Doselva Builds A New Supply Chain For Coffee Farmers In Central America

by Creating Change Mag
Doselva Builds A New Supply Chain For Coffee Farmers In Central America

Coffee farmers in Central America have been hard-hit in recent years by both the impact of climate change and price volatility. With revenues down, they’ve been turning to other sources, particularly cattle raising, as well as growing crops for their own subsistence. Trouble is, those alternatives aren’t sustainable for either their livelihoods or the environment. With a significant portion of the world’s biodiversity located in Central America, it’s particularly important to protect the region’s environment.

Five years ago, Jefferson Shriver launched Doselva, a social enterprise in Nicaragua and the U.S., aimed at addressing that problem—in a big way. A coffee famer with many years of experience at NGOs working with smallholder farmers, Shriver’s company offers coffee farmers in Central America a turkey solution. Specifically, it not only helps them grow botanical ingredients for spices to sell to the food industry, but also has established a new, sustainable supply chain system to process and export those materials.

“This is a big problem and we needed to be thinking about a big solution,” says Shriver.

Diversifying his Crop

Shriver first learned about the potential in growing spice ingredients during his time working with smallholder farmers. He observed coffee farmers in Madagascar, Uganda and elsewhere successfully supplement their income by growing more-profitable crops like vanilla and cinnamon.

Shriver, himself a coffee farmer in Nicaragua since 2006, decided to diversify into growing turmeric, ginger and cardamon in 2012, when he realized he couldn’t make it on just that one crop. He started with vanilla, which he says is native to the region. “I fell in love with vanilla,” he says, although it was more of a love-hate relationship, since the crop is difficult to grow. That’s because you have to manually pollinate the flowers. Plus they’re very sensitive to disease. Shriver then added turmeric, ginger and cardamon.

While in the process of his own diversification, Shriver started thinking about the challenges small holder coffee farmers faced and what he could do about it. “I realized I could be more effective in the private sector to create a lasting solution to some of the great problems of our time—environmental destruction and rural poverty—focusing on coffee farmers,” he says. In 2017, he founded Doselva.

An Anchor

The company acts as what Shriver describes as an “anchor”, purchasing, processing and exporting the crops, which include vanilla, turmeric, ginger and cardamom. But it also provides a suite of services to farmers, including everything from technical assistance and transportation to helping with the food safety and environmental certifications needed to sell to a premium market. And it provides farmers with organic fertilizer seed and repellent, the better to improve their yield.

Annual contracts with farmers are set at the beginning of the season. The company buys all of the spice crops farmers produce; they usually work on about three to five acres of land. “That level of production makes it viable for us to be able to buy the entire crop,” says Shriver. The contract includes such matters as certifications, a range of prices farmers will be paid and inputs, such as organic fertilizer.

Farmers generally continue to cultivate coffee, just less than they did before. Because the harvests for the various spices happen after the coffee season is over, the new crops provide not just more money, but also an income cushion during what used to be a down time.

Customers and Growth

The company sells mostly to supermarkets, as well as nutritional supplement, beverage and table spice companies. About 40% sales are from customers in the EU, 60% from the U.S.

There are now about 300 farmers participating. But Shriver expects that to more than triple by 2025. He also employs about 100 people in the company’s 15,000-square-foot processing plant on around five acres in Grenada. (Doselva has a rent-to-purchase agreement and Shriver expects to own the facility sometime this year). According to Shriver, up to over 5,000 people a year will be impacted by his new supply chain system. “We’re creating an industry,” says Shriver. “With spices as the engine, it’s creating job opportunities and income opportunities—with a spillover effect beyond the famers directly participating in our supply chain.” Farmers have been able to triple or even quadruple their incomes, with crops that are more resilient to the impact of extreme weather than coffee, he says.

The company also just launched the program in Honduras, focused on cardamom and all spice. Also, Shriver anticipates that potential competitors will see his success and try to imitate it, further spreading the opportunities for people in the region.

Mentorship at Miller Center

In 2019, Shriver entered an accelerator program at Miller Center for Social Entrepreneurship, where he worked with mentors. Then, when the pandemic hit, his mentors extended their guidance for another year. During that time, they also helped Shriver to register as a Public Benefit Corp. and then establish a U.S.-based holding company. Through Miller Center’s Truss Fund, Shriver got a $150,000 loan that provided much-needed working capital for buying new equipment and received more mentorship focused on investment readiness.

That money also served as catalytic capital, helping Shriver to raise more equity and debt from other investors. “When entrepreneurs need funding and other institutional investors may be hesitant, we can invest first and give a signal to the rest of the ecosystem that we have confidence in this entrepreneur,” says Alexander Pan, Miller Center’s director of impact investing.

The post originally appeared on following source : Source link

Related Posts

Leave a Comment