Brewing coffee with impact
5 June 2019 at 8:41 am
Matt and Whitney Teluk are self-confessed coffee snobs. They are also passionate about breaking down education barriers for primary school kids in Tanzania, so they started selling coffee to fund their impact work, writes Maggie Coggan in this month’s Spotlight on Social Enterprise.
Four years after Whitney founded Monochrome International in 2012 – a not for profit helping kids get access to quality education in East Africa – Monochrome Coffee Co. was born.
Monochrome International ran predominantly on donations. The public could sponsor a child to get a quality education in a private school which the charity had partnered with in the Tanzanian village of Arusha.
In Tanzania, primary school children have to pass an exit exam to make it into secondary school. Because of low-quality government education, only 25 per cent of kids makes it to secondary school, despite an 80 per cent attendance rate in primary schools.
To grow their impact work, and provide a sustainable education program for the cohort of 26 kids, Matt and Whitney looked to other revenue streams.
“We found it very challenging to attract sponsors, and then retain sponsorship because of the length of the kid’s education,” Matt tells Pro Bono News.
While the idea of selling their own coffee wasn’t an obvious one, especially because they didn’t have a whole lot of experience in the industry, the more they looked into it, the more the idea made sense.
“It was a really exciting opportunity for us to not only have an impact from the perspective of our education programs, but also because many coffee producing nations are developing nations, so this would give us the chance to have an impact through our supply chains too,” Matt says.
While they were both seasoned in the trials and tribulations of running a not for profit, they had a lot to learn about running a business with purpose.
“It’s challenging enough starting a successful for-profit business, but I dare say it’s even more challenging when the predominant aim of the business is for social impact,” Matt says.
“Everything has to make a lot of sense in terms of our supplier and client relationships.”
When the coffee venture first came about, they saw themselves as a retail specialty coffee brand, selling to the everyday consumer. But as they learned more about the industry, their focus began to shift.
“The specialty retail coffee market is already incredibly crowded, and people are very loyal to particular brands. After a while we started to see that the real opportunity was in social procurement,” Matt says.
“There are organisations buying tens or sometimes hundreds of kilograms at a time for their offices and workplaces and so often there’s very little thinking that goes into those purchasing decisions.”
He believes that more and more, there is a commercial imperative for businesses to operate in an environmentally and socially sustainable way, which is where Monochrome Coffee Co. comes in.
“From our perspective, we can offer a really high quality, responsibly sourced bean that also has a positive social impact,” he says.
While the enterprise didn’t turn a profit in its first year of operation, it continued to fund education programs, even if it meant the business was running at a loss.
“I don’t at all begrudge social entrepreneurs that reinvest in the business and then make distributions once they are profitable,” he says.
“But for us, we put so much time, love and affection into this venture that to not be making a contribution to the NFP didn’t make sense.”
With the business now profitable, Matt says they have almost entirely transitioned to funding the education program in Arusha through selling coffee.
“Whitney and I get to go back over to Tanzania semi-frequently and the kids, who were only tiny when we first met them, are almost teenagers and are nearing the end of primary school,” Matt says.
“Their dreams are so big and they’re really starting to understand and appreciate the possibilities that are open to them.
“They all want to be teachers and pilots, or play for Manchester United, which is amazing and exactly what we want for them.”
Something that surprised him when visiting the communities was the impact their program had on the parents of the sponsored kids.
“The parents had actually formed a committee where they would come together and talk about the challenges and issues that their children and young people are facing,” he explains.
With the program operating under a co-funded model (Monochrome provides the tuition while the parents cover the cost of uniforms and transport to school), the parents also support one another if a family is struggling.
“They’ve done things like making jewelry and sell them at markets so that they can bind together and support all the kids to stay at school, which is really cool to see,” Matt says.
With the business now self-sustaining, and the cohort of kids set to finish primary school and hopefully move into secondary school, Matt says they are now looking at how to take the next step in their impact plan.
“Fairly early on in the piece we came up with a three-pronged model for impacting, which was equipping young people with the education and skills they need to thrive, empowering parents to empower their kids, and enabling young social entrepreneurs to give back to their communities,” he explains.
They have run over 400 workshops throughout Ethiopia, Tanzania, Kenya, and Uganda with the parents of children who are the first generation to be educated, with plans to run more, as well as piloting the social entrepreneur’s program.
“We hope to be doing that within the next 12 months,” Matt says.
Looking to the future, Matt believes that while Monochrome can grow organically through expanding its client base, figuring out how to expand on a large scale while maintaining control of the businesses impact is a challenge.
“There might be a point where we need more external capital injections, and we need to figure out if that will mean giving up equity in the business, or whether it’s important to us that we retain all of the equity so that we can make sure that the mission’s not diluted,” he says.
“But I think that one of the advantages you have of being a social enterprise is having such a clear reason for existence.
“There are plenty of things that could be commercially advantageous but don’t make sense in the context of what we’re trying to achieve, which has been a really good guide when growing the business.”