A new ‘coffee reality’ for Colombia

When talking to Martín Rojas, from Colombia, you soon get the feeling that he is passionate about something very special. His mission? He wants to replace what he calls ‘the global coffee reality’ with a fairer and more sustainable system. He is supported in this by Business Ideas for Development. The major popularity of his Hilo Café start-up shows that the 31-year-old, whose master's degree at Leipzig University looked at the opportunities and challenges of the transition to a sustainable society, is in tune with the times in several ways.

Founder Martín Rojas and his team

‘With Hilo Café we are building an alternative trading system, a system that reduces complexity and is based on trust and transparency rather than on maximising the profits of the middlemen.’

HILO CAFÉ

  • Founded in 2019
  • Turnover: 500 kg coffee in 2019, 3,500 kg coffee in 2020 (planned)
  • Martín and his team are based in Leipzig, Hamburg and Berlin
  • The coffee farming family that supplies the raw beans for Hilo Café is located in north-western Colombia
  • Website: https://hilo.cafe
  • Video YouTube

Overcoming colonial ways of thinking

According to Rojas, the global reality of the coffee trade currently looks like this: coffee beans are the most important agricultural commodity in global North-South trade. In terms of value, the coffee bean is the most important raw material after crude oil. In terms of quantity, coffee is the most consumed beverage after water. Much of the raw material comes from smallholder farms. In Colombia, the proportion is 90 per cent. Many farmers put in the same effort year after year but, as in 2018 and 2019, earn less and less for the beans they supply, meaning the reward for their work is shrinking. Meanwhile, the prices of coffee for consumers in other parts of the world are not falling. 

Rojas explains: ‘In the conventional coffee system, it’s mainly the middlemen who make the money. The farmers can hardly make a living from their work. They are caught in an annual cycle of taking on debts and paying off debts. They’re more or less at the mercy of the conventional coffee system. Processing of the coffee beans, especially roasting, usually does not take place in the countries of origin, but in the destination countries. With Hilo Café we want to do something to counter this exploitative system.’

The business idea

Hilo Café buys coffee beans from Colombian farmers on fair terms. It manages the processing and markets the final product in Germany. To this end, the start-up has established companies in both Colombia and Germany. Hilo means ‘thread’ in English. Martín Rojas is trying to create a direct thread, a connection, between Colombian coffee farmers and German coffee consumers, without any middlemen. ‘The life and culture of the coffee farmer couldn’t be more different from those of a coffee lover in Europe,’ says Rojas. ‘I see myself as a mediator between these two different worlds. So what I do can be seen as a kind of cultural translation service.’

Colombia: Andrés Giraldo drying coffee beans. Photo: Daniel Avalos, Nítido Fotografia

Visit to Colombia: Martín (second from right) and some of Hilo Café’s co-founders and supporters visiting the Giraldo family, who have been growing coffee for three generations and supply the coffee beans for Hilo coffee. Photo: Daniel Avalos, Nítido Fotografia

Knowing where the product comes from and where the money goes

Hilo Café's slogan is, ‘Hilo coffee tastes great and it feels even better’. That’s because if you drink Hilo coffee, you know exactly where your coffee has come from, namely from the Giraldo family in north-western Colombia. You also have the certainty that your consumption is not exploiting or harming anyone. On the contrary, it enables this family of Colombian coffee farmers to earn a stable income because – and this is another special feature of Roja's alternative coffee reality – Hilo pays the Giraldos a fixed monthly income that they can comfortably live on.

Assessing the quality of the coffee beans at the farm: Coffee farmer Andrés Giraldo, left, Martín Rojas, middle, and another member of the Hilo network. Photo: Daniel Avalos, Nítido Fotografia

Hilo Café is committed to transparency. This illustration from Hilo's website shows in detail what costs arise and where. The percentages refer to the final price of the product.

Away from debt and dependence on the global market price

Shortly before harvest time, Hilo pays the family an additional sum to finance the harvest without having to take out a high-interest loan. Rojas says that if you add up these payments, the Giraldos get more for their efforts than do the farmers who work in the conventional system. An alternative remuneration system like this not only protects farmers from debt, it also ensures they are not left defenceless against fluctuating world market prices. 

The coffee farmer Doña Alicia Giraldo describes that feeling of defencelessness: ‘Why can't we farmers have a say in the price of our work and what we produce? Why is it just the people who buy our product who determine the price? Hilo gives us hope that after decades of exploitation we’ll finally be appreciated for our hard work and that our grandchildren will one day work in a more humane system than we do.’

Social responsibility: Hilo Café is committed to educating young people in the region where it sources its coffee. Photo: Jardín community

The beans for Hilo’s coffee grow at 2,000 metres above sea level, in north-western Colombia, in the Vereda Morro Amarillo in the Antioquia Department. Photo: Daniel Avalos, Nítido Fotografia

Social engagement and higher ‘return to origin’

Something that is already improving the lives of the younger generation where Doña Alicia Giraldo and her family grow their coffee beans is that Hilo is also carrying out educational projects in the region. ‘It’s because we are concerned about sustainability and fairness,’ explains Rojas. Hilo is also determined to ensure that most of the added value remains in the country of origin. Besides the production of coffee beans, this includes processing, in particular roasting, and the manufacture of packaging. ‘If you look at the return to origin – the amount of money that remains in the country of origin as a proportion of the final price – Hilo’s figure in 2019 was 51 per cent. In the conventional coffee system, that value is usually well below 10 per cent,’ Rojas says.

Actively participating in change

Hilo Café started in 2019, initially as a pilot project producing 500 kg of roasted coffee beans. Thanks to a successful crowdfunding campaign, the company is planning to buy the whole of the Giraldos’ harvest this year. That means 3,500 kg of beans. In the future, the start-up wants to further expand sales and production, enabling other families to earn a regular income.

‘For us, the crowdfunding campaign was like a proof of our concept,’ explains Rojas. ‘It showed that potential consumers are interested in our system. The campaign has already allowed us to win over a lot of supporters – people who are willing to participate in the long-term success of Hilo by purchasing a form of subscription with Hilo respectively the Giraldos.

‘Of course, we need consumers with a sense of social responsibility like that. But if we are to bring about real systemic change, Hilo also needs other private and public supporters for whom sustainability and sustainable coffee consumption are important.’ According to Rojas, that is biggest challenge is start-up is facing at the moment.

But Hilo Café is not only enabling coffee lovers to participate actively in a change towards greater sustainability, the international team of volunteers that has formed around the young Colombian Martín Rojas, based in Leipzig, Berlin and Hamburg, is also driven by the desire for change. This is how Rojas describes his interdisciplinary team: ‘We are between 24 and 42 years old and come from different continents, but we all have the same desire. In addition to our jobs, we want to do something more meaningful, something we can get involved in as people and not just as workers. And we want a world that focuses not on profit and growth, but on sustainability.’

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