How Our Open Business Model Inspired an Industry to Change

Nov 14, 2011 9:00 AM ET
Campaign: Business+

When I began working in coffee in the 1980s, many of the twenty million coffee farmers around the world were at the mercy of middlemen who paid farmers little for their product. I was frustrated—the business ‘norm’ left farmers in a cycle of poverty. So I set out to change the system. I founded Sustainable Harvest Coffee Importers to create a relationship-based supply chain, helping farmers take their livelihoods from subsistence to sustainability.

Transparency has been a guiding principle for Sustainable Harvest from the beginning—it’s our idea of business+. It might not be the traditional way of importing coffee, but transparency creates indispensible value throughout our supply chain. Producers are empowered to increase their competitiveness and earn higher incomes; roasters are assured a traceable, quality cup of coffee for their customers.   And it’s good for us, too. The transparent network that Sustainable Harvest has cultivated over the years allows us to respond quickly to an ever-changing market and to evolve in ways that keep our business viable. Sustainable Harvest is growing more than 30% a year, and we now import one out of every six pounds of Fair Trade, organic coffee sold in North America.   Our business+ can be seen in action at our annual event called Let’s Talk Coffee. Every year since 2002, we have gathered everyone in our supply chain to meet face-to-face. It’s the culmination of our daily work towards total transparency—everybody is invited to express what they value and what they need. For this year’s Let’s Talk Coffee we gathered 365 people from 22 countries, making it the largest private supply chain meeting in the world. Over the years we have expanded the event to include a broad group of players—joining the producers, agronomists, co-op leaders, and coffee roasters that make up our supply chain are local and international banks that provide farmers with credit, technology companies like Cropster and Pinhalense, and international development organizations such as Heifer International, Catholic Relief Services, and the Grameen Foundation.   This year, we also invited the leaders of the Fair Trade movement—Fair Trade USA, Fair Trade International, as well as the Network of Latin American Coffee Cooperatives—to join in a discussion at Let’s Talk Coffee. Fair Trade USA’s recent decision to split from Fair Trade International has caused farmers, importers, and roasters alike to wonder how the shift will affect their market. Let’s Talk Coffee was the first time the leaders addressed the split together, and the first time farmers affected by the change had their questions addressed.   So how do we thrive even as the ground shifts beneath us? We leverage the transparent network that we have built over the years and innovate together. We have found that the open and collaborative relationships that start at Let’s Talk Coffee have made more impact in supporting specialty coffee growers than each player might have working alone.   Last year, Sustainable Harvest purchased millions of pounds of Fair Trade and organic certified coffee from smallholder farmers at prices averaging 50% more than the commodity market. That means we channeled $8.26 million more in income to those families in 2010 than they would have received from local intermediaries. Today, other companies are adopting the same ideas, and gathering their supply chain in person to create greater transparency and connectedness among their business partners. The business ‘norm’ is changing—creating benefit not only for the farmer, but for entire communities.