We appreciate folks seeking to more deeply understand Equal Exchange and our work. We encourage you to also request this information of other companies you support with your dollars.
The Short Answer:
For every $1.00 Equal Exchange receives through our product sales, over 97 cents goes back out through:
- coffee, cocoa, sugar, tea, etc. purchases from 40 farmer co-ops around the world
- our buildings and equipment
- basic expenses of importer/manufacturer/wholesaler
Of the 3 cents on the dollar we keep:
- up to 10% is donated to organizations working in the Fair Trade and co-op movements.
- 35% of profits or losses, depending on which we have, are divided equally amongst the worker-owners.
- The remaining 55% gets reinvested in the company to enable us to grow our business and connect yet more farmers and consumers.
The Long Answer:
Here are some of the significant differences from standard business practices:
- A Commitment to Farmer Co-ops
We're sourcing fairly traded, organic coffee, tea, chocolate, snacks from small-scale, farmer-owned co-operatives. The price we pay farmer co-operatives ranges from 50-100% more than what they would get paid in the marketplace. In addition to a higher price, Equal Exchange provides a long-term stable buyer in an otherwise volatile commodities market. In contrast to the norm, we stick around. We believe the mechanism for local and systemic change for remote farmers largely comes from their membership and participation in a locally owned, democratically controlled co-operative.
How the farmer co-operatives divide up their premiums is up to each co-operative to decide. As democratically run organizations, their representatives make those choices based on their members' interests and goals. In partnership with fair trade banks, Equal Exchange provides low interest loans to help the farmer co-operative sustain itself and to grow.
- Dedicated Investors.
Equal Exchange has outside investors and provides a non-guaranteed annual return of 5%, at a fixed share price. Because of the kind of investor we recruit they typically reinvest 80% of their dividends, meaning Equal Exchange actually only pays about 1 cent annually for each dollar invested. This allows us to grow while the ownership and control of Equal Exchange is kept in the hands of the workers.
- Open Books.
Take a look! Equal Exchange's annual reports can be found here.
Equal Exchange's practices and organizational structure means we strive for and achieve long-lasting relationships with our community: farmer co-ops, staff, investors, and customers.