Supply Chain Innovation Gets the Consumer Closer to the Farmer

BY KENNETH LANDER ON JUN 23, 2016

Kenneth Lander is co-founder and chief sustainability officer of Thrive Farmers Coffee.

Franco Garbanzo, one of the first farmers to partner with THRIVE Farmers, smiles with his family on their farm "La Violeta" in Tarrazu, Costa Rica.

Kenneth Lander is co-founder and chief sustainability officer of Thrive Farmers Coffee.

Franco Garbanzo, one of the first farmers to partner with THRIVE Farmers, smiles with his family on their farm "La Violeta" in Tarrazu, Costa Rica.

I read a lot about sustainability, especially in the food and beverage space. This topic is written about every day from every angle. A very popular topic, and the most prevalent approach to measuring a company’s sustainable practices, is the environmental impact of a company’s supply chain, including its suppliers. Perhaps a bit less, but still a significant amount of energy, is spent talking about social justice issues like gender equality and labor relations within the supply chain.

Much less energy is focused on what we have discovered as a fundamental indicator of sustainability for a brand. The first approach to corporate social responsibility should be economic sustainability, indicated by how close we really are to the men and women who grow products at the base of the supply chain.

For decades the coffee industry has relied on a volatile commodity price that is not set by farmers, but by the buying and selling of global coffee traders. We have communities in Thrive Farmers that avoided a 60 percent downward swing in price in a 12-month period for the past two years. You cannot run a business with those kinds of uncertainties.

The next generation of coffee farmers is abandoning family farms at a double-digit rate for more profitable occupations, and with them goes the potential future supply of a commodity that has an ever-increasing demand. Because of this reality, a business can actually help sustain this industry further by simply selecting products, such as coffee, with the producers in mind.

If we approach sustainability at the economic level first, then farmers as our suppliers will be able to increase positive environmental and social impact in their operations. The solution is to put the consumer closer to the farmer, making him or her a stakeholder in the real value of the product on the consumer side.

Thrive Farmers was founded because I was about as close as one could get to a coffee farmer. I am a coffee farmer in a little town called San Rafael de Abangares, Costa Rica. Thrive Farmers saw an opportunity for the coffee industry and the food and beverage industry as a whole to be sustainable by addressing something fundamental; farmer participation in the supply chain.

We saw an opportunity for larger companies to regard economic sustainability through their purchasing decisions and redefine the supply chain and connect with the real producers who are the foundation of the business of coffee. 

This new approach takes speculation out of the demand side, but enhances speculation by every buyer and seller along the supply chain as coffee moves towards the cup. By taking out all of the speculating “buy-sells” in the chain and getting the customer closer to the farmer, the platform allows a company to know who grows the coffee they consume each day. It also allows the farmer to share in the revenue in the purchase of the roasted coffee where the value is higher and the market is predictable.

The incredible part of this restructuring of the value chain is that the market is screaming for more transparency to, justice for and connectivity with the people who grow products domestically and internationally. Now farmers can have a viable, long-term business with stable, predictable and higher prices. When a farmer moves up the supply chain alongside his product, the price of the final product is competitive with the old way of doing things. Additionally, the value and quality of the product increases from the consumer perspective because it helps the farmer through economic sustainability. 

Franco Garbanzo is a smallholder farmer in La Violeta in the Tarrazu Valley of Costa Rica. He is my friend, and one of the first farmers to work with Thrive. He grows on about 12 acres of land and has partnered with Thrive Farmers for five crop years. He is making three times more money than he did before. Because of Thrive, he decided to invest in a mill and start processing his own coffee fruit to create a business that made sense for his son Carlos and daughter Estefani to carry into the future. He is able to provide more than just necessities for his family now. He is thriving. If you walk into a Chick-fil-A somewhere in the U.S., you will find a cup with his face and story on it. 

Today’s world is a much smaller place. With technology and intention, a big company can connect, interact with and sustain a network of small suppliers in a way that is beneficial to all stakeholders in the chain. This makes that company’s supply chain truly sustainable. Partnering with companies like Thrive Farmers, companies can innovate parts of their supply chains that previously were not open to “farm to table” innovation at scale. 

After getting to know farmers personally, when I think about supply chains and sustainability in the food and beverage space, the first question I ask is whether or not the people growing the food are thriving. Are their kids going to continue in their parent’s footsteps? In the corporate social responsibility world, that is the fundamental question we should ask.

Get closer to the farmer, even if it is just changing the cup of coffee you use. I promise you, it will change how you think about sustainability.