Derek Perkins, the brand and marketing manager for Level Ground Trading, is probably one of the most jovial and easy-going guys you’ll ever meet. Down to earth and approachable, is an understatement. He gave me an extensive insight into both the brand and business model for Level Ground, in our sit down interview at the company headquarters in Saanichton, BC- last Friday afternoon. What I thought would be a simple and cursory 20 minute interview, was anything but. Our discussion and corresponding tour of the roastery and packaging floor was eye-opening to say the least.
Level Ground Trading started small and has grown progressively larger over the last decade and a half. It was founded in Antioquia, Columbia by a Hugo Ciro. Originally born and raised on a Columbian Coffee farm, he has since returned as an adult from his adopted home on Southern Vancouver Island to start a progressive coffee distribution business with four other island families. Derek is a recent recruit to the Level Ground family, but he has tons of experience, which he informed me about during our comprehensive interview:
To Tread Lightly [TTL] :Can you tell me a little about yourself?
Derek: Well, I was formally the brand manager for Tourism Whistler during the Winter Olympic Games. I worked in collaboration with VANOC to ensure that Whistler wasn’t forgotten about during the games, by creating the volunteer uniforms. I then arrived at Level Ground, following the Olympics- when my sister and I were brought in, to act as image consultants. We did a complete helicopter analysis of their brand, and what we discovered is that the company needed a rejuvenated and new approach to the marketing and branding of their product. They had to expand their branding, outside of their traditional charity groups. Their old packaging was a little gaudy and it didn’t represent a local and organic imagine that the company is trying to portray. It seems a little to intimate and in the UNICEF style. It is tiring when you are constantly subjected to images of poverty, especially when this isn’t always the case. The coffee bean farmers, that we deal with, aren’t living in object poverty. More importantly, you don’t want to guilt people into buying your product. This is a wrong motivation. As you can see, the new brand packaging is all about the farmer; everything that we do is to get more money for the farmers and their families. We want to help improve their quality of life, so that they can send their kids to school.
TTL NOTE: Derek, though is cautious to make the distinction between business and charity, this was a line that he thought was far too blurry when he arrived. He candidly says that, when consumers choose Level Ground: “they are making a commitment to the farmers. It is sort of like, attending farm markets; all the images of farmers on the packaging are real people [so you can establish a connection with the person who provides your food]. They love what they do and they also appreciate the working relationship that they have with Level Grounds”. This relationship affords the farmers, the opportunity to pursue organic & fair trade certification, which without their assistance is extremely expensive and prohibitive. When and if they receive this certification, they can command a larger asking price for their beans. Which is ideal in the long run.
According to Derek, coffee like any consumable goods must be of high quality to ensure repeat business: “the simple fact is that we pay top dollar for coffee, more so than our competitors” and this means that when you buy a bag of Level Direct Fair Trade coffee you can taste the difference. I sure can!
Good coffee is going to cost money, as it should. This is what I learned from Shane Deveraux. Shane, the owner of Habit Coffee on Pandora Street in downtown Victoria, pays anywhere between $2.50 to $5.00 to his distributor in Vancouver for a pound of coffee. According to Derek, so too does Level Ground. Derek and his company, Level Ground are in the relationship business; by building and maintaining healthy and mutually beneficial working arrangements with local farmers it pays off: “the farmers who we work with, will save their best beans for us [Level Ground] and they will sell their remaining or B-Grade quality beans to commodity brokers.”
TTL: So it’s safe to say, that the farmers, who you work with are astute and shrewd business people?
Derek: They are. We are committed to helping improve their quality of life through ensuring increased access to education and access to state of the art By infrastructure locally, it is a win-win situation we get the best selection of beans and they get top dollar in return.
TTL: So then, this level of integration between the coffee distributor and the producer; has resulted in driving up wages for many farmers. When they become more experienced they can ask more for their product, which really creates free market competition:
Derek: Africa has become a really competitive market for coffee distributors to get into and stay within. But it wasn’t always like this. In the past, coffee farms were so poorly managed that the quality of the coffee bean suffered, this was because it was often grown in substandard soil and washed in dirty water. By requesting higher quality beans it forces infrastructure upgrades which then creates a better quality product.Our investments into African farms, has peaked companies, such as Starbuck’s attention. This means that the farmers are now getting more for their product then they would have in the past. This is largely to do with, Level Ground’s participation and engagement in the local economies.
TTL: In terms of the market share, that you have right now, what is it in comparison to Starbucks, is it growing?
Derek: We aren’t really comparable to Starbucks, we are specialty coffee, which isn’t to say that Starbucks isn’t, but it is more comparable to a Tim Horton’s or a Nabob branded product. We compare ourselves to grassroots companies, such as Saltspring Coffee, Kicking Horse or Intelligentsia for example.
TTL: Is there a friendly level of competition between the locally established coffee houses, roasteries and distributors?
Derek: There is, in fact the Serious Coffee chain on Vancouver Island, allows us to use their Air-Roaster from time to time. Serious Coffee is our back plan if our equipment breaks down, and vice versa. This relationship is convenient, because we both operate our businesses to the same professional standards [HASAP organic certification].
TTL: So Level Ground Trading, was founded by Hugo Ciro, who also started the Famicafe Foundation in Columbia to offer scholarships and other educational opportunities to the families of coffee farmers. Does this program operate on the principles of micro credit?
Derek: We see these little kids, some of whom have grown up to become doctors and we realize that reality has been made possible because of the scholarships afforded to them through our Famicafe program. In Tanzania, we offer another type of assistance program. We give redeemable health cards to 1200 women who sort the green beans that the farmers harvest. These health benefits are extend too not only the employees, but their families as well. So we end up providing health coverage to more like 4-5,000 people because the families in this country are quite large. They go to a doctor’s office and present the health card, and any help they need is covered. The women [of Tanzania] sit on the floor on these big mats and they take out all the stones and defects from the batches of harvested coffee beans. Just generally for physical strength the men are the farmers and the women are the sorters [of the green coffee beans].
TTL: So it does sound, indirectly, like Level Ground’s programs are based upon the principles of Micro Credit? To reiterate the research has shown that once you empower the women in a disadvantaged country, they bring up not only their own statuses of living but make the entire country better off.
Derek: [nods his head in agreement]. It’s true, when you take away dealing with the burden of health care [they can really expand their opportunities in life].
TTL: So you really believe in CSR [Corporate Social Responsibility]?
Derek: Yes it is central to company and what we do. We pay 26% on average above the current fair trade minimum pricing, which is quite high in comparison to what other companies are doing. I will give you an example here; fair trade is basically like being paid minimum wage in the West- you are living hand to mouth or cheque to cheque, if you want to look at it another way.
TTL: So if this is the reality of fair trade, that it isn’t as good as many perceive it to be. Then how bad is commodity level pricing system? Are the farmers who grow and sell their beans at the commodity level price, living below the poverty line?
Derek: Quite below, much below the poverty line. So conventional or what you would say is ‘commodity’ level pricing is below the poverty line.
TTL: How much of the market [of global coffee producers] would you say operates by using the conventional pricing model?
Derek: The majority of the market. Companies like Nabob and Folgers, which are Proctor and Gamble, they don’t care [about the public perception of their business practices]. Nestle is one of them. Cadbury is a little bit different because they own Kraft, or vice versa. But Kraft would be a big one too, when you think about it, because Philip Morris owns Kraft, which is a tobacco company-which is scary when you think about it.
TTL: Wow, it sounds eerily familiar to that old Russell Crowe movie called the Insider.
Derek: It kind of is. Robusta beans [which are the majority of the beans that are sourced and then sold by the aforementioned multinational corporations] are usually plantation farmed in bright sunlight. In comparison, Level Grounds only in engages in small-scale farming methods, the farmers whom we choose to work with only operate on about an acre or two of land, or 5 or 6 acres but this is the biggest that we would go. Also these farmers, whom we work with, grow their food crops next to their coffee bean crops, because that is just how they live. In Columbia for instance they [the farmers Level Ground works with] they have to grow: mango, pineapple and bananas alongside the coffee which makes it a more diverse [and resilent] crop. This just makes sense [environmentally] and it also allows them [the farmers] to feed their families.
TTL: So you are saying, that the majority of conventional distributor’s promote clear-cutting to maximize coffee bean growing space?
Derek: Oh yeah, for sure. It’s like factory farming- like feedlots for beef production, because it is cheaper to have them [coffee farms] all located in one central area. Plantation farming is the standard for large companies because it would be logistically impossible, for those companies [Proctor & Gamble etc] to do what we do, because they don’t have the relationships with the farmers that we do, nor would they be able to get the quantity of coffee beans [through alternative farming methods].
TTL: That being said, I look at the Chinese model for example [within the context of the interview]. You have entered into these formally underdeveloped business markets and have stimulated economic growth and general wage increases by offering both accessible education and infrastructural upgrades. Therefore are the conventional coffee distributors, such as the Nabobs and the Folgers of the business world taking notice of your actions? Are they now having a difficult time finding and sourcing cheap beans these days?
Derek: No, there is a dramatic split within the coffee producing industry. There will always be Robusta bean farmers, who plant their beans at low altitudes within plantation type areas. It is a pretty dramatic divide between the Robusta and Arabica farmers.
TTL: What is the difference between Robusta and Arabica?
Derek: Arabica means that the beans must be grown at least 1200 feet, it is high altitude coffee, so the quality is much better. Robusta is a low altitude form of coffee; this type of coffee bean is known for being of poorer quality than Arabica coffee. So most typically, you would find this sort of coffee from a Taster’s Choice or a Maxwell House type brand or something like that. This Robusta style coffee is generally always produced in a plantation, by using too much water and being spread with roundup- it is fully conventional coffee. It’s bad news.
TTL: So unintentionally, the consumers who purchase this coffee might be drinking [trace elements] of roundup and other pesticides in their morning coffee?
Derek: O yeah, we could probably get into it a bit more, but Folgers’s isn’t even coffee! They make coffee-like crystals, this is because Proctor and Gamble has messed up so badly, by creating a ‘frankensteined’ coffee crystal that is then sprayed with a coffee flavouring.
[TTL Note: Proctor and Gamble owns Folger’s Coffee].
Derek and I chatted for a while longer about the in’s and out’s of the coffee industry, but the real take home message from our interview is that: “you get what you put in”. Level Ground Trading’s commitment to the farmer’s is so extensive that they recently brought a mango farmer from Columbia to British Columbia. He came here to learn the business model and technical skills, that are required when operating food drying equipment. He has learned these skills through gesture alone, as he speaks no English [although I am sure he has Hugo act as a translator from time to time] in an Abbotsford food facility. He is being taught these skills, by Level Ground, so that he can take this knowledge back home with him and apply it there and start drying Mango fruit which will be exported for sale by Level Ground. This is part of the company’s recent product diversification plans.
In conclusion, for Derek and his colleagues, they really provide tangiable evidence, that a small group of people can truly make a difference, in what is often an extremely predatory industry. My only reservation, following the interview, is that we can be doing a lot more to ensure that the coffee, that we are buying as Western consumer’s is more ethicial and sustainable. This can only be achieved through discretionary spending and by demanding more ‘relationship and quality’ coffee from our trusted retailers. For more information about Level Ground Trading visit them on the World-Wide-Web. Stayed tuned for my next post, as I finish off our coffee tour with a stop at Habit Coffee in downtown Victoria. Until next time, may you tread lightly.