Wednesday, May 4, 2016

Empowering Farmers the Equal Exchange Way

I know, it is May 4th... and all of us geeks are going crazy. Yes, I am making semi-sweet Darth Vader heads for dinner but we also have a brand new brand from one of the coolest brands to share on Saturday so I wanted to tell you more about them. Sisters and Brothers in Chocolate, please help me welcome Dary Goodrich, the Chocolate Products Manager at Equal Exchange. He is going to tell us more about the company and about himself before our Saturday Sacrament featuring them this weekend. Mr. Goodrich, thank you for joining us for this interview.

Let's start with a really basic question, Dary. Do you like chocolate? If so, do you prefer white, milk, or darker chocolate?  

Yes, I definitely like chocolate…  I’d be in the wrong job if I didn’t!  Honestly, I typically like all type of chocolate but I usually eat dark chocolate. That said there are some great milk chocolates out there (I lean towards darker milk chocolate when eating for pleasure).  Right now I keep reaching for our Panama 80% dark chocolate.

You have held two managerial positions at Equal Exchange. Do you have a management degree or did you work your way up in business?  

I do not have a management degree. I studied Environmental Policy in college and I ended up getting a job at EE about a year after I graduated because its mission was a real fit for me. I have now been at EE for over 15 years. We are actually a worker-owned cooperative, meaning the company is owned and controlled by the employees, and something we do as an organization is support people moving throughout the organization.  This can take the form of access to different jobs within the company or access to leadership in our governance structure. I’ve had great opportunities allowing me to now manage our chocolate program and I’ve also been on our Board of Directors. 

Your previous position with Equal Exchange was with their Interfaith Programs. Would you please tell us what that is and how it works?

Around 1996, about 10 years after EE was founded, one of our colleagues at the time, Erbin Crowell, realized that outside of more traditional channels (markets, cafes, etc.) a lot of congregations were using Equal Exchange coffee to live out their social justice mission by using fair trade coffee during coffee hour to support small-scale farmers and communities in other parts of the world.  He worked with Lutheran World Relief to pilot the Lutheran Coffee Project that was a collaborative partnership to between the Lutherans and EE to promote fair trade in churches.  The model was that EE worked with Lutheran World Relief, the relief and development organization within the larger Lutheran denomination, to create co-branded materials promoting fair trade to people in the congregations.  Congregations bought coffee from Equal Exchange to serve at coffee hour or to sell for fundraisers or holiday bazaars, and through this action churches had a positive impact for farmers, they were able to educate their members about social justice issues and EE donated a certain amount of money per pound of product back to Lutheran World relief to help further their work.  The pilot was a huge success and we have since expanded to 13 different partnerships and have worked with over 10,000 congregations around the US.

To go from working with the Interfaith Programs to Chocolate Products Manager seems like it would require a lot of training in cocoa farming and the production of chocolate. Would you tell us what type of training this was and where you were trained? Was it within Equal Exchange itself?  

Equal Exchange partners with farmer cooperatives and we actually work with family owned companies to make our products, so luckily I didn’t have to be an expert in all of these things right off the bat!  We really rely a lot on our partners’ expertise to bring our customers the great products that we offer. That said, I had to learn a lot about managing and launching products and I was able to learn from my colleagues but without a doubt there was also a lot of trial and error. This is a job and industry where there is just so much to learn and what I know is really just the tip of the iceberg and things are constantly in motion.  It’s complex and every time I visit one of our partners I continue to learn a lot, and hopefully vice-versa. As an example of how we and our partners are constantly learning, we actually have been working with several of our farmer partners through a USAID grant that we have focused on supporting the farmer coops to increase their productivity and quality and to also implement member equity programs similar to our coop ownership model at EE. For all of us involved it has been a huge learning experience. 

Ledices Alberto Zamora of the association Fortaleza del Valle in Ecuador
As an industry, we still have so much to learn to really understand flavor development through the post-harvest process and there are many different tools to improve productivity.  How this is can be most effective at each coop, really depends on the context of the coop and country.  Even at a particular coop, the context is constantly changing.  A great example is that we worked with a partner coop of ours in Ecuador so they now have the resources to analyze their cocoa bean quality through making small batch chocolate liquor samples. With this tool, they worked on updating their post-harvest infrastructure and protocols to create more consistent and higher quality bean flavor profiles.  They made lots of changes and felt good about their quality but sometime after this, they realized when tasting liquor samples that something was making their beans much more astringent than usual. They did some investigation and learned that there had been microclimate changes at one of their central collection and processing centers and the beans were no longer getting to a high enough temperature during the fermentation process and they weren’t fully fermenting.  Based on this information they actually built an additional wall around their fermentation tanks, which did a better job of regulating the temperature and once again allowed the beans to fully ferment.  This is just one example the need for our industry to constantly be learning and adapting to provide chocolate lovers with a great quality product.

Equal Exchange is a Co-op not merely a company or brand. Tell us what the difference is between this business model and the ones that many if not most chocolate companies follow.

Being a worker cooperative means that we are a democratic workplace where employees both control the company and we have an ownership stake in the company.  What does this mean? In terms of ownership, employees who become members in the coop (typically staff become members after their first year) actually buy 1 share of stock in the company.  This ownership stake gives us control of the company because with this 1 membership share we each get 1 membership vote. Currently we have over 110 employees who are members of the cooperative. What can we vote on?  Pretty much anything we want to change at the governance level of our company, but that said, our main powers lie in voting in our Board of Directors (we are the ones who choose the Board) and we can change our bylaws.  Our Board typically consists of 6 of our employees and 3 external Board members meaning our employees are always a majority of the Board but we find real value in having external members to give us different perspectives and bring specific skill sets. On the day-to-day, EE has a more traditional management structure of how decisions get made so as worker owners we come together to make governance decisions as a body every couple of months.

This is of course very different from the traditional capitalist model that dominate the US, where most companies are owned and controlled by external shareholders (or a very small # of internal shareholders) and the sole purpose of a corporation is to return greater profits to the shareholders.  At EE, the employees provide capital to the company and therefore the employees are the beneficiaries of the success of the company and of course with our mission we also build in mechanisms to ensure that our company benefits other stakeholders like our farmer partners and our customers.  In a traditional company, the vast majority of the time, employees have zero influence on the company’s mission and vision or how it works in this world. For us, we are the ones that decide what we should be accomplishing as a company and what kind of impact we want to have.

There’s a lot more to it than that, but hopefully that gives you a little bit of an introduction to a worker cooperative.  I would also add that we strongly believe in the cooperative model beyond our own workplace and we only work with farmers that are democratically structured as farmer cooperatives or associations.  We believe this model empowers farmers to have more control over their business and better positions them to have direct market access to international markets and gain a voice in these markets.  When we first started we had a lot of support from food cooperatives in the US and we continue to have a strong connection with food coops around the US who sell our products.

How many countries does Equal Exchange work in? How often do you travel to each?

Equal Exchange as a company works in over 25 countries but for chocolate we focus mainly on the Dominican Republic, Panama, Ecuador, Peru and Paraguay. I try to travel to several countries per year and often have the chance to meet with various partner coops at trade events as well. Other colleagues on my team also travel to visit our partners we have a philosophy that every employee of EE will visit our farmer partners within the first 2 years at the company to really understand the work we do. (Photo: Ramon Antonio Mosquea, of the CONACADO Cooperative in the Dominican Republic, opening cocoa pod while Dary Goodrich watches)

Within each country you have cocoa or sugar co-ops that you work with. Did Equal Exchange help establish these co-ops or did they exist before you? Which one was the first one you made a business alliance with?  

We do not establish coops but rather work with coops that already exist.  Our first chocolate product was actually hot cocoa, which we launched in 2002.  When we started, we used cocoa beans from the CONACADO cooperative in the Dominican Republic, sugar from the Manduvira cooperative in Paraguay and we sourced our milk powder from Organic Valley, a dairy cooperative in the US. Today we still work with all 3 of these farmer cooperatives for our hot cocoa, as well as in many of our other products. 

I don't want to get you into trouble, Dary, by asking for a favorite co-op, but perhaps you could share an inspirational encounter that you've had at a co-op that helps you keep going when all the travel and business stresses start to press on you. 

Ha! It’s great to work with the diversity of coops that we work with from smaller coops with several hundred members to larger coops with over 8,000 members.  For me, I would highlight a particularly close connection I have with the CONACADO cooperative in the Dominican Republic based on our long history with them and their move up the value chain. As I said, we’ve been working with them since 2002 when we launched our chocolate program and we continue to work them today.  What’s been really exciting is to work with them as they’ve moved up the value chain.  In 2002, there was really no one processing organic cocoa beans in the US so CONACADO beans were shipped to Europe to be processed into cocoa powder and then the powder was shipped to the US for our product.  In 2008, CONACADO purchased a manufacturing plant in the Dominican Republic to process their beans into semi-finished products (chocolate liquor, cocoa powder and cocoa butter).  In 2010, we began buying cocoa powder directly from the plant in the DR and in 2015 we imported 80 Metric Tons of cocoa powder directly from CONACDAO for our cocoa products.  We’ve been working closely with CONACADO at the production plant to support the strengthening of their food safety and quality programs. I’m really proud of what we’ve accomplished together.

Equal Exchange does far more than chocolate but you began with coffee, is that correct? Now Equal Exchange partners with growers of all types of food. Some of these like sugar, coffee, and nuts you combine with the chocolate. Ideally, does Equal Exchange want to create a collective of growers and producers who trade only with each other?

Our mission is to build alternative supply chains for small-scale farmers and as you note this can span across many products. There are actually cooperative principles that any cooperative should follow and one of them is “cooperation among cooperatives.” This principle dovetails perfectly with our fair trade mission to change trade for small-scale farmers, which I think can often be most effective through the cooperative model. This of course has many challenges and is always a work in progress. We now work with over 40 farmer cooperatives around the world (not just for cocoa and sugar but coffee, bananas, avocadoes, vanilla, nuts and dried fruits) and have seen a lot of success and impact over our 30 year history. This network is not just an EE network but really a larger authentic fair trade network that has grown since the inception of fair trade coffee began in the 1980s.

Finally as the Chocolate Products Manager, is there anything you are working on right now that you could give our readers a hint about? Anything that is new and exciting?

Actually, at the moment we are stepping back after a couple of big projects to take a little breather. One of these was the launch of our new Extreme Dark 88% chocolate.  (Our Saturday Sacrament will be about this new product) We are really excited about this bar, which is our darkest bar yet.  Based on this we don’t have any other major things in the work at the moment, but we are always out there looking for inspiration for when we will begin a new round of product development.

Thank you so much for speaking with us, Dary. This was fascinating. Readers, if you have any other questions, please leave a comment to ask them or simply let us know what you thought about this interview.


Emilie Johnson said...

Very informative!

Mary Peterson said...

Yeah, Equal Exchange!

TammyJo Eckhart said...

Emilie and Mary, how many times have you used Equal Exchange products?

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