E02: What’s Brewing? Big Returns in LatAm Coffee with Adam Jason

In the first episode of the Passive Investing Show, Adam Jason, partner at Legacy Group, shares how they grew the startup Green Coffee Company to be the biggest coffee production company in Colombia. So many factors influence the success of a business. Find out how to leverage the playing field and set your business up for success by taking control of the risks and opportunities!

Here are some power takeaways from today’s conversation:

• Know the risks and opportunities in your industry
• Make modest cash flow projections
• Be resourceful
• Plan for an exit strategy and timeline

Episode Highlights:

[07:55] The Green Coffee Company

Adam took Green Coffee Company from modestly yielding collateralized asset play to becoming the largest coffee producer in Colombia. The business is primarily focused on B2B coffee sales with green coffee or pre-roasted beans as their main product.

[13:27] Growing The Company

The coffee industry in Colombia is decentralized and generational turnover is high so in growing the company, Adam looked at:

• the prime coffee regions in the country
• where they can buy at scale
• where does it functionally work to consolidate infrastructure

Through financing and acquisition, Adam was able to consolidate the needed land. As for their company structure, their team has a three-person board of directors with their own expertise to offer.

[21:52] Projected Returns

Green Coffee Company initially had an 8% annual cash flow with 12–13% overall returns, but as they scaled, they were able to make more modest projections. They always target a margin of about 30–40% annualized which is split across several revenue sources. Some of the byproduct work they’re doing has the potential to become secondary revenue streams.

[29:09] Risks in the Industry

Weather is always a risk in the agricultural industry. It’s important to keep track of the weather and notice the patterns so you can manage your farm well. Planting coffee at higher elevations mitigates the risk of climate change and heating.

The conflict between Russia and Ukraine has restricted the Green Coffee Company’s ability to obtain fertilizers, but their scale has offered them advantages in the political space. Land is one of the best inflation hedges available. Coffee consumption is growing globally.

[36:05] Exit Strategy and Timeline

Adam told their investors that they would get to an exit in 2025 or 2026. Their rationale is the planting schedules for coffee optimization and when they can have the most valuable product to sell. They keep the valuation low to give people a product to invest in that has huge upside potential.

Notable Quotes from the Episode:

[12:29] “The farther down the value chain you get, the higher the prices go.”

[33:44] “I think land is maybe one of the best inflation hedges available, and especially when it has actual producing commodities on it.”

[40:56] “If we pay it, we pay. If it doesn’t get paid, it’ll get caught up at the exit. So there’s a floor for anybody who comes in.”

Resources Mentioned:

Green Coffee Company

Legacy Group

adam.j@legacy-group.co

Adam Jason’s LinkedIn