Can my online coffee order lift farmers out of poverty?
How can coffee lovers around the world be encouraged to adopt a more socially conscious coffee culture and thereby simultaneously help a large number of people out of poverty? Coffee Circle, a young company that is implementing an innovative trading model for premium coffee, has one answer to this question. They buy specialty coffees from Ethiopian farmers at justifiably high prices and thereafter directly distribute them via the internet to the European market.
As an active philanthropic investor, elea strategically and financially supports this cooperation model.
Entrepreneurial success and fairness hand in hand
Coffee Circle was founded in 2010 by a young, dynamic team of entrepreneurs from Berlin. They founded the company following the implementation of a social project that stimulated their enthusiasm for the Ethiopian coffee culture, and they were motivated by the idea of being able to sustainably help thousands of poor coffee farmers on-site. According to Martin Elwert, one of the co-founders and the CEO of Coffee Circle, “We wanted to make a difference, but not via the traditional means of development assistance or charity.” As former business consultants, he and his team colleagues brought with them significant experience in the area of business management. They wanted to use this experience not only to achieve economic success, but in particular to develop fair and transparent trading partnerships and to establish a new specialty coffee culture. As Martin says, “We believe in entrepreneurship and its supporting effect on development perspectives.”
Coffee and its potential to transform life
What is the basis of Coffee Circle’s entrepreneurial idea? Approximately 80% of the Ethiopian population lives in the countryside. The cultivation and sale of coffee, which is one of the most important export goods of Ethiopia, forms the economic livelihood and thus the basis for survival of a majority of the Ethiopian population. According to one of the coffee farmers who works with Coffee Circle, “Our whole life is built on coffee.” Nevertheless, the small coffee farmers lack the professional knowledge and experience to be able to exploit the potential of their high-quality coffee on the export market. As a result, the prices for Ethiopian coffee remain low, and coffee farmers are not able to lift themselves out of poverty by selling their coffee. They still lack access to safe drinking water, electricity, adequate health care, and educational opportunities for children. What's more, given population growth and the corresponding increase in the need for agricultural land, the deforestation of Ethiopia is rapidly progressing. This not only has environmental consequences, but it also endangers the coffee farmers` ability to use their most valuable resource: wild growing premium coffee from traditional forest gardens that grows in mixed cultivation without the use of pesticides, before it is subsequently picked by hand and carefully processed in small amounts. The sale of this special coffee has the potential to greatly improve the living conditions of Ethiopian farmers, provided that it is sold at fair prices. Coffee Circle is working hard to ensure that this will happen.
An innovative trading model
In concrete terms, the Coffee Circle model works like this: Each year during the coffee harvest, Coffee Circle itself is on-site to search for the best coffee. “It is like a treasure hunt whose goal is to find the best coffee beans each season. In order to achieve this, one must be at the right place at the right time,” says Hannes Fendrich, who is responsible for the purchase of coffee beans at Coffee Circle. For these special coffee beans, Coffee Circle pays the farmers a price that takes into account its outstanding quality as well as the know-how and labor utilized for its growth and harvesting. In this way, the coffee farmers are paid more than twice as much as they would usually get paid on the global market. As a result, they have considerably more money left over for their daily lives as well as for urgently needed investments. The premium coffee is then distributed throughout Europe by Coffee Circle. The internet plays a key role in this regard. It not only serves as a distribution channel, but also a means for increasing the accessibility and transparency of the work done by Coffee Circle - a distinctive and uncommon feature in this business. Furthermore, for every kilogram of coffee sold, one additional Swiss Franc is invested in customized, local development projects. The coffee buyers themselves can decide online in each case to which project their donated money should go. These development projects, which are set up by the farmers together with Coffee Circle, primarily begin with training farmers in the professional techniques of coffee cultivation. They then go beyond that to include access to medical care and drinking water and the improvement of educational conditions for school children. And finally, they culminate in the promotion of bio-certification.
An engaged partner for even more impact
Based on their conviction about the large impact potential of Coffee Circle as well as the personal commitment and professionalism of its founders, elea is a stockholder in Coffee Circle's parent company, Circle Products GmbH. In cooperation with other strategic investors and by means of its active role on Coffee Circle's Advisory Board, elea helps Coffee Circle to achieve long-term success and thereby as many people as possible out of poverty. The close partnership between elea and Coffee Circle makes it possible for them to have regular, open discussions about possible solutions to the typical challenges that young companies face, as well as a very personal exchange regarding strategic themes such as sustainable growth and social impact.
Why are you so passionate about coffee?
A big goal: a revolution on the coffee market
Altogether, Coffee Circle has already sold more than 220,000 kilograms of coffee. In 2015 alone, the company worked with over 4,600 farmers and could guarantee them fair prices and reliable acceptance conditions for the sale of their coffee. Coffee Circle has become operationally break-even in the meantime and sees large growth potential for its business. In the fall of 2016, it opened up its own roasting plant in Berlin, and it plans to develop its premium coffee business beyond the borders of Ethiopia. With their innovative trading model and authentic transparency, Coffee Circle would like to make people around the world aware of the currently prevalent conditions in coffee trading in order to change their views about it and encourage them to actively participate in improving it. Coffee Circle thereby supports a growing number of coffee farmers along the path to better living conditions. In return, ever more clients around the world should be able to benefit from their absolutely world-class coffee. The European market is just the first step.