Coffee. It’s that flavourful hot beverage loved by most of the world. A cup in your hand may feel like home and comfort—so long as you don’t trace it back to where it came from and how it got to you. That may conjure up a very different feeling and leave a bad taste in your mouth.
Many people don’t know that the farmers who grew their coffee beans are likely to be among the world’s most exploited—often unable to put their children into education or access healthcare. What stands in the way of fair pay?
“Traders with wrong intentions push down the coffee price for the farmers and sell it for high prices on Western markets, filling their pockets on the way in unethical ways,” explains Maarten van Keulen, at This Side Up Coffee. “Coffee is a colonial product, built in a colonial system. Sadly, much of these structures have not changed. The producers are often destined to accept the power of the local or international buyers, and the power dynamics are structured so that without them, tey won’t be able to sell at all.”
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Despite the sector acting on sustainability initiatives, commercial practices still often exploit farmers with only 10% of coffee’s total value staying in the countries of origin.
Achieving fair value distribution alongside circular economy and sustainable practices requires significantly disrupting the way business is done, and this requires scale. The Green Coffee Company, Colombia’s largest coffee company, founded in 2017, has been on a growth journey to becoming the world’s largest producer of Arabica coffee. It recently closed its $25 million Series C equity round to fund ambitious plans for an out-of-the-box approach to rewriting the coffee business model to promote fairness throughout the supply chain.
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“If you can buy green coffee at $1.09 per pound, and the roasters are selling you a bag of roasted coffee in the U.S. at $12.99 in the suprmarket and it is only 12 ounces, who’s getting the money? Not the growers and they’re the ones doing everything,” says Green Coffee Company CEO Boris Wullner.
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GCC is out to change this: “Value share is very important for us. Everything we do, we are not only doing for us as a company, we are also doing it for the coffee growers. We’re getting away from intermediaries and going directly to the consumer so we can pay a better price to farmers. But to do this, you have to have scale.
“In 2021, we decided to scale up so we could produce the coffee and then go direct to consumers into mass market supermarkets in the U.S. and around the world.”
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GCC has been on a step-by-step journey to cutting out intermediaries; at first, it sold coffee to exporters in Colombia. Later, it bypassed exporters by selling directly to U.S. importers and began exporting green coffee into the European market. GCC then started a pilot program selling its specialty coffee brand online, and is now moving toward launching a white label roasted product in the US. By year-end 2024, it expects to sell millions of pounds of roasted coffee annually.
The company now has complete control of its supply chain: from cultivation to processing to direct trade with end clients. This means they can pay a fair price to coffee farmers and grow coffee sustainably.
“With GCC, we are provided with benefits like pensions, financial aid for our kids, school support and health insurance,” says GCC Coffee nursery worker Claudia Mesa.
“We have a lot of opportunities to get ahead financially. This job has helped me grow not only professionally but also on a personal evel,” adds GCC Coffee nursery worker Cindy Serna.
From dramatically reducing water usage, to repurposing coffee cherry waste to create new product lines, GCC is proving that what’s good for the planet and people also makes great business sense: “We take a close look at every point where waste is generated and explore ways to turn that waste into an additional industrial benefit or reduce its environmental impact,” says Wullner.
“Everything’s unique, from the coffee tree nursery to the end consumer, we’re attacking all the old parts of the supply chain that normally are not tackled by growers.”
It takes five kilograms of coffee cherries to produce one kilogram of coffee parchment. Out of these five kilos, approximately two and a half are typically considered ‘waste’ or cherry cascara, but GCC repurposes its cascara to produce ethanol and baking flour. The flour has multiple uses in baking, can serve as a coagulant, or can be converted into animal feed. Cherry cascaras are fermented nd pressed to produce pure neutral ethanol for commercial use, potentially in the form of spirits like vodka or gin. On top of this, GCC is also exploring using waste from the fermentation process to create biochar and generate energy.
Sophisticated processing machinery in GCC’s wet mills recycles water so it uses just 0.3 liters of water per pound of green coffee compared to 20 liters per pound used in traditional processes.
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With over 12 million coffee trees across their farms, every sustainability initiative introduced has an enormous knock-on impact on the environment and coffee business culture.
“The company generates something very important in the agricultural sector: a mirror effect. As long as the small producers located around GCC crops are able to implement best practices in agriculture, like the ones GCC already has, that brings wonderful externalities to the table,” explains Marcela Urueña, Colombian government chief dvisor for coffee affairs.
“I see them as an ‘anchor producer’ that sets the coffee business dynamics in the area of influence where they are located, and they can contribute a lot, from delivering information about technologies to centralizing purchases of fertilizers to get better prices for all producers around the region, sharing these economic benefits with all the small producers and coffee farmers around GCC. It is a truthful generator of enriched social networks that should lead to social and economic stability in the region where it is located.”
Wullner stresses that the technology exists to transform agriculture, supply chains, and production to work in harmony with nature and share value fairly. The greatest challenges he faces, apart from securing initial investment, have been cultural.
In Colombia, coffee growers are not accustomed to using a centralized wet milling facility. Instead, each producer has their own small, technologically dated wet mills, resulting in low eficiency and large product losses. Convincing them to sell their cherries to a central facility, which also improves traceability and consistency, took two years of training and teaching: “This process has involved a complex cultural shift, as we needed to explain our approach and change how we communicate information to these growers,” says Wullner.
He adds that driving transformative change requires audacity: “What drives me and our team is determination, particularly when it comes to leveraging technology and adopting a circular economy approach. As a biological systems engineer, I have a knack for identifying ways to transform one thing into another. When I spot opportunities in this direction, I act swiftly.
“We weigh in on the cost of an investment, but if we see a compelling opportunity, such as the distillery project, where we’re investing $8 million, it’s a no-brainer investment because we anticipate recovering our investment in less than two years. For us, it’s about seizin these opportunities and moving forward,” Wullner adds.
The ultimate goal is to create a fully automated roasting process. This project could represent a significant investment, totaling around $25 to $26 million. GCC has already raised a total of $65 million of equity, and is currently seeking $65 million of institutional debt capital to execute expansion plans. Given its growth trajectory, the company projects it will be in a position to launch an IPO in 2026.
For millions of coffee farming families worldwide, the GCC model offers hope for change in a sector where fair value distribution has been long overdue.
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