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My Visit to Equal Exchange

by: Jill Richardson

Tue Aug 25, 2009 at 21:33:08 PM PDT


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Monday morning, I drove south of Boston to see the headquarters of Equal Exchange, a company I knew only for its Fair Trade chocolate, coffee, and tea. Rodney North, their PR guy, had invited me to visit for a tour (and some delicious tastes of their products) and while I normally turn down any offers of that sort from for-profit businesses, this one was different because Rodney also asked if I'd address the staff of Equal Exchange to tell them a bit about my book.

Equal Exchange is a company I have personally bought products from in the past (both chocolate and coffee), and I'm certainly an advocate of Fair Trade products. However, I'd prefer to continue advocating for ethical business models and sustainable practices without endorsing specific companies in exchange for a bit of free food. That wouldn't be honest to blog readers, and it probably wouldn't even make for very interesting blog content. On the other hand, we do need businesses like Equal Exchange as part of our movement, both because they provide us with Fair Trade products (so we can eat cocoa and know it wasn't harvested by child slaves) and because we want businesses weighing in on our side of political issues.

That said... here are a few pics and some details on my visit with Equal Exchange.

Jill Richardson :: My Visit to Equal Exchange
Equal Exchange is about 40 min outside of Boston (or at least, that's how long it took from where I was staying in Boston). On the way there, I could NOT find a decent cup of coffee anywhere. Dunkin' Donuts has just about taken over the entire northeast and my options were that or McDonalds. But I figured that a coffee company would probably have some coffee available for me to drink. Sure enough, I was not disappointed...


Coffee... hallelujah!

What you don't see in that picture is the large, very well equipped kitchen at Equal Exchange. Eating well at work has always been a challenge for me, because you're limited to what you can cook in a microwave or eat raw. Perhaps it's because Equal Exchange is a worker-owned co-op where each employee has 1 vote, but they've got an entire kitchen so that their staff can eat real food. And, of course, all you can drink Fair Trade coffee.

Most of their business is coffee. They start by receiving samples of green beans from their growers, which the quality control department roasts and "cups" (cupping is essentially the coffee version of wine tasting). They place orders and - if the coffee isn't good - they tell the growers exactly why so that they can improve in the future. All of the coffee comes from cooperatives of small farmers and Equal Exchange wants them to succeed - hence the thorough feedback loop when the coffee isn't up to snuff.

The orders come in after they are placed. In the pictures below, you'll see enormous piles of burlap bags filled with green beans.


A lot of green coffee beans

Much of the roasting process is computerized. From these burlap bags, the green beans go into a storage area that is hooked up to the roaster. The computer knows what kind of beans is in each different storage container, and it can move whichever variety of beans you specify into the roaster. You can see the roaster below, but you can't see it well because it's blocked by a large vat where the beans are cooled to stop the cooking after they are done roasting.


The roaster... The actual roaster is in the background a bit, the vat in the front is where the beans are cooled

Often coffee is sold in blends (i.e. beans from more than one origin or beans that are roasted differently are mixed together), and you can either form the blend before or after roasting. For example, you can mix green beans from El Salvador and Guatamala and roast them together, or you can roast them separately (perhaps for different amounts of time and to different temperatures) and then blend them once they have cooled down. After the coffee is roasted, the cooled down beans go into another storage container, and from there they are packed into 1-lb or 5-lb bags using the machine below:


The machine that puts the roasted beans in 5-lb bags

During the process, there is a bit of waste, and Equal Exchange gives this to a farmer for compost. They also mentioned that they have leftover organic burlap bags to give away, if anyone wants them.


Leftovers from the coffee roasting process

So where does the coffee go from there? Coffee shops, natural foods co-ops, retail outlets, and places of worship. Because Fair Trade practices jive pretty well with religious beliefs about treating others the way you want to be treated, several religious denominations and faiths work together with Equal Exchange to get their churches and/or mosques to buy Fair Trade coffee.


A poster for one of the interfaith outreach programs

Equal Exchange also sells cocoa (see the poster below), tea, pecans from Georgia, cranberries from Massachusetts and Wisconsin, and bananas. Most of these products come from small farmer-owned cooperatives, but tea is a little bit different. A lot of the world's tea is grown on large plantations, so finding small farmers to work with can be challenging. Equal Exchange only works with one plantation for tea and the rest of their tea still comes from small farmer co-ops. In addition to the Fair Trade products listed above, I've also seen Fair Trade sugar, mangoes, and cheese, sold by other companies. When you can't speak to a farmer directly, Fair Trade is a good way to go.


A poster for Conacado cocoa cooperative


A few books from Equal Exchange's library, which now contains a copy of my book

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...without endorsing specific companies... (4.00 / 6)
I don't want you to trade your endorsement for a year's supply of free coffee, but some companies have policies that are better than others, and they should be extolled to the skies. The best counter to the argument "it can't be done, it isn't practical" is "it is practical, it is being done, and here's who is doing it."

You have spotlighted a company in a field where wonderful work is being done. I don't know anything about Equal Exchange, but it sounds a lot like Stumptown in Portland, Intelligensia in Chicago, Counter Culture in North Carolina, 48th Parallel in Vancouver B.C. - the list of wonderful North American coffee companies actually is very long, and not naming a particular one is not meant to slight. (The companies I named don't do chocolate and tea.) These companies do sell some Fair Trade coffees for customers who want a Fair Trade label, but all of them go way beyond Fair Trade practices in their relationships with growers.

Perhaps Equal Exchange is just another Fair Trade vendor, I don't know, but any company that, like Equal Exchange, gives actual feedback to actual growers or grower coops, might well be part of this tremendously exciting third wave movement.


Correction (4.00 / 4)
49th Parallel

(What's one degree of latitude among friends?)


[ Parent ]
"Fifty-Four Forty or Fight!" (4.00 / 4)
(What's one degree of latitude among friends?)

Oh ho...

The Oregon Dispute became important in geopolitical diplomacy between the British Empire and the new American Republic. In 1844 the U.S. Democratic Party, appealing to expansionist sentiment and the popular theme of manifest destiny, asserted that the U.S. had a valid claim to the entire Oregon Country up to Russian America at parallel 54°40' north. Democratic presidential candidate James K. Polk won the 1844 election, but then sought a compromise boundary along the 49th parallel, the same boundary proposed by previous U.S. administrations. Negotiations between the U.S. and the British broke down, however, and tensions grew as American expansionists like U.S. Senator Edward A. Hannegan of Indiana urged Polk to annex the entire Oregon Country north to the parallel 54°40' north, as the Democrats had called for in the election. The turmoil gave rise to slogans like "Fifty-four Forty or Fight!" and the catchphrase "Manifest Destiny".


[ Parent ]
The march of history decreed (4.00 / 4)
Yea verily, 54-40 shall be Alaska's southern boundary. The southern tips of Dall Island and Prince of Wales Island are about 54°40' north. (Most of the Aleutian Islands are a little below that.)

[ Parent ]
chaff (4.00 / 3)
Green coffee beans have skins that come off during roasting, which is what you photographed in your "leftovers" pic.

thanks (4.00 / 2)
I didn't remember the name for it.

"I can understand someone from Iowa promoting corn and soy, but we are not feeding the world, we are feeding animals and soft drink companies." - Jim Goodman

[ Parent ]
I gotta agree with Count (4.00 / 6)
on this Jill. If people don't put companies like Equal Exchange in the spotlight, a lot of people won't know about them, aren't able to support them and the farms they support by buying products from them, and won't be able to counter the argument that this type of business model won't work because they won't have the example of succesful companies that are working in this type of business model.

If you hadn't gone to Fair Exchange and put up this article, I wouldn't have known about them.....  

Normal people scare me. But not as much as I scare them.....


Exactly what I've always said... (4.00 / 5)
On the way there, I could NOT find a decent cup of coffee anywhere. Dunkin' Donuts has just about taken over the entire northeast and my options were that or McDonalds.

Now you know what I'm talking about!

:)

I knew these guys mainly from some co-ops back in Jersey.  I only wish we had more places like that back there.

Living in the City of Coffee Roasters (Ristretto, Stumptown, Blue Kangaroo, Spunky Monkey, Schoendoenken, etc...), it's sometimes easy to forget many don't have the same choices.  Better them than the 'stuff' at McDonald's or Exxon.  

And that's just coffee, not to mention the rest...

....................

I wanna work in a place with a library like that!


thanks for this! (4.00 / 5)
what a great diary.... what a great company!!

do they have on-line shopping?

come firefly-dreaming with me....


yep (4.00 / 1)
online shopping here: http://shop.equalexchange.com/

I haven't tried my coffee yet bc it's vacuum packed and I'm trying to use up what's in the freezer before it goes bad first. However, I've tried the chocolate and it's GOOOOOD. So's the tea. I've got the silk pyramid shaped bags, and that stuff is all from small farmers. The wild rooibos is great, much better than other rooibos I've had (which I normally don't even like).

"I can understand someone from Iowa promoting corn and soy, but we are not feeding the world, we are feeding animals and soft drink companies." - Jim Goodman


[ Parent ]
Not a big fan of EQ (4.00 / 2)
or many of the other fair trade type groups.

Having worked with product from several of them over the years I have asked the same question over and over again.  Please point to one situation where the people who are receiving the increased payments have moved out of poverty.

Yes some schools, and basic medical facilities have been build but the overall economic situation for these people has not changed. In fact in 2008 the tea workers in Sri Lanka rejected their fair trade checks because the amount was too small.

The problem with fair trade programs, and there are/was investigations in the UK as to where the money really goes, it that the extra fee paid to these farmers/laborers is NOT based on the retail sales value of the products.  In simple terms the biggest profit is in the marketing of the products not the sweat equity of the poor.  Yet consumers believe that most of their money is going to the poor.

If these groups would simply share the retail profits with the poor, instead of the little increase in raw material prices they could really effect change. As it is, these groups basically skim the fat profits for themselves.

If these groups were really serious about their programs to lift people out of poverty they would have an open book marketing program so everyone would know where the profits go.

Good intentions do not make a good program.


"open book marketing" (4.00 / 3)
Just fyi to Organic George, Equal Exchange does post their entire annual report to the public on their website.

Also, it took a couple hundred years to establish the economic and political systems that created the extreme poverty we see today, so it makes sense that it might take more than 20 years to un-do the damage.

Fair trade should be "movement-building," and seeing the fruits of anti-status-quo organizing takes time.


Fair Trade, (4.00 / 2)
although only a first step, is a much-better-than-nothing first step in my opinion. For one thing, it laid the groundwork for the inspired, inspiring direct trade people that came after. Fair Trade itself, though, continues to evolve and has achieved much for such a recent phenomenon.

Thanks for the tip about the annual report.


[ Parent ]
Some answers about Equal Exchange for La Vida Locavore readers (4.00 / 3)
Hi, this is Rodney North, Jill's host during her visit to Equal Exchange.

for RiaD: yes, we do have online shoppping. see http://shop.EqualExchange.coop

for JayinPortland:
Good news, Equal Exchange is coming to PORTLAND next month. Actually we've had a small office there off and on for 10 years, and a bigger office/warehouse in Hood River, Oregon. But in the next 2-3 months we're going to consolidate the two locations into one bigger, better space in downtown Portland.

It won't have a retail space, but it will bring us that much closer to many of our local accounts, like New Seasons.

+ this move is a big deal as it will strengthen our worker co-operative, the only one in the world to span 3,000 miles. (We also, by the way, run a nice cafe in Seattle's Ballard neighborhood).

for Count:
I feel pretty good about saying that we're not "just another Fair Trade Vendor".
For starters, most firms selling Fair Trade products treat it as just an "add-on" to otherwise conventional product line. For us it is 100% of what we do.
Also, back in the 1980's we helped to introduce Fair Trade coffee (the first Fair Trade food/beverage product) to the U.S. along with a few other now long gone non-profits and the still-kicking Friends of the Third World in Indiana.
To see more about how Fair Trade is just a part of what we're about see:
http://www.equalexchange.coop/...

Lastly, for Organic George, that will  take another, seperate comment.  


thanks for showing up and participating (4.00 / 2)
in the discussion Rodney.

"I can understand someone from Iowa promoting corn and soy, but we are not feeding the world, we are feeding animals and soft drink companies." - Jim Goodman

[ Parent ]
Thank you. (4.00 / 1)
Although I copped to not knowing about the company, I failed to take the obvious next step of drilling through your website.

Also, I didn't know the Fair Trade minimum had been raised, nor that you pay more than the minimum, in addition to the other things you put into the effort.

In the press release about increasing the FT minimum, you quote commodity prices that seem to be for green Arabica. I assume the reason is that that is what you trade, exclusively. Consumers should know, however, that Kraft, Nestle, Proctor and Gamble, and Sara Lee buy much Robusta, which is cheaper. When Arabica was $0.42/pound, Robusta probably was around $0.30 and recently had been about $0.20? When Arabica was $1.02 Robusta was, what, around $0.70? Also, it bears noting that in 2007 non-Fair Trade farmers in Ethiopia, for example, were receiving $0.50/kilogram for Arabica cherrys. Per kilo, not per pound. For cherries, not beans, but still. Not to climb on a soap box.

Also, consumers should know that the prices you pay are for green beans, and that a pound of green yields much less than a pound of roasted.

(What is an average ratio of roasted/green, by the way?)


[ Parent ]
answers for OrganicGeorge about the efficacy of Fair Trade and more (4.00 / 2)
Organic George had a number of issues with Fair Trade and I think they deserve a point-by-point response, especially as so many of the readers here, and Jill herself, believe in Fair Trade.

George wrote " . . .  Please point to one situation where the people who are receiving the increased payments have moved out of poverty."

Not surprisingly hundreds of PhD students and other scholars and journalists from around the world have tackled this and related questions - and the consistently find is that Fair Trade with farmer co-ops helps on many fronts.
It helps to:
- Reduce poverty
- Increase the economic opportunities and options for small-scale farmers
- Reduce the risk that otherwise falls disproportionately upon farmers
- Helps farmers work their way, collectively, up the supply chain so that they do more of the more-profitable crop processing, and not just the harvesting of crops.
- Increase the political heft of the small farmers in their local and regional political circles.

As for "moving people out of poverty" no one ever claimed that Fair Trade could do that alone. As BostonJLM suggested, that would be like asking a small town in Iowa to overturn the WTO. Nevertheless Fair Trade can, and has, made a big difference. I encourage OrganicGeorge and others to see the many academic studies that are listed at the following links and that provide the data he's looking for: http://www.fairtrade-institute... , or http://www.fairtraderesource.o...

George wrote:
"Yes some schools, and basic medical facilities have been build but the overall economic situation for these people has not changed. In fact in 2008 the tea workers in Sri Lanka rejected their fair trade checks because the amount was too small."

George is citing examples taken from Fair Trade Certified PLANTATIONS and we actually agree with him. You can read about one such expose at:  http://www.timesonline.co.uk/t...
It is precisely for such reasons that we're trying to push back against allowing PLANTATIONS into the Fair Trade system. See our many blog posts about this at: http://smallfarmersbigchange.c...  or our press release at http://www.equalexchange.coop/...

George wrote:
". . . that the extra fee paid to these farmers/laborers is NOT based on the retail sales value of the products.  In simple terms the biggest profit is in the marketing of the products not the sweat equity of the poor.  Yet consumers believe that most of their money is going to the poor."

George is, I believe, citing a poorly researched article in the Wall Street Journal from a few years back.
For starters, we don't know what consumer think (though I wish we had the market research budgets such that we could!), but we at Equal Exchange at least tell folks that farmers are receiving MORE than they would otherwise, which is categorically true.
Also, Fair Trade is about MUCH more than just the price paid for crops. Other critical ingredients include:
- support for farmer co-ops
- buying directly
- long term relationships
- providing affordable credit
- and public advocacy

George wrote: "If these groups would simply share the retail profits with the poor, instead of the little increase in raw material prices they could really effect change. As it is, these groups basically skim the fat profits for themselves."

George is confusing the RETAILER of a Fair Trade product with the company who bought that coffee or sugar from the farmer co-op. At Equal Exchange the chain between farmer and shopper is often very short, but for other Fair Trade products there could be an importer company, AND a coffee roaster, AND a distributor, AND then the retailer. Consequently, George's idea would be much more complex to execute than he might imagine.

As for an "extra fee" consumer sometimes in fact pay no more for our products or other Fair Trade products - though arguably they should. And if they do that higher price is often dictated by the retailer, not the Fair Trade import company, who might be a step or two removed from the retailer. Further, even your conventional supermarket is operating under pretty thin profit margins (like 1-3% on the dollar).

Similarly at Equal Exchange our normal profit is only 2-4% a year. Further that profit is divided up between state and federal taxes, a modest 5% dividend to our non-employee investors; a distribution to employees (everyone from top-to-bottom gets the same amount), re-investment in the business, and then 7% of net profits are given away to non-profits working in Fair Trade. Consequently, I wouldn't say anyone is skimming "fat profits" off our Fair Trade sales.

Further, our "non-employee" investors include three of our farmer co-op partners in Mexico and Costa Rica. So they seem to believe in what we're doing.

Lastly, the Fair Trade price is often no mere "little increase in raw material prices". For example, during the infamous "coffee crisis" of 1999-2002 when the world coffee market went down to 42 cents/lb Fair Traders like Equal Exchange continued to pay $1.26-1.41/lb all along. That means that farmers were getting 200-300% more than normal market prices.  

George wrote:
If these groups were really serious about their programs to lift people out of poverty they would have an open book marketing program so everyone would know where the profits go.

See above + our 2000-2008 annual reports at  http://www.equalexchange.coop/... especailly pages 12 & 14-17 of the current report which details "where the money goes".
You'll see that the current report, and many past reports, are downloadable in Spanish, so that our farmer partners can read them, too.  

Ok, I think that about covers it, though we'd be happy to field more questions.

Rodney North
Equal Exchange
Rodney@equalexchange.coop
774-776-7398


OrganicGeorge might possibly have had in mind (4.00 / 1)
companies like Starbucks and Newman's Own, who seek maximum advantage from the FT label in return for minimum participation.

Just guessing.


[ Parent ]
ratio of green coffee to roasted coffee (ie what's the weight loss?) (0.00 / 0)
Count,

You're right to point out that many coffee farmers are selling robusta coffee, which fetches an even lower price than the arabica (which is nearly exclusively what is used in the specialty coffee industry).

re: difference in weight between green and roasted coffee.

You're right that we (and other coffee importers) are buying GREEN (ie unroasted coffee). And because the green coffee loses moisture during roasting it also loses about 16-20% of its weight.

Consequently we need to buy about 20 oz. of green coffee for every 16 oz. of roasted coffee that we sell.  


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