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Social Enterprise @ Goizueta : Founder and Director

TransparentTradeCoffee.org : Founder

Are We Accelerating Equity Investment Into Impact-Oriented Ventures

The Changing Effectiveness of Local Civic Action: The Critical Nexus of Community and Organization

A Comparative Analysis of Corporate and Independent Foundations

The Profit Orientation of Microfinance Institutions and Effective Interest Rates

Corporate reputation and sustained superior financial performance

Friendships among Competitors in the Sydney Hotel Industry

Peter Roberts, Professor of Organization & M anagement at Emory University’s Goizueta Business School, was founding academic director of Social Enterprise @ Goizueta. He joined The Goizueta Effect Podcast to explore the vast inequities between growers and retailers/roasters, how historical movements like colonialism and slavery have shaped the origins of this industry, and what role climate change and the pandemic are playing today. He also delves into how consumers, roasters, and retailers can work together to balance the scales. Peter also serves as the academic director of specialty coffee programs for The Roberto C. Goizueta Business & Society Institute.His research focuses on how the behavior and performance of organizations evolve over time. His current projects focus on social entrepreneurs and accelerators, microbusiness development, and the global specialty coffee industry. He has been featured in the Harvard Business Review, Forbes, Bloomberg, Food and Wine, and Salon. The Magnitude of the Coffee Industry By the Numbers 
In 2019, roughly two-thirds of American adults drank coffee every day. 
Over the past 30 years, the specialty coffee market has expanded exponentially and now accounts for up to 40% of all coffee consumed.  
In 2020, the coffee market was valued at more than $102 billion.  
With 25 million families around the world responsible for growing coffee, the economic and social impacts of this industry are broad and deep.  
Evolution of the Coffee Industry The global coffee industry has always been characterized by stark contrasts. Retailers, roasters, and importers often do very well financially, while those who grow coffee struggle to break even.  This is not a new phenomenon. The coffee industry only exists because of colonialism and slavery. Originally, coffee was not grown in Central and South America, but when Europe and the United States started consuming inordinate amounts of coffee, coffee plants and people were brought from Africa.  In the late 1800s, formal slave owning and colonialism went out of fashion. At this point, global markets kicked in, and coffee became a lucrative way for middlemen, such as roasters and sellers, to maintain low coffee grain prices.  Major brands like Folgers and Maxwell House dominated the first wave of coffee consumption, then Peet's and Starbucks and Caribous set up a second wave of coffee. Recently, the third wave of coffee has become popular, which is the movement focusing on small, micro lot-oriented, and direct-trade roasters.  While coffee has often been lucrative for retailers and roasters, most coffee producers in the world are not able to cover the cost of production. From Bean to Cup Consumers often assume that all the magic happens in a coffee shop. However, the people that work on coffee farms, or in beneficios, pour a lot of skill, talent, work, and time into the production of coffee. Before coffee is roasted, it's a bean. Before that, it’s a cherry. And prior to this, it’s on shrubs. Before the beans are ready to be harvested, the grower cares for the plant for at least three to four years. Often, at least 25 sets of hands play a role in shaping a single pound of coffee.  Coffee growers handle much of the heavy lifting and shoulder much of the risk. However, the payoff is not even. On the retail end, $15-$20 is a reasonable per-pound price for specialty coffee, but the median price that coffee growers receive is just $2.60.   Specialty Coffee Production Exchange grade coffee or commercial/commodity coffee has fairly low standards for quality, which allows for many defects. However, specialty coffee must secure a grade of at least 81, which involves cupping and scrutinizing all of its elements. This product cannot feature green beans that would change its flavor profile. The coffee has to be picked, processed, and sorted multiple times. The world of specialty coffee involves high quality expectations. All of that extra work needs to be paid for. The Effect of Climate Change on Coffee Growing Coffee production is impacted by many external forces, including climate change. In the next 20 years, 60-70 percent of the land that currently grows coffee may become ill-suited for cultivation.  For instance, in Nicaragua just a decade ago, coffee farmers set their watches by when the weather changed from wet to dry to determine when it was time to pick coffee. Now, the weather is variable, which makes it difficult for farmers to grow. Economic and social mobility proves difficult for coffee farmers who don’t have hefty savings. If we don't start valuing the work that goes into coffee, paying the people that do the work, accounting for some of the investment and risk, we may not have enough coffee to satisfy demand in 10 or 20 years. Rural communities are oriented around growing and selling coffee, so their economy is built around their core industry. Farmers who are looking ahead to an unsure future can invest in climate change adaptation, using concepts such as shade-grown coffee, which shifts conventional agriculture back to growing coffee in forests. Organizations such as The Nature Conservancy are exploring coffee growing as a form of reforestation. If we can figure out how to pay farmers for growing excellent coffee the right way, there is a built-in incentive for people to reforest, contributing to both adaptation and mitigation of climate change. The Impact of the COVID-19 Pandemic on Buying Patterns, Growers, and the Coffee Industry The initial shock of the COVID-19 pandemic hit the coffee industry as hard as the general public. The industry had several concerns: If people go back to drinking coffee at home, then would they stop drinking better-produced or specialty coffee? What happens to local retailers and coffee shops? What price would consumers be able to pay? Like many products, the industry also faces multiple supply chain issues. For instance, without shipping containers for coffee coming from certain suppliers, coffee can’t reach consumers quickly and its quality decreases. Industry leaders also worry about workers’ and farmers’ health and safety as they grow the coffee.  However, “the new normal” did introduce a few silver linings such as subscription services. As people missed specialty coffee, producers realized that people would be willing to spend more to have better coffee to brew at home. Therefore, subscription services and online sales of the specialty shops did fairly well during the pandemic. Nonetheless, the industry is still uncertain about how the specialty coffee industry will settle down over the next few years.  Coffee Movements Create a More Equitable System Many movements over the years including fair trade and direct trade have helped drive progress in the coffee industry, but they have introduced challenges as well. Today, organizations like Fair Trade, Rainforest Alliance, and Smithsonian's Bird Friendly certifications are working in the right direction. The unbalanced marketplace always puts downward pressure on prices including what the farmer gets, so the next step in the world of specialty coffee is getting consumers to pay for it. What we need is a larger share of what we spend on coffee to continue to flow back to coffee-producing countries and growers. How You Can Engage in Conscious Consumerism When addressing the issue of disparity in the coffee industry head on, the majority of the onus is not on the consumer.  Consumers have actually been paying dramatically more for coffee over the last 30 years, but the benchmarking New York C-price is lower now than it was 30 years ago. So even though consumers have been paying more for the things that producers do, we haven't figured out how to enable and empower producers to recognize their value and effectively negotiate better prices. That being said, it’s important for more people to get more excited about paying more money for coffee. When looking at the wine industry, consumers are willing to spend a lot of money for a glass of wine in a restaurant or a bottle of wine in a bottle shop, and the same needs to happen for coffee. Consumers need to appreciate quality coffee and good farm stories.  While the consumer problem is being addressed, the producer problem is not. We, as consumers, expect that if you pay more, the money goes back to producers in the appropriate ratios, and the farmer gets paid. However, in the 1940s, producing countries took home about 40 percent of what consumers paid for coffee; now, it's less than 10 percent further evidence that the problem lies with empowering the producers. Educating Growers and Buyers – The Specialty Coffee Transaction Guide  The challenge in the coffee industry is that the only green price that people track is the New York C-price. The pricing for specialty coffee is still following a very low and volatile commodity C-price, but it needs better reference prices. That’s where the Specialty Coffee Transaction Guide comes in. Through a partnership between Goizueta Business School and more than 80 roasters, importers, exporters, and cooperatives, the group has developed a low, medium, and average price for different kinds of coffee. The guide allows specialty coffee producers and buyers to have a critical reference point for transactions.  It also allows policymakers and advocates to determine whether coffee prices are even covering the cost of production, then use that information to drive necessary change.  In addition, many retail and roasting organizations are pledging to be more transparent and make market information widely available. For example, Onyx Coffee tells consumers everything about the producer, including what they paid for their coffee.  Goizueta’s Grounds for Empowerment Program The mission of Goizueta’s Grounds for Empowerment program is to provide women specialty coffee growers the business know-how, market connections, and investment funds that will allow their farms to reach full economic potential. With the help of a diverse group of advisors, including Goizueta leaders and students, farmers participate in a series of workshops and gain unique perspectives on topics like storytelling, social media, cost of production, and relationship management. Producers are also empowered with information to recognize the value of their coffees and make plans to secure prices consistent with these valuations. Participants leave with a stronger vision for the future of their farms, and with plans and connections to achieve more prosperous and sustainable businesses. To learn more about Goizueta Business School and how principled leaders are driving positive change in business and society, visit www.goizueta.emory.edu.

What Goes into Your Cup of Coffee?

Peter is Professor of Organization & Management at Emory University and was the founding academic director of Social Enterprise @ Goizueta, now known as the Business & Society Institute at Goizueta Business School. He currently serves as the institute's Executive Academic Director. The institute is an academic research center that addresses complex challenges facing people and the planet through academic discovery and purposeful action.

His research interests relate to how the behavior and performance of organizations evolve over time. Currently, he directs his interests in entrepreneurship and organizational performance toward topics in the field of social enterprise. His current projects focus on social entrepreneurs and accelerators, on microbusiness development, and on the global specialty coffee industry. 

For the past several years, he has been cultivating several programs which focus on making markets work for more people, in more places, in more ways. This led to the establishment of the global Entrepreneurship Database Program, the Start:ME accelerator program, and the Transparent Trade Coffee and Grounds for Empowerment programs.

Peter's PhD is from the University of Alberta. Before taking up his current position at Emory University, Peter served on the faculties of Columbia University, Carnegie Mellon University, and the Australian Graduate School of Management.

Micro-Business Development

Specialty Coffee

Entrepreneurship

Social Enterprise

Transparent Trade Coffee

Specialty Coffee Transaction Guide

Grounds for Empowerment

Business & Society Institute

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The COVID-19 Pandemic Will Only Make the Price Crisis Worse

Social Impact Accelerators Drive Revenue Growth Among Just A Small Portion Of Ventures

Another Giant Step for Transparency with the 2018 Specialty Coffee Transaction Guide

Green Coffee Pricing Transparency Is Critical (And Complicated)

The Macro Benefits of Microbusinesses

Startup Accelerators Have Become More Popular in Emerging Markets — and They’re Working

Perks of gourmet coffee boom elude growers

New insights on what makes emerging market entrepreneurship accelerators work

How can coffee become a better tool for development?

Coffee Disconnect Is Brewing

Randall Kempner and Peter Roberts: Aren’t Accelerators Great? Maybe…

What does the term "ethical coffee" actually mean? - Salon.com

The story behind the rise in coffee prices worldwide - The World from PRX

Why the pandemic hit Georgia's Asian-owned businesses especially hard | FOX 5 Atlanta

The Specialty Coffee Transaction Guide Puts Price Increases In Perspective

Notwithstanding some visible debates, systematic evidence about the implications of greater corporate involvement in the social sector is sparse. We provide some of this evidence by
examining one channel of corporate influence within the nonprofit sector–company sponsorship of philanthropic foundations.

A Comparative Analysis of Corporate and
Independent Foundations

Debate continues as to whether corporate or independent foundations are more impactful, despite the shared interest in supporting charitable services. In research from Justin Koushyar, doctoral candidate in organization and management (2017), Wesley Longhofer, assistant professor of organization and management, and Peter Roberts, professor of organization and management, the trio determines that the answer is mixed. They used data from a matched random sample of corporate and independent foundations that operated across the United States in 2005 and 2009. With deeper pockets, corporate foundations were able to raise more funds than their nonprofit counterparts. Company sponsorship of a philanthropic foundation also meant that they could operate with lower overhead. However, Koushyar, Longhofer, and Roberts found that corporate foundations are “more dispersed and less relational, and they tend to be governed by more ephemeral groups of officers and trustees.” Simply put, corporate foundations have fewer longterm attachments to the charitable organizations they support. Additionally, “market-based motivations” may influence how they give. Corporate foundations do tend to provide smaller individual grant amounts than independent foundations. These “stakeholder effects” are even more dramatic for the foundations linked to larger publicly traded companies.

The impact of corporate vs. independent foundations

When you change your perspective you can change business for the better. Join us on Goizueta Effect to hear from leading faculty at the Goizueta Business School on the latest trends, research, and innovations in business, and find out how you can achieve more, do more, and create more in today’s ever-changing marketplace.

Goizueta Effect

the-impact-of-corporate-vs-independent-foundations

Professor of Organization & Management; Executive Academic Director, Business & Society Institute

Associate Professor of Organization & Management; Senior Director, Center for Faculty Development and Excellence; Assistant Vice Provost for Faculty Affairs

Debate continues as to whether corporate or independent foundations are more impactful, despite the shared interest in supporting charitable services. In research from Justin Koushyar, doctoral candidate in organization and management (2017), Wesley Longhofer, assistant professor of organization and management, and Peter Roberts, professor of organization and management, the trio determines that the answer is mixed. They used data from a matched random sample of corporate and independent foundations that operated across the United States in 2005 and 2009. With deeper pockets, corporate foundations were able to raise more funds than their nonprofit counterparts. Company sponsorship of a philanthropic foundation also meant that they could operate with lower overhead. However, Koushyar, Longhofer, and Roberts found that corporate foundations are “more dispersed and less relational, and they tend to be governed by more ephemeral groups of officers and trustees.” Simply put, corporate foundations have fewer longterm attachments to the charitable organizations they support. Additionally, “market-based motivations” may influence how they give. Corporate foundations do tend to provide smaller individual grant amounts than independent foundations. These “stakeholder effects” are even more dramatic for the foundations linked to larger publicly traded companies.

Source:  

Today, we’re very happy to present the second episode of the “The Role of Innovation and Technical Advancement,” a session recorded at Re:co Symposium this past April. This session explored and evaluated advances in innovation positioned to make an impact within our industry as we work to resolve the coffee price crisis. 

We are pleased to welcome Peter Roberts, Professor of Organization and Management at Emory University and Academic Director of Social Enterprise at Goizueta. Producers of specialty coffees face serious questions about whether and how the market values their products. These questions are symptoms of long-term, structural problems rooted in inequality and information asymmetry. For the specialty coffee industry to survive, these questions need to be answered. In this episode, “Empowering Specialty to Look Beyond the ‘C’,” Peter introduces The Specialty Coffee Transaction Guide, which relies on an expanding group of roasters, importers, exporters, and others who donate contract data covering specialty coffee transactions from recent harvests.

Special Thanks to Toddy 
This talk from Re:co Seattle is supported by Toddy. For over 50 years, Toddy brand cold brew systems have delighted baristas, food critics, and regular folks alike. By extracting all the natural and delicious flavors of coffee and tea, Toddy Cold Brew Systems turn your favorite coffee beans and tea leaves into fresh cold brew concentrates, that are ready to serve and enjoy. Learn more about Toddy at http://www.toddycafe.com.

Related Links: 
  - Read a full transcript on SCA News: https://www.scanews.coffee/podcast/55/reco-podcast-peter-roberts-on-empowering-specialty-coffee-to-look-beyond-the-c/
  - Read more about our 2019 speakers: https://www.recosymposium.org/2019/speakers

Table of Contents
3:10 The story behind how Peter came to realize Central American coffee producers were not earning sustainable prices for their coffees
8:25 Specialty coffee needs a pricing benchmark for paying coffee producers, but it can’t be the C price. 
11:55 Why the American Blue Book for comparing used cars prices is a good model for comparing specialty coffee premiums paid to farmers
20:15 Future considerations once the specialty coffee industry has this pricing data

Peter Roberts on Empowering Specialty Coffee to Look Beyond the “C” | Re:co Symposium 2019

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