Seattle Coffee Company Uses Profits to Aid Bean Growers

March 26, 2009 at 6:30 PM EDT
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Seattle-based coffee company Pura Vida's core mission is to help its bean growers in Central America improve their lives. NewsHour special correspondent Lee Hochberg reports.

JIM LEHRER: Now, another in our series about social entrepreneurship, businesses that do good work. Tonight, a look at a Seattle coffee company that operates solely to help growers in the third world. Special correspondent Lee Hochberg reports.

LEE HOCHBERG, NewsHour correspondent: Warding off disease is an ongoing struggle in towns like El Salse in Nicaragua. These children have faced stomach ailments throughout their young lives.

But now a $45,000 project to provide clean water and latrines in six villages is improving health for more than 150 families.

In the nearby town of Cerro Colorado, the Blanco family said the children and the animals aren’t getting sick like they used to. The community recently blessed the latrines in church and gave thanks to the Seattle coffee company that provided them and took these pictures.

That company is Seattle-based Pura Vida. It not only sells organic fair-trade shade-grown coffee, but it uses its profits to provide health care and education programs to the growers, fulfilling the vision of Pura Vida co-founder John Sage.

JOHN SAGE, co-founder, Pura Vida Coffee: So we know that Americans spend somewhere between $15 billion and $20 billion every year on coffee, and if there’s an opportunity to just get some small piece of that…

LEE HOCHBERG: From a liberal background in Berkeley, California, Sage went on to put his MBA to work at Microsoft, becoming one of the company’s early millionaires. But he says that money wasn’t enough for him.

JOHN SAGE: I found myself at just a stage of life where I was sort of thinking there had to be more. I’m absolutely bugged. My job is burning me out; I’m not getting enough sleep; I’m not seeing my wife and family. There’s got to be more.

LEE HOCHBERG: He says he figured out what was missing in 1998 after his brother, a musician, died of AIDS. Sage approached Starbucks and proposed putting a gift box together with a C.D. of his brother’s music and four bags of coffee with proceeds to benefit the Northwest AIDS Foundation.

JOHN SAGE: That was a very, very catalytic experience, because I think it illustrated for me what would happen if you could kind of get everything lined up, if you could deliver something that had functional value and utility, and that also gave — somebody called it a karma hit, you know, just a little bit of an afterglow that said, “Yes, I’m glad to have my coffee, and it’s just nice to know that some good is being done.”

Two friends form company

LEE HOCHBERG: With college friend Chris Dearnley, who had been struggling to find steady funding for charitable programs in Costa Rica, the two formed Pura Vida. With its slogan, "Create Good," the company began selling coffee and today sells on 325 college campuses and to thousands of churches.

It funnels profits to coffee-growers and poor communities in Central America. The company says it's donated $3 million, including its own contributions, those it encouraged from its distributors, and private donations.

The company proudly points to its dealings in Guatemala, where it buys coffee beans from an organic co-op of 32 growers called Santa Anita. The beans the farmers grow are high-quality, but the education their children receive is not.

JOHN SAGE: They have a very small little schoolhouse, one teacher, dirt floors, and it only went to the ninth grade. So there was really no opportunity for the kids of the farmers at Santa Anita to go beyond a ninth-grade education.

LEE HOCHBERG: There is a school in a nearby town, but it can only be reached by bus. The fare to ride it is a quarter of a grower's average annual income, so few children use it.

JOHN SAGE: And so we launched a little product called the Bus Blend. And in less than six months, we had generated enough money from the sale of that product and the added-on contributions that we were able to buy an old bus. And so every child in that community now has an opportunity to at least complete a high school education.

LEE HOCHBERG: The company also recently donated $4,000 to the co-op to purchase this new coffee-processing machine. It will remove several steps from production, increase yield by 18 percent, and significantly decrease water loss. The co-op's income could increase by more than $7,000 per year.

And there's a lot more that coffee pays for, including teaching useful skills like photography to children who live in Guatemala City's dump and investing in Costa Rica's nutrition and sports centers.

Economic downturn forces layoffs

LEE HOCHBERG: But the bitter economy has started to take a toll on these projects. This year has seen a significant drop in Pura Vida's campus coffee sales, as students aren't spending as much. Pura Vida President Jeff Angell.

JEFF ANGELL, president, Pura Vida Coffee: That's the scariest piece for us of what's happening in the U.S. now, folks not being able to go to school because they can't afford to go to school, they can't afford the tuition, the financial aid is no longer there, class sizes shrinking, locations closing, and there are, frankly, not being as many mouths to drink coffee on a particular campus.

LEE HOCHBERG: The company recently laid off 7 of its 18 employees in the Seattle office. Angell says, without those layoffs, the company may have had to dramatically cut its donations. And the thinning of staff itself may cause long-term damage to the company's mission.

JEFF ANGELL: Because we won't be able to grow the business at a rate that continues to provide that sustainable funding. The net effect of it in the longer term would be less funding to those countries, less cups of coffee being consumed, less profitability, less dollars going into the field.

LEE HOCHBERG: And fewer people understand it, just where their coffee comes from.

JEFF ANGELL: This translates into less profits, but also, just as importantly, it also translates into less people hearing about the plight of the people that we're working with in the coffee-growing communities, less people being involved in our mission.

LEE HOCHBERG: Congress may help. Pura Vida's coffee recently was selected to be served in the House cafeteria, as part of an effort to green up the Capitol, and a video telling Pura Vida's story now plays on screens there.