Like many entrepreneurs, I began my company with little idea of how difficult it would be to succeed in the industry I set out to work in – in my case, specialty coffee importing. The market was dominated by large multi-national firms, and I saw a need to help farmers benefit by establishing greater transparency in the supply chain. Early on, I took my business plan to the local business school and asked the students to complete a case study on my proposed trade model. At the end of their semester, they turned in their analysis to me and essentially told me that my plan would fail: if I provided total transparency in the supply chain to both suppliers and customers, the students predicted that my customers would leapfrog me to work directly with my suppliers.

I went ahead with my business anyway, in part because I didn’t know what else to do. Now as I look back, I realize that in business sometimes you have to trust your gut, try something totally new, and accept the risks.

Breaking the Rules

When I founded Sustainable Harvest in 1997, I could not compete effectively against the established importers. I lacked the market power to level the playing field; so instead, I decided to break the rules of the trade. Traditional coffee importers buy low, sell high, and limit the flow of information through the supply chain to maximize their profits. I wanted to distinguish Sustainable Harvest by being totally transparent and creating a new kind of trade model. Over the past thirteen years, I’ve hit a lot of obstacles and each time learned important lessons as a result. The accumulated wisdom of these experiences has led Sustainable Harvest to its Relationship Coffee™ model, best defined by the following five components that have developed as the company matured: training, transparency, technology, traceability, and trade credit.

Training

As I spent more time in coffee-growing communities, I quickly realized that farmers lacked the information they needed to compete in the market and meet customers’ expectations. So Sustainable Harvest began providing training for farmers in agronomy, coffee processing, and product quality. The company now invests more than two-thirds of its operating expenses in capacity building for suppliers, channeled through offices in Mexico, Peru, and Tanzania. Recently, a Peruvian grower named Manuel Rojas attended a coffee quality training and reflected afterwards that, “The course has helped me understand what the customer wants and what attributes they seek.” The resulting improvements in the quality and consistency of farmers’ coffee allow them to gain access to speciality markets, sell their product at higher prices, and obtain income security from multi-year or repeat contracts. And our customers – coffee roasters – receive a reliable supply of excellent coffee as a result.

Technology

I have visited many rural coffee-growing communities without electricity or good infrastructure, but I still believe that we can offer them access to the same technology that we use to conduct business. To thrive in the market, farmers must increase their efficiency through technology in the same ways that Sustainable Harvest and our customers do.

Sustainable Harvest is piloting a cutting-edge, web-based application for supply chain management with farmer cooperatives in Tanzania. Sara Morrocchi, Sustainable Harvest’s Africa Program Director, told me, “There are so many stereotypes about poor farmers – that they can’t use advanced technology because it’s too complicated. But they are proving everyone wrong – with training, the farmers, who a couple of months ago had no idea how to turn on a computer, are using our system and now they’re emailing me to ask for more tools.”

Transparency

We encourage the direct interaction of our suppliers and customers (a terrifying proposition for more traditional importers) to iron out differences and establish long-lasting relationships. Each year we host an event called Let’s Talk Coffee®, which brings together coffee farmers, roasters, baristas, finance organizations, NGOs, and other stakeholders to meet face-to-face, participate in training workshops, and work together to address common problems. While friends and business school experts once warned me that transparency was a liability and that my customers would buy directly from my suppliers, in reality, transparency has become an asset for Sustainable Harvest.

Traceability

Over the years, I have seen the power of communicating to consumers about where their morning cup of coffee comes from and the people who grew it. More than 90% of Sustainable Harvest coffee is certified either Fair Trade or organic, providing social and environmental benefits and embedding product traceability into our core business. As consumers request more information on product origins and the government prepares to address food safety concerns with legislation, adopting systems for complete traceability delivers substantial marketing benefits and helps us, our suppliers, and our customers to more effectively manage risk.

Trade Credit

Like many farmers, coffee growers must stretch the income they earn from their crop throughout the year to cover the costs incurred at the beginning of the next harvest. This is exceptionally difficult for families who might have to forego basic needs – food, school fees, or health services – to meet the demands of the harvest. To ease this reality, Sustainable Harvest uses our purchase contracts with cooperatives as collateral for pre-harvest loans, providing coffee producers with the credit they need to reach their productive potential. Last year, Sustainable Harvest facilitated nearly $14 million in credit for farmer cooperatives, reducing growers’ risk and ensuring a stable supply of coffee for roasters.

B the Change

The tenets of Relationship Coffee™ can be adapted to most any business. By investing in partners, operating with transparency, and innovating with technology, companies can find ways to unify the demands of business with their values and their desire to create social change. Sustainable Harvest is only beginning to explore the potential coffee has to change people’s lives for the better. And what I’ve learned so far leads me to an exciting question: if rethinking our industry can make coffee beans a tool for social change, what else can B Corporations do to lead change across all industries?

David Griswold, President and Founder

David’s coffee career began in 1989, when he was helping organic coffee cooperatives in Mexico find new markets for their coffee. David and a group of farmers co-founded Aztec Harvest, the first coffee importing and marketing office owned by small-scale Mexican coffee growers. David directed Aztec Harvest from 1990 to 1995. Aztec Harvest’s organic coffee beans were sold to specialty coffee roasters across North America and named as a flavor of Ben & Jerry’s ice cream. In 1997, David founded Sustainable Harvest, a coffee importing social enterprise with the mission to improve the livelihoods of smallholder farmers around the world. For the past thirteen years, David has guided the company through enormous growth and today is the company is an industry leader in sustainable specialty coffee production and trade.

Prior to his work as a coffee importer and market builder for organic, Fair Trade, and shade grown coffees, David had extensive experience in international development as a journalist in the developing world during his Thomas J. Watson Fellowship, and as the Acting Director for Ashoka: Innovators for the Public. He began his work at Ashoka under the mentorship of William Drayton as Ashoka’s first Communications Director, a position he held from 1987 to 1989. He also worked as Director of Coffee Programs for Conservation International.

David served as President of the Specialty Coffee Association (SCAA) from 2003 to 2004 and led the association in its first Sustainability Conference. In 2008, David received the SCAA’s Outstanding Contribution Award in recognition for his contribution to the SCAA and the specialty coffee industry. David has served on the International Coffee Organization’s Sustainable Task Force, the Advisory Board for Coffee Kids, and the Board of Directors of the SCAA. He is currently the Chair of the SCAA’s International Relations Council. He speaks English and Spanish.

photos by Clay Enos