Think Coffee Provides a New Model for Sustainable Businesses
Join Entrepreneur's The Goal Standard Challenge and make 2017 yours. Learn more »
In 2006, when Jason Scherr opened the first Think Coffee in Manhattan, he wanted to maintain a socially and environmentally responsible business. To that end, Think, like many other coffee shops, stocked certified Fair Trade coffee. Over time, however, Scherr and colleague Matt Fury began to question the validity of Fair Trade programs in some countries because, Scherr says, it was hard to trace the coffee to its origin. The two decided to see for themselves whether Think's dollars were ending up in the pockets of those who grow coffee responsibly.
So Scherr and Fury, Think's head of farmer relations and sustainable practices, went to Central America and Africa to meet with coffee growers, first using contacts supplied by their roasters and later relying on word-of-mouth on the ground. "We think the coffee business is a relationship business," Scherr says, "and we want people to feel good about our stores." If Scherr and Fury couldn't feel good about their relationships with farmers, they figured, how could customers appreciate their product?
The two decided to begin importing beans themselves, working only with coffee-growing communities where they could build relationships and address the needs of local people, through improved schools or access to better food or medical care. To help launch those programs, Think offered employees--the company has about 100--and customers the opportunity to travel to coffee-growing communities to see how the beans are grown and to work on philanthropic projects.
During a trip to Ocotal, Nicaragua, a Think employee met with farmer Jaime Lovo high on a mountain near the Honduran border. That tasting turned into a deal between Lovo and Think--and better lives for members of Lovo's community. Think agreed to pay higher than market rate for Lovo's beans (coffee beans are often sold at auction, where prices fluctuate). Lovo, meanwhile, agreed to provide workers with fresh produce daily so they can eat on-site, as well as medical care for them and their families.
Think has also launched programs in Guatemala, furnishing school supplies for the children of farmers in the mountains of Huehuetenango. In Kellensoo in southern Ethiopia, Think employees met with village elders to discuss ways to reduce the school dropout rate. The company helped finance the building of a library and purchased books, tables, chairs and supplies.
By cutting out most of the middlemen and Fair Trade certification fees, Think pays less for its coffee, but the farmers make more. The company, which has five locations in Manhattan plus a wholesale coffee-bean business, recorded revenue of $6 million in 2012. In an unusual twist, it has also licensed its brand to a South Korean company, Seoul Food; Think experienced exploding popularity in that country after one of its cafes was featured on a popular TV show in 2009.
Scherr figures he has spent tens of thousands of dollars sending people on trips and supporting coffee-growing communities. His company also supports local nonprofits, donating 10 percent of sales to organizations near each Think store location.
The philosophy has attracted employees as well as customers, helping the company recruit and retain talent.
"We want to create goodwill with our staff and our customers," Scherr says. "We have to be able to tell them a story about how we're doing a good thing. That definitely breeds loyalty and interest, and we want to keep attracting that kind of person."