Fair Trade 101 with Equal Exchange’s Rodney North

May 11, 2015

JOHN SHEGERIAN: Welcome to another edition of Green is Good, and we’re so honored to have with us today Rodney North. He is the Answer Man, and he’s going to be talking to us about equalexchange.coop and everything he’s doing at Equal Exchange and the fair trade industry. Welcome to Green is Good, Rodney. RODNEY NORTH: Thank you very much for having me on. It’s a pleasure. JOHN SHEGERIAN: I made a little joke at the top, the Answer Man. You’re really a worker and you own the Equal Exchange. We’re going to be talking about fair trade today, but before we get into all those important topics, Rodney, share with our listeners a little bit about the Rodney North journey leading up to Equal Exchange and your life in the fair trade industry. RODNEY NORTH: Sure. I should make clear that I’m one of the owners, one of 150 owners here. The company was already 10 years old when I joined, which was back in ’96. Probably like a lot of people in this field, I had never had any expectation of going into business. I thought I’d work for the government or a non-profit, maybe like a UNICEF or Save the Children or something like that. I’m really interested in how to make the world a better place, especially where life is hardest. It was in the early 90s. I was a mature student. I had gone back to get my BA, and I was studying about international economic development. This was this constant refrain from my professors and from my colleagues and from the sources that I was reading about business is bad. Business is bad. They’re destroying the environment, they’re exploiting people, and, unfortunately, government is largely powerless to do anything about it. All they can do is clean up the mess that’s left behind. It occurred to me, and I learned later that it occurred to other people, that if we don’t like what we see happening in the business world, shouldn’t we get involved and try to do it a different, better, more fair, more sustainable way? This was a real shift in my perspective, and I think over time, a lot of people have been having this shift, where you can both have this other orientation. You can be interested in helping society or your neighborhood or the world, the ecology, and do it through the form of business. Again, for me, this was the mid-nineties. I graduated with my degree in economic development, but then I tried to find companies out there who are in the marketplace or trying to pioneer a new, more sustainable, more fair model. That’s when I stumbled across Equal Exchange. It was really by chance. At the time, they were only 10 years old, a small company with 12 employees. I got my foot in the door as a temp, just answering the phones and sorting the mail. I was excited about what they were doing, and it’s interesting. I think it’s true for a lot of people coming out of college, and it’s certainly true for them today, that when you pick an organization to join, you’re kind of rolling the dice. It may not pan out. It may fizzle, but it’s all worked. I’ve now been here 20 years. We’ve gone from a $3 million company to a $60 million business, from 12 people to 150, and I feel very lucky to have stumbled across Equal Exchange when I did. JOHN SHEGERIAN: For our listeners out there, to learn more about Equal Exchange, please go to www.equalexchange.coop. Rodney, we’re going to be talking about fair trade today, which is such an important topic that we’ve never covered in our seven years here, hundreds of shows of Green is Good. We’ve never talked about fair trade. Everything you want to know about fair trade but was afraid to ask, we’re going to be talking about that. Talk to us a little bit about Equal Exchange. How does it work? How many people are there now? You said you’re doing $60-plus million. Explain a little bit about your mission there, and then we’ll get into all the great topics about fair trade and the great products that you’re creating. RODNEY NORTH: Sure. We have the name Equal Exchange because that’s the ethos behind what we’re doing. We are an importer and a wholesaler of organic fair trade products, coffee, tea, cocoa, bananas, cashews, olive oil, about 200 things altogether, and all of them are fairly traded. Almost all of them are certified organic. All are coming from small-scale farmers. Except for some almonds from California and some peppermint from Washington State, all the rest of it is coming from the global south. We’re a coffee roaster. This is a big part of our business. We’re not just an importer and wholesaler, but also a food processor. We’re a for-profit employee-owned, employee-controlled business, a very rare thing. Some people think we’re a non-profit because we are so committed to trying to make farming work for farmers, and to make trade work for these same farmers, but also we want the business to work for ourselves, we, the employee-owners, and just to demonstrate that it doesn’t have to be dog eat dog. It doesn’t have to be all about maximizing the bottom line, but that you can really run a business with a heart based on the golden rule to spread the benefits of commerce more equitably. From the farmers in Peru to the people in the warehouse, including the management and the people who have financed us, no one is going to get rich here, not the investors, not the founders, not the employees, unfortunately not the farmers, but they’re going to be better off. We’re trying to make something that works for everybody. JOHN SHEGERIAN: Under the term fair trade, you have all these wonderful products. I say fair trade in quotes, and as all the products you just mentioned, the bananas and the tea and the chocolate and the cocoa and the coffee, is this list constantly growing, or is it a limited list for a reason? How do you continue to expand what you’re doing? Obviously, when you came on, it was much smaller 20 years ago. Now, you’re at 60. Is that going to keep growing and are more and more Generation Z and millennials out there really craving and searching for these fair trade products? RODNEY NORTH: Sure. Probably like a lot of people you’ve had on the show, we got into this long before it was cool. If you really care about something, you have to go create the market, educate people and then when they learn, “This is the story behind where my bananas come from. This is how coffee is normally traded. Gee, I don’t feel so good about that,” it’s their choice. We try to give them a choice. Here is an option you can feel good about. Here are the farmers that we work with. We work with the same farmers year after year. In those early years, sure. You try to find something that works. We tried all kinds of things, banana chips and tuna from Cape Verde, but it was coffee that caught on. Specialty coffee was beginning to catch on with Peet’s and Starbucks. Coffee stuck, what worked. We focused on that, and as is the case for many entrepreneurs, you’re like this is working, and take the success of your successful product, and then make some investments laterally. Can we apply this to tea? That actually took a couple tries before that began to click. We’re now going to hot cocoa. That worked. From that base, can we then expand into chocolate and more value added products? Thankfully, as the years have gone by, we’ve been able to add products much more rapidly. It used to be years in between new product introductions, and now it might be months. Just in the last few years, we’ve added a whole line of organic dried fruit and nuts, helping us to reach all new communities of farmers around the world. JOHN SHEGERIAN: Just so we understand, Equal Exchange’s role between us as the consumers and the great farmers around the world that are growing these products is a facilitator and a certifier of these products. How does that work and what is exactly Equal Exchange’s role there? RODNEY NORTH: Again, we’re an importer and a processor because we roast coffee, about 7 million lbs. a year. We wholesale it. We also do some retailing directly to the consumer, to small offices and what not. But we’re not a certifier. That was something that the founders considered doing. Obviously, certification is a big way to change industries, if you look at recycled paper or certified organic foods. They decided no, we’re going to be a doer, not a certifier. We made a point to pioneer this model. One of the things that was different was that we always wanted to show others you can do this too. Sure, the norm is to buy low, sell high, and the farmer that gets the low price, that’s his problem. We wanted to show, no, actually it can work for everybody. You can pay these higher prices and, by the way, there are all these business benefits to doing the right thing, greater loyalty from your suppliers, our farmers have more means to invest in quality, to invest in sustainability. We’re a business. We want other people to adopt our practices. For a long time, it was like no, you’re just a crazy little company that’s going to go out of business because you can’t pay these fair prices when the rest of us are paying those prices. I like to think that we’ve had the last laugh. Now hundreds of companies are at least buying and selling a little bit of fair trade coffee or bananas or tea, and that’s a start. Like all of us are trying to do across the green industry, we want our peers to keep taking those steps, and in this case, to make their supply chains not only greener, but more fair. JOHN SHEGERIAN: Got it. For our listeners who just joined us, we’ve got Rodney North. He’s one of the owners and, of course, one of the workers at Equal Exchange. You can find them at www.equalexchange.coop. Rodney, talk a little bit about co-op, that word there. What is co-op, and why is that so important to the Equal Exchange process and the fair trade label? RODNEY NORTH: It’s interesting. Some of the stuff is new, like your work with electronic recycling is relatively new in the big history of things. We think cooperatives are actually one of the original socially responsible business models. Co-ops go back over 150 years, and in fact, they’re all around us. A cooperative is a business that’s owned by the people who use the business. This can take all different kinds of forms. It can be for profit or non-profit. When you think of a credit union, that’s a bank, but it’s not owned by Wall Street or investors; it’s owned by the depositors, the people who walk in the door and deposit their paycheck, who use the ATM. They’re the owners. We’re a worker cooperative, so we, the people who show up here at the office, at the headquarters, we own the business and we all own it evenly. One person, one share of stock. Farmer co-ops are bigger in the American economy. Think of Ocean Spray, Welch’s, Land-O-Lakes, Organic Valley, Sunkist. Those are all food businesses owned by the farmers, not owned by Wall Street, and the list goes on, Tru Value, Ace Hardware. Those are stores, the brand owned by mom-and-pop store owners across the nation. We’re a cooperative, and we only source from co-ops of small-scale farmers around the world, about 70 of them. One reason we’re so focused on that is in our 30 years of work, we’ve really seen how agriculture in tropical countries is really dominated by the 1%, to use Occupy Wall Street terminology. It’s the little guy and the little woman farmer who are taking it on the chin. The markets are dominated by these big players. If we can be a friendly buyer, coming down from the United States, and work directly with 100 farmers in Mexico or Guatemala or Uganda, and they, by working with us, can begin to start their own little businesses, collecting, warehousing and processing whatever it is, pineapples or sugar or coffee and then exporting it directly to us on fair trade terms and working with us year after year. We talk about the market being like a series of one night stands. That’s not really a recipe for sustainability. We work with the same farmers. It’s like a marriage. We work with the same farmers for decades. JOHN SHEGERIAN: Rodney, we’re down to about five minutes or so. We’re all inundated with all these labels out there when you walk through the aisles of all these great stores now that sell these new products or revisited products that now say they’re organic or MSC-certified or gluten-free, fair trade also. Why is the seal of fair trade more worthy than ever? There are different fair trade seals out there, at least four. How do we find yours? Are they all the same, or how do we differentiate them at least? RODNEY NORTH: Sure. Quickly, I think one thing to get excited about about fair trade products and something with a fair trade certification seal is that most of the certifications are about the stuff, like the material history of the product. No chemicals were used or it has recycled content, etc. Fair trade is essentially the certification for now, at least, that’s looking at the human story behind the product. Almost all fair trade products are also organic, so they’re green, but in this case, what about the terms of trade for the small farmer who grew that product or that ingredient? Fair trade is telling you something was done to level the playing field, to move more of your consumer dollar to that farmer to give them a chance. There’s that. Regarding all the different certifications, three that we feel pretty good about are a brand new one that’s actually controlled by farmers, and this is a rare thing, it’s called SPP. It’s a Spanish acronym, but you just need to know SPP. We’re beginning to use that on our coffee. Also, there’s Fair Trade America and there’s one called IMO. One the boxes, it will look like Fair For Life, an orange seal. Those are three to look for, and we encourage people to do that. JOHN SHEGERIAN: Gotcha, and can they learn more about this at equalexchange.coop? RODNEY NORTH: They can. Just Google Equal Exchange and fair trade. Also, the Fair World Project, fairworldproject.org, is a great source for information about that. JOHN SHEGERIAN: In some other interviews, you’ve called fair trade a gateway product. Can you explain to our listeners in the last couple minutes we have what does that mean to you, and why should our listeners be so interested in that terminology? RODNEY NORTH: Sure. People joke about marijuana as the gateway drug, here meaning it’s going to lead to heavier stuff. In this case, a fair trade product can be the thing to introduce you to the human story behind the product. We always have farmers’ photographs and stories on our packaging. You begin to think about, “This is cool. I’ve never stopped to think about where my chocolate bar came from and who grew the sugar that went into it.” And then you begin to think, “What about everything else that’s in my grocery cart? What about the shirt that I’m wearing? Who stitched it? Who grew the cotton? What was their life like? Is there an ethical choice that I could seek out?” It gets people thinking about the people story behind our products and what are the exciting options that may be out there. JOHN SHEGERIAN: Gotcha. Rodney, in the last minute or so, any last thoughts? What’s the future? You’ve been doing this 20 years. What’s the future of the Equal Exchange, and where do you and your partners want to take this? RODNEY NORTH: Since the food industry is about a $1 trillion business, we have a long way to go. If we kept to the same rate, maybe half the food in the country would be fairly traded in a century. In fact, if anything, we need to pick up the pace and keep bringing the model to more farmers, to more parts of the grocery store, because the sky is the limit. JOHN SHEGERIAN: Hey, the sky is the limit with fair trade and with Equal Exchange. You can learn more about all the great work Rodney and his partners are doing at www.equalexchange.coop. Thank you, Rodney, for being a fair trade ambassador and superstar. You are truly living proof that green is good.