I have been closely watching the way coffee companies engage in the coffeelands over the past five years or so. I would say that in most cases, their approaches can be characterized by one of the following “3Ps”: public relations; process and product improvements; and people-centered investment. (OK, really there are 4Ps.)
- Public relations.
We all know this approach because we see it on beautiful brochures in retail shops: Your coffee helped build a school in the coffeelands. This kind of philanthropy, usually funded by a small percentage of pre-tax profits earmarked for charitable works, is good for coffee communities and can help provide needed social infrastructure. But investments like this tend to have a bigger impact on a company’s reputation in the marketplace than on the lives of the people who grow its coffee, and don’t tend to change the way the company conducts its core business.
Scoreboard: Public Relations 10, Pro-Poor Business Models: 1.
- Process and product improvements.
These are the kinds of investments with which anyone watching the specialty coffee industry over the past decade has become very familiar: the Pearl Project’s technical assistance in coffee quality and cupping, corporate support for the Coffee Quality Institute to train Q-graders at origin, building cupping labs and post-harvest infrastructure, etc. This is the kind of business model that leading development agencies and research institutes promoting pro-poor agroenterprise are trying to create through chain-wide approaches to specialty crops like coffee. The investment that companies make benefits their own bottom line and image because it improves the quality of the product they can offer and supplies them with great stories to tell their customers about their direct relations with farmers. Imagine trying to compete with Stumptown or Intelligentsia or Counter Culture without being able to say you source your coffee through direct relationships with farmers you are helping to improve their quality. You would have no credibility with the coffee geek industrial complex. While these investments have real impact at the organizational level — they are critical to ensuring the sustainability of farmer enterprises — they don’t necessarily address the developmental needs of farming households.
Scoreboard: Public Relations 5, Pro-Poor Business Models: 6.
- People-centered investment.
If this sounds strange, it may be because there isn’t much of it out there in the coffee industry…yet. The idea here — and again, it is still mostly just an idea — is that visionary coffee companies come to understand that issues like hunger and poverty and migration, which seem to be well beyond the coffee chain, are very much a part of their business model. Then they invest in the coffeelands to address those issues at the individual level. Not as PR. Not as charity. Not as a business investment to help cooperatives control quality. But as a business investment in the families who grow great coffee. When farmers are hungry, they have less energy for farming. When they are desperately poor, they can’t afford to reinvest in their farms. When they migrate they neglect their farms or abandon them altogether. In short, when farmers can’t make ends meet, it impacts the ability of specialty companies to source great coffee. Some companies are beginning to see that threats to specialty coffee coming from beyond the coffee supply chain are worthy of their attention and investment. More on this model as current initiatives develop…
Scoreboard: Public Relations 2, Pro-Poor Business Models: 10.
It’s been two+ years since you published this post – do you think anyone is yet delivering the people-centered investment you recommend? Or maybe some have it on the drawing board?
You allude to positive competition that now exists in the coffee industry at that 2nd tier (“Process & Product Improvements”). I imagine that after 1 or 2 pioneer that 3rd level eventually the copy-cat effect (& I say that in a positive sense) will take hold there, too.