History of Equal Exchange

History of Equal Exchange

A Vision of Fairness to Farmers

Fairness to farmers. A closer connection between people and the farmers we all rely on.

This was the essence of the vision that the three Equal Exchange founders — Jonathan Rosenthal, Michael Rozyne and Rink Dickinson (pictured above), — held in their minds and hearts as they stood together on a metaphorical cliff back in 1986.

The three, who had met each other as managers at a New England food co-op, were part of a movement to transform the relationship between the public and food producers. At the time, however, these efforts didn't extend to farmers outside of the U.S.

The founders decided to meet once a week — and did so for three years — to discuss how best to change the way food is grown, bought, and sold around the world. At the end of this time they had a plan for a new organization called Equal Exchange that would be:

  • A social change organization that would help farmers and their families gain more control over their economic futures.
  • A group that would educate consumers about trade issues affecting farmers.
  • A provider of high-quality foods that would nourish the body and the soul.
  • A company that would be controlled by the people who did the actual work.
  • A community of dedicated individuals who believed that honesty, respect, and mutual benefit are integral to any worthwhile endeavor.

No Turning Back

It was a grand vision — with a somewhat shaky grounding in reality. But Rink, Jonathan, and Michael understood that significant change only happens when you're open to taking big risks. So they cried "¡Adelante!" (rough translation from the Spanish: "No turning back!") and took a running leap off the cliff. They left their jobs. They invested their own money. And they turned to their families and friends for start-up funds and let them know there was a good chance they would never see that money again.

The core group of folks believed in their cause and decided to invest. Their checks provided the $100,000 needed to start the new company. With this modest financing in hand, Rink, Jonathan, and Michael headed into the great unknown. At best, the project, which coupled a private business model with a nonprofit mission, was viewed as utopian; at worst it was regarded as foolish. For the first three years Equal Exchange struggled and, like many new ventures, lost money. But the founders hung on; by the third year they began to break even.

The Changing World of Food

But we’re getting ahead of ourselves in the story. In the mid-1980’s the world of food was going through major changes. The U.S. public was beginning to see their nation's family farms squeezed out and replaced by industrial-scale, corporate-run agribusinesses reliant on toxic chemical fertilizers, herbicides, and pesticides. As a result, consumer food co-ops who offered their members more organic and locally produced food grew in popularity.

At the same time, the U.S. specialty coffee market was exploding. Coffee aficionados, including many influenced by their travels in Europe, were eager to find and make great coffee here at home. It was not a coincidence that the founders arrived at a strategy to start their venture with fairly traded specialty coffee.

Café Nica: "The Forbidden Coffee"

They chose Nicaraguan coffee — which they called Café Nica — as the first Equal Exchange product for a few reasons. In 1986, the Reagan administration imposed an embargo on all products from Nicaragua’s Sandinista government. Importing coffee beans from Nicaragua would demonstrate solidarity with the fledgling people's movement and would challenge U.S. trade policies.

Equal Exchange brought Nicaraguan coffee into the U.S. through a loophole in the law. If the coffee was roasted in another country, it could be regarded as a product from that country, and therefore legally imported into the U.S. A friendly Dutch alternative trade organization stepped forward to offer assistance with the brokering and roasting.

Alerted to this symbolic action, the Reagan administration tried to stop the tiny organization. Officials seized Equal Exchange’s Nicaraguan coffee as soon as it arrived in the port of Boston. During their first two years of business, the founders spent many days, with trade lawyers at their side, doing battle with customs officials. Each time the coffee cargo was released it was a small victory.

In 1988, the Office of Foreign Assets Control threatened to close the loophole, and Equal Exchange’s founders launched a campaign against the move. Local and national congressmen, such as Rep. Joe Moakley and his dynamic assistant Jim McGovern, provided critical help alongside a groundswell of grassroots support. The result was a victory that made it clear that Equal Exchange wasn’t going away. Now Rink, Jonathan, and Michael — and a few new members of the Equal Exchange worker-cooperative — could focus all of their efforts on building their alternative business.

Farmer Partners

In those early years, the founders didn't know how to find small-scale farmers to trade with under the enlightened terms that they had envisioned. They spent much of their time trying to identify democratically run farmer groups, understand the internal structure of farmer co-ops, and determine product quality. There was a dramatic learning curve in many areas, including their fluency in Spanish.

Slowly but steadily Equal Exchange located farmer groups and added coffees from cooperatives in Latin America and Africa. By 1991 Equal Exchange had become part of the European Fair Trade network — aligning with groups that were at least a decade ahead of what was happening in the U.S. That movement in Europe was growing rapidly and counterparts there helped the company establish links with farmer cooperatives worldwide.

Tea also seemed like a step in the right direction. First, it was a commodity consumed by millions and second, it was a natural complement to coffee. The founders were already in close contact with representatives from a village movement in Sri Lanka, and by 1987 Equal Exchange brought in its first high-quality black tea. After confronting many obstacles, including a civil war in Sri Lanka, this initial effort eventually failed—only to be followed 10 years later by a successful tea line from India. Today, in an industry dominated by plantations, Equal Exchange is working to establish markets for small-scale tea farmers from India, Sri Lanka, and South Africa.

A Growing Worker Co-op

Around 1991, Equal Exchange established itself as a Fair Trade specialty coffee company, offering loyal food co-op customers a store bin system with a full line of beans, decaf coffee, different roasts, and flavored coffees. By the end of the year what had once been the "pipe dream" of reaching $1 million in sales had become a reality.

By 1994, Equal Exchange was a worker-owned cooperative with 20 members—with departments, managers, and a growing number of outside investors. A pivotal early investment by the Adrian Dominican Sisters helped to alert others that this undertaking, however risky, might be worthy of outside financial support.

Another exciting chapter in our history started in 1996, when Equal Exchange joined with Lutheran World Relief in a pathbreaking collaboration to launch what has now become our Interfaith Program. This major initiative helped Equal Exchange create partnerships with communities of faith throughout the U.S. Over the next seven years more than 10,000 congregations across the U.S. began using our Fair Trade coffee.

The idea of Fair Trade had caught on among a small but growing segment of American consumers during this same period. In 1998, a system of Fair Trade product certification was launched in the U.S. This was also the year that an Equal Exchange office opened in Oregon in order to support the growth of West Coast sales.

Cocoa and Chocolate Join the Mix

In 2001, we polled our Interfaith partners to determine what new Fair Trade products would inspire them. The response from congregations could be summed up in a single word: “cocoa.” With this in mind, we put together a hot cocoa mix that met our standards of quality and social responsibility — a partnership between cocoa, sugar, and dairy cooperatives.

Our hot cocoa mix has helped us reach out to a different group of farmers and has provided options for people who want to be certain that their cocoa is not being harvested by slave or child labor. It has allowed children in the U.S. to participate in promoting Fair Trade along with their parents. A year after successfully launching the hot cocoa mix, we added baking cocoa powder.

The next logical step was to introduce Fair Trade chocolate bars, which we did in 2004. Three varieties of Equal Exchange bars meant working with ingredients sourced from around the world. The chocolate bars met with an enthusiastic reception by Equal Exchange supporters of all ages. Through the bars, we have brought our work with cocoa farmers to the next level — and provided consumers with an alternative to West African chocolate tainted by slavery.

25 Years and Counting

Today, Equal Exchange is a thriving model of Fair Trade that has exceeded our founders’ original vision. With over 25 years of experience behind us — a history replete with successes, failures, innovative partnerships, exciting new products, and inspiring stories — we are nevertheless humbled by just how far we still need to go. Not so long ago, the specialty coffee industry dismissed our vision of more equitable relationships with farmers as unrealistic. Today there are some 400 coffee companies purchasing at least a small portion of their coffee under Fair Trade terms.

But the growth of Fair Trade has not come without profound challenges. The acceptance of large plantations and corporations such as Nestlé into the Fair Trade labeling system calls into question the very underpinnings of the certification system of which we are a part. And even with our successes, most small-scale farmers around the world remain impoverished and at the mercy of volatile and complex commodity systems.

Over the next few decades, Equal Exchange needs to engage and collaborate with like-minded partners and stakeholders throughout the Fair Trade system if we are to continue to transform how business is done. Our vision includes breaking new ground by bringing Fair Trade home—by fostering direct relationships with family farmers here in the United States. Our collective achievements of the past 25 years prove that we can create change beyond our wildest dreams.

We invite you to share in our vision of a better world — a vision that connects us more closely to the food we eat and to the farmers who grow it.

Historical Highlights:

May 1, 1986: U.S. customs officials release the first shipment of Nicaraguan coffee from the Port of Boston, and Equal Exchange is born.

1987: Equal Exchange launches our second product, Samusala Tea, the first to be directly imported from producers.

1988: Office of Foreign Assets Control in the U.S. Department of Treasury issues a reinterpretation of the Nicaragua embargo that threatens to make importing "Cafe Nica" illegal. Organic Peruvian, Equal Exchange's first organic product, quickly becomes our top seller.

1989: International Coffee Agreement expires - coffee prices drop from $1.30 to $0.80 per pound.

1990: Equal Exchange formalizes worker-owner co-op structure.

1991: Equal Exchange formally adopts European Fair Trade pricing. Product line expands to include a full assortment of whole beans, decaf, different roasts, and flavored coffee. Sales break $1 million.

1992: Equal Exchange introduces "Cafe Salvador" in partnership with Oxfam and Neighbor to Neighbor.

1994: Equal Exchange's first producer trip with customers to El Salvador. Freeze in Brazil causes spike in world coffee prices.

1995: Equal Exchange moves from Stoughton to Canton, Massachusetts, and opens new office in Madison, Wisconsin. Staff defines Mission and Guiding Principles at weekend retreat.

1996: Pilot project with Lutheran World Relief. Equal Exchange is the first U.S. coffee company to actively provide pre-harvest credit to small farmer cooperatives.

1997: Equal Exchange creates Organizing Department for grassroots outreach, and launches first national advertising campaign as part of three year, intensive marketing plan.

1998: TransFair USA creates Fair Trade seal for U.S. market. Equal Exchange launches new tea line, and opens new office and warehouse in Hood River, Oregon.

1999: Rink Dickinson and Rob Everts assume Equal Exchange leadership as Co-Executive Directors. Board approves first strategic plan for 2000 - 2003.

2000: Equal Exchange receives Business Ethics magazine award for Stakeholder Relations.

2001: Coffee prices hit lowest price in 100 years: $0.42/lb.

2002: Equal Exchange introduces hot cocoa mix, the first U.S. cocoa product to carry the Fair Trade Certified seal, and to use Fair Trade Certified sugar. Sales break $10 million.

2003: Equal Exchange launches baking cocoa. Farmer co-op makes first investment in Equal Exchange. Equal Exchange helps provide $1 million in pre-harvest credit for producers.

2004: Equal Exchange purchases new building in West Bridgewater, Massachusetts, and introduces three organic, Fair Trade chocolate bars and the first Fair Trade Certified sugar on the U.S. market.

2005: Equal Exchange builds the largest worker-owned coffee roasting operation in the U.S.

2006: Equal Exchange adds three new chocolate bars and three new teas. Fundraising pilot project introduced to schools. We celebrate our 20th anniversary!

2007: Equal Exchange brings Fair Trade home with a new line of nuts and berries from U.S. farmers. Equal Exchange opens a new office in Minnesota and installs a new roaster in W. Bridgewater, Mass,. tripling our coffee roasting capacity.

2008: Equal Exchange opens a new Café in Boston, and launches Equal Exchange bananas in partnership with Oke USA.

2009: Equal Exchange moves our Hood River, Ore. office to Portland.

2010: Equal Exchange becomes Fair Trade and Social Certified by IMO. Equal Exchange redesigns our coffee package and expanded tea line.