One crop can make or break a farming community’s fortunes explains Jacqueline Arias, founder of coffee brand República Organic. But the odds are weighed against them if they can’t get a good price for their product.
“I was born in Colombia where some of the best coffee is grown, and grew up in Australia listening to my parents tell stories about coffee. There was always a romance to it, but we also knew the farmers were struggling.”
Arias admits her family’s egalitarianism (which included volunteering on farms because “helping your community is just something you do”) sometimes put it at odds with the ruling parties of Colombia and then Chile during her childhood. Her family eventually found asylum in Australia, and as a young reporter with the ABC she won several awards for her groundbreaking reports on children in detention.
In 2005 she took her family to her birthplace, promising them the best coffee on the planet — but all they found was instant. “Nescafé was buying coffee beans at a pittance and processing them, so the Colombian farmers didn’t know their product was the best,” recalls Arias. “It was the catalyst for me to change careers, to find a solution to get them a better deal.”
Changing the commodity price
The best coffee is grown in mountainous areas with rich volcanic soil and plenty of rainfall. But the best place to sell coffee beans is in a bustling town, where farmers can access brokers who know the value of coffee on the New York Coffee Sugar and Cocoa Exchange.
“If a farmer is far from a main town, they could be waiting for someone to come by the farm gate to buy their coffee at whatever price they feel like paying,” notes Arias, whose journalistic research into commodity markets led her to Fairtrade Certification, launched internationally in 2002.
“With Fairtrade, there’s a stable premium on top of the New York price to ensure farmers and their communities can plan for their future.”
Part of the premium is paid to the farmer; the rest is invested in the co-op for equipment to help with sustainable production and community services such as health clinics.
When Coles began selling República Organic nationally in 2007, it was the first Fairtrade-certified coffee on supermarket shelves (Woolworths picked it up in 2008). “It challenged the status quo,” says Arias. “I still find it amazing when someone picks up República at the supermarket, reads the package, connects to what we stand for, then drops it in the trolley.”
The head of a large company once told Arias they personally believed in everything República stood for, but wanted the product at the same price as Nescafé. She replied, “You either believe in what we do and are willing to pay more so everybody in the supply chain benefits — or you don’t.”
Board member Felice Testini had already warned her not to get caught in a price war. “Consumers are trained to buy specials,” she says. “60 per cent of products are discounted, but a brand like República can’t compete against multinationals by cutting prices. It’s a death trap. We’re already constantly absorbing currency exchange fluctuations. We’ve been on the shelves for 10 years, building brand loyalty by sticking to our DNA. In that time, we’ve seen five brands come and go trying to play the price game.”
República has gained many accolades for sticking to its DNA over the years, including a World Environment Day award in 2014. Alongside pioneering Fairtrade in Australia, Arias says her proudest achievements are back-to-back awards (2016–17) for “Best for the World, Environment” from B Corporation.
“It’s the toughest certifying body on the planet for sustainability and ethical standards,” says Arias. “An award from BCorp is the gold medal for sustainability and ethics in business. I want to replicate our performance in the US because no-one has done it with coffee in America.
Benefits of an advisory board
Accountability: “When I appointed my board, a lot of people said, ‘It’s a private company, why are you putting in place people you report to?’ I like the discipline of being held accountable and I know they lift my game.”
Performance review: “I speak highly to any entrepreneur about having that structure and regular reporting because it allows you to review how you’re performing towards your goals.”
Focus: “If you develop a great idea, you bring it to the board and persuade them to come on your journey. They help you focus that idea.”
Wisdom from experience: “Felice Testini has 30-plus years’ experience in FMCG (fast-moving consumer goods). Another board member, David Cunningham, is strong in sales and managing people. He’s an entrepreneur with international interests who understands people and culture.”