Commodity Disruption — Just Crazy Enough To Work
From the taste of wheat, it is not possible to tell who produced it, a Russian serf, a French peasant or an English capitalist.
Oh, Karl Marx. While we certainly aren’t on the same page, especially with me being a west-Berliner (except for on names. Karl’s a personal favorite of mine), I like this quote a lot. Take it completely out of context — sorry Karl — and it’s a perfect explanation of how today’s branding obscures the origin of commodities. Send that wheat through a whole chain of middlemen, put it in fancy packaging with a proprietary label, and suddenly the Russian serf, French peasant and English capitalist alike are all erased. The brand receives a high margin, while the wheat growers, whoever they may be, barely eke out a living.
This is the situation of coffee farmers. Coffee is one of the most traded commodities in the world, second only to petroleum. Yet we rarely see the faces of those who produce it. Instead, we see brands. Starbucks. Folgers. Keurig. As the coffee beans travel from middleman to middleman, the farmer is forgotten, and only the brand remains. Meanwhile, the consumer’s price goes up with every step, while the grower’s return drops further and further below production cost. The result is an endless, inescapable cycle of poverty for over 500 million coffee farmers.
This is why we’re out to disrupt a commodity: because, once noticed, this status quo is unacceptable. Of course, aiming to disrupt a commodity market this big is a massive undertaking, ridiculous from any sane perspective.
Luckily, I’m not completely sane too many times a day.
So how do we do it? The answer is in replacing middlemen with facilitators. This is not meaningless jargon, an exercise in semantics. It’s a real way to rid brands of their stickiness, bringing products to consumers at earlier and earlier points in the supply chain. Right now, there is a missing link in any potential direct trade chain. Distributors fill this void, profiting by connecting producers to consumers, rather than by becoming “producers” (brand labels) themselves.
Bonaverde’s mission is to do this for coffee — and not just for coffee beans. While giving farmers faces is central to the Bonaverde concept, we’re not satisfied to stop there. We want to empower all producers in the coffee industry by giving them a place in the Coffee Cloud. Take, for example, the producer of your coffee machine. Believe it or not, your machine wasn’t built by whatever brand is emblazoned across its top. Coffee machines, like most consumer products, are built by original equipment manufacturers. These companies produce the machine and the brand simply slaps a label on it.
Do you need the label? Not necessarily. Can you buy from original equipment manufacturers directly? Nope. But with the ecosystem the Coffee Cloud creates, it’s very well possible. This is why we make the SIM card that goes into our BERLIN coffee maker readily available to anyone who signs up on our website as a coffee machine producer. By enabling any manufacturer to connect their machine to the ecosystem, we circumvent the current big brand-driven system and let the manufacturers, like the coffee farmers, become the brands. Welcoming more machines into the system, purchased directly from those who produce them, we create an opportunity for closer trade, same-day delivery, and fairer prices. It’s an ecosystem purposefully designed to foster radical transparency while bringing more readily-accessible, lower-cost goods to consumers. Most importantly, it allows millions of people to participate in a way we haven’t seen before, building their own brands through a direct-trade ecosystem. It’s the dawn of the producer-brand, and it’s going to be extraordinary.
Imagine this: Consumers buy goods directly from the people who produce them. The goods then arrive at your doorstep, almost instantaneously, though a network of distributors, facilitators who profit by supporting these producer-brands, not by exploiting them. Big brands, no longer truly of use, fade into obscurity, leaving behind a transparent market of diverse, lower-cost, readily-available products. This is what Bonaverde aims to create for coffee.
Sound crazy? We think so, too. Just crazy enough to work.
Learn more: https://vimeo.com/153753637