Tag Archives: fair trade coffee

Not just coffee, Okogreen also sells social justice

Located on Tongshan Street, the shortest street in Taipei, Okogreen is the first Taiwanese company certified by the Fairtrade Labelling Organization International (FLO). Hsu Wen-yen and Yu Wan-ju, the husband and wife co-founders of Okogreen, told Global Views monthly that their shop is not just selling coffee, but also ideals. “I am not running a business for the sake of business, but also to solve social problems,” said the 40-year-old Hsu.

Non-fair trade coffee keeps small time farmers in poverty

Drinking a cup of coffee is such a simple daily ritual, but few people know that with a sip, they drink the combined efforts of millions of small coffee farmers.

Coffee is the second largest commodity worldwide, after petroleum, with prices set by the futures market and in the hands of multinational companies. The whole process, from growing coffee to selling it to the end consumer, is filled with unfairness and injustice. Globally, “unfair coffee” keeps 2.5 million small coffee farmers living under the poverty line, often unable to feed themselves, provide clean water or send their children to school.

With the experience of almost 20 years in social movements, Hsu learned about how fair trade can change the market system while studying at the Graduate School of Environmental Science and Society at the University of Essex, United Kingdom. In order to realize his dream, Hsu launched a business intending to better people’s lives in 2007.

Earning FLO certification

Different from traditional businesses, Okogreen combines business with social justice. Every pack of coffee beans or every cup of coffee they sell is 100 percent in compliance with FLO certification and deemed fair trade.

The process of attaining FLO certification includes purchasing their beans directly from producers or cooperatives also certified by the FLO. By purchasing directly from farmers, they are free from traders and middlemen. This set-up, coupled with the FLO regulations of minimum purchase prices, safeguards small farmers from being exploited.

Hsu told Global Views that “small coffee farmers can benefit more from fair trade transactions.” As an example, the current minimum purchase price of coffee is US$1.60 per pound. However the non-fair trade coffee market prices range from US$0.80 to US$1.00 per pound. It was even lower in 2000, when the price fell to US$0.50 per pound.

Hsu has visited coffee farmers in Peru, and what impressed him most was that the farmland was originally cultivated for coca, the source plant for cocaine. The Peruvian farmers used to grow coca because coffee prices were too low. But with the FLO keeping prices higher, coca farms have disappeared. After 20 years working with the FLO, the drug gangs have finally gone.

Yu, who used to work in marketing and public relations, recalled it took almost a year for them to be certified by the FLO, since no company ever applied in Chinese. So the FLO had to tailor a set of rules for Okogreen.

Fair Trade champions

The initial funding of NT$3.5 million (US$112,000) to start Okogreen was raised with the help of several friends. Before FLO certification was attained, Hsu was unemployed. They survived on Yu’s monthly wage. “At that time, it was difficult for us to afford a meal of NT$80 (US$2.70),” Yu said. Then came the good news that Okogreen had been certified by the FLO.

Though, the business is not without other hardships. Now, they educate their customers daily on what fair trade means and travel abroad to meet coffee growers in remote countries. Although it might seem romantic from the outside, it was anything but.

Yu remembers their trip to Sri Lanka. After they landed in the largest city, Colombo, they were surprised to see few people in the streets outside the airport. Later they found out they just missed a huge explosion there. Then at gunpoint in Peru, they were asked by the police to pay bribes in order to clear Peruvian customs.

Nevertheless, they were not daunted by these challenges. It is imperative to do the right thing, emphasized Yu. She was invited to introduce the promotion of fair trade in Taiwan at a FLO conference in Asia. It is one thing she never tires of doing.

After delivering the speech, a gray haired European man approached Yu, saying “you are so young.” The gentleman was happy that a younger generation has joined the ranks working with fair trade. His positive feedback bolstered her confidence about Okogreen’s purpose, knowing that she did not champion fair trade in vain.

Just the start of Taiwan’s fair trade journey

In order to run a socially responsible business, creative marketing is more important than running a regular business. Okogreen once developed a strategy of no price fixing, that is, customers decided what they wanted to pay at the counter. There was once a guy who paid NT$1,500 (US$50) for a cup of coffee.

According to Global Views, there are 38 Taiwanese companies adopting fair trade coffee, including Google’s Taiwan office. In the UK, where fair trade prevails, at least 5,000 colleges and universities only sell fair trade coffee. This fair trade campus phenomenon is being adopted in Taiwan too. With the promotion of Okogreen, National Taiwan University was the first to adopt a fair trade campus, with four other schools to follow suit.

Okogreen has an annual revenue of NT$6 million (US$200,000), just breaking even. Hsu and Yu do not take a salary. “We survive on what we earn from delivering speeches and writing articles,” said Hsu happily, adding that it violates the spirit of a social business if earnings are put into the pockets of shareholders.

Okogreen has successfully created a business model where social justice can go hand in hand with commercial profits. There are many such companies promoting public welfare in the world, but in Taiwan, it is only just getting started, reported Global Views.