Small B.C. business, big Thai impact

Partnerships locally and abroad create a socially responsible enterprise improving quality of life in Thailand
John Darch, chair, Doi Chaang Coffee Company: Going beyond fair trade to build financial sustainability for indigenous people in Thailand

A few years ago, Doi Chaang Coffee Company made its mark in Vancouver introducing "cat poop" coffee to local coffee connoisseurs.

Fetching anywhere from $30 to $50 a cup, an increasing number of local cafés began brewing the rare coffee beans called Kopi Luwak that have been passed through the digestive tract of cat-like animals called civets.

While some Kopi Luwak beans are mass-produced with force-fed civets living in cages, Doi Chaang sells wild-civet coffee that is harvested in the jungles of northern Thailand.

"I can't imagine how they do that," laughs Gary Senez, vice-president and general manager at Richmond's Canterbury Coffee Company, which distributes Doi Chaang's coffee to local cafés and food service outlets in Canada. "But it's become a unique gift item, particularly around the holidays."

While Doi Chaang has garnered attention for its unique products and premium organic coffee beans, the Vancouver-based company has been earning international acclaim over the years for the social and economic impact its growing business is having for the indigenous people that not only grow the company's coffee but own half the business.

West Vancouver native John Darch, chair and co-founder of Doi Chaang, first heard about what the indigenous Akha villagers were doing once he was introduced to them by a colleague's daughter in 2005. After 25 years in mineral exploration and development, Darch had planned to retire after his last project, a major potash development in Thailand, was acquired by a Thai company.

"Being polite, I agreed to meet the hill tribe people and hear their story," said Darch. "I was so taken by what they had done."

In the past decade, the villag-ers had managed to bring themselves out of poverty, primarily by focusing on the quality of their beans and forming a co-operative to avoid getting shortchanged by international coffee dealers who had pitted individual farmers against each other to get a low price. By 2005, the villagers had developed a thriving Arabica coffee business in Thailand that had helped bring electricity, running water, a school and a medical clinic to an indigenous community of nearly 10,000 people.

To further expand, the villagers were looking to start selling their coffee on their own overseas. Darch and his family agreed to help by setting up Doi Chaang in Vancouver and marketing the villager's coffee primarily in North America.

While Darch has funded the startup of the company, his family has also gifted 50% ownership of the company to the village, giving the village the added benefit of receiving half of any profits the company makes from selling the roasted coffee, on top of receiving above fair-trade prices for the green coffee beans. This year, he expects to buy the villagers' beans 60% above fair-trade prices.

"The reasoning behind this is that it's an alternative form of capitalism, where if you're able to pay the farmers more than minimum wage or subsistence level, which is what fair trade is, they can improve their lifestyle and give them the ability to choose and do many different things," said Darch.

Today, Doi Chaang, which employs seven staff, is sold in more than 400 grocery stores and over 200 coffee shops and restaurants. While the distribution has primarily been in Western Canada, its coffee is also being sold in the U.S., Australia and at Harrods in London. The company made its first profit last year and expects to hit sales of $2 million from its seven coffee products, which are also roasted by Canterbury Coffee.

With financing from Langley-based First West Capital to bolster the company's working capital, Doi Chaang is planning further expansion into Central Canada, the U.S. and Europe over the next few years as production from the village farmers is expected to quadruple to 4,000 tonnes a year from 1,000 tonnes today. About half of their production is slated for global sales.

With a host of well-known fair-trade coffee roasters in B.C., having a distinctively Asian name like Doi Chaang has made it hard for the local company to be recognized as a Canadian company. But using a different name was out of the question. Darch noted one of the conditions for the company was that it needed to keep the local village name to help build the villagers' self-esteem and recognize that the coffee being sold internationally was their coffee. While some roasters blend coffee from various sources, Doi Chaang's beans come exclusively from the villagers.

Thailand remains a relatively small source of coffee in Canada, and in B.C. According to Statistics Canada, the bulk of raw coffee imported by Canadian roasters comes from key South and Central American countries like Colombia, Brazil and Guatemala.

But Doi Chaang has been grabbing market share in B.C., becoming the 13th largest source of coffee in B.C. in 2011 from 19th in 2010. The growth has helped fund further development in the village, which created its own foundation to help more of the estimated 1.2 million Akha people in northern Thailand that still live in poverty.

It's currently aiming to build a school for 400 hill tribe children a year from the profits of its operations, which include honey, macadamia and soap products sold in Thailand.

Over the past few years, the company has won numerous awards for its work, last year winning a World Business and Development Award and being recognized as one of the top 10 small and medium-sized companies in the world by the International Chamber of Commerce, the UN Development Programme and the International Business Leaders Forum, which judges the award. In 2011, it also received accolades from Asia-Pacific Economic Cooperation, the Canadian Association of Foodservice Professionals and the Canadian Chamber of Commerce.

"It's just an amazing operation," said Eric Lightheart, Canterbury's vice-president, who visited the Doi Chaang village a few years ago after meeting Darch at a specialty coffee trade show in Atlanta, Georgia. "The people really have a passion for what they are doing and have built up so much infrastructure from a day care to a coffee training academy where they train people in coffee horticulture. I've never seen that anywhere else."

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