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Virtuous Exchange Goes Beyond Fair Trade

Over the past four decades, the work of socially conscious entrepreneurs and consumers has helped to turn the phrase “Fair Trade” into a household name.  More than ever, consumers are paying attention to the producers of the goods that they purchase—wanting to ensure that they are working in safe conditions, receiving fair pay, and have opportunities for growth.  Undoubtedly, efforts rooted in the principles of Fair Trade have resulted in improved lives for many small-scale producers in developing countries. 

But, some would argue that it is time to grow beyond Fair Trade in our efforts to provide equity in the global marketplace.    

In a recent article from IRIN (the news and analysis website for the UN Office for the Coordination of Humanitarian Affairs), Abdullah Bagersh of the Ethiopian Commodity Exchange had this to say:   "Despite farmers' praise, some remain concerned that fair trade represents another form of charity that does not enable self-sufficiency.  . . . Farmers must adhere to strict [fair trade] practices or risk losing the market they have committed to and become dependent on. Others argue the system splits communities along the lines of farmers who qualify for fair trade premiums and those that do not."

Blessed Coffee aspires to take that next step–improving upon Fair Trade by embracing what's best about it (fair prices, ethical treatment, sustainable practices), and then adding in the relationship building, mutual benefit and empowerment that have been missing. Blessed Coffee calls this next step Virtuous Exchange.    

Tadesse Meskela: The Inspiration Behind Blessed Coffee

Tedesse at Blessed Coffee InaugurationHave you ever wondered where inspirational people get their inspiration?  Well, for Blessed Coffee co-founders Tebabu and Sara you need look no further than fellow Ethiopian Tadesse Meskela. 

Tadesse is the founder and general manager of the Oromia Coffee Farmers Co-operative Union (OCFCU).  The OCFCU was founded in 1999 and today represents some 240,000 small coffee growers from Ethiopia’s largest region, Oromia.  Blessed Coffee gets its Arabica coffee beans from the farmers of this co-operative.

Tadesse was featured in the 2006 documentary Black Gold.  The film premiered at the Sundance Film Festival and was a nominee for the Sundance Grand Jury Prize.  The film captures the paradox between the enormous sums of money generated by the global coffee trade and the meager existence of many of the farmers growing that coffee.  The film follows Tadesse’s efforts as he travels the world working to obtain better prices for OCFCU farmers than those set by the international commodities exchange.

The trailer for Black Gold opens with the startling statistic, “For a 3 dollar cup of coffee, the farmer earns 3 cents.”    It was this type of gross inequity that compelled Tadesse to develop a co-operative union system that allows farmers to retain much of the money that would otherwise be paid out to middlemen and exporters.   

The world has taken notice.  Shortly after the release of Black Gold, Tadesse met with former British Prime Minister Tony Blair to screen the documentary.  Britain’s then Economic Secretary to the Treasury, Ed Balls, said, “Delivering trade justice is not just morally right, it is an economic necessity for Tadesse and the farmers.”  Also taking notice has been Oxfam America, an OCFCU partner and sponsor of a 7-city US tour that gave Tadesse a platform for continuing to raise awareness about the inequities in the global coffee market.

Perhaps most significantly, in 2012 Tadesse traveled to Washington, DC to participate in talks related to the 38th G8 Summit and to sign the “Private Sector Declaration of Support for African Agricultural Development.” It was the first time that the G8 Summit included private sector leaders in these discussions.

Tebabu and Sara met Tadesse in 2002 at a forum organized by Oxfam International and Global Exchange.  It was through this meeting that Blessed Coffee and its business model Virtuous Exchange were born. 

Tadesse has become a friend, mentor, and business advisor to Tebabu and Sara.  During a recent visit to the US, Tedasse stayed at their Takoma Park home and met with members of the Brewing Change campaign team.   His words to the team echoed his earlier message at Blessed Coffee’s inauguration event: 

“Anyone who has based their business on the hope of finding a permanent loser has [an un]sustainable business.  I’m always telling business people that in order for them to have a viable, prosperous, and sustainable business, every company needs to incorporate human dimensions.  Tebabu and [his] associates are one of the few who respond to the need of the farmers in returning $1 USD from a pound of roasted coffee.”

Want to be inspired yourself?  Click here to read the full text of Tadesse's inauguration remarks which are posted on Maryland Governor Martin O’Malley’s website.

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About Blessed Coffee

Blessed Coffee (BC) is based on the philosophy, "from the farmer to your cup" and is established as a socially responsible business and trade geared towards development in coffee growing regions as well as in communities in the US where coffee is sold.


The Nation’s second Benefit Corporation
The significance and common good of the founding philosophy was recently confirmed through the enactment of the "Benefit Corporation," a new legislation signed into law in April 2010 in the state of Maryland. The first of its kind in the nation it is a hybrid of for-profit and nonprofit models that aims for community benefits as well as profits. BC is the second company to be registered under the Benefit Corporation law. BC's model is more than compelling; it resonates at multiple levels: the desire for the very best, the appeal of culture as well as the aspiration to produce common good for farmers in Ethiopia and communities in the US.

By working with Ethiopian coffee cooperatives and directly with 180,000 small farmers that have a stake in BC's success, BC brings light to the rich Ethiopian coffee tradition and introduces premium grade, shade grown, organic Ethiopian coffees. Getting the coffee directly from the farmers and bypassing several middle agents provides a bigger profit margin (US$2.50 per pound to US$13.00) for coffee growers.

coffee-beans

High value profit sharing arrangements and BC's long standing association with the small coffee growers secures its access to the highest grade of beans in regions renowned for producing the world's finest coffees. The same arrangements guarantee that quality is maintained in each step of the logistics chain – including 18 quality control checks during the crucial sorting and washing processes. The result is a branded product with a discernable difference in both taste and consistency.

As BC grows and expands its market share and variety of supply, small coffee farmers from other cooperative unions in Ethiopia and other African countries will establish a business relationship with other small coffee farmers in Ethiopia and other African coffee growing countries. Support and endorsement of BC's business concept has been received from Congressman Mike Honda, Chair of the US Congressional Ethiopian Caucus; the Ethiopian Embassy in Washington DC; Governor of Maryland and the Governor's Commission for African affairs. BC has also been awarded a Congratulatory Citation is from the General Assembly of the State of Maryland.

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Virtuous Exchange

What is Virtuous Exchange?

VE is a business model that facilitates businesses in:

• Directly connecting producers and consumers.

• Providing access to active investment and significant benefit sharing to the producers, consumers, and other stakeholders involved in every transaction.

• Developing engagement, production, transaction, and marketing processes that are socially, economically, and environmentally sustainable.

• Adding value to the lives of others, while building community.

How is Virtuous Exchange different from Fair Trade?

While Virtuous Exchange embraces Fair Trade’s principles of helping producers in developing countries obtain fair prices, be treated ethically, and implement environmentally sustainable practices, VE goes beyond Fair Trade to:

• Provide producers with significantly higher benefit—sharing up to 50% of profits.

• Offer producers attainable investment opportunity—making possible an ownership stake in the business.

• Recognize and appreciate the human element inherent in trade. Producers become more than commodities. Their cultural and social traditions are honored and shared in every transaction.

• Set a higher bar for socially conscious businesses. Rather than simply meeting a set of standards, VE asks businesses to be in real relationship with producers and consumers and uniquely connect them in ways that have the best interests of both, and our world, at heart.

How is Blessed Coffee implementing the Virtuous Exchange model?

• Blessed Coffee connects consumers and coffee growers by purchasing coffee directly from the Oromia Coffee Farmers Union which represents more than 240,000 small coffee growers.

• Ultimately, Blessed Coffee will offer farmers a 50% investment opportunity in Blessed Coffee and provide 50% equal benefit sharing of the profit from the wholesale revenue stream. Blessed Coffee will also offer 50% of the profit from the retail business (Blessed Coffee Café) to local nonprofits that provide vital public good. Lastly, Blessed Coffee offers community investment opportunity to small investors from diverse socio-economic backgrounds.

• Blessed Coffee will pay employees a living wage. Additionally, Blessed Coffee will continue to use community organizations and networks for marketing and as sales agents, forgoing expensive advertising campaigns and instead leveraging community support to raise visibility.

• Blessed Coffee will create a social and cultural hub, the Blessed Coffee Café, for communities to forge relationships and exchange cultural and artistic reflections.