Coffee C.S.A.: Linking Coffee Farmers Directly with Consumers

Coffee C.S.A.: Linking Coffee Farmers Directly with Consumers

PerúSacramento, Estados Unidos
Organization type: 
for profit
Project Stage:
Growth
Budget: 
$100,000 - $250,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Approximately 50 words left (400 characters).

About Project

Problem: What problem is this project trying to address?

The market price of green coffee does not allow small-scale farmers, who produce most of the world’s coffee, to recover their costs of production, leading many into debt and forcing many to abandon their farms. Despite the emergence of the fair trade coffee market, small-scale farmers continue to suffer from low margins and end-consumers continue to demand more direct and transparent access to the actual producers of their coffee. This has resulted in both a need and an opportunity for small-scale farmers around the world to move down the supply chain and capture greater margins by selling their roasted coffee more directly to end-consumers.

Solution: What is the proposed solution? Please be specific!

CoffeeCSA.org is a community supported agriculture model that allows consumers to subscribe to regular deliveries of roasted coffee from specific family farmers. CoffeeCSA is a project of Pachamama Coffee Cooperative, the first global cooperative of coffee farmers, consisting of more than 100,000 small-scale farmer-owners in Peru, Nicaragua, Guatemala, Mexico and Ethiopia. Founded in 2001, Pachamama is the largest farmer-owned co-op based in the US and is the only coffee company to use sophisticated information technology that lets coffee farmers tell their own stories to consumers. This authentic connection with consumers is unprecedented in the coffee industry, empowering farmers to differentiate outside of the commodity crop model and deal directly with consumers. All coffees are Organic Certified, hand-roasted in small batches and available on the CoffeeCSA.org website and at over 100 independent cafés and cooperative grocery retailers.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

In the traditional coffee supply chain, as well as in the supply chain supported by the fair trade system, coffee produced by small-scale farmers passes through multiple intermediaries prior to reaching end-consumers. Significant inefficiencies are created as each intermediary receives a margin for the functions performed, some of which are not required in today’s world. These inefficiencies result in a smaller portion of the end-price of roasted coffee being available for producers. Pachamama Coffee Cooperative addresses this problem by utilizing a supply chain that allows end-consumers to efficiently purchase high quality, freshly roasted, organic coffee directly from small-scale farmers. It is rare to find a premium product, such as our members’ coffee, which rewards small-scale producers and roaster-marketers so differently, and yet undergoes such minimal actual value-added processing from producer to end-consumer. Pachamama Coffee Co-op addresses this problem in two ways. First, we have developed our own farmer-owned and controlled distribution channel, which gives farmers direct access to end-consumers, primarily via consumer-owned food cooperatives and high-end natural food stores, as well as via the Internet at CoffeeCSA.org. We then take advantage of this access through our marketing materials, which provide consumers with information about who grew their specific coffee, where this coffee was grown, and under what conditions.
Sustainability

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

PCC is the only cooperative organization in the United States that is 100% owned by small-scale farmers around the world. Our marketing message is simple: “Our direct and fair trade solution is simple: ownership. Ownership not only provides small-scale family farmers with a better than fair trade price for their products, it also gives them 100% of profits, and assures you of getting the best coffee around – after all, if you owned the company, and put your name on the product, wouldn’t you want to make sure it’s as good as possible?” One of the primary challenges that PCC has faced is the perception held by some that the co-op is “just another fair trade coffee company." It's a challenge and an opportunity to differentiate our farmer-owned brand and technology.
Team

Founding Story

I worked for a small farmers’ cooperative in rural Bolivia while serving as a Peace Corps Volunteer in the 1990’s. I helped to finance and market our members’ corn, peppers, beans and citrus to wholesalers in Santa Cruz – 12 hours away – through challenging mountain roads. It was not a good business. I learned first-hand that the person who often works the hardest (the farmer) is paid the least. She earns less (and faces greater risk) than the processor, who earns less than the distributor, who earns less than the marketer, who earns less than the retailer! At that point, it became apparent to me that a great deal of the risk, and hardship, faced by small-scale farmers could be alleviated by communicating directly with end consumers via a high-quality, branded product. More than 15 years following my experiences in Bolivia, the success of cooperatives like Organic Valley only reinforce this belief.
About You
Organization:
CoffeeCSA.org
About You
First Name

Thaleon

Last Name

Tremain

About Your Organization
Organization Name

CoffeeCSA.org

Organization Country

, CA, Sacramento, Sacramento County

Country where this project is creating social impact
Age of Innovator

Over 34

Gender of Innovator

Male

How long has your organization been operating?

1‐5 years

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Innovation
How long have you been in operation?

Operating for 1‐5 years

Social Impact
What solution(s) does your initiative address to help emerging entrepreneurs and small businesses grow and thrive in underserved communities? (select all applicable)

Access to financing, Access to technology, Access to economic opportunity.

What has been the impact of your solution to date?

PCC represents more than 100,000 small-scale farmers Peru, Nicaragua, Guatemala, Mexico and Ethiopia. In the past 5 years, the company has purchased more than 500,000 pounds of organic coffee directly from it's member-owners. The cooperative sells roasted coffee to more than 100 wholesale accounts in the USA and to hundreds of families directly via the Internet. The average price paid to farmers of Pachamama is $9.75 per price, compared to the Fair Trade minimum price of $1.40 per pound. Not only is PCC generating more income and greater financial incentives for small-scale organic farmers, but it is creating significant equity in it's brands, technologies and relationships with end-consumers.

What is your projected impact over the next 1-3 years?

PCC expects to generate the following revenue in the next three years:

2010 = $372,000
2011 = $469,000
2012 = $613,000
2013 = $911,000
2014 = $1,338,000
2015 = $1,733,000

In the next 3 years, PCC will sell approximately 400,000 pounds of coffee in the USA at a price greater than $10 per pound. That's about $4,000,000 in sustainable revenue.

What barriers might hinder the success of your project? How do you plan to overcome them?

We face two primary challenges in the next 1-3 years. Specifically, we must (1) continue to find ways to differentiate our farmers in a crowded marketplace and to promote our alternative trade model and (2) we must find creative ways to finance the expansion of our business in the United States, which has been a challenge to date, given our unique ownership structure.

Recognition by Changemakers would help to shine a light on our approach, our impact and our potential to scale-up significantly. Doing so would help to attract the kind of investors we seek, allowing our farmer-owned business to grow and to thrive.

Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact
Identify three major tasks you will have to complete to reach your six-month milestone
Task 1

Annual Board meeting of farmer-owners in Boston on April 14, 2013.

Task 2

Retain our current staff.

Task 3

Hire a Community Manager for CoffeeCSA.org

Now think bigger! Identify your 12-month impact milestone

We need to reach monthly sales revenue of $82,000 (annualized: $1 million). We are currently at about $55,000 per month in sales

Identify three major tasks you will have to complete to reach your 12-month milestone
Task 1

Maintain current staff.

Task 2

Maintain line-of-credit with RSF Social Finance.

Task 3

Hire a traveling sales person with a budget to travel.

Sustainability
Tell us about your partnerships

You can learn about our partnerships with CLUSA, Agriterra, The World Bank, The Untours Foundation, ERM's Low Carbon Initiative and others here: www.pacha.coop/partners

Please elaborate on any needs or offers you have mentioned above and/or suggest categories of support that aren't specified within the list
randomness