Transcript

The origins of Café Direct with Geoff Tudhope, Chair of Café Direct.


Audio

You can also listen to the interview [MP3 15.9MB].

Transcript

James Ayers (Sustainability Communications Officer, La Trobe University):

Welcome to a La Trobe University podcast with Geoff Tudhope who is here as part of the Globally Responsible Leadership Initiative's General Assembly at La Trobe University. Welcome.

Geoff Tudhope (Chair of Café Direct):

Thankyou.

James:

Geoff, if you could give us a brief introduction and history to Café Direct?

Geoff:

Café Direct, started just over 20 years ago, it was due to the collapse in the coffee price. The coffee price is quoted on a New York commodities exchange and the price absolutely collapsed. Some development agriculturists were in Mexico with some small holder farmers in the Chiapas region of Mexico and they were discussing what they were supposed to do about this because not only were the farmers just at survival level, this was going to take them below survival level. In fact it was the Mexican farmer who said, why don't I give you some sacks of coffee and ill send them over to you in the UK and why don't you see if you can sell it and that way we will have cut out all the middle men and even though the price is lower the margin we will get will be higher because we've cut out the middle men. So, these agriculturists looked at each other and wondered what to do and they instantly thought of Lorna. Lorna Young was, unfortunately she has now died, was in Glasgow and was very interested in the issues of farmers in developing countries. So they sent a couple of sacks of coffee beans over and she roasted them up in her kitchen, ground them up, put them into little paper bags and drove around to shops saying 'you've got to buy this stuff.' So that's how it started. Very much grass roots, the early stages of the organic movement through church fairs and those sorts of channels so that was its origins and the breakthrough came 10 years later when this little company that had 1 employee took on another employee who came from a marketing background with the body shop,, Penny Newman. She turned the whole idea round with regards to the consumers, rather than saying this is a good cause, although it doesn't taste very nice please give us some money. She switched it round and said what we have to do is absolutely delight our consumers with the taste and the experience of tasting coffee or tea and as a result would be willing to pay a good price which we can then channel back to the farmers. That was the breakthrough which enabled one supermarket; it was the Co-op in the UK. So similar values to Café Direct, they decided to list us, so they gave us a little bit of space on the shelves, in turn we were then able to go to some of the other supermarkets and say 'look, one of your competitors has already got this on the shelves you really should do the same.' Another 10 years on to the current day, just to give you some dimensions of were Café Direct is now, we work with 260, 000 small holder growers who are in 40 co-operatives in 12 different countries, mostly in East Africa, Central and South America. We're in coffee, tea and cocoa. We have 120, 000 friends of Café Direct in the UK through twitter and facebook and our own website. We have 5,000 shareholders, 35 employees and a few board members, the majority of which are not British and two of them are farmers themselves, one from Kenya and one from Costa Rica.

James:

Being an example of a sustainable and ethical business, why do you think it is so important for new businesses and existing businesses to make those choices as part of their operations?

Geoff:

It's a values thing, we have a belief that much of the world is a world of big contrasts between the haves and the have nots, much of the world is highly competitive, so that there are winners and losers and as a result this planet has got far to many people in poverty. We are pretty clear that the purity of the Friedman model of capitalism actually doesn't work, so trickle down doesn't work. It works to some degree, but it needs more. So what do we do? Rather than be a charity, our idea is that we need to find a way of running along on this planet a little better and the way you do that is by building trust and you won't build trust unless you do something together. So it's around a joint endeavor. Why no business because business can be a force for good. But the way you then approach that business is different, it's not winner and losers, it is not buy low sell high, it's actually about sharing out the benefits of business together and in partnership. It is also about performing together to the highest possible level. This isn't a soft option; this is a robust professional, operation. The farmers themselves actually have to understand business, they need to produce really top quality crops and the marketers and sellers really need to be at the top of their game in order to prove this model.

James:

You've been one of the examples of a business that's been able to marry sustainability and ethical choices; do you think it's the way of the future for business? Do you think it has to be the way of the future?

Geoff:

I think it does and ill give you an example of how this flow within Café Direct itself, the issue of climate change and farmers always talk about the weather. There's always too much water or too little water. But there is a step change going on in this world and I think its pointless trying to rubbish the science, its clear we have got climate change. Now this has profound implications for the farmers and the co-operatives and the communities and their families. Such that we were concerned about and thinking from the business model point of view, how can we sustain a business in selling to consumers if our supply base was unreliable. We found ourselves thinking in quite normal business ways or well perhaps we ought to go to different sources or easier climate conditions and we woke up and were absolutely horrified with the conversation that we'd been having because it was a normal business conversation but it wasn't our business conversation. Instead we turned it around on its head and said 'no no no, what we do is work in long term partnerships with these communities so what we have to do is put our energies into helping those communities adapt and mitigate climate change.' That was a decision we took five years ago, so it was before it became really fashionable and we established four pilots in conjunction with GTZ from Germany, we put together a climate change adaptation program in and piloted it in Peru, Nicaragua, Mexico and Kenya ad there are some lovely stories that are emerging from that work now. But it is central, how can you possibly create this trust and harmony on the planet if you switch your suppliers and chop and change all the time. That can only be a winners and losers game. We have to recognize that we are in it together and we were in it together within the natural system not at the expense of the natural system.

James:

How much does the business take into consideration its purpose in engaging and creating awareness with people outside of the business?

Geoff:

Absolutely central, our business will not work on behalf of the farmers unless we can stimulate consumer consciousness, so whilst on the one hand we face one way and are working in partnership with the farmers back in the developing countries directly, so we then in turn have to face the other way to consumers. So the issue of stimulating consumer consciousness, around a more harmonious world a fairer world is absolutely central to what we do and we have a dramatic story to tell on that, we started before Fairtrade, we then did adopt the Fairtrade mark, we were the first branded product to adopt the Fairtrade mark and we were a huge and very proud catalyst for the change in consumer consciousness in the UK. The explosion of Fairtrade over the last 10 years has been dramatic but it has had a downside because we have shown how attractive and important this is for all of us to live together in this way and of course it brought in a lot of competition. Now, that competition is good for the farmers because it pulls through more products from them that gives them better value, but it is eating our lunch at the same time. So it is a very tough call, we have to continually reinvent ourselves and show ourselves in different lights and in different ways that are truly authentic. So from crop to cup authenticity, we have to be able to shine through so that consumers still find us attractive. We use humor quite a lot as a mechanism for doing that, because sometimes the underlying messages are deadly serious but do we have to present them in a deadly serious way. The issue of attractiveness to consumers is central because our mission and what we want to be is a very influential brand, we don't want to be a big brand. We know there are plenty of other people that have that aspiration but we want to be very influential and we feel that the best away of doing that is to demonstrate in action. That you can run a business this way, it is different but you can run a business or profit, this way. So we're not just advocacy or thought leadership, its central to showing in action that you can do this. Not that we are saying you have to do it our way but think about the spirit and the underlying principles we are working to and what does that mean for your sector, and why don't you start acting your way into a fairer way of doing business?

James:

You are here as part of the Globally Responsible Leadership initiative General Assembly being held here at La Trobe, speaking about these aspect of leadership, what you've learnt in a business model, do you believe can permeate into all sorts of industries? Do you believe Café Direct provides a good example of that?

Geoff:

Yes I do, I mean the GRLI has the vision which is of a future in which leaders contribute to the creation of economic and societal progress in a globally responsible and sustainable way. Now those are quite longs words but I think you can get the feel for what that is. Café Direct in its own little way is an exemplar of this. I'm personally delighted to be here at La Trobe with some of my GRLI colleagues and a number of ambassadors from different business schools here in Australia, many of them young graduates discussing some of these central issues and actually gaining solidarity on these issues from each others.

James:

Do you think the knowledge that leaders as they come out of university or business schools is changing, that as opposed to 20 or 30 years ago there is a different sets of boundaries that students and graduates need to learn about and understand?

Geoff:

Yes, I think it is changing, I think it's interesting that 7 years ago you could 'Google' anything because Google didn't exist. But if you 'Yahoo'd,' 'globally responsible leadership' it didn't exist. I mean that is our name, but the issue of globally responsible leadership is being talked about all over the place. So if you like there is a awareness that is starting to happen, that it is a serious subject. Certainly within the GRLI there are a number of business schools and universities, as well as businesses, because we are a coalition of both that are starting to act now in different ways. We are beyond awareness raising and we ourselves are trying to act in different ways.

James:

Do you think that something the global financial crisis increased that awareness, or leadership and responsible leadership?

Geoff:

The global financial crisis is a product of the old model, you might be intrigued to know that the GRLI stemmed from 9/11, now 9/11 was a horrific event but it didn't just happen out of thin air. There were an accumulation of grievances; let's put it that way, that created 9/11. There was a belief amongst a number of deans of business schools that maybe the way in which they had been teaching capitalism through the business schools might have contributed to 9/11. So there was a huge awakening, the sad thing if you like is that the financial crisis happened 8 years later but is a product of capitalism gone mad and we should have it, we shouldn't be tolerating that type of situation. So I think that although the financial crisis has caused a great deal of misery for a lot of people it conversely is helping us all to understand that we cant put up with this sort of thing and that we've got to find different ways of working and living together. It's sad that there has to be crisis isn't it, but we've got some very joyful things on the other hand in terms of Café Direct when you look at some of the social impacts lets say of what we have been doing in the co-operative communities there is some very valuable stuff being done in health and in education, infrastructures and all those sorts of things. But what is really intriguing for me is where a lot of the money we are channeling back is going into these co-operatives and their getting to a stage were they can make their own choices, their building their own capacity, their intellectual capacity to make real choices for themselves for the future.

James:

What sort of leadership or business advice can you give to people who are looking at starting business that are interested in sustainability and ethical choice.

Geoff:

Well, I think that there is one overall condition that is really important and that is try and keep your mind open. Try not to move to solutions to quickly, try not to close things down, try and stay open aware and connected because life does change and what you think is right one day is going to move on. There are some underlying values of course that are associated with all of that, I mean openness is very close to issues of integrity or indeed humbleness. So that's one side of it, there is another side of the and it's a mantra that we use in the GRLI a lot and we do also use in Café Direct and that's the entrepreneurial mantra, which we describe as 'think big, act small and start now.'

James:

That seems like a good place to finish, thanks very much Geoff.

Geoff:

Thanks.

No results found. Try searching again:

Search for ...

Find an expert

Search our experts database.