Although its approach almost seems too utopian to work in real life—Equal
Exchange has proven that you can be fair and fare well. Today, the company
has grown to over $36 million in sales and is the largest fair trade, organic
chocolate company in the United States. Its chocolate has won accolades at the
New York Chocolate Show and Equal Exchange has been featured in Time
magazine as well as in Fast Company, which honored the company with its Social
Capitalist Award in 2008. Equal Exchange’s innovative democratic business
structure has even captured the attention of Harvard, M.I. T. and other business
schools, who have asked the cooperative to present on its model. WorldBlu has
also named Equal Exchange one of the “World’s Most Democratic Workplaces”
four years in a row and the company was the recipient of the Financial Times/
JustMeans Social Innovation Award and numerous other honors.
In addition, Equal Exchange has helped pioneer the domestic fair trade
movement, led fair trade advocacy and spread the word about fair trade
through partnerships with faith-based organizations and school fundraising
programs. All together, Equal Exchange has proven that challenging the “
business as usual” model can result in great successes for everyone from the farmer
to the community.
Building a Fair
Foundation
The three founders of Equal Exchange—Rink Dickinson, Jonathan
Rosenthal and Michael Rozyne—were
no strangers to the cooperative model.
In fact, they met while working as
managers at a New England co-op.
Seeing local farmers negotiate with
the co-op made them wonder about
the farmers who created the imported
goods they sold. What kinds of rights
did these farmers have? The three
started researching the issue and after
a few years a plan was developed that
would not only give farmer cooperatives in developing countries a voice, but
also would create a domestic working environment that upheld the same cooperative ideals. Equal Exchange was born.
“We saw our business structure as half non-profit, half for-profit,” says Dickinson, the cooperative’s president. “Like a non-profit, we wanted to truly hold
ourselves to the mission of the company. We didn’t, however, want to be reliant
on grants, but rather on our own ability to be innovative and create a demand
for our product in the market.”
Referred to as the “John Adams and Adam
Smith business plan,” the Worker-Owned
Cooperative Model ensures a more democratic workplace.
Pioneering the U.S. Fair Trade Movement
In the mid-80s, there were no fair trade certifiers and no standardized rules to
follow so the founders developed their own system, a simple yet effective ap-
proach—come to the table and talk with farmers as equals. Their first venture is a
perfect indicator of the activist spirit that would define the company. At the time,
the Reagan Administration had just imposed an embargo on all products from
Nicaragua. Importing coffee beans from Nicaragua would support the fledgling
people’s movement and would challenge U.S. trade policies. To do this, the
founders of Equal Exchange found a
loophole and had the beans roasted by
a Dutch company, technically making
the beans a “product of Holland.”
The company moved on to partner
with other marginalized farmer co-ops
and by year four was selling enough
coffee to break even. By 1991, they had
hit the million dollar mark. At that
time they also joined the European fair
trade network, now known as FLO, and
when the U.S. launched its own fair
trade certification in 1999, Equal Ex-
change was one of the first to certify to
the standard. Equal Exchange was also
the first to introduce fair trade sugar as
a stand alone retail item and to use fair
trade sugar as an ingredient. Today, the
company partners with 43 small farmer
co-ops in 23 countries to produce over
130 fair trade certified SKUs, ranging
from a wide variety of coffees to choco-
late, tea and bananas.
Building a Worker-Owned
Business
To the founders, creating a democratic workplace for their domestic employees was just as important as
ensuring the farmers they worked with
abroad were treated fairly. Today, the
company is 100 percent worker-owned
with 91 employee-owners including
everyone from roasters and packers, to
customer service reps and senior managers. Employees have to work for the
company for a year before becoming
an owner, but after that they each have
one equal share in the company and
one vote—without regard to rank or
seniority. Even the president has one
share/one vote. The company also follows open book management, where financial information is shared with all
employees to ensure transparency. A
key element to ensuring that the owners are never tempted to “sell out” is
Equal Exchange’s “no exit strategy,”
which states that if the company is sold,
the net proceeds would not go to the
worker-owners, but would be donated
