Filling a Niche/
An Interview with Cristobal Lopez

When most people think of the types of beans that are widely produced and consumed in Mexico, the first ones that come to mind are usually black or pinto beans, and for good reason. According to Asociación de Agricultores del Río Sinaloa Poniente (AARSP), a Sinaloa-based agricultural association, the percentage of black beans and pinto beans produced in Mexico in 2019 was 51.5% and 35.7% respectively. The country actually produces around 50 different varieties of beans, and these are divided into four groups that, in addition to blacks and pintos, include pink (rosas, claros, or light-colored beans) and yellow beans (amarillos or azufrados or sulfur-colored beans).

This last group has become an important specialty product of one of Sinaloa’s most renowned grain producers Comercializadora de Granos Los Arbolitos. Founded in 1987, is a company with a strong work ethic and social consciousness, generating 30% of renewable energy through solar panels, refrigerated warehouses with advanced technology to preserve products in an optimal state and deliver them to customers.

We recently spoke to the General Manager of Los Arbolitos, Cristobal Lopez, who is a frequent participant in our dry bean webinars, to ask about how his company has developed and what the scoop is on Mexico’s yellow bean market specifically.

Tell me a little about the history of your company and how you became established in the Mexican bean market.

We are a family business. We started out as peanut traders—we planted, harvested, roasted and sold in the market. At the request of different customers, we started to buy grains harvested in Sinaloa, and that's where we started. We combined peanuts and grains. Over time we moved away from peanuts, working only on the purchase and sale of grains, focusing on Peruvian beans (another term for yellow beans) and more strongly on chickpeas. We also sold other grains harvested here (corn, wheat, sorghum, etc.).

These grains allowed us to reach a large part of Mexico. We started in Aguascalientes, Leon, Guadalajara, Zamora, etc. Then we reached Mexico City, and that market provided us with steady growth. From there we went on to strengthen our company in terms of internal processes, cutting edge machinery (sieves, electronic eyes, gravity table cleaners, etc.). This allowed us to compete with good quality in the Mexican market in such a way that we created our own brand, setting a quality standard in our products.

What is your role in the company and what are your main activities currently?

Today, I am the General Manager of Los Arbolitos Company. My functions include being aware of what is happening nationally and internationally to be able to forecast market changes, as well as being aware of new growth projects. I am very aware of what is being purchased in terms of products (prices, metric tons). I watch national and international marketing.

What place does the Mexican yellow bean occupy in the current bean trade?

Within the national market it is considered the king of the beans, since it is often used as a base for the pricing of other beans, although there are several issues to consider with this, from the market in which this bean is consumed to the costs required to produce it. So there are several things that establish the hierarchy that this bean has within the national market. Internationally, the situation is a little different since it used to compete with beans from Peru and nowadays it is exported to that country, so things have changed. In the United States, we compete with small local production, but Peruvian beans from Mexico continue to lead the American market.

Where is your company Los Arbolitos positioned in this market?

We are positioned very well In the domestic market, especially in the Mexico City market, and it is a good reference in terms of quality and price. We have a presence in the foreign market as well, and we are in all the markets where [these beans] are consumed. Our international presence is small, but we are growing in this market every year, since we are new to it.

It was mentioned in the GPC webinar that both production and surface area of yellow beans decreased by more or less 50% between its production peak in 2018 and its lowest level in 2020. Why is this? Do you think they will recover to 2018 levels?

Planting in Sinaloa is done based on market expectations; the producer makes the decision. 2018 was certainly a big year for planting and production, and prices dropped considerably, even below production costs. That makes the producer move away from planting. I think we will see those levels again in the future (high planting and production numbers).

What are the current challenges facing Arbolitos and how do you manage them? How has the pandemic affected your operations?

The big challenges we have faced since the pandemic—and there are several—include more difficulty marketing in the different economies affected internationally; scarce and more expensive containers; price speculation; and market confinement. So what do we do? Well, we adapt to the times and needs of the market, in some cases anticipating or advancing certain processes in order to be at the forefront of customers’ minds.

How has demand been in the United States and other countries?

In the U.S. when the pandemic started exactly one year ago, sales went crazy. After 2 or 3 months of sales, these fell below normal, and today all the yellow bean markets are very stable and there is a lot of speculation in prices, especially because of the high prices that were achieved at the end of last year, and this gives rise to the speculation the characterized the way the crop was managed this year.

Tell me how the current harvest is going, in terms of yields, prices being paid, and general outlook.
Are there any surprises or unforeseen events with respect to your forecasts?

The current harvest began at historical levels in terms of prices paid to the producer. As a result speculation came into play, and we saw several companies take the lead in positions, and that provided some certainty, but there were more people who thought that prices would not hold. In the end prices fell from the prices that were paid at mid-harvest—and today you can find product at different prices— but I think that in this category we anticipated the market trend and got it right, so much so that the company did not take inventory and only focused on buying and selling. Today you can find product at the same price as when the harvest ended.

You mentioned that the price of yellow beans determines the prices of other products. Can you explain how this trend works? 

It is something that we only see in Mexico, in our markets, and in my opinion, it has to do with the social sector that consumes this bean and with production costs. It is the bean with the highest production cost in Mexico, and that comes with a high price tag. This bean is regularly consumed by the upper middle class, so its consistent pricing determines or is used as a basis for the other beans produced in Mexico.

What are your expectations for the future with regard to Mexican yellow beans?

I think it will be a good market with lots of demand both nationally and internationally. We used to compete with Peru, with their harvest, and today we export to them. The U.S. continues to make gains in yellow beans, but they are not achieving the quality that you get in Sinaloa. So I see a good market in the present and future for this product.