For One Food Company, the Key Ingredient for Success is Fairness
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Eating could once be done without the considerable weight of a guilty conscience. Now, consumption of the simplest bowl of rice, the tiniest nip of chocolate, comes with countless silent questions: how many pesticides were used to grow this? What’s my carbon footprint? Were children sold into labor to grow it? It’s a heavy set of realities that quite rightly should provoke more than an upset stomach.
Food company Alter Eco is attempting to create a holistic, sustainable global food distribution system, one that resolves those moral quandaries by inserting a crucial ingredient—fairness. “We want to create a new model of a global company,” says co-founder and CEO Mathieu Senard, “a company that doesn’t destroy, but nurtures.”
Alter Eco’s model is truly one of alteration, an attempt to respond to doing more than just business as usual. “The way business has been run for the past 50 years is companies in rich countries going to buy commodities at the cheapest price possible, regardless of the effect on people or the environment,” says Senard. “We want to change that.”
Before the advent of big agriculture, the words associated with farming implied a sense of watchful cultivation. Farmers tended to their crops, cared for their herds. Since its founding in Paris, France, in 1998, Alter Eco has been 100 percent fair trade, recapitulating that level of care in its work with farmers in Bolivia, Ecuador, Peru, Thailand and the Philippines. “We’re not just importers,” says Senard. The business logistics they use are based upon buying food directly from small-scale farmers, but they’re linked to them by more than simply a financial affiliation. “We work for our friends, really,” says Senard.
Alter Eco trades in chocolate, quinoa, rice and sugar—simple foods that are often linked to unfair labor practices. But with Alter Eco, farmers sell their crop for fair wages and build relationships with the company that span years, or in some cases, over a decade. Staff members visit with the farmers, sometimes multiple times a year. Even among other certified B Corps, Alter Eco’s relationship to its suppliers stands out. As Katie Kerr from B Lab, the B Corp certifying body, points out, “On average, certified B Corps out-perform other sustainable businesses on community impact in general, and Alter Eco is leading the pack.”
Nearly all of the company’s products are organic certified, non-GMO verified, and all carbon emissions associated with the business are offset and compensated through “insetting” trees—strategic planting of trees within their supply chain.
Launching during a period in which retailers increasingly embraced fair trade products, the company grew, and by 2003 was operating out of offices in Sydney, Australia and its U.S. headquarters in San Francisco. This year, the French arm of the company pulled in about $20 million in sales; with $7.5 million in the U.S. and $1 million in Australia. “So, we’re the smallest multinational there is,” Senard says, laughing.
While their customer base shifted from what Senard calls “very informed and activist” to those who often simply see fair trade as a plus, fair trade became mainstream. Nevertheless, it took ten years for Alter Eco to achieve profitability. The first eight years proving their business model were difficult—and then the Recession hit the company. There’s a tone in Senard’s voice that echoes some of the anxiety most of us felt during those years. Alter Eco didn’t make things easy for itself either. “We are very uncompromising,” says Senard. “We sort of tax ourselves with fair trade certification, organic certification, carbon compensation.”
Their experience is not uncommon. Most startups—both single- and triple-bottom line ones—sacrifice some initial profit to invest in building their business, Robert Tomasko, director of American University’s social enterprise program explained via email. Yet having a social interest doesn’t curse a company to limited profits. “Triple-bottom-line firms just have a broader definition of their purpose, which guides how they spend their money,” Tomasko notes.
Profit in dollars might have been slow to build initially—and is now multiplying—but the measure of Alter Eco’s success can also be counted in Bolivian farmers who have reinvested their earnings in training other farmers to grow quinoa organically and in a way that regenerates the soil. In Ecuador and Peru, their farmers have invested in side business in eco-tourism and raising trees to reforest. Others have put new roofs on their homes. In the Philippines, Alter Eco’s farmers bought goats for every family in the village.
Having some financial freedom gives farmers the means to reinvest in their own sustenance, in farms that will produce well over the long-term. “They put so much care and love into their fields and in their crops,” Senard says. Alter Eco believes it has the best rice, chocolate, quinoa and sugar on the market, because farmers with a margin to invest in their farms can continually improve their conditions over time. As a result, the food grown on these farms is better. Senard’s notion is that you can “directly correlate fair trade with higher and higher quality over time.” For a company set to continue growing, it’s an early hint of what cared-for food tastes like.
Illustration by Zoe-Zoe Sheen
Photo of beet salad by Kelly Burgoyne for Alter Eco.
Photo of Quinoa farmer Esther Guarachi via Alter Eco.
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