This post originally appeared on Food+Tech Connect on March 15, 2017.
As demand for Fair Trade-certified coffee grows, there is concern that farmers don’t always reap the economic benefits. While the Fair Trade coffee you buy at a store is priced at a premium, most of those profits – 90 percent, according to Vega Coffee – go to the roasters. There are also up to 20 middlemen involved in the value chain from from farm to your cup. Vega Coffee wants to turn this model on its head. It gives small scale farmers the training and equipment to roast and package their coffee. Eaters are then able to purchases the coffee through Vega’s website and have it delivered within 5 days of roasting. This model enables the farmer to earn up to 4-5 times more per pound.
I spoke with Vega Coffee co-founder Noushin Ketabi [who won the Judges’ Choice Award at FoodBytes! San Francisco] about Vega’s business model. My interview is below.
Danielle Gould: Why does the coffee supply chain to be redesigned?
Noushin Ketabi: Despite the fact that coffee has a massive market worldwide (and a $48 billion industry in the US), 80 percent of the world’s 25 million coffee farmers earn barely enough to get by. They’re often disconnected from the market, and rely on middlemen (as many as 20!) to bring their product to market. Meanwhile, coffee consumers wind up paying high premiums for coffee due to the inefficient supply chain. Given that 80 percent of coffee farmers worldwide live in economically vulnerable conditions, they can no longer afford to be keep out of the profit making activities of the supply chain. The time for disruption is now.
DG: How is Vega reimaging the coffee supply chain?
NK: We are creating a whole new coffee experience by distilling the supply chain to three essential parts: the producer, the consumer and the marketplace. We equip farmers with the tools and training to roast and package their coffee into a high end product. As a result, they earn 4-5 times more money than they would from selling an unprocessed commodity to a middleman. Meanwhile, customers order coffee on our online marketplace and receive their order direct from origin within 5 days of roasting, fresh and ready to enjoy.
We are committed to promoting gender equity throughout our supply chain, and over 90 percent of our farmer roasters are women. This is something that’s very important to us.