The San Francisco Foundation (SFF) uses a variety of tools to advance racial equity and economic inclusion in the Bay Area. One of these tools, the Bay Area Community Impact Fund (BACIF), uses foundation and donor advised funds to provide nonprofits with long-term loans, helping them make an even bigger impact in the community, and create a racially equitable, inclusive Bay Area.
In 2017, SFF’s BACIF fund made a $1 million loan to Pacific Community Ventures (PCV), an organization that helps small business owners in the Bay Area grow their businesses and create good jobs in our communities. PCV used the loan from SFF to help finance businesses like Proyecto Diaz Coffee.
In April, Sarah Abbe Taylor, SFF’s Senior Program-Related Investments Officer, visited Proyecto Diaz Coffee, at their headquarters in San Leandro. Below are highlights from her conversation (held over a delicious cup of coffee) with the company’s owner, Fernando Diaz.
SFF: Tell me why you started your business.
In 2014, I was just out of college, working as a paralegal and itching to do something more meaningful to me. I worked in San Francisco’s Mission District and enjoyed the specialty coffee culture. My family identity is tied to coffee, because my grandfather owns a coffee bean farm in the Oaxaca state of México. This connection felt like an opportunity, so I began exploring a coffee business that would connect U.S. coffee drinkers with the richness of Latin American coffee and culture. That’s how Proyecto Diaz was born.
SFF: How did you launch the business?
We began selling our beans in pop-up locations and having a friend roast our beans. For the first three years, we continued doing pop-ups and borrowing or renting out small spaces to do our packaging while our friend roasted our coffee. But, to continue growing, we needed our own coffee roaster and our own larger space.
SFF: How did you finance Proyecto Diaz Coffee?
Getting capital to invest in our business has jumpstarted our business growth. We started with a Kickstarter campaign to purchase our first roaster machine in 2016 and in 2017 we moved into our current space in San Leandro where we roast and package our beans in house. But as demand grew, we needed more capital to purchase larger quantities of raw beans directly from the producers. Pacific Community Ventures not only helped us run projections and decide what kind of capital we needed, but they also provided our first working capital loan for $50,000.
Later, PCV provided our business with a second $50,000 loan to purchase a second, larger roaster. Our first roaster only yielded 16 lbs per hour, which meant we had to roast six days per week, sometimes over eight hours per day. Usually, I would come in early to roast, and then my dad would finish up at the end of the day. In fact, sometimes I would sleep over at the roastery so that I could start roasting early in the morning! This new machine roasts up to 64 pounds per hour, lowering our labor costs per pound and freeing up our time for marketing, purchasing and planning.
SFF: What does this business mean to you?
Proyecto Diaz Coffee is a huge source of pride for me. I am creating a bridge between my family heritage and my life. Coffee is part of my family’s identity, and this business helps us reflect that identity. We are a true family business from the production of the beans to the manufacturing and delivering of the final product. I am lucky to work with my dad and wife here in the Bay Area, while supporting my uncles and their families in Mexico.
We have also employed six non-family members. I’m especially proud of our team because of the culture of hospitality they provide and the level of professionalism they bring to the industry. We have employed a mostly female team and our manager and lead barista are both Latina. For our full-time employees we offer health benefits and paid time off.
SFF: What are your current challenges and goals?
Our biggest challenge now is to decide how fast and in what direction to grow. Our retail operation at the San Francisco Ferry Plaza Farmer’s Market does really well, so we may expand into more retail. But we need to think carefully about the right kind of capital to finance a retail operation. On the wholesale side, we’re roasting 1,500 lbs of coffee per week, but that’s small for specialty coffee roasters. My goal is to increase production to 2,500 lbs per week and max out our roaster! We want to be recognized as the premier specialty Latin American coffee roaster.
SFF: What does Pacific Community Ventures mean to your business and other Bay Area businesses?
PCV has been an important partner for Proyecto Diaz Coffee. They’ve provided the “blood” (i.e., cash) to help us succeed in both our initial and growing stages, along with valuable mentorship throughout the process and beyond. We would not have been able to thrive without them — they are an asset to the small business community in the Bay Area.
