Intelligentsia commits to purchasing 40K pounds of coffee from farmers

The Chicago-based craft coffee chain uses the ECWx events to engage with smallholder coffee growers in Central and South America. They help growers improve the quality of their product and in turn develop long-term relationships with them, Michael Sheridan, Intelligentsia’s Director of Sourcing and Shared Value, told BeverageDaily.

Intelligentsia hosted its first ECWx conference in Colombia in 2018, after 10 years of ECW internal events. The four-day workshop in Colombia partnered with Root Capital, a non-profit social investment fund, and taught local coffee growers new skills to improve product quality.

The second ECWx took place in Honduras from December 9-13, 2019, and was also hosted by Root Capital. The third ECWx was held in Guatemala from January 22-26, 2020, and was hosted by Catholic Relief Services (CRS).

A path to profitability

The workshops included farm visits, farmer exchanges, demonstrations of innovative applied technology in the field, in the mill and in the lab, cuppings and other sensory exercises, presentations and group work.

In addition to teaching new skills, the workshops also showcased strategies for integrated management of quality on the farm and value-added practices in coffee agronomy, processing, quality control, enterprise management, and marketing.

Each was led by Sheridan, with Intelligentsia’s Geoff Watts, VP of Coffee, and Sam Sabori, director of coffee, alongside direct trade partners in Honduras and Guatemala.

Sheridan said that Intelligentsia stands by the theory that ‘quality is the most reliable path to profitability.’ And smallholder coffee farmers like the ones a part of ECWx face similar challenges country by country when it comes to improving quality.

With the ‘small’ aspect, most have so little coffee to sell that few can attract the attention of service providers and banks needed to be profitable. Many also don’t have access to coffee buyers willing to pay premium prices to smallholders, even when the product is high-quality.

“It is a classic chicken-and-egg dilemma: growers who can't earn and sustain profits have a hard time reinvesting in their farms and producing quality, but producing quality is the most reliable path to profitability,”​ Sheridan said.

New opportunities for the vulnerable

During the workshops the company announced commitments to purchase 20,000 pounds of coffee from the most promising smallholder farmers and organizations that participated in each workshop, for a total of 40,000 pounds of purchased coffee.

The decisions will be based on assessments of coffee quality by Intelligentsia and of the financial, social and business management capacities by Root Capital and CRS.

“We expect that the amount we pay for the ECWx coffees we purchase this year will be more than the cost of the two Central American events, meaning it is an investment that pays for itself in the first year,”​ Sheridan said.

Intelligentsia intends to develop long-term relationships with the participating organizations and grow its purchases over time, expecting to see ‘exponential long-term returns’ on the initial investments the event partners have made in ECWx events.

“The specialty coffee market has grown over the past 25 years, but it still excludes the majority of the world's coffee growers. ECWx is central to our vision of expanding opportunity for the most vulnerable participants in the coffee trade,”​ Sheridan said.

He emphasized that being a coffee farmer is harder than ever right now, thanks to climate change, price volatility and a competitive craft market. In this context, he said smallholder farmers are especially vulnerable.

“Where they are more resilient in my experience tends to be in places where they are linked to high-value segments of the coffee market, have access to finance, are actively supported by local institutions that are making strategic investments in coffee.”​

Mutual benefits across the industry

Intelligentsia has always believed that coffee is culinary, and through all of its projects it commits to elevate coffee to a culinary standard. The ECWx events contribute to the company’s drive to grow the market for culinary-grade coffee in the US.

It worked to make the newer events specific to Honduras and Guatemala and increase value for the participants. ECWx Honduras 2019 was part of a larger project called Partnership for Sustainable Coffee, and ECWx Guatemala 2020 was part of Communities Leading Development.

All ECWx events are funded with grants from the US Agency of International Development (USAID) that cover most of the costs of participation for growers. Sheridan said this makes the program accessible for participants and limits impact in the community.

“Once we prove that the event can reliably generate mutual benefits for underwriters, growers, and market-based actors alike, we believe we can continue to drive investment to ECWx events in ways that allow us to include more and more vulnerable smallholder growers around the world,”​ he said.