making use of hedging instruments is another big area of improvement. This is why I will focus more on making coffee producers profitable in the long-term.

With new leadership, do you foresee any additional organizational realignment of the FNC itself?

We need to constantly evolve. The FNC has been around since 1927 and it is a very different organization from what it was 88 years ago, and even 10 years ago. We will be moving faster with the times.