Transparency

transparency One of the most commonly overlooked ethics of fair trade is transparency. We at JC are committed to it and in order to show this we have posted(see bottom of this page) our Profit and Loss statements since 2002-- our first year of business. To summarize the P&Ls, we have grown quickly and shown a slight loss or slight profit every year. Our accountant would call us a textbook "break even" company. The important thing for us-- as a worker cooperative-- is to provide a decent income stream to all people who work at our co-op as well as to the growers that we work with. In this we have been fairly successful. The purpose of this exercise is to show you exactly what we are doing with our company. This is why we post our contracts with the growers we buy from as well as all of the transaction documentation for getting the coffee from the farmers to us. Please feel free to check them out here or in the sidebar called "The Transparency Project". There are 4 types of documents featured in this section: Contracts (CON), Invoices (INV), Bills of Lading (BOL), and Organic Certifications (ORG). These can be a little confusing, so here is a brief run-down of what they are all about.

1) Contracts: The contract is signed between our importing co-op (Cooperative Coffees) and the grower cooperatives. It features Quality, Quantity, Price, Weight, Payment Terms, Insurance Coverage, Port of Shipping, Destination of coffee, and any special instructions or comments. The price section features all of the various organic and fair trade premiums. These can be hard to decipher, but it is cool to see how they break down.

2) Invoices: This is the invoice issued by the Grower Cooperative for the coffee purchase. This document includes quantity, quality stipulations, total price per pound, and total price for the contract as well as some of the same info available in the contract.

3) Bill of Lading: This document is issued by the sea freight company carrying the coffee to the US. It includes some of the info on the other 2 documents, but also the total cost for shipping.

4) Organic Certification: This document is issued by the organic certifier at origin to confirm that USDA NOP orgainc standards have been met in production.  In contracts the country of origin of the coffees we are roasting are indicated by the first letter of the code. For example MEV is from Mexico. COO is Colombian. Generally, the newest contracts are toward the bottom of each of these pages.

We are registered with the Small Producer Symbol-- the only fair trade certification owned by small-scale farmers in the global south and the only one that guarantees your product has come from small-scale farmers and their co-ops. We feel that certification can augment transparency, but does not replace it as the highest standard. We ask you to look at what we do, think about it, and then judge for yourself whether it meets your standards. Don't let other people tell you what is fair. In the end it puts another layer between you and the people that make and grow the things that you use in your daily life. And if you like what you see and the premise behind it, ask other companies to show you their books.

Please let us know if you have any questions or feedback. 

AttachmentSize
2002.pdf33.19 KB
2003.pdf34.34 KB
2004.pdf33.96 KB
2005.pdf35.53 KB
2006.pdf38.38 KB
2007.pdf37.98 KB
2008.pdf8.43 KB
2009.pdf37.09 KB
2010 final.pdf45.29 KB
2011.pdf45.73 KB

You rock!

Sales and payroll doubling every year.... that's a great benefit to the community. And you keep your profit at zero or less and you don't fund the war machine!

Congratulations!

-Carol

Wow!!!

I think that you may be the coolest coffee roaster of all time. Talk about transparency. Thanks.

prisoners of math

yes, you are.

Good start...

Can you show us approximately how much your worker-owners make per hour and about how much a coffee farmer makes per hour? How do you justify the difference?

I think that would be interesting. Also, why not post your balance sheet as well? In order to fully understand your financials (to be more transparent), the balance sheet is essential.

Pay

Hey there,

Balance sheets would be a good addition. I'll get year end sheets up as quickly as I can.

As far as our pay goes, the highest paid W/O makes $21.00 per hour (about $42,000 a year after health care but before taxes). The lowest paid employee makes $11 per hour with targeted raises as they complete trainings and take on more responsibility. We would like to find a way to pay W/Os more-- most are way under the average of what similar positions in Madison would pay, but I am not sure when this will happen. On the other hand, we pay one of the best starter wages of anyone in town and we offer health benefits to anyone working over 30 hours (which is everyone employed at JC). JC pays 70% of the cost and the individual pays 30%.

How do we justify attempting to pay a living wage to our employees? While I don't pretend to have the same struggles that a coffee grower has, I worry like hell about money, have no savings, and do not (and cannot) live "high on the hog". Everyone at JC struggles financially, it is part of the way we have decided to run our co-op. I don't pretend to compare my economic situation to a farmer's, but I want to be clear that we are not getting wealthy on the backs of our partners.

We are not a non-profit or a hobby-- we want to show that an ethical business can be successful and that-- while no one is getting rich-- we can all do better all the way from cherry to cup by distributing much more cash to farmers. Currently, around 33% of the money that we get for a pound of beans of goes back to the farmers we work with. About 33%-35% goes to people who work at JC. The last third goes to operational costs excluding labor. The percentage paid to farmers is way above the industry standard. Impoverishing the people who work at JC would not work toward accomplishing our goal which is to make trade fairer all the way down the chain. We pay more for our coffee than any roaster that we know of and we make way below what other business owners would make in a similar but standard capitalist business. In short nobody-- us or the farmers we work with-- are getting rich from what we do.

Small-scale coffee farmers will almost never rise out of poverty by selling coffee. No matter what JC pays. However, if we can get enough into the hands of the growers that we work with than they can diversify out of strict dependence on coffee and figure out how to make a better living using coffee as one piece of that strategy. That is our hope anyway.

Sorry I did not comment on this sooner-- I just saw it recently.

Thanks,

-Matt

 

 

 

 

Wow! You have come a long way

Wow! You have come a long way since 2002, keep it up!

A few Qs and As

Hi Matt,

I found this to be an interesting post, but would like to respond to another commenter then ask you a few questions.

First of all, to the guy who wants to compare the employee and coffee farmer incomes, it just isn't that simple. If you really want to do that and be looking at both incomes on a level playing field, then you would have to adjust for cost of living for the respective living situations. While a coffee farmer in Ethiopia may only be getting around $0.75/lb green coffee, that farmer can make that money go way farther than someone living in the North America or Europe.

With regard to my questions for Matt, I am very curious to hear about how you do your buying. Do you personally make the trips to origin on your own? As for prices paid, I know for a fact that there are other roasters paying higher prices than you are (if $2.50/lb green is what you are paying for Oromia Union coffees). That is not to say that you are paying low prices, though. Furthermore, I admire your model and would love to learn more about your own cooperative model, as I am sure that your buying power is not nearly as high as other, more established roasters as a result.

Keep up the good work.

Why not tax returns

You paid $17k+ in accounting fees and these are the statements that are being presented?

Why not pay a little more and publish some audited or even just reviewed financial statements with an independant CPA firm's name on the report? Pick a local one to support your local accounting firms.

Or if cost is an issue, simply publish the tax return. You can redact the personal info of the owners. Make sure to include the M1 and M3 schedules.

I hope you don't take this comment the wrong way. It's just anyone can make an income statement in QuickBooks. Something you submit to the gov't or has a CPA firm provide assurance on is way more transparent. 

 

Just my $0.02