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77. The case for (social) reinvestment at origin

2010-08-03 Comments Off on 77. The case for (social) reinvestment at origin

In June, I participated in Food Security Solutions, a four-day affair convened by a coffee importer (Sustainable Harvest), underwritten by a coffee roaster (Green Mountain), attended by smallholder coffee farmers and dedicated to something other than coffee – reducing hunger in the coffeelands.  The event revolved around hands-on workshops in beekeeping, gardening, mushroom farming and organic fertilizer production.  It had little coffee-specific content and was not designed to conduct coffee-related negotiations.  But if the experience of one CRS partner organization is any indication, this kind of non-coffee activity can have a big influence on how farmers bring their coffee to market.

More than 20 representatives from 11 farmer organizations participating in the CRS CAFE Livelihoods project took part in the food security event.  Going in, one of these organizations was seeking buyers for some new coffees it will have to offer for the first time in 2010-2011.  When we met over dinner one night to discuss what the group wanted to do with those coffees, the conversation was nested in the context of the event where we had gathered.

Members of the organization discussed the uniqueness of the Sustainable Harvest business model.  The group had never heard of another importer offering value-added services like four-day hands-on workshops that address the (non-coffee) challenges to smallholder farmer livelihoods.  They talked about the vision and generosity of a roaster like Green Mountain that would be willing to underwrite such an event, which had so little to do with coffee but so much to do with the quality of life among the smallholder farmers who grow it.  The next day, the group offered all of its new coffee to Sustainable Harvest and explicitly asked Sustainable Harvest to try to place some with Green Mountain.

In this case, it seems that the organization incorporated social criteria into a commercial decision.  In a competitive marketplace where negotiations tend to revolve around price, quality and volume, social investment at origin that responds to the needs of smallholder farmers can be an important source of differentiation, even especially when it responds to needs outside the coffee chain.