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197. Introducing SROC

Social Return on Investment, or SROI, is a holistic approach to measuring return on investment that goes beyond financial returns to consider also an investment’s social, economic and environmental impacts.  The farmers of the 5 de junio cooperative in Nicaragua, in partnership with the Fabretto Foundation, a local NGO dedicated to promoting food security, seem to be applying this concept to the coffee trade.  Although they might not talk about it in these terms, the coop and the foundation are collaborating to maximize the SROC — Social Return on Coffee — in communities where 5 de junio’s coffee is grown.

The cooperative is investing in coffee quality to increase the financial returns to coffee farming for its members.  And indeed, they were rewarded for their effort this year when they sold their pulp-natural espresso and single-varietal maragogype microlots to Counter Culture for healthy premiums.

But consider the ways that the cooperative’s coffee helps to fuel broader processes of social and economic development beyond its own membership, in the communities where its members live:

  • Mayorga Coffee, a family-owned roasting company based in Silver Spring, MD, sources coffee from 5 de junio that is grown in the communities served by Fabretto, and contributes 5 percent of its profits to the Foundation to support its work on behalf of children in the coffeelands.
  • Feed My Starving Children, a non-profit that supports feeding programs in more than 60 countries, sells 5 de junio coffee to support Fabretto’s work feeding children in Nicaragua.  The purchase of one pound of coffee provides 23 meals.

These commitments from the market end of the chain are helping ensure that 5 de junio’s coffee is generating direct social and economic returns for people who may not be directly involved in the coffee trade.  But the most remarkable aspect of the SROC story in my mind is that the SROC approach is not being driven by a certifier or coffee company, but by smallholder farmers in 5 de junio communities in the mountains of Nicaragua.  During meetings with potential new trading partners during the 2011 SCAA, the 5 de junio leadership included the issue of social investment in their agenda, along with the more traditional SCAA themes of volume, quality, finance, certifications, etc.

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