Dispatch Coffee: The power of adopting sustainable business practices

With 15 years’ experience in the specialty/craft coffee industry, Chrissy Durcak is the founder and CEO of Dispatch Coffee. Frustrated by the lack of consumer-facing transparency around pricing, impact and the provenance of coffee beans, Durcak decided to take a more responsible approach. She started Dispatch Coffee with one truck in Montreal and expanded to a team of 30 and a multi-channel retail business with customers in more than 680 North American cities. Passionate about the intersection of design, technology and business as a force for driving positive social and environmental transformation, she’s an engaged member of the North American specialty coffee community and has positioned Dispatch as a leader in the consumer-facing discourse around the coffee sustainability crisis.

Where are the coffee beans sourced?

CD: When it comes to sourcing, our approach is focused on quality, transparency, and (actual) fair trade practices. Coffee is produced in over 50 countries in some of the world’s poorest nations. We’ve carefully selected 13 of these coffee-producing countries whose export earnings and populations rely heavily on the production of commodity coffee. This is where our support of specialty coffee can most significantly stimulate a better economic outlook.

From Colombia and Peru to Tanzania and Myanmar, the vast majority (more than 70 per cent) of our coffee is produced on small-scale farms. These farms are less than 10 hectares and often aggregate via informal associations, regional groupings or co-operative structures to access market.

More than 61 per cent of our coffees are the result of recurring relationships with producers. This is particularly important to us as we aspire to cultivate deep relationships with our supply chain, allowing us to build trust through sustained, mutually beneficial work.

Additionally, more than 45 per cent of our coffee comes from women-driven businesses. We define women-driven coffee as one that drives direct income into the hands of women coffee producers, women-owned mills or exporters or supports businesses where women have decision-making power.

Where are they roasted/processed?

CD: We convert all our green coffee beans into delightful roasted coffee at our facilities located in the heart of Montreal. There, our team develops a personalized roasting profile to capture the unique character for each of the coffees on our menu. This process aims to highlight the varying complexity, sweetness and body of the individual coffee. They then roast in small batches, achieving our signature desired profile, which we describe as a balanced, medium-light roasted coffee designed to be suitable for all brew methods.

Please explain the packaging that Dispatch uses?

CD: Our coffee is packaged in bags that are 100 per cent biodegradable and decomposable in a backyard compost, commercial compost facility or at the landfill. It’s supplied by TekPak Solutions, a Canadian company based in Hamilton. TekPak has trademarked an “omnidegradable” material that is made of petroleum-based plastic, treated with organic compounds, and proven to biodegrade anywhere there are microbes—even within two years in an anaerobic environment such as a landfill.

Why is sustainability important for Dispatch?

CD: Ultimately, we believe in the power of doing good.

Further, there are pressing issues threatening global health and well-being and the very existence of our planet. As highlighted by the UN SDG goals – which we stand committed to as an organization – there’s never been a better time for individuals and the public and private sector to work together and try to revert these problems. The last decade was the warmest in recorded history, millions of people experience extreme poverty and food insecurity, and the coffee industry can make a tangible difference.

To unpack how transforming coffee systems and coffee consumption can contribute to a more sustainable world, I need to highlight some of the current status quo issues: 2 billion cups of coffee are consumed every day; coffee is in the top 10 highest carbon emitting food systems for its long distribution cycle; and largely we’ve become accustomed to drinking it out of tiny paper take-out cups since the trend hit in the eighties! One way to reduce greenhouse gasses is to drink more coffee at home, purchased from roaster/retailers committed to reducing waste and emissions within their own verticals, and drink coffee that supports sustainable agriculture. That’s one bucket of areas in which our business is taking action.

The next massive crisis in coffee is one of economic injustice toward coffee producers. Still today, coffee producing countries see less than 10 per cent of the $200-$250 billion of global wealth that coffee retail generates. All the world’s coffee is produced on roughly 12.5 million rural farms, across 50 countries with developing economies. Ninety-five per cent of these are smaller than 5 hectares. Eighty-four per cent are under 2 hectares. Too many of these farming families continue to live in cyclical poverty, earning prices for their crop that’s less than the cost to produce, thus relying on other income sources or aid money. Theoretically, if every one of the 2 billion cups of coffee consumed came from supply chains that transferred the retail wealth more equitably toward producers, entire communities of coffee farmers and GDPs (gross domestic product) of producing countries would rise out of poverty.

We’ve organized our business practices and marketing focus to address this massive environmental, economic and consumer awareness issue.

Please explain your supply chain model. What has been the impact at a global level?

To greatly simplify our supply chain, we purchase raw green coffee from over 20 small-scale farms or co-operatives each year, which we transform into delicious roasted coffee beans in Montreal and we retail it through three cafes and an online subscription service. While we’re a small company, we’ve designed our supply chain to drive a positive environmental and social impact locally and globally with every coffee bag sold; so, the more we scale, the more we can render coffee systems sustainable.

We measure our impact across many supply chain spheres from coffee purchasing to our employer policies and company culture, all the way to packaging and distribution.

Environment

To name a few initiatives and areas, we track the environmental sphere starting at the source of our raw green coffee:
• 100 per cent are shade grown (this reduces methane gas as opposed to conventional commercial farming); and
• 13 per cent are from organic certified farms.

Within our roasting and distribution operations:
• increased our zero-emission last-mile delivery options to online customers, which now account for 40 per cent of all online orders;
• our choice packaging for retail coffee is biodegradable bags;
• we store and transport our coffee for service at our cafés in reusable buckets;
• we compost coffee grinds and food waste at two of our three café locations, reducing landfill contributions;
• we partner with community organizations like Moisson Montréal, Native Women’s Shelter, and Mile End Mission to donate any experimental or surplus coffee, reducing our organic waste; and
• we incentivize reusable mugs in our cafés with a $0.25 discount, reducing the circulation of paper cups in our communities.

Social

In the social sphere of impacts, we focus on a pricing model that drives more capital into the hands of farmers than conventional markets, thus providing alternative pathways and market access to sell their crop.

Going beyond Fair-Trade Prices

A Fair-Trade certified pricing model guarantees a minimum price for coffee in relation to a farmer’s cost inputs, as well as a differential against an unsustainable commodity market value for a pound of coffee. Our pricing often goes well above the Fair-Trade minimums. We’re rigorous about collecting transaction data to continuously benchmark and evolve our pricing approach against conventional markets. We also want to conduct profitability audits within all our supply chains to guarantee the farmers are earning sustainable prices as they self-define that, as per their personalized margin structures. The visibility and access to data that we have today only guarantees the price we pay for a pound of coffee surpasses average known sustainable cost of production for this pound of coffee by 20 per cent. Using the same metrics for measuring differential of price and cost in a Fair-Trade supply chain, farmers may be earning -10 per cent their costs to produce.

Gender equality

Another area we’re committed to driving positive change is gender equality. We work to empower women and marginalized communities across our global supply chain, starting within our own employment practices, striving to build an inclusive and supportive culture and policies. We uphold a commitment to being a majority women management team and removing traditional barriers for women and marginalized communities to leadership positions via investment in their training and development.

Community support

Overall, the issues in coffee are complex. No one business or NGO can solve them alone, so we’re proud to be allies with organizations and supply partners across the globe, working toward similar goals to amplify our impacts. For example, we support the Specialty Coffee Transaction Guide by donating our pricing data to this project working to empower farmers and buyers to look beyond the unsustainable commodity reference price for coffee.

We’re also annual members of SCA, an organization whose purpose is to support activities aimed at making coffee a more sustainable, equitable and thriving activity for the whole value chain.

Finally, we donate proceeds from every kilogram of coffee sold to World Coffee Research whose mission is to create a toolbox of coffee varieties, genetic resources and accompanying technologies and to disseminate them strategically and collaboratively in producing countries to alleviate constraints to the high-quality coffee supply chain.

We also sponsor and donate to several local and global non-profit organizations doing fantastic work in social justice and environmental sustainability.

Why did Dispatch decide on a subscription model and not go retail?

CD: After establishing the leading craft-coffee brand in Montreal, we set out on a new journey to modernize the century-old home coffee market, from the distribution model to the retail experience and supply chain sustainability.

To position our brand long term, I’m always tracking trends in consumer behaviour and witnessing the disruption of digitization in other retail categories (beauty, apparel, grocery). My research led me to understand the coffee market was very slow in comparison to adopt the Internet. Still today, 95 per cent of coffee sold to home consumers is done through a grocery store and via large commodity brands with questionable supply chain ethics. Here we found an opportunity to apply a convenient subscription-box service that’s been validated in other consumer categories to a product that 80 per cent of North American households drink on a monthly basis. At the same time, we’ve also managed to further our impact goals of displacing commodity brands with our responsible supply chain approach.