Purpose At Work: How Thrive Farmers Reengineers Business To Scale Growth And Impact
As business is being challenged to become more purposeful, fresh business models and innovations are unlocking new ways to take better care of all stakeholders and the planet.
I had the pleasure of interviewing Michael Jones, CEO and founder of Thrive Farmers. The impactful coffee and commodities company is bringing purpose to life to transform business across coffee, tea and an expanding number of categories. categories: Here’s what Jones and I discussed
Simon Mainwaring: How do you see business leadership and has COVID 19 changed anything?
Michael Jones: For the last nine years I’ve been on fire with a mission that’s burned in my heart. We believe that we can use business as an instrument for positive change. It’s how we run the business.
Throughout COVID-19, our business has maintained those commitments. We continue to pay farmers the same level. We’ve stabilized our supply chain and support the families that depend on it.
If anything, COVID-19 reinforces the need to follow our mission and presents opportunities to do more of what we already do.
Mainwaring: Why did you start a business focused on doing good?
Jones: Why choose being making a profit or doing good? We should all do both.
Design your business to inherently improve some part of the world. The issue isn’t going to be the same for everybody, which actually is a positive. Connect your calling with your business.
For us, it’s helping farmers that live far from where their product is consumed. We wanted to fix some of the injustices in the market. It is an exciting and powerful opportunity.
Mainwaring: After 10 years working in the medical devices category at IPG, you pivoted to coffee. Why?
Jones: It was a calling. I didn’t go looking for it. I’ve been an entrepreneur my whole life. In 30 years, I started seven companies. The first three or four were failures. IPG was my first big success. I started that when I was 30. Through that journey I started to achieve a lot of my previous dreams.
I’d always wanted to start a company that was on the Inc 500 list. In 2008, I achieved that milestone. When I got the news I was super excited. After a day, the excitement was gone.
It left me with this hollow feeling. I realized I’d been chasing the wrong things for the wrong reason. I needed to give my life to something bigger than myself. I needed a purpose worth the hard work.
At 38, I didn’t want to spend the rest of my life feeling like I was on a treadmill. I asked myself, ‘What can I give my life to that’s going to matter and multiply?
Mainwaring: How did you find the answer?
Jones: A big Silicon Valley private equity firm bought the company. After that, I knew my time there was coming to an end. I’d been wrestling with what I was going to do. For a while I thought it was growing this company then selling it for big money. Then give it to something meaningful. That wasn’t my path.
When I left in 2011, I decided to take at least 6-months off to figure out what to dedicate my life to. I had 20-plus years in financial and health services. I had no idea it was going to be coffee.
My wife is English, but she grew up in Jamaica. Her dad’s a coffee farmer. Over the years we’ve talked about coffee and his value chain. I also started conversations with a guy in Costa Rica. I realized it’s tough on farmers. They’re tied to volatile commodity indexes.
They have to invest all this money without the ability to predict or control the future price of their crop. Sometimes they make money. Sometimes they get paid less than the cost to produce it. Some years they only eat rice and beans for months at a time.
I was heartbroken. This had to change. I asked myself, ‘If not me, then who?’ You asked me how somebody figures this out. Find the thing that is heartbreaking for you. There’s no lack of things that break your heart. Figure out how to match your skills with your calling.
A lot of the investors made out well from that private equity deal. They said, ‘Whatever you do next, we’re in.’ When I told them what I was doing, they had alligator arms. ‘My liquidity is not great right now,’ or ‘Let me wait and see how this goes.’ I’ve been a disruptor. I’m always challenging the status quo. I can’t stand to be told that, ‘This is just the way it is.’
Mainwaring: What are the first steps you took?
Jones: Start with a vision. Then seek counsel. You can’t talk to everybody. People will shoot you down. Know who your wise counselors are. For me, it was my wife. I also consulted an executive coach, who I’ve worked with for years and trust. And one or two other close friends. I found affirmation and clarity.
It’s the voice in your head that gets you up in the middle of the night. I had this free time, so I went to Costa Rica and spent a week walking around farms. I talked to farmers.
What I was reading in industry publications was about climate change destroying farmers’ livelihoods. Yet, when I walked on the ground, I started to learn layers that explain a lot.
A really healthy farm will prune a third to a quarter of their crop every year. If you’re struggling to make ends meet, you might cheat on pruning. That’s production, you need this year for a little extra money.
If you do that a few years in a row, because prices are bad, the plants start to suffer. Those plants become more susceptible to disease. It’s a self fulfilling prophecy.
As I looked deeper, I realized all the conversations led back to economics. I had some ideas and started to run them by different people. One of them became my co-founder.
Mainwaring: What’s different about the Thrive Farmers business model?
Jones: For coffee and many other commodities, buyers and sellers set a price by looking at the commodities index that fluctuates based on all kinds of factors.
For consumers, coffee is more expensive than it’s ever been and it keeps going up. The farmer can’t count on price, but the seller’s charging the customer a fixed price.
We do a revenue share. As long as we get a certain fixed price from our customer, our farmer can enjoy the same fixed price. We come up with a percentage revenue share. If we save money, at the end of the year we allocate a second payment. We’re building transparency between customers and farmers.
This translates to more money for the farmer. We set the revenue share so they’re making enough profit above the cost of production, to earn a living wage and run their farms.
Mainwaring: Was it challenging to convince the farmers that you were authentic?
Jones: Yes. We walked on to farms to tell our story. Later we learned that a lot of farmers thought that we might be lying and manipulating them. Nonetheless, they had to take a chance. They had no other options. But we did what we said we were going to do. Now we have deep relationships with farmers in many countries but it didn’t start that way.
Mainwaring: Are you still price competitive?
Jones: We have to be. Companies that buy from us need to keep their costs consistent with what they have been paying for comparable products.
We’ve told our farmers from the beginning that this is a business. We provide price stability and a platform but it is earned. We need a certain quality and volume. If that doesn’t come, we can’t give them the same return. I don’t think much good comes from giving anyone a pass. It creates dependency. When it’s earned, there are opportunities to flourish.
There’s a book by Bob Lupton called No Toxic Charity. It solidified the need to run this as a business. Every farmer has respected that from day one.
Mainwaring: What role do you play in their communities?
Jones: Four years ago we started a nonprofit called ThriveWorx to help communities flourish beyond coffee and whatever our tenure may or may not be.
We do leadership development, training, education, water, and community projects. We’ve organized volunteer efforts and brought people with different beliefs together in council.
One farmer was able to build his first house. Every time he sees me, he’s got the biggest smile. He hugs me and thanks me to the point of tears. The life change is exponential. His daughter was the first one in their entire community to go to college in Guatemala City.
He is the leader of his farmer group of 20 guys. We convinced him that he needed to develop other leaders. He stepped down. He’s now the Meritus leader position for two years, while the next youngest guy is stepping into a leadership role. That’s just one story of many.
We see ourselves as coaches and connectors. There’s a big difference when you empower people compared to acting as a savior. Our model brings organizations to the table that are doing things better and help scale impact.
Mainwaring: How does your purpose resonate with partners like Gordon Food Services?
Jones: We started small but soon realized that wasn’t going to pay the bills. We needed enterprises reaching millions of people to join the mission if we were going to have a big impact and make a business out of this.
We found companies who had already decided internally to use their purchasing power to have a positive impact. It’s a gift when it happens and we also invite them to get on board at ThriveWorx.
Gordon Food Services is a great example. They give us purchasing power, volume and revenue on the business side. They also find ways to go further. We’re also working on changing some companies’ expectations. Many want responsibly sourced products but want to pay sub commodity-grade prices. It’s often at the expense of people not earning a living.
Mainwaring: How do you balance the demands of business growth and social impact?
Jones: It comes from your company identity. We’ve built a culture and a team committed to the same things. Clarity of purpose allows us to attract amazing people. We’ve got people working here who could have higher titles and bigger paychecks. They stay because they’re committed to rallying around a meaningful cause.
Mainwaring: How do you articulate the role you want to play in the world?
Jones: We re-engineer business to change lives. We reengineered the way farmers get paid and the way customers participate in that. It’s created a positive impact on farmers, families and communities.
Mainwaring: How do you marry being competitive with being purposeful?
Jones: It’s a challenge. We’re doing things nobody else in the space is doing. Yet, there are big companies with large marketing budgets. They put out messaging that makes them sound very purposeful. Even my dad called me saying, ‘I saw this ad from so-and-so. It looks like they may be doing what you’re doing.’
In today’s headline driven world, a lot of consumers don’t do the homework. If something sounds good, people believe it. It’s become very popular now to use a farmer image in advertising.
The good news is that more people want to know their dollars are being spent in a responsible way. We welcome scrutiny into our value chain. Building that trust is what differentiates us from the competition.
Mainwaring: What is your vision for growth for the company?
Jones: There’s an opportunity to transform supply chains across the entire agricultural spectrum worldwide. I think we can play a big role in that. I’d be excited to see others help. It’s too big of an industry to do it alone. That said, it’s authenticity over growth. It’s no good to cut corners to grow faster.
We need to stay focused on the purpose. Everything is a result of that. Growth will be there. Innovation is also one of our core values. When we innovate we see growth, loyalty and better relationships.
Even if we don’t grow, I’d rather be a small to medium sized company with a strong positive impact than a larger company that’s lost touch with its mission.
Mainwaring: What is your vision for the role of business in the future?
Jones: I see private enterprise as the most powerful tool to transform the planet. If large corporations all the way down to startups think, spend, and make decisions differently, we can solve the world’s problems.
On a per company level, pick your cause and stick with it. Look at the growth that’s occurred in society. The opportunity we have today is because of sacrifices and breakthroughs made by companies before us. Government can’t solve all of our problems. Business has wealth, purchasing power and talent. It’s the tip of the spear.