"For us meeting the minimum requirements of Fair Trade certification is just a starting point," says Rodney North, Equal Exchange's 'Answer Man.' "There are many more opportunities beyond those rules for a business to use its sourcing practices to create a more egalitarian, democratic economy, such as providing value-added processing work for the farmer cooperatives, or partnering with other worker cooperatives in the US for processing and packaging. "
We asked Rodney to tell us more about Equal Exchange's worker-supportive business practices, its most popular products ("our organic Love Buzz coffee or our 71% organic Very Dark Chocolate bar"), and how its new domestic Fair Trade program is supporting pecan-farmers in Georgia, almond-farmers in California, and more...
Green America: What does your business do, and where are you located?
Rodney North: In general we work with small-farmer co-operatives around the world to bring their crops to the US market on Fair Trade terms, but we also see our purpose as demonstrating to other entrepreneurs and business leaders the viability of Fair Trade and of the worker co-operative business model. We succeed when we see others adopt these practices and structures.
More specifically we import and sell Fair Trade coffee, tea, cocoa, chocolate, sugar and bananas – almost all of it organic - from over 20 countries as well as work with small-scale pecan, almond and cranberry growers here in the States. Besides selling in the obvious places (grocery stores, cafes) we also try to bring Fair Trade to more people and more communities through other initiatives like our Fundraiser program for schools and our partnerships with thousands of churches, synagogues and mosques.
In the coffee business it’s important to be close to your customers and that’s why we have combination office/warehouses in southeastern Massachusetts, St. Paul, and Portland, Oregon. We also have employees who live and work in New York, Wisconsin and California. And then there are our cafes in Boston and Seattle. We think we’re the first worker co-operative in the world to be spread over 3,000 miles.
What makes your business green? Is it your products, your processes, your sourcing?
Equal Exchange worker-owner Jessie Myszka with rooibos tea farmer and co-op leader Hendrik Hesselman in South Africa.
Rodney: All of the above. One hundred percent of our products are fairly traded. Ninety percent of our coffee is certified organic and 100 percent of our tea, chocolate, cocoa, sugar, almonds and cranberries are organic. We’re a democratically organized enterprise that is governed and 100-percent owned by the employees on a one-person/one-share/one-vote basis. When profits are distributed all 90+ worker-owners receive the same amount, regardless of rank or seniority. For example, a warehouse worker with 2 years here receives the same check as the founder who's been here 24 years. We also cap salaries so that no one is paid more than 4x as much as the least paid full-time employee.
Everything we sell is fairly traded, including the US-sourced nuts and fruit. While there is no certification program for US crops, we are a founding member of the Domestic Fair Trade Association and helped to draft its principles. For our tea we source from small-farmer co-ops as much as possible, even though this is uncommon and more work for us. We do this because we feel it has a much greater transformative effect than buying from Fair Trade Certified™ tea plantations. Likewise all of our bananas come from a farmer cooperative while most Fair Trade bananas on the market are also from large plantations.
|The Equal Exchange biodiesel delivery van.
Linked to that is our focus on making sure that organic farming works for the farmers, too, as we know it entails a lot of work and sometimes extra risk as well. So in early 2007, in consultation with our coffee farmer partners, we increased the premium we pay for organic coffee by 33 percent, to at least 20¢/lb. over what we pay for non-organic coffee. That same year we fought hard, alongside other organizations, to defeat a misbegotten plan from the USDA to revoke the organic certification for hundreds of small-farmer cooperatives around the world, farmers who make up nearly the entire Fair Trade coffee, cocoa and sugar supply chains.
Plus, every year we also donate approximately 200,000 lbs. of burlap and coffee chaff (a waste product from roasting) to local organic farms. This would normally go into landfills. Lastly, we made every effort to make our new Boston café as green as possible. Nearly the entire menu is organic, Fair Trade or local. Even better, less than 4 percent of the waste needs to be thrown away as the other 96 percent is recycled or composted. Our café won an award as one of the greenest businesses in Boston.
What did you do before you started your business?
|Rink Dickinson, co-founder and co-director of Equal Exchange.
Rodney: The three founders, Rink Dickinson, Jonathan Rosenthal, and Michael Rozyne were all managers in a natural food distribution co-op where they could observe the marketplace up close and see how America’s food system wasn’t working for either farmers or eaters.
As part of the food co-op movement, the founders were already trying to reform the connection between American farmers and the public, but there was nothing yet that would involve farmers outside the US. Rink, Jonathan and Michael were also inspired by many of the revolutionary movements around the world, and the Sarvodaya self-help movement in Sri Lanka. So they combined those threads with co-operative economics and their knowledge of the marketplace to create a new kind of business that, they hoped, would work for farmers, consumers, and the workers at Equal Exchange, too.
What have been some of the biggest challenges of maintaining high standards of social and environmental responsibility?
Rodney: Once, in our early years, when we had fewer than ten staff members, and were pretty much alone in selling Fair Trade coffee, we came close to breaking off our commitment to pay farmers the Fair Trade minimum price. We were tiny, with no economies of scale, and competitors were paying such low prices for their coffee that it was getting very hard to stay price-competitive on store shelves. Since we had nowhere else left to cut, it was either lower the price paid to farmers or go out of business. But just before we were about to break the bad news to our farmer partners, a frost hit Brazil, ruining the harvest there. That shot world coffee prices way up and suddenly we were price competitive again. That was the last time we had such a close call.
What's been your proudest moment as a green business owner?
Rodney: In 2006, we celebrated our 20th anniversary and for a two-day event invited our farmer partners, fellow Fair Traders, customers, investors, past employees and supporters from around the world. Hundreds came literally from around the globe to celebrate with us and think about what we had all accomplished together and how much more there was to be done and how to do it. Day-to-day we sometimes get glimpses of what’s working, but that celebration was an overwhelming critical mass of appreciation for the previous 20+ years of effort. I truly think everyone involved with Equal Exchange in some way left that weekend feeling great and connected and looking forward to what would come next.
What is the most hopeful sign you have seen recently from the green economy?
| Worker-owners Dan Rony and Mike Cumminskey operate the coffee roaster at their democratically organized workplace.
Rodney: Each of us at Equal Exchange might answer this differently, but for me the most hopeful sign is that the public’s desire for reforming business – be it through Fair Trade, socially responsible investing, clean energy, etc – kept growing through the recession. In fact many Americans recognized that progressive approaches to business were not at all an indulgence to be scaled back in lean times (as some critics had predicted), but instead were actually quite pragmatic and responsible – at both the level of the firm and the nation.
Personally my vision for Equal Exchange has changed a lot over my 14 years here. Initially I was focused exclusively on our Fair Trade practices and the promotion of organic farming. But now I’m equally excited by our democratic worker co-op model and hope to see the next generation of social entrepreneurs embrace the co-op structure.
What advice would you give to other green entrepreneurs just starting out?
Rodney: Many mistakes can only be seen as such in hindsight but among our many goofs there were some things where we should’ve known better. One was trying to move into the Canadian market in the late ‘90’s. Before that attempt we had a business that was already quite complex for our small size and the attempt to sell north of the border nearly doubled the complexity of everything we did. Yet, in hindsight it was all in pursuit of a specialty coffee market the size of Ohio’s.
We had to create new bi-lingual labels that would meet Canadian regulations, plus create many new SKU’s in our books and in our warehouse for products dedicated for Canada. We had to deal with a host of new currency exchange and customs issues for shipments out and items being returned. We had to tackle a host of literally foreign HR issues for a single remote employee based in Montreal. And so on. We basically failed to map out in detail ‘will this be worth all the trouble?’ The answer was that it wasn’t and after a few years we pulled back to focus on the US.
Since then we’ve taken a new approach to export sales and now have customers Saudi Arabia, Taiwan and South Korea, but they’re handled in a totally different fashion that fits our strengths and existing systems.
What's the next green step you're working on?
Rodney: Right now I’m trying to tell everyone that we now sell organic Fair Trade bananas from a small-farmer co-op in Ecuador. But I’m also excited about our work with US farmers and some other Green America businesses (like Organic Valley, Co-op Fund of New England and many food co-ops) to create a domestic version of Fair Trade. We’re already selling Georgia pecans, California almonds and organic family-farmed cranberries, but so much more is possible. Our Fair Trade fundraising program for schools is also looking very promising.
Is there a valuable connection you have made through the Green America community?
Rodney: As a founding member of the Green America community, the connections are endless. I reviewed the Green Pages directory and just from “A” to “C” there were twelve business partners – and that doesn’t even include customers.
But maybe the most important connection has been with Green America itself. Green America has championed Fair Trade since long before others joined the bandwagon, and for the last three Halloweens has been a key partner with us and others in the annual nationwide Reverse Trick-or-Treating campaign to fight child labor in the cocoa trade.
What one green product could you not live without?
Rodney: It has to be my tough Bianchi single-speed that I ride as part of my daily commute, all year-round, year after year. It just keeps ticking.