On a virtual study tour of Caravela Coffee, the company which sources coffee from Latin American small-holder farmers and in which OI has a $4.7m equity stake, participants were reminded that the coffee we drink can help improve the lives of people and our planet.
We’ve all seen the jute bags filled with green coffee beans that move up the supply chain to roasters then coffee shops and grocery shelves. Less well known are the challenges facing small-holder farmers who plant coffee trees and harvest coffee cherries which are then pulped, fermented, washed, dried, milled and graded for export. Latin American coffee farmers have had to face low productivity, low profitability and generational migration to cities. Caravella’s mission is to make coffee better for the whole supply chain, including the 4,000 smallholder farmers and 500 roasters who partner with Caravella.
Julie Scott and Vaishali Dassani of Oikocredit Canada participated in the April 13 Caravela Coffee study tour and share what they learned:
What did you learn about the coffee business?
Julie: Before the study tour I did not fully understand that commodity grade, or lower quality coffee, can trap small-holder farmers in a cycle of low-income and low quality of life. Without education and support it is extremely difficult to upgrade farms to produce higher quality, higher margin coffee. This is where Caravela comes in - it’s mantra is ‘Better coffee means more money for farmers’.
Vaishali: During the study tour, it was interesting to learn the complete coffee production life cycle. Farmers and Caravela engage from the beginning i.e. from soil analysis to use of fertilizers in the production phase. In the later stage, Caravela does an extensive Cup analysis or cupping, which helps in understanding the quality and taste of coffee produced which helps in determining pricing.
How does Caravela support small-holder coffee farmers?
Julie: Small-holder farmers can feel used by businesses further up the supply chain so for the co-founders of Caravella the overarching priority is to build trust and long term relationships with farmers. To do this they help train farmers on how to improve bean quality and profitability. This in turn makes it more likely that small-holders can make their farms a sustainable family business where they can work with their wives and children for years to come.
Vaishali: Caravela is not only working with existing small-holder farmers in the fields with training, quality control and introducing new technology etc. But they are also training the future coffee producers. Caravela is training the youth as coffee analysts and educators. This will open opportunities for youth to follow the trade but become better coffee producers by keeping the technological advancement together with a sustainable way of production.
How does Caravela stand out from other companies in the coffee business?
Julie: In addition to being ‘origin focused’ and partnering with small-holder farmers, Caravela stands out for being transparent about its social and environmental impact. It is a Certified B Corporation which requires Caravela to both report on how it balances profit with purpose and to measure its social and environmental performance. Caravela has also set ambitious targets, like being carbon neutral by 2025.
Vaishali: Despite the competition, Caravela is giving the right price for the right produce. They not only work with farmers during the delivery of coffee, but throughout the production cycle. Apart from this, Caravela is encouraging diversity and inclusion, supporting minimum wage and providing health and pension benefits. They are imparting knowledge, connecting via technology and building sustainable communities.