A Conversation about the Impact of Equal Exchange with Rob Everts
Rob Everts served for 20 years as Co-President and CEO of Equal Exchange, Inc. (E.E.), helping grow the worker cooperative from $5m to $70m in revenues, and from a team of 20 to 130. Prior to E.E., he worked as a political and union organizer with the United Farm Workers and UNITE HERE, the Hotel & Restaurant Workers Union. He is currently an advisor to the Main Street Phoenix Project.
om :
The career of Equal Exchange since the founding in 1986 has to be one of the more remarkable stories about the roots of the social economy emerging today.
For those readers who don’t know about how Jonathan Rosenthal, Michael Rozyne, and Rink Dickinson built such a transformative organization, you can find a recounting on the company site. So we’ll be coming back to various moments in that history, especially where you think there are some lessons learned.
Tell us little about how Equal Exchange looked to you when you first arrived there.
RE :
Sure, I did a kind of cameo visit with them for six months in 1992, and then came back full-time in early 1997. These three guys came out of the New England co-op world, the food warehouse scene, when they launched — and note this — on May Day, 1986. [Laughs.] They felt that workers in these food businesses didn’t have a voice so they hallucinated this radical model that probably none of them thought would actually succeed. But they just decided to shoot for the moon, with what was then the most radical capital model ever.
om :
There’s another important background to this time in U.S. history — the mid-1980s and the Reagan Administration’s secret Contra war in Central America. I read that the E.E. founders wanted to demonstrate solidarity with the fledgling people’s movement in Nicaragua. So they picked Nicaraguan coffee — which they called Café Nica — as their first Equal Exchange product.
RE :
Absolutely. We trace our May 1, 1986 founding to the day U.S. Customs finalized released our first shipment of coffee from Nicaragua, using a loophole in Reagan’s embargo.
om :
The product was embargoed unless it was roasted in another country — in this case, Holland, thanks to a Dutch fair-trade partner — so that’s how Equal Exchange expected to get hold of it. With lots of legal battles. By 1991, they reached an ambitious milestone of $1 million in sales, bolstered by a growing number of outside investors, including the Adrian Dominican Sisters, and enlightened customers, including food cooperatives. In 1996, Lutheran World Relief became a partner.
RE :
Right. I was very aware of this work because of my work with a national grassroots political organization called Neighbor to Neighbor, working to change U.S. policy in Central America, to stop the aid to the Contra militias, and shut off the U.S. gravy train to the butchers in El Salvador. A passionate Central American movement was going on at that time. I was working on the policy side while E.E. was trying to launch a business which benefited from this purposeful start, challenging the embargo.
om :
I want to come back to the impact having this kind of mission had on the company. But in addition to the global justice wave, E.E. caught some waves of changing consumer taste.
RE :
Correct. Starbucks had launched back in 1971 and that led to a renaissance of specialty coffee — people really would pay up a bit for better quality. This was ironically very helpful for us, being in a fast-growing niche. It means you have more room for mistakes, given the healthy margins.
om :
Would it be too much to say that E.E. really created the Fair Trade movement in this country?
RE :
I think that for commodity foods, that’s right. I mean, we were years ahead of everybody else. And at that time, fair trade was not yet an idea whose time had come. Even the notion of free trade had not fully entered the American dialogue in the late 1980s, early 1990s.
om :
What were the other market forces at work back then?
RE :
I’d say we contributed to two things. First the growth of the organic coffee market—which Starbucks still doesn’t offer! And second, we helped move fair trade into commodity food products, beyond just handicrafts, like you see in stores like Ten Thousand Villages, which was founded by Mennonites, and SERRV, started way back in 1949 by the Church of the Brethren.
And we learned a lot from some alternative trade organizations — ATOs as they’re called — in Europe. They had started up before we did and already had established networks that gave fair trade a kind of infrastructure. But by the time a European umbrella group established a presence in the U.S., E.E. had been around about a decade. I think of us at E.E. as like people making popcorn the old way, cooking it over a fire, shaking things up and waiting impatiently for it to pop. It finally popped.
om :
You’ve had a strategy of making acquisitions over the years. You bought the Oke USA banana business, the Equal Exchange U.K. operation (despite the name, not connected with E.E.), and also rescued La Siembra, the Ottawa-based cocoa products co-op.
RE :
Yes, we built an ecosystem and we call ourselves fellow creatures of the ecosystem. And for years, E.E. was by far the strongest member of that ecosystem. And then we entered 2020, the year of Covid. And for various reasons, these other, much smaller and less financially stable members of our ecosystem performed better than we did! Which was great to see. Covid had winners and losers, of course. Like all the flour companies, once everybody started baking at home. Bob’s Red Mill — boom! [Laughs.]
om :
Do you have the hope that E.E. has in some way created a model, something that can be created elsewhere and in other industries?
RE :
I sure hope so. As a movement, we need to create a model which is tangible, inspirational, not a freakish one-off that makes people say, I could never do that.
You know, I give the three founders so much credit for their vision and the capital model. During my time as co-director, we tried really hard to export the revolution. “Here’s our bylaws!” “Here’s how we do it!” We don’t want to be this freakshow, this one-off. We want copy-cats!
I told people, let’s socialize this thing, help other companies, use company time on the clock, whatever. Like talking about this role for Class B non-voting preferred stock — which just didn’t exist out there in the social enterprise world.
So now we have 600 outside investors who’ve put in $17–18 million. No guaranteed seat on the board, no vote, no guaranteed dividend. It has been targeted at 5%, last year it was a little under 4%. It’s been incredible.
om :
Could we say you guys more or less invented multi-stakeholder co-ops before anybody was talking about them?
RE :
Depending on how that term is interpreted, we certainly advanced the concept in a practical way.
om :
And among those stakeholders are all those farmers in the global South.
RE :
It has absolutely been a strength of E.E. that we have this external mission of helping small farmers stay on the land, of challenging the oligarchs, helping build market share for marginalized small-scale farmers. That brings many people to E.E. and the co-op structure is the icing on the cake.
I want to believe that co-ops in other businesses — that are just making widgets — could do the same. But I believe we have benefitted from having this dual mission, even if fair trade internationally doesn’t have much to do with worker democracy here.
It’s been a fortunate thing and it’s where a lot of our passion is. I don’t think we would be where we are otherwise.