Coffee farmers devote years to producing top quality beans enjoyed by coffee lovers around the world. However, due to a lengthy and inefficient supply chain, these largely independent farmers are rarely rewarded with financial security. Inspired by a Nicaraguan women’s coffee cooperative, Noushin Ketabi, Rob Terenzi and Will DeLuca founded Vega Coffee to help give farmers a larger share of the global coffee market.
Tell us about Vega Coffee. How are you working to make the coffee trade more equitable for farmers?
We started Vega to completely reinvent coffee’s broken supply chain. Specialty coffee farmers often earn around $1 per pound of coffee, which is ultimately roasted and sold abroad for upwards of $20 per pound. That dollar leaves many farmers unable to afford basic needs like education and health care, let alone reinvest in their crop or community. In fact, 80 percent of coffee farmers worldwide—about 20 million farmers—are trapped in a cycle of subsistence farming, which means that they barely earn enough to continue farming.
Vega delivers the tools and training to coffee farmers, so that they can roast and package their beans – fully processing them into a final product. We then connect farmers directly with consumers via our online marketplace. Our vision is to connect the world’s coffee farmers directly with the world’s coffee lovers. As a result, farmers earn up to four times more income, which means more children can attend school and families can have greater access to things like medical services. Plus, consumers get an exclusive, specialty grade ‘Farmer Roasted Coffee’ directly from the people and communities who grow it.
What drew you to Nicaraguan coffee growers in particular? Could Vega Coffee’s model be replicated in other countries and communities as well?
Back in 2006, my co-founder and husband Rob Terenzi spent two years working with a women’s coffee cooperative in the Miraflor Nature Preserve near the town of Estelí to build a brand around their roasted coffee. I first traveled to Nicaragua with Rob during a law school trip in 2008, and returned a few years later on my own to complete a Fulbright fellowship.
As coffee lovers, we couldn’t grasp how farmers who had dedicated generations to grow high-quality, organic, Fair Trade coffee could barely afford to feed their families. So, along with our other co-founder and great friend Will DeLuca and the producers of Miraflor, we came up with the idea to start a coffee company that empowers farmers to take on more of the value chain, and earn more skills and income while doing so. This past January, Rob and I left our legal careers in San Francisco (Rob was a former start-up attorney with Wilson Sonsini Goodrich & Rosati and I worked in energy policy at the California Public Utilities Commission) and moved to Nicaragua to make this dream a reality. Will, a web developer with extensive online marketing expertise, designs and builds the Vega online marketplace from New York City.
We set out to create a model that we believe could effectively and reliably scale beyond Nicaragua to other coffee growing regions. As we work toward our full product launch, we are optimizing training, technology and operations protocol so that we can nimbly iterate and expand. Eventually, we’d like to see our model include other products, and feature a variety of ‘farmer-finished goods’ on the Vega marketplace.
You’ve mentioned that farmers often earn around $1 per pound of coffee, but consumers generally pay 20 times that amount. Why are farmers so shortchanged?
There are several factors that contribute to this dynamic. Most farmers in the developing world, particularly small scale farmers, lack direct access to markets. With up to 20 intermediaries, the typical coffee supply chain adds costs at each step and excludes farmers from the most profitable activities, leaving them barely able to sustain their livelihood.
As a result of this disconnection, farmers often don’t know what the finished product looks like or how coffee lovers enjoy it. In turn, coffee lovers pay a premium for their coffee and have no connection to the farmers who grow it.
Delivering top notch coffee directly to customers effectively cuts out retailers. Does this also make the process more environmentally sustainable?
Yes. Environmental sustainability is one of Vega’s core values, and we’ve committed to mitigating our impact on the environment throughout our supply chain. In the typical chain, coffee often takes a rather circuitous route from farm to consumer involving up to 20 middlemen. By streamlining the supply chain, and working as hard as we can to deliver coffee as directly as we can from farm to consumer, Vega is working to minimize the coffee’s carbon footprint.
We are also open to providing Vega at some specialty stores or online farm-fresh purveyors. But as we consider involving retailers, we will strive to deliver coffee to customers as directly as we reasonably can.
What sort of farmer education will Vega Coffee involve?
We train farmers in quality control, making sure only the best beans make it to our customers. Drawing on our own background as certified roasters, we provide extensive roasting training on our new sustainable roasters. One point I’d like to highlight is that most farmers have already been roasting for generations. So, the training is really a collaboration among our whole team, where we optimize old and new world techniques and popular roasting styles.
How did you involve these farming communities in your plans for Vega Coffee?
We returned to Nicaragua to launch Vega in January 2014, launching the model with the same coffee growers in Miraflor that Rob worked with back in 2006. In fact, we bounced ideas off of the farmers when we came up with the idea behind Vega, because we wanted to make sure that we had a clear grasp of the problems these coffee growers were facing, their particular resource constraints and also their interest in taking on more of the value chain as a means to earn more income. We believe this type of community engagement is critical to building an operations framework that is scalable, but also adaptable to specific community dynamics and farmer organizations.
How has the coffee rust plague, La Roya, complicated Vega Coffee’s work and mission?
La Roya has been a devastating force throughout Central America and Southern Mexico. The most recent tally that I’ve seen of the damage marks it at around $1 billion. (Some more quick facts on the impact of La Roya.) Some of the farmers in the communities we work with have seen their entire crop depleted, and in some cases, totally destroyed. Economics have forced many farmers to abandon their land because they simply cannot afford to replant their crop.
Vega is bent on working alongside our farmers to manage the La Roya plague. Through our model, farmers can get significantly more value out of every bean they produce than from the usual supply chain. It also offers them an opportunity to continue their livelihood, rather than abandon it in pursuit of other income. Plus, the additional income farmers receive from roasting and packaging their beans means more resources available for basic needs, including combating La Roya rust plague.
Also, as part of our Kickstarter, we offer several rewards that include replanting coffee plants that have been destroyed by La Roya. Over the long term, we plan to look into whether crop diversification could help support healthy ecosystems in our coffee growing areas.
How will Vega Coffee change not only growers’ socio-economic status, but also their relationship with the coffee?
We can’t speak for the farmers themselves, but we believe that by taking on more of the value chain, farmers can have a more intimate, rewarding relationship with the coffee that most farming families have spent generations cultivating. Also, via Vega’s online marketplace, farmers can actually connect with the people who enjoy their coffee every day, thousands of miles away, and learn first-hand what customers think of their product. With connection comes knowledge comes empowerment, and, we hope, a more equitable coffee supply chain for farmers and customers alike.
Most coffee lovers probably don’t have a concept of what coffee farming actually entails. Could you offer a quick rundown?
The small-scale farmers that we work with take on a lot of manual labor themselves. Coffee farmers tend to a plant for about five years before it bears its fruit—called the coffee cherry. The cherries turn bright red when ready for harvest, and their seeds are coffee beans. Farmers then hand-pick the cherries, wash and dry them, hull the actual coffee bean, polish the thin layer of “skin” remaining after hulling, sort, grade and pack the green, unroasted beans, which are then passed along the supply chain, ready for export. These several steps require a great deal of time, labor and expertise developed over the years.
Will consumers be able to connect with these far-flung farmers in a more meaningful way?
Connection is really the spark of our model. We envision our online marketplace to serve as a virtual international farmers market at your fingertips. Customers will be able to search for farmers and select coffee based on origin, tasting notes, and/or roasting profile.
Also, customers will have the ability to read farmers’ personal stories and watch videos of them harvesting, processing and roasting their beans. In time, the Vega Marketplace will feature a platform to message farmers directly and give feedback on their coffee. We are excited to include coffee lovers at each step of Vega’s more inclusive and transparent supply chain.
Vega Coffee has partnered with non-profit tech developer EOS International to give the farmers even more autonomy and stability. What exactly is the organization doing to promote coffee farming and roasting, as well as environmental sustainability?
EOS International is a non-profit organization made of engineers dedicated to promoting “appropriate technology in the developing world.” We’ve spent the last several months working with EOS to design modular roasters that can be installed at the farm level. These roasters are based on technology that farmers have been using for generations, so the farmers are familiar with the theory behind the roasters, and yet they are modernized to ensure a consistent, high quality roast.
These roasters also use 90 percent less fuel than traditional models, so they not only empower our farmers, but respect the environment as well. They run on old food stuffs, and our farmers are currently using the wood from felled La Roya trees as fuel. Since a disproportionate amount of the profits are in roasting, providing farmers with the tools to roast coffee beans themselves is a huge disruption to the status quo.
How will your Kickstarter campaign help Vega Coffee take the next step?
Our Kickstarter campaign will fund our pilot, by enabling us to source additional coffee, install roasters, train farmers and deliver a limited batch of coffee to folks who have signed up via our website to be beta-testers. We’ll actually also invite Kickstarter backers to be part of the pilot by providing feedback on their experience.
Our goal is to test all the back-end operational aspects our model, as well as the front-end customer experience. We’ll evaluate what works and what we can improve, so that we can iterate as needed in preparation for our full launch.
Can people get a taste of Vega Coffee before it hits the online marketplace?
Yes, through our Kickstarter campaign! We’re offering our coffee at a great deal via the campaign, as thanks to folks for joining our family of early backers – which we call ‘Team Vega’. We encourage folks to check out the campaign, pick up some coffee, and spread the word. Together, we can take Vega to the next level.
Vega Coffee website
Vega Coffee kickstarter campaign