One Year After Investment: Pre-Financing Used To Make Possible The Sale Of Over 22.3 Million Pounds Of Coffee, Improve Circumstances For Small Coffee Farmers
BETHESDA, Maryland and SEATTLE — One year after the Starbucks Coffee Company (Nasdaq: SBUX) invested $1 million to support Latin American coffee farmers, the Calvert Foundation reported today that it so far has "recycled" those funds into $2.7 million worth of loans to coffee cooperatives, benefiting 24,400 of the world's smallest coffee farmers and supporting them in their efforts to export more than 22.3 million pounds of Fair Trade and shade-grown coffee.
Since the spring of 2004, when Starbucks announced its $1 million investment in the Calvert Foundation to finance coffee farmer cooperatives, Calvert Foundation initially distributed the investment to three coffee cooperatives -- located in Costa Rica, Mexico, and Nicaragua -- and EcoLogic Finance, Inc., a Massachusetts-based nonprofit. When that financing was repaid by coffee cooperatives, it then was loaned out again by Calvert Foundation to other coffee growers.
Today, Calvert Foundation announced that, based on the success of the first and second round of investments, it is recycling another $650,000 in new investments in Fair Trade coffee cooperatives. The new third round of financing will enable Calvert Foundation to further extend the impact of the capital initially provided by Starbucks, using repaid funds from the first and second rounds to provide financing for coffee-producing cooperatives in Peru and bringing the total amount of recycled financing so far to $2.7 million.
Calvert Foundation Executive Director Shari Berenbach said: "Calvert Foundation is all about helping individuals and institutions make a real difference in the world through the power of investment. That emphasis on results is clearly on display in the $1 million invested in Calvert Foundation by Starbucks. This investment demonstrates the success that we can achieve when corporations and non-profits work together on sustainable strategies that address the needs of those outside the economic mainstream. Calvert Foundation makes available to the public a financial instrument, called a Community Investment Note. This safe and convenient investment instrument makes it possible for investors to channel capital to low-income communities in the US and abroad. By investing with Calvert Foundation, institutions and individuals achieve a real impact that directly benefits people who otherwise might have few hopes -- and even fewer opportunities."
Starbucks Vice President of Business Practices Sue Mecklenburg said: "Starbucks is proud to work with the Calvert Foundation which is empowering thousands of small holder farmers in Latin America by enabling them to get money when they need it. When farmers have access to credit, we believe they are able to negotiate better prices for their crops, build credit histories and improve their lives and that of their families and the local communities. These are important components in ensuring sustainable development as it helps farmers gain more control over their lives and build more secure futures for their families."
William Foote, president, EcoLogic Finance, Inc., said: "We're thrilled to count both Calvert Foundation and Starbucks as our partners. The farmers we extend loans to play a vital role as stewards of the land. Without financing, many of these coffee-farming communities cannot invest in scaling up their operations; they are therefore unable to invest in quality for the specialty markets."
Calvert Foundation provided the following details about the Starbucks- supported coffee investments:
--$200,000 to COOCAFE -- Consorcio de Cooperativas de Caficultores de Guanacaste y Montes de Oro R.L., a certified Fair Trade Coffee cooperative in Costa Rica. The funds were used for the pre-financing of the purchase of coffee for export. The investment affected a total of 4,500 farmers in nine different cooperatives.
--$200,000 and $300,000 to Union Regional de Huatusco (Huatusco), a certified Fair Trade coffee cooperative located in Mexico and with 14 percent of the land involved dedicated to organic coffee production. The investment had an impact on 1,908 coffee growers, including 438 women farmers.
--$250,000, $250,000 and $387,500 to Prodecoop Central de Co-operativas, a nonprofit owned by 40 cooperatives in Nicaragua. The investments focused on sales and distribution. The nonprofit focuses on providing credit and technical assistance to member cooperatives. The financing benefited a total of 2,300 coffee growers, including 504 women farmers.
--$300,000 to CEOCOAFEN -- La Central de Cooperativeas Cafetaleras del Norte, a Fair Trade registered federation of small coffee farmer cooperatives in Nicaragua. Fair Trade coffee represents 23 percent of sales and Fair Trade organic coffee represents 18 percent of sales. The investment has an impact on 2,016 farmers, including 329 women.
--$250,000 to EcoLogic Finance, which has operations in Belize, Bolivia, Brazil, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico, Nicaragua, Peru, Rwanda and Uganda. The investment was used to capitalize a fund generating 135 loans totaling $21 million for Fair Trade agriculture, eco- tourism and sustainable fisheries. Additionally, EcoLogic joined Calvert Foundation in founding the Finance Alliance for Sustainable Trade (FAST), the members of which leverage each other's resources to identify producer needs, raise loan capital, and mitigate the risks involved in lending.
The new third round of $650,000 in Fair Trade Coffee investments by Calvert Foundation involves three cooperatives:
--COCLA is located in the Quillabamba region of Peru, east of the Incan city of Machu Picchu. The cooperative is composed of 7,500 producers from 22 co-ops and 10 associations, with women comprising 25 percent of the membership. In an area with very few economic options, Fair Trade offers an alternative to growing coca, the main ingredient in cocaine.
--CECOVASA is federation of coffee-producing cooperatives in the Peruvian Andes, with 5,000 members (30 percent of whom are women).
--La Florida started out as a group of 100 small-scale family coffee farmers from Peru's Chanchamayo region who joined together in 1965 to form their own cooperative. Their efforts focused on education, infrastructure, credit, and environmental restoration for their remote corner of the Peruvian jungle. Today, the cooperative has grown to include more than 1,200 farmers who work together to improve the quality of the cooperative's coffee.
Starbucks and Calvert Foundation have worked together on a range of projects in recent years. In 2001, Starbucks invested $150,000 to help grow affordable housing programs and small-business facilities in disadvantaged communities across United States. Starbucks' initial investments in Calvert Foundation benefited The Low Income Housing Fund in San Francisco, the Corporation for Open Land in Illinois, and ACCION New York, Inc.
Starbucks is helping EcoLogic Finance work on an even larger scale. In September 2004, Starbucks approved a $2.5 million loan to EcoLogic Finance for lending to coffee farmer cooperatives across Latin America and in East Africa. From 2001 through 2003, Starbucks provided $650,000 in credit to EcoLogic Finance and Conservation International to support short-term harvest loans for small holder coffee farmers operating in Chiapas, Mexico.
Fair Trade certification is a program that guarantees coffee farmers a fair price while also encouraging social and environmental sustainability. The Fair Trade system currently includes 670,000 farmers. Fair Trade certification guarantees a price of $1.26 for coffee, or $1.41 for organic coffee.
With Fair Trade premiums established, farmers are often able to purchase equipment and machinery that ordinarily would be financially out of reach. Drying beds and cupping laboratories aide important aspects of the coffee farming process, and the farmers in turn make larger profits for their coffee harvest. Fair Trade also impacts the farming community outside the scope of the farming business. Children who would otherwise be forced to work in order to take advantage of free labor are in school, and more money means more food on the table, a higher standard of living, and an elevated sense of pride in the farmers themselves.
ABOUT CALVERT FOUNDATION
The Calvert Foundation (http://www.CalvertFoundation.org) is an independent 501(c)3 nonprofit organization that uses the power of investment to revitalize poor communities, reverse inequality and create hope and opportunity where it's most needed. The Calvert Foundation receives investment capital from individuals and institutions, and uses industry- leading due diligence to select and manage a diversified portfolio of high social impact investments. Over the past 10 years, Calvert Foundation has recycled more than $250 million in investments that have helped to create over 100,000 jobs for low income individuals, built of rehabilitated approximately 6,000 affordable homes, and financed more than 5,000 nonprofit facilities, including daycare centers, community health clinics, and schools. Calvert Foundation makes available a wide range of innovative financial instruments. Its Web-based information services and philanthropic products include Community Investment Notes, the Community Investment Profile Database, the Calvert Giving Fund, and Community Giftshares. Calvert Foundation is a separate entity from Calvert Group Ltd. and its products should not be confused with any Calvert Group-sponsored investment product.
ABOUT STARBUCKS COFFEE COMPANY
Starbucks Corporation is the largest retailer, roaster and brand of specialty coffee in the world, with more than 9,000 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim. The Company is committed to offering the highest quality coffee and the Starbucks Experience while conducting its business in ways that produce social, environmental and economic benefits for communities in which it does business. In addition to its retail operations, the Company produces and sells bottled Frappuccino(R) coffee drinks, Starbucks DoubleShot(R) coffee drink, and a line of superpremium ice creams through its joint venture partnerships. The Company's brand portfolio provides a wide variety of consumer products. Tazo(R) Tea's line of innovative superpremium teas and Hear Music's(TM) exceptional compact discs enhance the Starbucks Experience through best-of- class products. The Seattle's Best Coffee(R) and Torrefazione Italia(R) Coffee brands enable Starbucks to appeal to a broader consumer base by offering an alternative variety of coffee flavor profiles.
ABOUT ECOLOGIC FINANCE
EcoLogic Finance provides low-interest loans and financial training to help struggling farming communities in the developing world maintain their livelihoods in environmentally sustainable ways. Launched in 2000, the organization manages a portfolio of $25,000 to $500,000 loans. Their borrowers: small- and medium-sized farmers' co-ops which are too large for microcredit agencies and too small or untested to be "bankable" with a commercial bank. EcoLogic Finance loans benefit villagers involved in agroforestry (shade-grown and sustainable agriculture), wild-harvested products, sustainable fisheries, and ecotourism, with a particular focus on small-scale producers of sustainably-grown coffee.
Source: CSRwire, Calvert Foudation, Starbucks, Ecologic Finance