We speak to Virginia Gov. Terry McAuliffe (D) as he prepares to leave office after four years at the helm.
More than 35,000 Ethiopian immigrants call the Washington, D.C., metro region home, making it a hub for the tastes and talents of this African diaspora. From contributions in business and science, to restaurants and the rich, Arabica coffee now popular in stores, our region reaps rich benefits from this diverse culture. But now some budding Ethiopian entrepreneurs are looking for ways to give back at home — and to their homeland. Using popular models like fair trade as inspiration, a growing number of entrepreneurs are bringing Ethiopian spices and coffee to our region by trading directly with farmers and producers in a model they call “virtuous exchange.” Kojo finds out how this model works, and learns more about how these exchanges act as a form of gastrodiplomacy.
- Sara Herald Assistant Director for Social Entrepreneurship, Center for Social Value Creation, University of Maryland's Smith School of Business
- Stefanos Ghebrehawariat Cofounder, Qmem Quality Ethiopian Spices
- Johanna Mendelson-Forman Scholar in Residence, School of International Service, American University; Senior Advisor, Stimson Center
- Tebabu Assefa Founder, Blessed Coffee
Ethiopian Spice Basics
Almaz Dama, one of the owners of Dama Market and Restaurant in Arlington, Virginia, talks about some of the pastries and foods made with the staple Ethiopian spices berbere and mitmita. The spices aren’t limited to Ethiopian cooking; they can be used to season Mexican food, add flavor to Italian sauces and treat minor ailments using homemade medicinal concoctions .
Tracing Coffee Around The Globe
This January, Kojo and two of our producers traveled to Ethiopia to explore the many cultural, political and economic ties between Addis Ababa and Washington, D.C. They explored a variety of topics, including coffee sales and production. Below are some of the interviews, photos and observations they collected during the nine-day reporting trip.
From Ethiopia To D.C., The Life Cycle Of A Coffee Bean
Few countries are as synonymous with coffee as Ethiopia, which is said to be the birthplace of Arabica coffee itself. A few years ago, Ethiopia mandated that its coffee farmers sell their crops through a commodity exchange — a plan designed to help many of the country’s low-income farmers fetch better prices on the market. But that plan’s come under criticism from some who feel it’s ended direct trade for single origin coffee there and diluted the country’s brand. Kojo explores the links between the coffee American consumers drink and the economic fortunes of the farmers who grow it. Listen to the interview.
Sounds From The World Of Ethiopian Coffee
Kojo Nnamdi Show Producer Michael Martinez shares the sounds from Ethiopia’s commodity exchange trading floor and a warehouse where coffee is sampled and graded.
Solomon Edossa Of The Ethiopia Commodity Exchange
Kojo spends a moment with Solomon Edossa, who helped launch the Ethiopia Commodity Exchange and continues to serve as one of its technical advisers. He also maintains close ties to the Washington, D.C. region.
Sampling Coffee At The Ethiopia Commodity Exchange
The Kojo Show team watched a traditional Ethiopian coffee ceremony and learned about the commodity exchange system through which the Ethiopian government requires coffee farmers to sell their crops.
MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the word, it's Food Wednesday.
MR. KOJO NNAMDIThey make up the largest African Diaspora in our region and the second largest African immigrant group in the United States. We know them for their professional and cultural contributions, but maybe it's their culinary contributions you might be most familiar with, starting with the coffee.
MR. KOJO NNAMDIUp to 250,000 Ethiopian immigrants and their families call the Washington area, home, and the rich flavors of their homeland are apparent almost anywhere you go, from the colorful Ethiopian restaurants dotting Adams Morgan, Georgetown and Arlington, to the bold cups of Arabica coffee at cafes and markets.
MR. KOJO NNAMDIBut now some budding Ethiopian entrepreneurs are looking for ways to give back, both at home and to their homeland, using fair trade as their inspiration, their goal is to change lives here and in Ethiopia by trading coffee and spices directly, cutting out the middleman. It's a socially conscious business model they call, virtuous.
MR. KOJO NNAMDISo how does it work and how will people and their pallets benefit? Well, joining us, in studio, to talk about it is Tebabu Assefa. He is founder of Bless Coffee. Tebabu, thank you so much for joining us.
MR. TEBABU ASSEFAThank you, Kojo.
NNAMDIAlso in studio with us is Stefanos Ghebrehawariat, he is co-founder of Qmem, Quality Ethiopian Spices. Stefanos, thank you for joining us.
MR. STEFANOS GHEBREHAWARIATA pleasure to be here.
NNAMDIAnd also joining us is Johanna Mendelson-Forman, scholar and residence at American University and senior advisor at the Stimson Center. Johanna, always a pleasure.
MS. JOHANNA MENDELSON-FORMANGreat to be here, Kojo.
NNAMDIYou too can join this conversation with your questions or comments, call us at 800-433-8850. Are you a fan of the flavors of Ethiopia? Do you drink the coffee? What are your favorite foods, 800-433-8850. Tebabu, you came to the United States from Ethiopia, 33 years ago, you made a career in media, communications, community organizing, cultural promotion. A lot of listeners might be familiar with the Ethiopian Festival in Downtown Silver Spring, which you founded.
NNAMDIAfter so many years of promoting your culture, small businesses, you finally decided, three years ago, to become a small business owner, yourself, But you wanted to do it differently. Tell us about what inspired you to found Blessed Coffee in Tacoma Park.
ASSEFAWonderful, wonderful. First and foremost, thank you very much, Kojo, for this...
ASSEFA...opportunity. I can't tell you this, an honor for me. I've listened to you from distances and near. Let me make a quick correct. I am not a founder, I'm a co-founder.
ASSEFAMy beautiful wife, who was on my side from day one, is a co-founder as well. So...
NNAMDIAnd to mention that you do have to go home.
ASSEFAYeah. Actually, I'm the co-founder and chief storyteller and my wife, Sara, is a co-founder at (unintelligible) Mission. That's very, very important. It's a family affair with her husband and team. Next to that, inspiring, there are two fundamental important things I'd like to unclear before I talk about Blessed Coffee.
ASSEFAFirst and foremost is what the farmers are doing. It is amazing for me to see, to travel to Ethiopia, and see 254,000 small coffee farmers organize in the (unintelligible) working hard, collectively, to make a difference. They started it in 1991 -- 1999, with $90,000 capital, today they are 254,000 strong with $15 million capital.
ASSEFAWhat they've done to overcome the challenges of the world is amazing, that inspired me a whole lot. The second, we call important, my wife and I have made Tacoma Park, Silver Spring, the Greater Washington, our home for such a long time and we're very active in our social and civic space. And what people do on a grassroots level to produce a common good, the many organizations that we've done, we've seen and our local community's producing massive public good, like organization, to name a few, impact Silver Spring.
ASSEFAThe PTAs, the (unintelligible) that collect $20,000 to produce massive public good. We're inspired by our collective effort in our locality to produce massive good. We based Blessed Coffee in that context.
NNAMDIWell, co-creating a socially responsible company that connects producers and consumers more directly and shares profits, 50/50, seems idealistic but, as you mention, you live in Tacoma Park, so we understand what that's all about. But it's my understand, you've also had help from Maryland's Benefit Corporation Law to get this going.
ASSEFAYes, yes. Actually, I want people to understand the 50/50 share is also good in business, it makes a good business sense. To be honest with you, I'm taking the Nike model. Nike gives so much money to the marketing infrastructure that they have behind them, to double up their brand, from Michael Jordan to, oh, I mean, for a shoe that you can purchase from Nike, a significant part of it goes to marketing.
ASSEFASo our marketing component is community good. Our marketing component is the people, the public good. So it makes sense of it business because it's not, it's not what you sell as what kind of market you have to sell your product, that matters. So that is very, very, very important. The 50 percent, even though we are social activists to begin with, at the end of the day, it also makes sense in business as business science.
NNAMDIFifty percent of net profit from your wholesale revenue go to social programs in the coffee growing regions of Ethiopia.
NNAMDIFifty percent go to more than a dozen community organizations in the Tacoma Park and Silver Spring area, that's a 100 percent. Your company is not exactly a non-profit but you're not profiting yourself from Blessed Coffee.
ASSEFAWell, see, the final model -- we're building a first protype in Tacoma Park Silver Spring, that will be duplicated in every other Starbuck market. Coffee is a $100 billion market. We're positioning ourselves in a 30 billion specialty coffee sector. And mind you, we're only giving 50 percent of the whole sale. There is two revenue stream, 50 percent of the whole -- the revenue from the wholesale to the farmers and 50 percent of the profits from the café, back to our community organization.
ASSEFAAt the end of the day, I still have 50 percent reserved for my community investors. So it's a win-win situation. It's a business model, by the people, for the people, of the people.
NNAMDIIn case you're just joining us, that's the voice of Tebabu Assefa. He is co-founder of Blessed Coffee. He joins us in studio with Stefanos Ghebrehawariat, who is co-founder of Qmem Quality Ethiopian Spices and Johanna Mendelson-Forman, scholar and residence at American University and senior advisor at the Stimson Center. We're inviting you to join this Food Wednesday conversation. Are you willing to go out of your way to shop at a business, if it's socially responsible? Give us a call, 800-433-8850.
NNAMDIStefanos, you are a technology consultant by day but in the past year or so, you have found yourself in the Ethiopian Spice trade. What inspired you to become a social entrepreneur?
GHEBREHAWARIATWell, Kojo, the story behind Qmem is my brother and I, technologists by trade and by training, as you pointed out. We went back to Ethiopia and started an IT company, a technology services company focused on solving social issues using, excuse me, using technology.
GHEBREHAWARIATAnd while we were there developing this business, we noticed that my mother was financially supporting, you know, about a dozen or so of women that she had come to know over the years. And this is not unusual in our culture, it's actually very, very common phenomenon and we grow up with this notion that your community is there to help you and you are there to help your community.
GHEBREHAWARIATSo what's interesting is, we were observing this transaction and we discover -- we started thinking, this is a great concept, this is really how we should all live our lives but it's not sustainable and it's not scalable. This is, you know -- so we started looked at, how can we make -- how can we translate this into something that's more scalable, more sustainable? So we started thinking about, well, you know, how -- what are ways to do this?
GHEBREHAWARIATAnd so, inspired by what we had learned from Prof. Mohammad (word?) we started thinking of, let us try to identify a unique skill set in one woman and see if we can make an enterprise around that. So, you know, we went to mommy, of course, so we say, "Mom, you know, we have this idea, what do you think?" Her first reaction was, "I did not support you through grad school to sell shiro and berbere."
GHEBREHAWARIATYou know, it's the stigma that goes with that. But, you know, all the...
NNAMDIBut those are the spices she were making -- she was making at home.
GHEBREHAWARIATYep, she was making those at home and, you know, when we asked her, she said, "Well, you know what, here is Malcom, they call her (word?), she's from the region of Ethiopia. And she says, "Malcolm is known locally for her spices." And my mom, you know, her shiro, actually for her berbere -- Malcolm berbere and my mom's shiro is, you know, five generations in the making. So she says, "There are two products that you can immediately start selling."
GHEBREHAWARIATSo we start thinking, well, you know, let's do a quick market research and we figured out that it was a need. So we packaged the spices and we brought it here, we put it in a nice packaging and, you know, the (unintelligible) in the Silver Spring Festival. So here we are, we're thinking, you know, we have an idea, we don't know if it is going to work, we've never been social entrepreneurs, you know, we have some idealistic, you know, portion of us in some idealistic way but not really, we are born and bred capitalists and we meet Tebabu and we say, "Tebabu, we have this idea and this is how we want to make it."
GHEBREHAWARIATAnd he says, "Well, let me tell you about my idea." And, you know, it was really, truly an aha moment, seeing this, you know, that this can actually work, we're not the only people thinking about it. And so, we decided, you know, to join forces and, you know, try and inspire people to follow this type of responsible social entrepreneur.
NNAMDIFascinating story. Johanna, you have spelled -- spent a lot of your career educating your students and the rest of us about the legacy of states that are in conflict. How can things like spices and coffee give us a sense, not only of what's going on in Ethiopia, whose citizens represent our areas biggest African Diaspora but get us to understand better who Ethiopians among us are.
MENDELSON-FORMANWell, I think, this is a very important question because first of all, to comment on women in general as agricultural is 60-80 percent of women are agriculturalists and make our food. And we need farmers, three times a day, we may not need a doctor every day but we do need to eat. And so, we have to consider that most of this work is unpaid. And so, both of these gentlemen are doing something first to create and income stream for women who ordinarily would not be able to get funds.
MENDELSON-FORMANI think the other thing, specific to Ethiopia, is the history is tragic. And the history is a history that started, of course, it's a Solomonic empire. But then in the '80s and '90s, underwent severe famine. There were famines in '84 which finally reached the American press, when TV was starting to cover international issues. And the Diaspora here, that you've mention at the opening, came in the early '90s because of the violence and the criminality that we saw.
MENDELSON-FORMANBut, I think, what we are recognizing in conflict zones is that life goes on and that the economy tries to continue, even if it's with small share-holded, even if it's with the informal sector. And what's interesting about this experiment and I don't think it's an experiment, is that this virtuous exchange model is directly giving resources back, like remittances, but more effective because it's being reinvested and that's what it means to the Ethiopian community, not only in Washington but in the larger presence in the United States.
NNAMDIOne of the fascinating things we found, when we went to Ethiopia in January of this year, is that here you have a country in which the population is not concentrated in the major city of Addis Ababa but in fact the majority of the country are living in rural areas, working on farms. But, Stefanos, cultural issues. It is my understanding that the expectations that you had of these women showing up to work regularly and doing the jobs, did not exactly match their expectations initially.
GHEBREHAWARIATWell, that's very true, Kojo. You know, running a business is the same, wherever you go. And this goes to show Tebabu's point earlier that this is not a non-profit organization, it is a business that we're trying to run. And, you know, you have the same kind of problems that you have with employee, with resources. One of the ones -- the special instance that you notice that you're pointing out is, you know, it is actually more than -- it is a cultural issue.
GHEBREHAWARIATAnd the issue is actually as much with us as it is with them because, you know, here I am educated in the United States, you know, having run accounts for HP and others. I knew that, you know, a relationship -- a business relationship -- an employment is a business relationship. So, you know, I'll pay you and there's some expectations for you.
NNAMDIYou work the 9:00 to 5:00, we get paid the next week. The next month we come back, we work, we get paid. The next week, the next month, we come back, we get paid.
NNAMDINot exactly your experience in Ethiopia.
GHEBREHAWARIATNo. No, it's not. And you know, what -- actually what that teaches -- what that taught us is the idea of work life balance. You know, we just -- we thought, well, we're going to pay you above market rate so you're going to show up and you're going to do your best and you're going to leave, and that was it. But it turns out that, you know, that didn't work. You know, you would have people show up for work and then once they get paid maybe they'll skip the next two, three days.
NNAMDIAnd come back again when they needed money.
GHEBREHAWARIATYeah, essentially. So, you know, what we learned from that is that we need to alter our model to make it -- to get a more long-term commitment from this relationship that we are creating. So how do we do that? So it's not enough to just pay above market rate wages. You have to develop other components. You know, it could be 401K benefit type of benefits. It could be, you know, health care benefits.
GHEBREHAWARIATSo, you know, we sat down and we said, well, you know what, let's figure out what they want. And again, you know, my mother steps in and she says, you know, here you are again trying to solve women problems pretending like you know what the problems are. So why don't you just go over there and ask them, what is it that stops them from coming? And it turns out it was not because they're lazy or because they are short-sided. There were real social issues preventing them.
GHEBREHAWARIATYou know, all of these women have kids, very young kids. So as soon as they have money the immediate concern is not feeding the kid anymore. Maybe it is attending to the kid that is not being attended throughout the day.
NNAMDIGot to take a short break. If you have called, stay on the line. We will get to your calls. If you'd like to call, the number is 800-433-8850. It's a Food Wednesday conversation on sustainable trade and the flavors of Ethiopia. You can also send email to firstname.lastname@example.org. Would you be willing to invest in a company if it promised to make working and wage conditions better for employees, 800-433-8850? I'm Kojo Nnamdi.
NNAMDIWelcome back. We're having a Food Wednesday conversation about sustainable trade and the flavors of Ethiopia with Johanna Mendelson-Forman, scholar in residence at American University and senior advisor at the Stimson Center. Stefanos Ghebrehawariat is co-founder of Qmem Quality Ethiopian Spices. And Tebabu Assefa is the co-founder of Blessed Coffee.
NNAMDIWant to call us? Try 800-433-8850. You can go to our website where you can watch a video of berbere, mitmita and shiro, how they're used in Ethiopian cooking from Almaz Dama, the owner of Dama Market and Restaurant in Arlington. Almaz Dama, thank you very much. She prepared an Ethiopian spread for us to teach us about the importance of these spices in cooking. You can see all of that at our website.
NNAMDIBut I'd like to start with the phones this time and hear from Ana in Bowie, Md. Ana, you're on the air. Go ahead, please.
ANAHi. I just wanted to say that I love Ethiopian food first. Like, really awesome. And there's a Bolivian -- sort of Bolivian farmers who are doing very similar things as you guys. And their central (unintelligible) is chocolate and it's out of Bolivia called el ceivo E-L C-E-I-V-O. And it is literally the best chocolate I've ever had in my life. And I will totally buy all my chocolate from them until they are no longer available. And hopefully they'll always be.
ANAThey're doing exactly the same thing, including quinoa and other products as well.
NNAMDIJohanna, you've been making connections between conflict and cuisine through your course on gastro diplomacy at American University. So there's no surprise here in what Ana's talking about.
MENDELSON-FORMANNo. And in fact a lot of these projects, not only in Africa but in Latin America with sustainable development look at products, like how do you help farmers on the ground, men and women, develop their own products.
MENDELSON-FORMANAnd even in a country like Colombia, to mention something that's related, when you go into an area that's been liberated of the guerillas or liberated of armed conflict, one of the first things you do is find out what you can farm to help people create a livelihood. So all of these not only give your caller a pleasure of eating wonderful chocolate or drinking wonderful coffee from Ethiopia, but they also are helping to create the baseline for economic growth in these countries.
NNAMDITebabu, nothing connects our region to Ethiopia quite like coffee. When our show, as I mentioned, went to Ethiopia in January we learned about efforts to bring small farmers into the modern marketplace. We visited the commodity exchange in Addis Ababa. You can also see that on our website at kojoshow.org where advisors there said farmers are now able to see what price they're getting for coffee, which is a huge change from the past. Are efforts to equalize the coffee marketplace in Ethiopia going far enough? How does your virtuous exchange model improve upon that?
ASSEFAWonderful, wonderful. We looked at the existing market. There's a community market which most of the world's coffee passes through. And there is a specialty coffee market which is about 20 to 30 percent of the total market and growing. And within the specialty coffee market there is a fair trade market. And basically what we saw, what we observed initially that really, you know, got us upset, the farmers do 90 percent of the work and only get 1 percent of the money that we customers pay on this end in the community market.
ASSEFAAnd website came into the scene and made it a little better. And the farmers who were working with 254,000 small coffee farmers, they do sell 60 percent of their coffee in the fair trade market. So they've gotten -- they've increased their take from 10 percent to 20 percent for the 90 percent of input.
ASSEFAAnd another thing that we realized is not only the farmers are taken for a ride, even consumers on this side are charged exuberant amount of money and they don't get anything back. That's what we took as an advantage. So we created the virtuous exchange model that recognizes the most important significant part of the stakeholders, the consumer and the producer. And it offers them a dynamic equal to the investment and profit sharing into the model. Their interest is embedded in the model itself.
ASSEFAAs we said, there are 254,000 farmers. We've asked them to save $10 in the coming three years to own a -- that is $2.5 million. Amazingly the farmer's given the opportunity to invest in this market. They can take care of themselves. And then we flip the same thing and turn to our community and say, take 50 percent of the profit from the retail so that we can support our local community organizations and return, invest in ours. So it's a 50-50 deal.
ASSEFAAs far as the farmers are concerned, now from a 20 percent take when they're fully engaged in our model, they will have a 50-50 percent model. And I've seen what they've done with the 20 percent take in the fair trade. They're doing an amazing job building their own school, their own clinics. It's like a touchdown. It's like a field goal. We want to take them to the final end line so that they can score their own touchdown.
NNAMDIJoining us now by phone is Sara Herald who is assistance director for social entrepreneurship at the Smith School Center for Social Value Creation at the University of Maryland. Sara Herald, thank you for joining us.
MS. SARA HERALDHi, Kojo. Thanks for having me.
NNAMDISara Herald, we've been hearing, you've been listening about the socially responsible mission and virtuous trade models that Tebabu and Stefanos are developing. Are we seeing more entrepreneurs trying out business models that combine aspects of for profits and aspects of nonprofits in order to, well, do good?
HERALDAbsolutely. These types of models are proving to be very popular. And I would argue that, as we see here on our college campus, they're especially popular with the millennial generation.
NNAMDIWhy is that?
HERALDI think it's because younger people are really passionate about marrying their personal values to how they spend their careers. And so a lot of them are both interested in starting their own social enterprises and also incorporating social values into more traditional jobs. So for example, if they were to go to work at a large accounting firm, maybe they would be pushing their managers and pushing their senior leadership to incorporate some of these social value tenets into a more traditional corporate model.
NNAMDIWell, this all sounds wonderful but, Sara, I think a lot of our listeners may be familiar with fair trade. We see it on coffees at Starbucks, on labels at places like Whole Foods. That model is supposed to provide fair compensation to laborers who produce commodities. But it's also gotten some negative press lately. Is fair trade really doing what it's set out to do?
HERALDThat's a great question. And I think it depends on how you look at what they really set out to accomplish. One of their main reasons for starting was to try to reduce poverty in some of the most impoverished regions of the world. And while it's certainly hard to single out the different factors accounting for poverty reduction in a region, I think that the basic answer is that fair trade so far has not solved the problem of poverty in a country like Ethiopia. I do think it has had a very positive impact for some communities but I think that there's more that they need to do. And I think there's more that they recognize that they need to do.
NNAMDIJamal in Washington, D. C. has a specific question along those lines. Jamal, you're on the air. Go ahead, please.
JAMALThank you very much for having me, Kojo. I just want to, first of all, comment about -- I mean, I just want to comment you that you are inviting Ethiopians to have this kind of -- I really commend your program. One thing that I want to say is, I want to ask this question to Mr. Tebabu. This is really good info. I really commend him for doing that. And this definitely helps the farmers in Ethiopia because originally I'm from Ethiopia as well.
JAMALAnd I have had a chance to meet many of the coffee farmers when I was living in Ethiopia. And they are so poor. They work so hard to grow this coffee (unintelligible) coffee but they sell the coffee for (word?) a price. And they're not really benefitting a lot from it. So it's good to have that model where they can get more money into their pocket, into the farm so that they can also go ahead and reimburse that money in the farm.
NNAMDIBut your question is how can we assure that, right?
JAMALHow can we assure that money going actually to the farmer's market because Ethiopia is also where you have a high correction problem.
ASSEFAThank you, Jamal. The shorter side of the equation is, we're -- this -- our model was developed in partnership with Oromia Coffee Farmers Cooperative Union. Oromia Coffee Farmers Cooperative Union is established under the International Cooperative Alliance, a very democratic organization. The (unintelligible) and the farmers run their business. And the Ethiopian government has organized their contribution and have allowed them to have a special window under the Ethiopian community exchange.
ASSEFAAnd I think the transparency would come by giving them a very significant ownership in the model that we're trying to build. They will be -- like if you open a business with a partner, it will be obliged to be transparent. So this is not a give-back. This is partnership with them. So as partners they will go through the books. And we've designed a transparent capitalistic way of doing business, partnership. So that will guarantee their take.
NNAMDIJohanna, you've spent your career working in countries like Haiti and other post-conflict nations. So what red flags pop up for you when you hear about young companies wanting to do good in such a volatile, sometimes political environment?
MENDELSON-FORMANWell, I think what Tebabu said was very important, that transparency builds legitimacy for these companies. And that is the big challenge in development. It can't be externally imposed. So if you create this democratic environment that everybody can see the books, that everybody knows where the profits are going and who's not paying their share, it creates a base for trust. And that's where I think some of the fair trade misses it as compared to the virtuous exchange. Because the people in the virtuous exchange know what they're getting upfront and they work together. And that's, I think, a very important point in any environment that has suffered conflict.
NNAMDIStefanos and Tebabu, how do you prepare for the worst at Qmem or at Blessed Coffee? How will you protect your employees if there's some kind of upheaval in Ethiopia?
GHEBREHAWARIATWell, that's a very good question. It's -- you know, it goes back to building this as a company. This has to be an entity that can far outlive any one of us that founded or participated in the foundation of it. And, you know, you have to use whatever tools are available for that. For example, you know, we employ similar tactics with regards to, you know, the justice and equitable distribution of the value that we create by making, you know, some of the participants, some of our partners with the -- for some of the women that'll become partners. So they are there running the company.
GHEBREHAWARIATSo, you know, I think my understanding -- so our take on this is they have to be part of the solution. It's not -- you know, it's not me coming with my Smith MBA sitting there telling people, dictating this is how we're going to run the company. Going back to my earlier illustration, my mother's absolutely right. I need to sit down with the people that are locally in Ethiopia and ask them, you know, how can we ensure that we can live a legacy for our children and children's children.
NNAMDIHow about the consumers here? Where can we get Blessed Coffee or Qmem spices, and what do your models mean for customers here? Tebabu, are we paying a premium for your products?
ASSEFAWonderful question. By the way, coffee came from Ethiopia, I need to mention that, and the coffee that I bring is (unintelligible) single origin because we have a strong relationship, a direct relationship with the farmers. So with singular origin ultra premium organic coffee, simply the mother of all coffee from the mother place. So actually the warning that we put on our coffee is, once you drink our coffee we redefine what coffee is all about.
ASSEFASo currently, for the last few years we've been selling it at the farmers market, community events, festivals, your local co-op, online and delivered in the area. And now next year we're upgrading our outlets and we're working with cafes and restaurants in the DMV area to expand our base.
ASSEFAAnd one thing that I'd like to say, Kojo, the context needs to be articulated here. Capitalism works. Business works. It's only the motive that doesn't work. If the motive is greed, it will die. And what we've done is -- I'm an African living in America pursuing an African dream in America as opposed to American Dream. And in that dream, I've surgically implanted the African hurt and capitalism meaning the common good.
ASSEFAI grew up -- when I grew up I was because of my community. In fact, we have a saying in Ethiopia which happens to be true all over Africa, I am because we are because we are, therefore I am. Our unity, our -- if that is -- if that relationship is disrupted in any way you can think of, socially, culturally, economically, there's no health in the community. So we've planted that common good in our model. That's why it's going to work.
ASSEFAWhat do we mean by that? We give ownership for every stakeholder. So everybody's skin is in the game. So that sustainability is embedded because everybody's interest is the ultimate goal of the business model.
NNAMDIStefanos, where can we get your spices and are we paying a premium for them?
GHEBREHAWARIATNo. In fact, well, I'll answer the second question first.
GHEBREHAWARIATPart of -- so what our implementation or our adjustments that we have made to be in align with the virtuous exchange model is that we decided that the prices on the spices on this end need to be controlled as well. So, in other words, we are -- our goal is to ensure that every participant on the value chain should extract value. That includes the consumer on this end.
GHEBREHAWARIATSo how do we do that? Well, you know, we work with retailers. Predominantly, it has been Ethiopian or other African retailers in the DMV area. (unintelligible) in the Skyline in Virginia and (unintelligible) in Silver Spring -- excuse me -- are the two largest ones that we work with. And so our agreement with them is that we will ensure that you have enough value that you can extract from working with us. In other words, we will give you enough profit margin but in return you have to promise to help us keep the prices down so that the single mother that depends on this product on this end can extract, you know, the value as well.
GHEBREHAWARIATAnd what we have learned is especially for non-Ethiopian consumers, they may not jump directly into -- and buy this product. So there are two restaurants that we work very closely with. One is (unintelligible) Café on 18th Street and U in D.C. And the second one is (unintelligible) in the Skyline area as well. I would recommend, you know, stop by, order anything that has berbere or shiro in it and you will sampling our products.
NNAMDISara Herald, talk about the financing for socially-conscious companies. What special challenges do they face as they seek to grow their businesses?
HERALDThese sorts of hybrid businesses do face quite a bit of challenges when it comes to raising capital because traditional for-profit investors are simply looking for a finance overturn. And philanthropic investors are looking for solely a social return. And I certainly think that those lines have blurred in recent years. And there are definitely nonprofit funders, for example like the Gates Foundation, who do work with for-profit social enterprises. But it's a real challenge at this time.
HERALDThere are venture capitalists who do invest in social enterprises. There are angel groups but the amount of money that they command is definitely less than that available to traditional for-profit companies because people think, you know, I invest in a social enterprise, I must, you know, by definition be making a lower return, which isn't necessarily true.
NNAMDIEnter Hapta in Lanham, Md. Hapta, you're on the air. Go ahead, please.
HAPTAHi. Thank you, Kojo. Great show. And it's really great to hear about this (unintelligible) doing business with Ethiopia and the U.S. I salute them and you. My question is, is there any suggestions to bring (unintelligible) and be part of this venture helping the people in Ethiopia, helping themselves and actually making a difference because of (unintelligible) about poverty and (unintelligible) nowadays listening to such great things is really impressive. Any suggestions?
ASSEFAYes, that's a wonderful question actually. Recently we're advancing the virtuous -- we introduced the virtuous exchange international trade and advanced the models, Blessed Coffee and Qmem in this case, only to showcase what's possible . Our ultimate vision is to enter this (unintelligible) in the international development discourse as far as the U.S. culture and trade exchange is concerned. What we hope to do, what we aspire eventually is to inspire empower other African (unintelligible) social interpreters to duplicate our model across the continent from different product lines.
ASSEFAAnd we essentially formed an organization called U.S. Africa Diaspora (sp?) Council that would lend the experience that we have so far gained and that would (word?) the social good -- the social capital will build to allow others take a shortcut and take a smoother ride to duplicate our model. Ultimately the rising African immigrant in the U.S. is a means to develop African -- develop (unintelligible) grassroots (unintelligible) initiatives.
NNAMDIAnd Johanna, I have to raise what I think is a very important aspect of this. A lot of Americans associate Ethiopia with crisis, whether it's drought, famine, conflict with neighboring (word?) . Do you find in your studies of post-conflict communities that there's a real sense of wanting to shift that negative narrative, if you will, in addition to giving back the homelands left behind?
MENDELSON-FORMANWell, I think no nation wants to be branded as the conflict center. And what these gentlemen are doing is trying to reverse if there's a negative image that people generally have of Ethiopia, not to mention Africa. There's a lot of business going on in Africa. The promise of the continent is great. The gross domestic products of so many countries, even those in conflict are going up.
MENDELSON-FORMANBut I think there is a social responsibility component and working with the diaspora, giving them the opportunity to give back in this way to an organized form is extremely important. But not only young African students. Our colleague from Maryland talked about millennials. My students are millennials. They love the idea of learning about diasporas, working with the diasporas and trying to find out ways in which the value chains that they've created here can even be places for internships for them or working in the future.
NNAMDISara, you point to the Honest Tea organization and its founder Seth Goldman as an example of a socially-minded company that has powerfully changed a market. Care to talk about that before we take a break?
HERALDCertainly. So I think Honest Tea is one of the great success stories and it's even better because they're right here in the D. C. area. They're based in Bethesda. And they just started with a mission to create a tea, a bottled tea that wasn't as sweet as traditional options or existing options. And they have just grown catastrophically. They've expanded into lemonade and other drinks. They do chocolate. They really have expanded.
HERALDAnd they were purchased actually entirely by the Coca Cola company because Coke recognized that what could be a threat to their market share could actually be entering into a new market. And they even launched a kids line called Honest Kids which is juice boxes.
HERALDAnd they were so fast at gaining market share, particularly with moms in supermarkets with their lower sugar content that the moms were choosing for their kids, that traditional juice makers like Capri Sun, things that have been on the market for a long time were losing so much ground so quickly that they cut their own sugar content. And so Honest Tea, as a social enterprise, was directly responsible for reducing both the amount of sugar and the calories in diets across the country.
NNAMDIGot to take a short break. When we come back, we'll continue this Food Wednesday conversation. You can still call us at 800-433-8850. You can also send email to email@example.com. Are you willing to go out of your way to shop at a business if it's socially responsible? You can also go to our website kojoshow.org, look at some of the postings there about our own trip to Ethiopia earlier this year and about what some of our panelists are doing. I'm Kojo Nnamdi.
NNAMDIIt's Food Wednesday. We're discussing sustainable trade and flavors of Ethiopia with Stefanos Ghebrehawariat. He is co-founder of Qmem Quality Ethiopian Spices. Tebabu Assefa is co-founder of Blessed Coffee. And Johanna Mendelson-Forman is scholar in residence at American University and senior advisor at the Stimson Center. Sara Herald is assistant director for social entrepreneurship at the Smith School Center for Social Value Creation at the University of Maryland. Go to the phones, here is Invali in Centerville, Va. Invali, you're on the air. Go ahead, please.
INVALIYes, Kojo. Thank you for opportunity. My name is Invali and my question is, Tebabu and Stefanos are the export of coffee, shiro, berbere and all kinds of spices here to America to Diaspora and for local Americans. My question is, this product coming from Ethiopia doesn't have any impact for the shortage of food like shiro and berbere common, including injera (unintelligible) to America when the price and the shortage of this group in Ethiopia is very high of people doesn't have (unintelligible) to eat at least once in a day. What kind of impact that it have. The second question is...
NNAMDIWait a minute. Allow me to stay with the first question first because I need to add to it. Our producer Elizabeth Weinstein had an interesting conversation with Tesfaya (sp?) who is a cab driver in this region. He mentioned the shortage of Injera in Ethiopia. It's the staple bread of Ethiopian cuisine. He says there's such demand for freshly made injera in Ethiopia by foreign populations that the daily shipments of this bread out of the country are pushing up prices for already poor Ethiopians. One bag of four pieces of injera can be more than $7.
NNAMDIHe said, many Ethiopians in the D.C. area are cutting back their consumption of Ethiopian-made injera and subbing in domestically-made bread to try to help. I wonder if you both could comment on this as you seek to ramp up efforts of exports of Ethiopian staples like coffee and spices. And what kind of effect that's having back home, Stefanos.
GHEBREHAWARIATWell, for the spices -- you know, for injera, if we can speak about that for a minute.
GHEBREHAWARIATThe government has actually -- the Ethiopian government has actually imposed export restrictions on teff, which is the grain that you use to make injera. And I can absolutely, you know, recognize that this is a big problem since it is...
NNAMDI...driving up prices back home.
GHEBREHAWARIATYeah, potentially it could. But also I think from my experience in Ethiopia, not a lot of people would actually purchase ready-made injera. They would make it at home. And so from that perspective I think the government is -- so what's happening now is -- this is actually, I think, a good problem to have because if there is a market for it, maybe the government will have the incentive needed to open it up, you know, to allow entrepreneurs to actually capitalize on this market.
GHEBREHAWARIATSo, you know, the short term effect is going to be the government needs to control it. But in the long term, they should just make it available so that people like us can produce and export.
MENDELSON-FORMANJust let me comment because your caller's asked about food insecurity in Ethiopia. Let's not forget the country has still been through multiple crises. And the country is food insecure. In 2014, this year, the humanitarian requirement document of the World Food Program said that 2.7 million Ethiopians need assistance. And the bulk of those are women and children. So the shortage of teff and other grains represents two things. One, what you said, Stefano, about the market increasing, but also that market access is still a problem because of lack of infrastructure because of the lack of resources to invest and for agricultural practices. So we need to remember that we're not out of the woods yet.
ASSEFASo to make a quick comment. As far as coffee's concerned, our immediate strategy is not to increase the volume that comes out of here, but to increase the share of the market. Our long term capacity -- strategy is to grow capacity. But right now, we're trying to get as much dollar from the market, from the end market and share to our farmers, not really increasing the volume that comes out.
ASSEFABut eventually we have to invest. We have to play in the global market. We have to help our farmers have an active presence. So the ultimate solution is growing the capacity but in the very immediate we just want to share -- we just want to increase the share our farmers get from the market.
GHEBREHAWARIATAnd also -- sorry.
NNAMDIPlease, go ahead, Stefanos.
GHEBREHAWARIAT...to tie this back to, I think Jamal was the one who asked how we can, you know, inspire other entrepreneurs to follow this model. And, you know, and then going back to what Sara was saying about the lack of funding for this type of businesses. I worked extensively with the Digma (sp?) Center at the University of Maryland. And what I learned there is, you know, in this -- in our segment of the industry or the business we actually have to prove that it works before we can scale and start actually affecting or impacting, you know, the food security or, you know, the domestic market. So there's...
NNAMDITebabu, we mentioned, I think, your dream of opening a roasting facility and coffee house in the heart of Tacoma Park where people can enjoy coffee and participate in an Ethiopian coffee ceremony. That's a daily ritual. We learned about it in Ethiopia this year. Could you describe it for us?
ASSEFAWonderful. The Blessed Coffee came and they (unintelligible) coffee ceremony people (unintelligible) will get together once a day to sit in a circle as they roast and brew and share coffee and talk about their social matters, their social issues. And that is how community is built. That's how friendship is forged. And we also bring that culture. The French sell us the wine as a romantic drink. We offer Ethiopian coffee experience as a community-building friendship-forging intimate space for community to come together. So we do that. That's very, very important for us.
NNAMDIYou can see pictures of a coffee ceremony and coffee production at our website kojoshow.org. But I interrupted you. Go ahead.
ASSEFAWonderful, wonderful. That is very important element because, you know, when the coffee ceremony -- before the coffee ceremony breaks out, the last cup is called baraka (sp?) . That's when the community will stand and that's when the community will give out the prayers. Baraka is blessing. And to signify the importance of the social component, as I said earlier, we call our venture Blessed Coffee. And we want to do it in Tacoma Park for two reasons, Kojo.
ASSEFABlessed Coffee was possible because of the common good declared in Tacoma Park. Every community needs to uphold on -- to hold dearly their common good. And we want to show a place like Tacoma is a model to create social enterprises that create well but also advance social economic development and a grass root label.
NNAMDIWe got an email from Stella in Washington who says, "I've been involved with sustainability initiatives in U.S. communities for over 20 years. Your conversation about Ethiopian virtuous exchange initiatives confirms one of my long-held observations, that U.S. sustainability efforts have a lot to learn from our immigrant communities about livelihoods, agriculture and social connections. Sustainable D.C. would do well to take a page from your book."
NNAMDIBut then there is Jenna in Alexandria, Va. Jenna, your turn. You only have about -- we only have about two minutes left but go ahead, Jenna.
JENNASure. Hi, Kojo. Thanks for taking my call. My question is about savings seeds. I heard actually on the Splendid People about two people who went through several countries and visited several farms across Africa. And they had mentioned that the seeds in Ethiopia are not often saved, that they often -- that many farmers actually buy seeds from the government instead of saving them and making that part of the value of their farms. And I'd be interested to hear what your panel has to say about that.
NNAMDIThat she thinks that that's not a sustainable model, right, Jenna?
JENNASavings seeds is better.
NNAMDIGo ahead. I don't know your expertise in that area, Tebabu.
ASSEFAYeah, but we -- I think I'm going to focus to my own -- the DNA of my business model.
ASSEFAThe DNA in my business model is stakeholder responsibility or stakeholder ownership. And we've embedded ownership and profit-sharing to the million stakeholders in any transaction the producer and the grower. And as a businessman, we call our self facilitators of the need of the tool as opposed to brokers. So we're there to serve the common good of the most important stakeholders in any transaction. That will carry us all the way and will secure the system...
NNAMDIAlmost out of time, Stefanos, but what's your vision for investors in the future of your spices, Qmem Spices?
GHEBREHAWARIATInvestors of the future? Well, it has to be somebody that buys into the actual -- into the model, the sustainability aspect of this. And, you know, the one thing that we didn't talk about today, which I talked about my mother about this was inspired by my wife. And it is that this is an opportunity for us to change the image of Ethiopia, as we discussed earlier with Johanna. So we spent a lot of energy and effort into the packaging, the delivery and the (unintelligible) ...
NNAMDIThat was Hapta's concern also. I'm afraid that's all the time we have. Stefanos Ghebrehawariat is co-founder of Qmem Quality Ethiopian Spices. Tebabu Assefa is co-founder of Blessed Coffee. Sara Herald is assistant director for social entrepreneurship at the Smith School Center for Social Value Creation at the University of Maryland. And Johanna Mendelson-Forman is scholar in residence at American University and senior advisor at the Stimson Center. Thank you all for joining us. And thank you all for listening. I'm Kojo Nnamdi.
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