This is an unredacted version of my very first writings about this business model. It still holds a lot of the key ideas we use today. We have now built further upon these ideas and have refined our focus since then.
Enjoy the read,
Bram
23 August 2022 - At home, Hannover Germany
The idea of a silver bullet is incredibly attractive and many companies have successfully leveraged this notion to market their products. Usually these ‘silver bullets’ claim to save the world, make you fit or provide some other type of shortcut to happiness or wellbeing. We’re all prone to spend our money on these types of products but usually deep down know and acknowledge it's not the full picture.
The silver bullet however, is usually made out of tin and the target wears kevlar. Now, this would be the line for me, to present my silver bullet. However, I must admit that there are none. What I believe most companies get wrong is that they think the consumer will judge them for their honesty. Well, they’re not entirely wrong, they will get judged but the consequences may be different than they expect. Therefore, I believe that honesty should be the primary pillar in my business. Honest about what we do, why we do it and whom we do it with. This includes sharing our imperfection, our ambitions and adapting a pre-competitive mindset. Value is infinite, we don’t have to take it from other companies to gain it ourselves. If we can all grow together the industry will grow which will allow for the supply chain to accrue value as well.
To lay out this business plan I will have a lot of writing to do, hopefully I can bundle it one day and weave it all together. Let’s lay out the beginning and the ‘end’. Afterwards I can stitch it up and fill the gaps.
Where does it begin? First a company must be formed, a private limited liability with approximately six to eight founders and one binding factor: We are all leading coffee farmers in our respective communities - and me of course. This will be a groundbreaking corporate structure as farmers are rarely owners of the majority of the value and capital in the supply chain. This is where I can easily stray off a bit. But, keeping it short and simple, I’ll leave it with this:
“The extraction of raw materials through trade, limits the distribution of value generated by the end-consumer. This prevents farmers from enjoying the same profitability and scalability as coffee roasters. By shifting ownership of coffee roasting to coffee producers we can balance the scales and improve the value distribution.”
Update September 2023: We formed the company!
It is hard to put an end goal to a company, it implies that it would cease to exist at this point. However, without a vision there would be nothing to guide us on our entrepreneurial journey. Whatever words will follow this line, don’t see it as an end point. See it as a strive, the point on which we can look back and be satisfied. Perhaps take a breather and re-group before we look forward again. The vision for the company is to be the reference point for the global coffee industry, an inspiration for people to follow suit and revolutionise trade and economic models throughout industries. I want people to stand up and challenge us to be continuously improving, copy and improve upon our model. Consumers throughout the world should be able to drink a cup of coffee of their preferred quality, price range and preparation without doubting its provenance.
At Paso a Paso there is no place for pre-determined ideas of enjoyment, nor limiting contribution to a better world to the affluent. We can all participate and chip in if we recognise that improvements can be made in each segment of the coffee business.
Regarding that vision, let’s be a bit more concrete now. Dreams are nice but measurement and numbers is the oil that keeps the machine running. This is not yet the financial part of this plan though, we’ll save that for the annexes. This is the operational ambition.
At some point we want to run a dual operation in Central America and Western Europe which is our home turf. In Central America we will operate the entire supply chain from production to retailing of coffee, Europe does not allow for coffee production so we will run an import, manufacturing, distribution and retail operation there. The goal is to serve the full coffee portfolio with an initial focus on wholesale and online direct sales. This can be expanded to retail (coffeeshops) gradually as well as product development such as ready to drink, pods and instant coffees. This part of the process is the same in Central America.
Update October 2023: We found a roastery!
On the production side, we build on the strengths of our founders / community leaders. Initially we will use coffee produced on the farms of the owners to supply our needs. Financing and logistics are handled within existing networks and can be incorporated into the company when the right conditions appear.
As the company grows our demand will exceed the farms’ production capacity. This will initiate phase two of the company: neighbour programmes. Coffee production and trade is a complex web that I have studied and worked in for the past six years. Improving the existing models is hard because of the forces of external pressures such as market and economic conditions. The base for the purchasing strategy lies again in ownership. Combining both a free market philosophy as well as shared ownership is no easy feat. We have not figured this out yet but I am certain the solution exists.
Beyond strong operations we need clear values for our costumer to connect with us and clearly communicate what we stand for. The values of Paso a Paso revolves around a couple of themes.
- Provenance
- Transparency
- Accesability
The provenance of the product is the main driver of both functional and symbolic value. Each partner farm is exceptional in its own way and referred locally and internationally for their dedication to quality and sustainability. These achievements form part of building the appreciation and uniqueness of the coffee.
Distributing coffee seedlings in Ethiopia
Transparency is a word that’s thrown around a lot, but as someone who is able to observe the full supply chain in detail I know that it is almost always murky rather than transparent. Transparency is worthless without traceability and vice versa. The traceability of our coffee is covered by the fact that we source from the farms we own ourselves and control the full supply chains.
In terms of transparency we use a highly focused model instead of data dumps without context. We much rather share context, data, knowledge and progress through in-depth content, events and honest conversations. Transparency, and its related sustainability topics cannot be reduced to just numbers and shiny reports. As stewards of our communities we live the reality of coffee production every single day and we are committed to its continuous improvement. This is the backbone that assures the continued production for decades to come in the best possible conditions and with the least negative impact.
Discussing coffee processing with Don Jorge at Roble Negro, Costa Rica
Accessibility of coffee for all without pretentiousness is a very important part of our business model. We can make no changes to the coffee industry if we exclude a large portion of the coffee production area based on the quality produced. By managing a wide range of products we can supply more types of coffee from our farms. This will also help to include all consumers in our audience regardless of price or quality preferences.