Beyond Fair Trade

by Mark Pendergrast

  Documentary Evidence

  THREE MONTHS AFTER the momentous switch to Canterbury, Doi Chaang Coffee got another crucial boost: Darch Senior (and Wicha, when he visited Canada) had appeared on local television and radio shows. The story about the extraordinary coffee from northwestern Thailand was beginning to percolate but had not yet achieved national recognition. In October 2010, Darch got a call from producer Linda Aylesworth of Global Television Network, which had twelve owned-and-operated stations across Canada. Aylesworth wanted to arrange a visit to the village of Doi Chang with a film crew. Could Darch perhaps facilitate that?

  Yes, indeed, he could, and he and his son would accompany her. Because of the success of Doi Chaang coffee, earlier in 2010 the government had finally paved the road up to the village. Because it was seen as being for the benefit of the hill tribes, the road was sub-standard, without proper foundation, and the asphalt was too thin, so that potholes almost immediately appeared, but it was still a vast improvement on the previous mud road, and now it took only an hour to drive from the city of Chiang Rai instead of four or five hours.

  Aylesworth was enchanted by what she found. She was charmed by Wicha and the Akha. What had originally been planned as a three-minute segment on the news turned into four consecutive nights, showing audiences the miracle that was occurring on this remote mountainside, in large part because of the Darches and their Vancouver coffee company.

  The first show aired on Monday, November 22, 2010, introduced by an anchorwoman: “It’s been said that the only thing that keeps people awake more than coffee is your conscience. Well, what if your conscience could be eased by the perfect cup?” Then she turned the show over to Aylesworth, who said, “Canadian coffee lovers are increasingly demanding more than a heady aroma and full-bodied taste. They want to know that the people who grow their beans are being paid fairly—people like the Akha of northern Thailand…”

  With that, the camera zoomed in on a traditionally dressed Akha woman, singing in her native tongue as she picked coffee. The scene was exotic, enticing—and almost realistic. It was true that Akha women did the bulk of the coffee harvesting, but they no longer wore their elaborate headdresses, except on special occasions. Apparently a television documentary was one of those occasions. “In spite of their hard work,” Aylesworth said, “discrimination and unscrupulous coffee brokers have kept them from rising out of poverty.”

  Then Wicha appeared on camera, with his earring, beard, and earnest manner, explaining: “These people have nothing, [treated] worse than a dog. OK, they look down [on them], that’s why their children are not to go to school. Even teachers, they just look down at our people.” The camera turned to cute little children running down a broken concrete village road.

  Aylesworth then introduced Darch Senior, shown drinking coffee with Wicha at the café in Doi Chang. “He’s good, he’s a kind man,” Wicha said of Darch, who then explained in his calm, measured British accent, “I wanted to see if, by taking the coffee to North America and introducing it, that I would be able to add to what Wicha wanted to do.” He would pay “beyond Fair Trade” prices and give the Akha half of the company. With that money, Aylesworth explained, the Akha had been able to expand production, which the camera documented by showing the newly constructed wet processing plant and huge concrete drying patio, where a worker was raking beans to turn them.

  The program did not explain why the new processing plant had been necessary, or what a rift it had caused in the village. The success and fame of Doi Chaang Coffee, and the higher prices it commanded, had tempted some of the Akha processors to buy inferior beans from lower elevations and mix them with the locally processed beans. As a result, some of the Doi Chaang green beans had been rejected. Adel and Wicha decided to stop using the twelve Akha associations and their processing stations. Instead, they would build a larger, faster facility and buy just-harvested cherries directly from the farmers. But this move to cut out the middlemen infuriated some of the Akha who had run the processing facilities.

  Aylesworth continued: “This year 800 tons of premium beans will be shipped to Richmond, BC, where they will be roasted and distributed to Canadian buyers, who with every purchase help the Akha to help themselves.” The figure was inaccurate (only 200 tons would go to Canada), but otherwise Aylesworth had it right.

  “After decades of being paid a pittance for their beans, the Akha are at last getting what they deserve,” she concluded. “We never beg,” said Wicha on screen. “We want to work for whatever we want to see.” Darch wrapped it up: “I was living a comfortable life. I could have retired. But there’s a much greater feeling and passion toward this project than anything else I’ve done before.” The program closed on a shot of Akha children laughing.

  That first night, 250,000 people watched the Global TV news show with this segment. By the time the fourth segment aired three days later, viewership had risen to 750,000. Aylesworth took the rest of her footage and turned it into a half-hour documentary, televised over the Christmas holidays of 2010 and then posted on YouTube.

  Because of the switch to Canterbury and the media bonanza from Global TV, Doi Chaang sales hit $1.3 million for the year 2010.

  Growth, Awards, and Profits in Sight

  THE DOCUMENTARY WON the award for the best long feature of the year from the Radio-Television News Directors Association of Canada and launched a string of other awards and media that followed in 2011 and 2012. The Thai-Canadian Chamber of Commerce, based in Bangkok, named Doi Chaang Coffee its “Company of the Year 2011.” The Canadian Association of Foodservice Professionals gave the firm its “Outstanding Community Development” award, while Asia-Pacific Economic Cooperation, covering twenty-one nations with borders on the Pacific, from Peru to Russia, from Canada to Thailand, awarded Doi Chaang Coffee third place in its “One Village One Brand” contest. The firm was short-listed to the top ten Small-Medium Enterprises at the United Nations Conference on Sustainable Development in Rio de Janeiro in June 2012—the only coffee company and sole Canadian company to be so ranked.

  The media fell in love with the story of the plucky, thriving Akha of Doi Chang village, their coffee, and the Vancouver firm that was roasting it. Mutineer Magazine, which covered all “fine beverages,” alcoholic or not, ran a long encomium to Doi Chaang Coffee in its May 2011 issue. “The Akha seem to possess an uncanny ability to learn by doing,” wrote author Chris D’Amico. “They’ve mastered complex agricultural practices as well as mechanical and civil engineering.”

  The June 2011 issue of Sawasdee, the inflight magazine of Thai Airways, featured Doi Chaang in “Coffee Quest,” an article by Matthew Kadey, with the subtitle, “A mountain community in northern Thailand is brewing a success story in coffee, tea, and agro-tourism.” Kadey, who bicycled up the mountain to the village as part of a ten-week cycling adventure through Laos and Thailand, declared the strenuous effort worthwhile once he got to the top and got an iced coffee from Adel and a tour from Miga.

  Global Coffee Review, in its September 2011 issue, featured a photo of Wicha and Darch with hands clasped in solidarity in an article by David Swinfen, headlined “Business Thais.” Wicha, who had grown into his role as a media star, told Swinfen, “I live for Doi Chaang, and it’s 24 hours. I sleep for two hours sometimes, but I work at night, in the day, whenever there is anything the village requires me to do.” One could doubt whether Wicha really slept only two hours a night, but there was no question that his mind was racing with new plans, and he seemed unstoppable. Darch told Swinfen, “I met with Wicha out of politeness, but I was overwhelmed by the commitment that I saw [in the village].”

  Darch explained that the Fair Trade coffee certification had “done a wonderful job in terms of raising public awareness about the need for a decent and reasonable wage for growers,” but that the Fair Trade price was really equivalent to a minimum wage. “It does little to break the cycle of poverty for many coffee farmers.” That was why he had gone “Beyond Fair Trade” in his busin
ess model. By that time, 2,000 acres of coffee trees in Doi Chang were producing 640 tons of green beans annually. Another 5,000 acres had been planted with coffee seedlings in various stages of growth. Each year, the Akha planted another 100,000 shade trees, including macadamia, plantain, plum, and peach trees, as well as nitrogen-fixing trees that were particularly good for the soil.

  “Until you establish a brand which is recognized internationally,” Darch said, “there is no demand other than for your [bulk commodity] green beans.” Now that the brand was getting attention around the world, sales were growing in Thailand, where pride in being recognized outside the country translated to better domestic appeal. Luxury Thai malls such as Siam Paragon and Emporium were begging for the beans. Thai sales had reached 200 tons, with the same amount sold in Canada.

  In the article, Darch Junior noted that they were selling at select stores in the UK, including Harrods of London, where Doi Chaang was the most expensive coffee. Darch Senior’s younger brother, Terence “Terry” Darch, who still lived in Weymouth, had taken on the task of promoting Doi Chaang coffee in the UK, at first selling roasted beans he got from Canada. He carried samples to London and the Midlands, spreading the Doi Chaang gospel and persuading Harrods to sell the beans. He then contacted DRWakefield, a British coffee bean importer, where Simon Wakefield had taken over the business his father had begun. Wakefield began to buy a container of Doi Chaang beans annually to supply the UK specialty market.

  Canadian sales were growing as well, surpassing $1.8 million in 2011, though the company had yet to turn a profit, and Darch had now sunk nearly $4 million into the enterprise. All the articles mentioned that the Akha owned half of the Canadian coffee company and were entitled to half of the profits—but they did not mention the inconvenient fact that there were no profits yet. Regardless, the Akha shared in the equity and goodwill of the company, and the Canadian company’s marketing, including the widening press coverage, proved invaluable.

  As 2012 rolled around, the media attention continued. Miles Small of CoffeeTalk Magazine visited Doi Chang village and was blown away by the coffee and the place. He wrote an article in which he called Wicha “this quiet, peaceful, and wickedly intelligent man.” He also injected a little romance when he wrote that Darch first rode up the mountain on a mule—not true, but not that far in comfort level from the actual jarring trek in a four-wheel-drive truck that Darch had taken up the rutted dirt road.

  The coverage just kept coming. In March 2012, Stir, a coffee industry periodical, published a feature article, followed the next month by a long article in the Tea & Coffee Trade Journal. Kenneth Davids made a pilgrimage to the Thai village and wrote about it in Roast in the October 2012 issue. At first, he wrote, Wicha seemed too good to be true, “with his endless energy, open, innovating spirit and part hippie, part Buddhist idealism. But he ultimately convinced me, thoroughly.” He was impressed that Wicha, Adel, and the farmers had “tirelessly worked almost every possible angle to increase the Akha cooperative’s coffee volume, coffee quality, revenues, and general well-being.”

  By this time, there were twenty Doi Chaang coffeehouses that were fully owned by the cooperative, and nearly 300 other Thai cafés that exclusively served the Doi Chaang brew, so that they were essentially franchises. Doi Chang village had running water, a rudimentary sewage system, electricity, and paved roads. Thai officials who had once scorned the ignorant, lazy Akha now proudly took visitors up the mountain to show off an example of their successful development efforts. In April 2012, Darch Senior was invited to accompany Canadian Prime Minister Stephen Harper to Thailand on a goodwill trip. Though his roasting company was tiny compared to the other corporations whose CEOs came along, his was the only Canadian venture that actually partnered with people in Thailand—and with marginalized hill tribes at that.

  A Family Feeling

  OVER TIME, DARCH Senior and Junior assembled a tight-knit young office staff in Vancouver. “We try to run it like an extended family,” Darch Senior said. “Everyone here is involved and passionate.” He became chairman in 2012, while his son, elevated to president, was more active in day-to-day nitty-gritty details. Tanya Jacoboni progressed from receptionist to office manager and then vice president of business development. “I always laugh at titles here,” she said, “because we all do so many things.”

  Danika Speight joined Doi Chaang in January 2011 as an accountant, taking over the bookkeeping from Darch Junior and gradually handling receivables and payables, then doing the firm’s financial statements. When Darch Junior became president of the company, Speight was named chief financial officer.

  Anand Pawa, who had been born in Bangkok and moved to Vancouver with his family when he was in Grade 8, joined the company in 2011 and quickly became a key employee. During his interview with Darch Senior and Junior at a Vancouver restaurant, Darch Senior told him that he wanted someone with extensive experience with media contacts. Anand Pawa, who had earned a degree in marketing from Simon Fraser University, admitted that he didn’t yet have that specific expertise, but he could learn. He pointed out that he was fluent in Thai. “That’s nice,” Darch Senior said, “but Wicha and Sandra both speak English, so I don’t think we’ll really need that skill.”

  To his great disappointment, Anand Pawa wasn’t initially offered the job, but the Darches called back in March to offer a three-month trial period. He quickly proved to be invaluable, especially after he visited Doi Chang in October 2011 with Jacoboni and Darch Junior. Anand Pawa discovered that every piece of information about the village he’d been given back in Canada was incorrect, including how the coffee cooperative functioned and how the coffee was processed. “It was all lost in translation,” he said. He quickly bonded with Adel and Miga, translating for Darch Junior. They negotiated prices for the next harvest, a process that went smoothly for the first time.

  The next hire, in November 2011, was receptionist Jacquelyn “Jackie” Kingston. She was followed by Sanja Grcic, a native of Bosnia, who became vice president of sales in the grocery division in February 2012, and Katharine Sawchuck, who was hired in October 2012 as public relations director.

  Darch continued to travel extensively, not only for Doi Chaang Coffee, but also for his other business ventures. He may have sold the first potash development company he helped to start, but now he was working on six other Thai potash deposits in the same northeastern region, as well as having part-ownership of Waste Energy, a Thai firm that would burn waste to produce sustainable energy, IMS Global Corporation, a Canadian firm providing safety systems to mining companies, and a few other ventures. His daughter Katharine was back as his main assistant.

  Thus, by the end of 2012, most of the Vancouver Doi Chaang staff were in their twenties, excited to be pioneering the new coffee venture that was helping the Akha tribe halfway around the world. Each would get to visit the village of Doi Chang three years after joining the firm.

  Despite his travels, Darch Senior kept close tabs on the Vancouver roasting business. Gross sales crested $2.3 million in 2012, finally netting a small profit of $145,000 for the year.

  CHAPTER 7

  Learning Curves in Vancouver

  BY JUNE 2013, the coffee company that John Darch Senior and Junior had launched in 2007 with such optimistic naïveté had gone through a series of trials, tribulations, and growing pains. The idealistic, energetic young office staffers were working smoothly together, but trying to increase sales of Doi Chaang Coffee remained a challenge, particularly because the name sounded so strange to Canadian ears. Even when consumers realized that these were coffee beans from Thailand rather than tea leaves from China, they often didn’t know why they should choose Doi Chaang over other coffees.

  The fact that they were labeled “Beyond Fair Trade” was a nice touch, but what did that mean? The story of the Akha tribe, its transition from trading in illegal opium to specialty coffee, and the impact that coffee sales had had on life on a remote mountainside in Thailand were difficult to c
onvey on the side of a bag of coffee. And getting consumers to first pick up the bag and read it was even more challenging.

  Doi Chaang bags were jostling with competitors for shelf space in the coffee section of several Vancouver stores. At Meinhardt Fine Foods, a small upscale store where Doi Chaang would seem a perfect fit, the Doi Chaang single-origin beans sold in one-pound bags for $16.99, but they were up against more established names, including Ethical Bean, 49th Parallel, Piccolo Brothers, Salt Spring Coffee, Caffè Umbria, Level Ground, Commercial Drive, illy, Starbucks, and JJ Bean, Meinhardt’s house blend. Many of these coffees sold in 340 gram (12 ounce) bags for $13.99 or less, and while the price per gram for Doi Chaang was competitive or even cheaper, many customers made purchasing decisions based on the sticker price of a bag. They didn’t see much visual difference between the 12 ounce bag and a full pound.

  Another problem Doi Chaang faced was that all its beans came from just one place, so that its different offerings were really just different roast levels or permutations of what were essentially the same beans. The company offered a Dark and Medium Roast option, as well as a Signature Blend, combining Dark and Medium. And there was the Doi Chaang Peaberry, with mutant round beans that grew singly rather than two facing seeds inside a coffee cherry, the Doi Chaang Espresso (at a real disadvantage for making a good crema, without blending with other origins), and a decaf version.

  All of these options were available through the Doi Chaang website, but each item also had its own SKU (stock keeping unit), and in the fierce grocery business, companies often had to pay an initial “slotting fee” for each SKU taking up shelf space. Small stores such as Meinhardt did not charge a fee, but shelf space was still limited, so Doi Chaang sold only Dark, Medium, and Peaberry there. In larger stores, the slotting fee could range from $5,000 per SKU for twenty stores up to $40,000 for a national chain. This one-time fee was no guarantee that the store would continue to stock Doi Chaang if it didn’t meet their sales targets or if the store reconfigured its shelves. At Save-On-Foods, for example, Doi Chaang’s bags had been displayed on the bottom shelves and were subsequently ousted by the store’s new house brand, also sold in a black bag.