Big Idea: The coffee supply chain can be used for more than just moving coffee, and there’s a way for YOU to be involved.
Why it Matters: By leveraging coffee wet mills for micro-manufacturing business models, we can address the coffee smallholder living wage challenge without increasing the cost of high-quality coffee to end consumers, doubling the household income for millions of smallholders.
Going Deeper:
80% of the coffee in the world is grown by 25 million smallholder farmers, and as many as two out of three are living below subsistence level (around $2 per day in most cases) and are food insecure at least part of the year.
Most of those coffee growers live in rural areas without access to better paying jobs. Many of the next generation leave to find better paying jobs, threatening the ongoing availability of high-quality coffee.
Coffee washing stations, or wet mills, are often the first point of aggregation where farmers bring their coffee cherries for the first stage of processing (depulping, washing, and drying) before the coffee is moved to dry mills for further processing and exporting. One wet mill can service hundreds of coffee smallholders.
These wet mills can often be one of the few locations in the area to have reliable water and electricity, and they often sit idle for many months of the year outside of coffee harvest time.
Many of the countries growing coffee are rapidly emerging economies and do not have local manufacturing of many of the basic products demanded to support growing trade, thus relying on import of those products at a higher cost.
Micro-manufacturing is one emerging trend driven by hyper regionalization that could meet many needs. If co-located with washing stations and leveraging local raw materials, they can provide needed goods to the local market while providing additional income to coffee farming communities in the non-harvest months when labor is freely available.
For example, bananas grow well with coffee and are a beneficial intercrop, providing shade and nutrients to the coffee plants and an additional source of food for the community. Unlike coffee, bananas produce year-round, and when the fruit is harvested the stem is cut so the next stem can produce the next bunch a few months later. That stem is typically left to mulch or rot in the field, but can serve as raw material for production of many goods if the fiber is processed appropriately.
Banana stem fiber has a texture somewhere between jute and sisal, and has many commercially useful properties (high absorbency or water repellant depending on processing, strength and/or softness depending on processing) and can be used to make goods from sanitary pads, to paper, to textiles, and even plywood through a special delamination process.
Textiles from agricultural waste byproducts are an area with much growing interest and investment, driven by concerns around water scarcity among other factors. Water and land used to grow other natural textile fibers such as cotton and jute will need to be used to grow food in the future to meet the demand of growing populations and expanding consumption of the emerging middle class in many economies.
Paper from renewable resources is also growing in demand, as deforestation is a key driver of climate change with growing consumer awareness and regulatory focus.
Both textiles and paper can be produced from banana stem fiber with fairly low capital requirements, and when the cost of importation and long supply chains is removed from the equation, small production facilities such as those that could be co-located in rural coffee communities may become economically viable options.
For example, a single coffee exporter in East Africa may use 250,000 jute burlap bags per year and pay $2 per bag landed cost on those bags. Around 70% of that cost is logistics cost to import from India. That $500k could go back to the local economy if just three of the 60+ wet mills had micro-manufacturing facilities to process banana fiber into twine and another wet mill was set up with a small weaving facility to convert that twine into the bags. Then the bags could ride with the coffee to the dry mills where they are used, thus both reducing the environmental impact and improving the resilience of that supply chain.
When you double an income, you meaningfully impact the next generation and accelerate economic growth. When food scarcity is not an issue, families and communities have an opportunity to thrive.
If $2 per day is the baseline, then $750 per year additional income doubles the income. There are many micro-manufacturing models with the potential to double incomes for a hundred or more households in a single community, using locally available raw materials.
Imagine a portfolio of readily available “kitted” micro-manufacturing businesses… textiles, paper products, feminine pads, and more… each optimized for income generation and commercial viability. Match these with startup capital through equity sharing or low-interest financing, mentorship, small business back-office support, access to market… all connected on a simple streamlined tech infrastructure… scaled to thousands of micro-manufacturing locations, providing life-changing income to millions of households within reach of the coffee supply chain.
How to Get Involved:
Join the conversation. Start dreaming, asking questions, offering ideas. Challenge the assumptions at the premise of this vision, or offer solutions to strategic risks you see. Do this on whatever platforms you use, or join us at our LinkedIn community https://www.linkedin.com/groups/14361382/
Become an investor or donor. Whether it’s $100 towards a crowdfunding campaign, $25k to fully fund a single micro-manufacturing location, or a larger investment to fund multiple sites, this undertaking will undoubtedly require capital to get going.
Who do you know? Do you have contacts in coffee growing regions that would be eager to participate in entrepreneurial models to bring industry and job-creation to remote areas? Do you know potential purchasers or manufacturers of textiles or paper products in emerging economies where coffee is grown? Do you know someone with experience in micro-manufacturing models? Or investors that would like to join us on this journey? Invite them to join the movement.
Join our team. If you like this vision and want to bring your unique skills to the table, let’s gooooo!