Use Markets, Don't Be Seduced By Them.

Shareholder capitalism has run its course. In August 2019, the Business Roundtable issued a statement signed by 181 CEOs committing to lead their companies “for the benefit of all stakeholders.” One of capitalism’s greatest sins is that the system fails to consider the value of both labor and the earth. But if capitalism is the problem, how can business operate as part of the solution?  

Tyler Youngblood has spent the better part of a decade reimagining and — against massive odds — building a fair, inclusive, and sustainable coffee business. A trip to Colombia led him to become obsessed with the richness of the coffee produced there —and equally, left him flummoxed by what he saw as a patently unfair, unsustainable global system. How, he asked, could farmers producing some of the best coffee on earth regularly fail to secure a price covering their costs?  

A Colombian farmer overlooking the farm. (Photo: Fabiola Ferrero)

At the same time, Tyler imagined “a consumer like myself (who) wanted to know where what they consumed came from.” Even more to the point, Tyler added, “consumers do not want to be perpetuating poverty every time they buy a cup of coffee.”

In 2010, Azahar was born. A specialty coffee company that sources directly from smallholder farmers in post-conflict areas of Colombia and is dedicated to building a “community of trust” that fairly includes all stakeholders along the supply chain. Tyler’s north star is aligning stakeholders at opposing poles of the supply chain: consumers and smallholder farmers. The business model is designed from the perspective of the smallholders themselves. That required immersion — getting close to the realities of smallholders within the current broken system. Tyler says it took years to build trust with farmers who had seen too many “business as usual” types come and go across generations.

Two Azahar employees inside a cafe in Bogotá. (Photo: Fabiola Ferrero)

The farmers knew they weren’t getting a good price, but they also knew “there was nothing they could do about it; that it was ‘the market’ that defined their price and that the price could change on any given day.” On the other hand, he heard repeatedly that while the farmers knew they weren’t being fairly compensated, they also yearned for “recognition of the quality” of the product they’ve put their life’s work into producing.

Distance dulls the moral imagination. The middlemen who transacted with farmers blamed a faceless global marketplace. Yet, as human beings, no matter who or where we are, we yearn to be seen. Now the world has the tools to make the different components of our systems more visible. Our challenge is thus to make stark injustices more visible to our collective conscience and then, to act.

“I want people to understand what goes into making this coffee — and to value it. Right now, coffee can only cost what it costs because someone is willing to work or is forced to work for much less than they should,” Tyler said.

Two farmers sort coffee beans in Colombia. (Photo: Fabiola Ferrero)

This will only change if both farmers and consumers understand more about where coffee is produced, at what price, and what it costs to keep a full-time working person out of poverty.

In addition to spending real time with smallholder farmers, Tyler and his team have developed a “Sustainable Buyers’ Guide” to bring radical transparency and knowledge to all parts of the supply chain. Essentially, the company calculates the time spent and volumes produced by farmers and considers both the minimum wage and what it would take to pay a living wage in a region. They make these numbers fully transparent to prospective buyers and to the farmers themselves. In this way, Tyler sees potential for different parts of the supply chain to benefit from the same information.

A coffee farmer tends to the field in Colombia. (Photo: Fabiola Ferrero)

And while the sustainable price might be two or even three times higher than the global coffee price, increasingly conscious buyers like Blue Bottle, Stumptown, Heart, 49th Parallel, and Intelligentsia choose to pay it. Today’s more privileged consumers can do their part by insisting that buyers only choose to pay that sustainable price. Tyler hopes that eventually the Guide will help set new standards while empowering consumers to demand that farmers be protected and rewarded for their contributions. Ultimately, the Guide allows for a new conversation, one grounded in the economic realities of farmers — something too often left invisible.

Azahar is now a $10 million company, and after a decade of experimenting and of building trust and a radical new approach to using markets on behalf of traditionally vulnerable groups, Tyler feels hopeful.

“It feels like the solution in 2021, with these tools at our disposal, is so close to being able to work. The job can actually be done.”

A coffee farmer hugs his dog. (Photo: Fabiola Ferrero)

Tyler insists the Sustainable Buyers’ algorithm is straightforward: the price of coffee should equal income to the farmer needed for a sustainable wage over volume produced plus costs of production. There is no reason, he insists, that the farmers who grow and produce our food and drink should live in poverty (especially when the cost of a one-pound bag of premium coffee in my New York City neighborhood can run above $20 per pound (fair trade prices are currently running around $1.40/pound. Azahar farmers are earning, on average, twice that rate).

When it comes to his own success, Tyler’s definition sets a standard for the new economy. “It’s doing really well by the people that I work with and being able to do well as an organization; and then being able to not just pay people better but to give them more responsibility and voice and power so that they can go out and have impact and be proud of their work...I mean, that’s the coolest thing.”

When moral leaders become “the coolest thing,” we know we’re winning. Tyler knows he’s onto something important. “I think we’d be able to sleep better at night, and I think people would be able to do what they do and be happy. And I think that coffee farmers should also have that.” And he added, “I’m happy doing what I’m doing. But I want things to move more quickly.”

Because we can solve this problem. And if we can, we must.

This is part seven in Jacqueline Novogratz's monthly series on Moral Leadership, featuring a new generation of leaders for a new economy. The photos in this piece were created by Fabiola Ferrero and Mengwen Cao, grantees of the Magnum Foundation, as part of a partnership to invite readers into the stories that are shaping our shared future.

About Acumen 

Acumen is changing the way the world tackles poverty by investing in companies, leaders and ideas. We invest patient capital in businesses whose products and services are enabling the poor to transform their lives. 

About Magnum Foundation

The Magnum Foundation is a nonprofit organization that expands creativity and diversity in documentary photography, activating new ideas through the innovative use of images. Through grant making and fellowships, the Magnum Foundation supports a global network of social justice and human rights-focused photographers, and experiments with new models for storytelling.