Enacting a fair trade model that values the farmers, consumers, and the environment, Equal Exchange is an inspiring example of success based on collaboration and honest intentions to do good. Equal Exchange is a co-operative that accurately calls itself a social change organization. It has been built as a company that is controlled by the employees. By collaborating with worker co-operatives around the globe, the organization is successfully providing high quality food to the customer. Additionally, it is also proactively educating consumers about trade issues affecting the farmers bringing positive social change in the community.
Innovation
The foundation of Equal Exchange is a for-profit business model with a not-for-profit mission. Built on the principles of democracy, Equal Exchange is a worker owned co-operative that partners with co-operatives of small scale farmers who are empowered to make their own decisions on business and community issues. By cutting out the middlemen, Equal Exchange pays the farmers more and gives the consumer a better value. The co-operative is built on principles like one-person/one-vote equality; open access to information; free speech; and the equitable distribution of resources such as income. The "worker-owners" both elect the Board of Directors and fill six of the nine Board seats. The Board in turn is responsible for hiring and supervising management.
Other aspects of their business model include ‘fixed price shares’ and ‘extreme community’. Fixed price share is based on the idea that their shares are kept at a fixed price with a typical dividend of 5%. Outside investors help the co-operative to grow while earning ensured dividends. Extreme community is a principle that involves each employee spending a minimum of one week meeting and working with farmers.
By creating partnerships with small farms that use organic farming methods, Equal Exchange encourages sustainable farming practices. Their partnerships and egalitarian trade model has lead to a democratically run and cooperative workplace, as well as environmentally sound business practices.
The broad network of relationships with farmers began with their partnership with European Fair Trade Network which helped in locating and linking with small farmer cooperatives worldwide. Similarly, their venture into tea was brought about by creating markets for small scale tea farmers from India, Sri lanka, and South Africa. Today their products include fairly traded and organic coffee, tea, chocolate and snacks from farmers all over the world, including the United States. Through a wide web of relationships Equal Exchange fosters cooperative development. This is manifested as new lines of fairly traded products; broader economic participation by stakeholders; and the development of new entities and organizational relationships.
Another innovative aspect of their model is the ‘Inter-Faith Program,’ a progressive, for-profit business partnership with 10 faith-based organizations. This began when the organization joined hands with Lutheran World Relief. It has enabled the company to create partnerships with communities of faith throughout the country. In a span of less than seven years, more than 10,000 congregations began using their fair trade coffee.
Venturing into selling hot cocoa mix was a response to consumer demands and seemed a logical progression for the company. This was achieved by a partnership between cocoa, sugar, and dairy cooperatives. For consumers who believe in not consuming products made from child labor this was another opportunity to live up to their values of human empowerment. This also provided the children in the country to know about and participate in the fair trade movement. The overwhelming response lead the company into manufacturing fair trade chocolate bars providing consumers with an alternative to the West African chocolate made from unethical labor practices.
Impact
The business success of the organization is evidenced by the growth in annual retained earnings from 2006 to 2007 is almost 23% with growth in sales of more than 24%.
The social impact of the organization has been widespread and sustainable. They introduced US grocery stores to the idea of fair trade coffee in the mid 1980s. They were also the pioneers as US coffee importers in providing comprehensive Fair Trade pre-shipment financing for coffee grower partners. Through their activism the organization has consistently fought against tokenism in fair trade marketplace.
In their continuing efforts toward creating awareness about fair trade, they are helping to bring fair trade to schools by raising funds and creating new curricula. The organization is also fighting against forced child labor in the cocoa trade as well as fighting to protect organic certification for small farmer co-operatives.
The determined efforts of the organization have been recognized by the society through a myriad of awards like 2008 (and 2007) Worldblu World’s Most Democratic Workplaces Award, 2008 Fast Company magazine’s Social Capitalist Award, 2006 SBANE Innovation Award and 2000 Business Ethics Magazine Stakeholder Award.
Inspiration
Equal Exchange was born in response to a desire to empower both farmers and consumers by trading in a way that is honest and fair. The motivation came from a hope to save the environment and develop communities by supporting family farms that use organic methods rather than industrialized agri-businesses that use harmful chemicals.
Their mission sums up all the wonderful work they are doing by building long-term trade partnerships that are economically just and environmentally sound, fostering mutually beneficial relationships between farmers and consumers, and to successfully demonstrate that worker co-operatives and Fair Trade are powerful tools to create a more equitable, democratic and sustainable world.
The World Inquiry editorial team edited this profile from the original submission of the interviewer or other source. The views expressed do not necessarily represent Case Western Reserve University, the Weatherhead School of Management or the Center for Business as an Agent of World Benefit. More >>
