With Thrive Coffee, Chick-fil-A Puts Profit In Farmers' Pockets

Specialty coffee retailers are a dime a dozen, but Thrive Farmers coffee has managed to stand out from the crowd, both in terms of the quality of the brew and its relationship with the farmers in its network.

Serving up cups of coffee to the attendees of last week's Sustainable Brands conference, Thrive's founder and chief sustainability officer, Ken Lander, was quick to describe what makes his company different from all the other triple-bottom-line coffee purveyors.

"We go straight to the economic," he explained, describing his company's business model of giving as much as 75 percent of revenues directly to the farmer. Lander should know how much of a difference this business model makes -- he's an ex-lawyer turned Costa Rican coffee farmer. He is just one of dozens of farmers that sell their wares through Thrive.

Thrive is already moving millions of pounds of coffee from farmers in Costa Rica, Guatemala, Brazil, El Salvador, Panama and Burundi, enough to shift the spot price for coffee beans.

While Thrive sells directly to consumers, its main goal is corporate partnerships with their much higher volume. The company's first partnership may surprise TriplePundit readers familiar with the firm's stance on gay marriage. Chick-fil-A might oppose gay rights, but that doesn't mean it doesn't see the value in a good cup of coffee. Indeed, the famous chicken restaurant has a history of environmental stewardship and, eager to reboot its coffee, saw Thrive as a great opportunity to "do some social good without paying more," as Bart Newman, vice president of national accounts, puts it.

The partnership has been very successful for Chick-fil-A, earning it the designation as No. 1 in fast-casual coffee, according to Thrillist.

As readers who are familiar with the fair trade model will likely already understand, coffee is a commodity, and the average farmer out there earns only a small fraction of the money you spend when you buy a bag of beans or a cup of joe. Numerous models like fair trade offer protections to farmers in the form of a guaranteed minimum payment or a premium for the co-op, which can be used to fund local schools and hospitals.

Thrive takes things one step further. "Not that fair trade is bad," clarifies Newman, "but we wanted to take a step further. We wanted to make farmers a true partner."

Farmers earn when Thrive earns. It's a startlingly simple model, and one that has been very successful for both the coffee startup and its farmers. The farmers involved generally sell 30 to 40 percent of their supply through Thrive, meaning that they aren't dependent on a single buyer for all their crops, which could be a risky situation. Nevertheless, farmers are clamoring for bigger purchase orders. A group of would-be partners from Honduras was actually monitoring Thrive's social media accounts during the conference, hoping to catch wind of a deal being brewed. "They are hoping that we’ll close a deal so they can come online!" Lander exclaimed.

Thrive's coffee is "specialty grade ... objectively one of the highest quality cups of coffee you can buy," Newman said. The specialty grade is awarded to only 10 percent of beans sold worldwide. Since people are obviously more willing to pay for high quality, Thrive is able to keep its price point on the higher end for coffee ($11.99 per 12 ounce bag) while delivering a quality product to customers and a good price to farmers.

When asked about the worker protections that accompany most Fair Trade programs, Newman alluded to the fact that Thrive knows each farmer, and has seen anecdotal evidence that the money flowing to farmers is having a benefit, like new schools and hospitals, for entire communities. With that said, he acknowledged that certification may be a good choice as the company grows. In the meantime, transparency throughout the supply chain is a great intermediary.

It's hard to argue with Newman's example: "Most of the time, coffee buyers don't want the farmers to know how much their beans are being sold for. We brought the CEO of Chick-fil-A to Costa Rica to introduce him to his farmers."

Image credit: Thrive coffee