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Forbes
14-07-2025
- Business
- Forbes
Roasting Responsibly: Inside Wonderstate's Model For Equitable Coffee
At the heart of Wonderstate Coffee's roastery is a vintage 1930's Probat roaster where they roast in ... More small batches, aiming for the perfect expression of the bean's natural characteristics. The specialty coffee industry has built its brand on the promise of sustainability and traceability—but a closer look at the numbers reveals how far it still has to go. Globally, an estimated 125 million people depend on coffee for their livelihoods, yet many smallholder farmers live below the poverty line, earning as little as $0.03 per cup sold in U.S. cafés (Fairtrade Foundation, 2023). Despite decades of ethical sourcing initiatives, most coffee prices remain tied to the global commodity market which has hovered around $1.35 per pound for much of the past 50 years, rarely covering the true costs of production. Meanwhile, climate change continues to threaten key coffee-producing regions, with up to 50% of current land suitable for Arabica projected to become unsuitable by 2050. In this context, Wonderstate Coffee—a roaster based in rural Wisconsin—is attempting to rewrite the rules of engagement. Founded in 2005 with a mission to source coffee more ethically and build lasting farmer relationships, Wonderstate has become one of the few U.S. companies to offer a published minimum price significantly above market rates: a $3.15 per pound floor, adjusted annually to reflect rising costs. Their supply chain is 98% Certified Organic, and their sourcing model prioritizes long-term contracts, pre-harvest financing, and hands-on collaboration with producers. But the company's commitment to equity doesn't stop at origin. In 2023, Wonderstate launched a profit-sharing initiative that distributes 10% of its annual profits to non-leadership employees—including baristas and production staff—based on hours worked. Last year, the program returned $41,520 to frontline staff, deliberately excluding executives to emphasize the collective nature of the company's success. I had a chance to talk to co-founders TJ Semanchin and Caleb Nicoles who both expressed they have long viewed coffee not just as a product, but as a platform for structural change. Drawing from their early experiences in sustainable development and fair trade, they have built a business model grounded in what they call 'Sourcing Coffee for the Collective Good.' This means investing not only in price premiums but also in logistical systems that preserve quality, even under volatile conditions. Their approach reflects a growing push within the industry to move beyond labels like 'Fair Trade' and toward deeper, more transparent partnerships. As coffee's future becomes more uncertain—economically, environmentally, and socially—Wonderstate's model offers an alternative path. It asks: What if businesses bore the true costs of sustainability, rather than offloading them onto producers and workers? In our conversation, Semanchin and Nicoles explore how a small company in Wisconsin is attempting to answer that question—one transparent, equitable transaction at a time. Christopher Marquis: You launched Wonderstate in a small Wisconsin town in 2005. What motivated you to take the leap, and how did your vision for ethical sourcing and sustainability shape the company from day one? TJ Semanchin, co-founder and president of Wonderstate Coffee TJ Semanchin: When we launched the company in 2005—then called Kickapoo Coffee—we were motivated by a shared belief that coffee could be a force for good. Caleb had just left a career in wine importing to be closer to family in Viroqua, and TJ and Denise had recently moved from Minneapolis, where TJ was working in fair trade coffee. We came from different paths, TJ's studies in sustainable development and Caleb's passion for quality & innovation, but shared a vision: to build a company rooted in quality, transparency, and relationships—with both farmers and our local community. Viroqua, in the heart of Wisconsin's Driftless region, was the perfect place to bring that vision to life. It's a place where organic farms, food co-ops, and small-scale craftsmanship thrive. That environment shaped our values from the start. We sourced coffee exclusively through direct relationships and fair trade cooperatives, and we paid some of the highest prices in the industry to ensure farmers could invest in their land and families. At the same time, we prioritized sustainability at home—installing a solar array, building out with locally made furniture, and adopting a four-day workweek to support quality of life for our team. Ethical sourcing and sustainability weren't marketing points for us—they were the foundation of our company from day #1. Marquis: You've developed one of the most sustainable coffee supply chains in the world—98% Certified Organic and built on direct, long-term farmer relationships. How did you establish those relationships? What does it take to maintain that level of commitment in a global supply chain? Caleb Nicoles, co-founder of Wonderstate Caleb Nicoles: We have always been curious about the product and have taken many opportunities to travel coffee regions to discover what is possible. These trips are an important opportunity to spend time with producers, review the prior year's crop, taste coffees as they are being harvested, and meet new partners that are aligned with our company's emphasis on organic production and benchmark quality. Over the years we have learned that coffee quality potential is based on the same three things that will determine the quality of a good bottle of wine: Micro-climate or terroir, the variety of the plants, and the way the coffee was grown and processed. Coffee is very different from the wine industry in that it is relatively easy to develop a relationship with a wine maker and find ways to import their product. In contrast, coffee is not a finished product—it has a quick shelf life, ideal processing techniques are not very well studied, even now, and there are infinitely more challenges for producers to process their coffees well, like weather and storage conditions. We had to create our own systems and benchmarks for quality processing, more stringent than the industry benchmarks and team up with coffee producers who had the desire and ability to execute these standards at a very high level. Each group we purchase from will have their own unique challenges every year that can impact their harvest. These complexities can be weather related, structural challenges within an organization, political or even geo-political dynamics can bring new, unforeseen challenges to our purchasing relationships. We maintain really good communication with our partners, especially during times of hardship and instability and invest heavily in travel and spending time at origin. This is not always possible as many of the places we purchase coffee from are not safe to visit every year. Earlier this year, we had planned to take a team of six staff members to one of our partners from Chiapas, Mexico but had to cancel the trip because the local Cartel had taken over their town. Also, coffee that sits at origin too long loses quality and takes on undesirable traits like woody, herbal and papery flavors. Because of this, specialty coffee is also a game of logistics, getting coffees out of country in a timely manner in order to preserve the delicate sweetness and complexity that producers had worked so hard to create. We plan our purchases 6-12 months in advance and communicate them clearly with our partners so that our producers can get necessary pre-harvest financing and develop detailed plans to support global logistics for timely shipments. It usually takes roughly 3 months to receive a coffee that we have purchased. There is nothing worse than receiving a once beautiful coffee at our roastery that tastes dull and flat because it got held up too long at origin. Imagine taking a bite out of the perfect apple…if you leave that apple on your counter for a month, the bright, piquant crispness is replaced by dull, flat and muddled flavors. This is an all too often occurrence in the coffee industry. Marquis: Wonderstate offers the highest published minimum price in the industry, far above Fair Trade. How do you determine fair pricing, and what does that financial transparency mean for the producers you work with? Nicoles: Our sourcing philosophy is guided by these nine principles which collectively we call Sourcing Coffee for the Collective Good. Our producer relationships are guided by a philosophy that first and foremost, has to be a viable product for coffee producers economically. Coffee farmers today on average, still make far less than they did before Specialty Coffee was born, 50-60 years ago. This is all because coffee prices for Specialty are set against what we call the C price, which is the Commodity price for coffee traded on the New York Stock exchange. For blender grade coffee, most coffee roasters and coffee importers will pay somewhere between the C price and +75 cents over the market price. This price is extremely volatile and has been sitting on average at $1.35 since the 1970's. When you adjust for inflation, coffee prices in the 1970's were two to three times higher than they are today. Back in 2017, we made this realization and established a floor price that protected farmers from market dips. We set this price at $2.75 as a minimum and vowed to increase it by .05 each year to keep pace with rising costs of production. Today, our minimum price is $3.15. Interestingly, we are in a moment where the C price is at historic highs, cresting over $4.00 in the last four months. So our minimum price is not relevant until the market goes back down to its historically low levels. Even still, our producers know that the market will dip again and having a floor price guarantees that they can produce coffee profitably when it does go back down. It is extremely difficult to determine a fair price for coffee as the economies and cost of production in each country is so diverse. Our approach to each country is unique and we do ask more of our producers because it takes extra effort to grow and produce the world's best coffee. Our baseline prices are typically set at $1.00 over the C price, that price is roughly $3.90 today, and go way above that to $6-$10 per pound for the more unique coffees that we purchase. We pay higher than that for some coffees and our hope is to keep finding ways to bring these exceptional, boutique and rare offerings to our customers. Marquis: Your profit-sharing model redistributes 10% of profits to frontline staff, excluding leadership. What was the thinking behind this decision, and how does it reinforce Wonderstate's broader philosophy of equity and shared success? Nicoles: We have always looked up to companies like Patagonia who took a long-range, human and environment centered approach to developing equity in our capitalist economy. The decision to pay our employees 10% of our profits was a fairly simple way to ladder the company's financial success back down to the employees who made it possible. At our core, we hope to create a workplace culture where staff can feel how their efforts and successes are connected to the overall health and well being of the company. Our profit-share model was an important way to build that culture. Everyone plays a vital roll at Wonderstate and we created a way to monetize that reality. Last year, we paid $41,520 back to staff, based on hours worked. Our hope is to pay significantly more to our staff in 2025.
The Guardian
07-06-2025
- Business
- The Guardian
Kenya tells tea factories to cut ties with Rainforest Alliance due to costs
The Kenyan government has told its tea factories to stop working with the Rainforest Alliance because it says the costs involved in securing the ethical label don't add up for farmers. The non-profit organisation is one of the world's most recognisable certification schemes with its green frog seal on food packaging a sign consumers 'can feel confident that these products support a better world'. However the world's third largest tea producer has ordered tea factories to suspend certification work because the cost is adding to the financial strain on struggling smallholders. A recent Fairtrade Foundation poll found only one in five tea workers and farmers in Kenya are earning enough each month to support their families with essentials. In a memo issued after an industry summit, the agriculture principal secretary, Paul Ronoh, said the 'burden of implementation' of the Rainforest Alliance scheme was vested on tea factories then 'cascaded to the tea farmers and growers'. This cost 'ordinarily should be met by the customers', Ronoh said. Rainforest Alliance is a global non-profit organisation that works to promote sustainable agriculture, forestry and responsible business practices. The green frog seal appears on nearly 240 brands and is almost ubiquitous in UK supermarket tea ranges with big names including Tetley, PG Tips and Yorkshire Tea among those signed up. About half the tea consumed in the UK comes from Kenya. The widespread demand for ethical certification is linked to the reputational risk of sourcing from tea-producing regions with a long list of problems. These include low wages, unsafe working conditions, gender inequality and environmentally unsustainable practices. In addition, countries such as India and Kenya are grappling with climate crisis-related weather changes. However critics complain that while buyers for western markets only want to buy certified tea they rarely offer to pay a premium for it. While UK consumers are happy to splurge on coffee, the same is not true of tea. The average price of a teabag is 'just 2 or 3p' despite the fact that the cost to grow and pick tea is increasing, according to a recent Fairtrade Foundation report on the subject. Although Rainforest Alliance facilitates certification, it does not set the fees charged by external auditors who evaluate whether growers meet its 'sustainable agriculture standard'. The cost of certification depends on factors such as farm size, with growers often grouping together. For a smallholder-managed tea factory the annual cost is estimated to be about $3,000. This could come down however as a streamlined process that cuts the preparation work involved in an audit is being introduced this year. Ronoh said that as the Rainforest Alliance logo 'had not demonstrated solid impact commensurate to the costs of implementation, the meeting resolved to suspend the scheme with immediate effect'. Sign up to First Edition Our morning email breaks down the key stories of the day, telling you what's happening and why it matters after newsletter promotion Tea is a major cash crop for Kenya and the decision comes as the country grapples with the knock-on effect of a moribund tea price on the millions of people who rely on it for their livelihood. The Rainforest Alliance says it is engaging with the State Department of Agriculture in Kenya to 'gain clarity and to work towards a joint resolution quickly'. It has contacted certificate-holders to assure them that the endorsement remains valid until the expiration date, meaning 'farmers are able to sell their tea as certified'. A spokesperson said: 'We remain committed to supporting in Kenya to the fullest extent possible, and our tea brands and companies have communicated that they remain fully committed to continuing to purchase Rainforest Alliance certified tea.' The Kenyan government is said to be considering putting in place a localised certification model. It would likely have similar sustainability goals but lower compliance costs and less administrative complexity. A spokesperson for the Ethical Tea Partnership (ETP), an NGO focused on tackling problems in the tea sector, said it hoped the Kenyan suspension would be 'short-lived and that a solution to this current impasse will be found'. Certification is a 'critical tool to allow all stakeholders in the tea supply chain to ensure that the workers, farmers and communities who rely on tea for their livelihoods are being treated fairly', the ETP added.
North Wales Chronicle
21-05-2025
- Business
- North Wales Chronicle
Fairtrade flags ‘window of opportunity' to drive systemic change for tea farmers
The organisation is urging the Government, businesses, retailers and tea drinkers to take action that ensures fairer pay and working conditions for farmers across the world as part of a major campaign launched on Wednesday. Scaling up Fairtrade impact across the tea sector has been a particularly difficult and longstanding challenge compared to some of the other certified commodities, such as bananas or cocoa. Working conditions can be tough, exacerbated by climate impacts and poverty, while global supply has often outstripped demand, causing tea prices to drop lower than the cost of production. Moreover, around a fifth of Fairtrade's certified producers globally work in tea, which means sales are split across a large number of producers. Even though 100% of their product is eligible, they only sell on average 4% of the tea they produce on Fairtrade terms – volumes Fairtrade is now pushing to grow. A global trend towards legislation that ensures businesses act responsibly provides a key opportunity for meaningful change, the organisation said. It also argued that the UK's significant history, market and consumption of tea means it is uniquely positioned to tackle the systemic inequality seen across the tea sector. Eleanor Harrison, chief executive of the Fairtrade Foundation, told reporters: 'The people growing our tea should be able to live with dignity, to be safe at work and to earn enough to feed themselves, their families and to be able to plan for the future. 'Making systemic changes to the tea sector to deliver fairer incomes and wages, safer working conditions and protecting our future cups of tea with investment in climate resilience is something within our collective control and agency. 'We can through both demanding and enabling fairer trade at scale, working together, improve employment, women's empowerment and rural economies for 39 million people globally.' In a report released alongside the campaign launch, the organisation urged the UK Government to follow the EU by introducing legislation that ensures businesses protect human and environmental rights in their supply chain, and to support producers through international climate finance commitments. Fairtrade is also calling on ministers, industry, retailers and brands to deepen collaboration over sustainability, supply chain transparency and fairer prices. Meanwhile, British shoppers are encouraged to support farmers by buying Fairtrade products and signing Fairtrade's 'Brew it fair' petition, launched on Wednesday. Ms Harrison said: 'Frankly speaking, it's not okay to turn a blind eye during such an important window of opportunity. 'Tea reflects so much of what is going on in the world right now, the power imbalances, growing inequalities and the lack of transparency, accountability, and the cuts to vital funding that should support the most vulnerable.' She added that the role of trade has 'never been more central to rebalancing the world we all share'. 'We have a long history both good and bad in terms of the global tea trade,' she said. 'This is one where the UK could genuinely show global leadership.' Gacharage Tea Factory in Kenya, which takes care of 5,000 farmers and their families, is among those who have benefited from the Fairtrade Premium, which they recently spent on education and helping producers diversify into avocado and dairy farming to supplement their incomes. Farmer Jacky Wangari, a Gacharage Premium Committee member, said: 'We have about nine students enjoying full scholarships through Fairtrade funds… [with] two of them working; one is a teacher and the other one is doing a business in town. 'If Fairtrade was not there, these bright students in need would not have joined campus.' Sherrie Silver, Rwandan choreographer and Fairtrade Foundation partner, said: 'Being based in Rwanda – a major tea-producing country – I have seen firsthand how tea has the potential to change lives through employment, women's empowerment and improving the quality of life for people in farming communities. 'Fairtrade is such an important cause as it ensures people around the world receive better prices, decent working conditions and a fairer deal for all.'
Western Telegraph
21-05-2025
- Business
- Western Telegraph
Fairtrade flags ‘window of opportunity' to drive systemic change for tea farmers
The organisation is urging the Government, businesses, retailers and tea drinkers to take action that ensures fairer pay and working conditions for farmers across the world as part of a major campaign launched on Wednesday. Scaling up Fairtrade impact across the tea sector has been a particularly difficult and longstanding challenge compared to some of the other certified commodities, such as bananas or cocoa. Working conditions can be tough, exacerbated by climate impacts and poverty, while global supply has often outstripped demand, causing tea prices to drop lower than the cost of production. Moreover, around a fifth of Fairtrade's certified producers globally work in tea, which means sales are split across a large number of producers. Even though 100% of their product is eligible, they only sell on average 4% of the tea they produce on Fairtrade terms – volumes Fairtrade is now pushing to grow. A global trend towards legislation that ensures businesses act responsibly provides a key opportunity for meaningful change, the organisation said. It also argued that the UK's significant history, market and consumption of tea means it is uniquely positioned to tackle the systemic inequality seen across the tea sector. Ms Sunitha Kumari at the United Nilgiris Tea Estates, South India (Fairtrade) Eleanor Harrison, chief executive of the Fairtrade Foundation, told reporters: 'The people growing our tea should be able to live with dignity, to be safe at work and to earn enough to feed themselves, their families and to be able to plan for the future. 'Making systemic changes to the tea sector to deliver fairer incomes and wages, safer working conditions and protecting our future cups of tea with investment in climate resilience is something within our collective control and agency. 'We can through both demanding and enabling fairer trade at scale, working together, improve employment, women's empowerment and rural economies for 39 million people globally.' In a report released alongside the campaign launch, the organisation urged the UK Government to follow the EU by introducing legislation that ensures businesses protect human and environmental rights in their supply chain, and to support producers through international climate finance commitments. Mr Murugaraj, a member of the Fairtrade PremiumCommittee at Stanes Amalgamated Estates, South India (Fairtrade) Fairtrade is also calling on ministers, industry, retailers and brands to deepen collaboration over sustainability, supply chain transparency and fairer prices. Meanwhile, British shoppers are encouraged to support farmers by buying Fairtrade products and signing Fairtrade's 'Brew it fair' petition, launched on Wednesday. Ms Harrison said: 'Frankly speaking, it's not okay to turn a blind eye during such an important window of opportunity. 'Tea reflects so much of what is going on in the world right now, the power imbalances, growing inequalities and the lack of transparency, accountability, and the cuts to vital funding that should support the most vulnerable.' She added that the role of trade has 'never been more central to rebalancing the world we all share'. 'We have a long history both good and bad in terms of the global tea trade,' she said. 'This is one where the UK could genuinely show global leadership.' Gacharage Tea Factory in Kenya, which takes care of 5,000 farmers and their families, is among those who have benefited from the Fairtrade Premium, which they recently spent on education and helping producers diversify into avocado and dairy farming to supplement their incomes. Farmer Jacky Wangari, a Gacharage Premium Committee member, said: 'We have about nine students enjoying full scholarships through Fairtrade funds… [with] two of them working; one is a teacher and the other one is doing a business in town. 'If Fairtrade was not there, these bright students in need would not have joined campus.' Sherrie Silver, Rwandan choreographer and Fairtrade Foundation partner, said: 'Being based in Rwanda – a major tea-producing country – I have seen firsthand how tea has the potential to change lives through employment, women's empowerment and improving the quality of life for people in farming communities. 'Fairtrade is such an important cause as it ensures people around the world receive better prices, decent working conditions and a fairer deal for all.'
South Wales Argus
21-05-2025
- Business
- South Wales Argus
Fairtrade flags ‘window of opportunity' to drive systemic change for tea farmers
The organisation is urging the Government, businesses, retailers and tea drinkers to take action that ensures fairer pay and working conditions for farmers across the world as part of a major campaign launched on Wednesday. Scaling up Fairtrade impact across the tea sector has been a particularly difficult and longstanding challenge compared to some of the other certified commodities, such as bananas or cocoa. Working conditions can be tough, exacerbated by climate impacts and poverty, while global supply has often outstripped demand, causing tea prices to drop lower than the cost of production. Moreover, around a fifth of Fairtrade's certified producers globally work in tea, which means sales are split across a large number of producers. Even though 100% of their product is eligible, they only sell on average 4% of the tea they produce on Fairtrade terms – volumes Fairtrade is now pushing to grow. A global trend towards legislation that ensures businesses act responsibly provides a key opportunity for meaningful change, the organisation said. It also argued that the UK's significant history, market and consumption of tea means it is uniquely positioned to tackle the systemic inequality seen across the tea sector. Ms Sunitha Kumari at the United Nilgiris Tea Estates, South India (Fairtrade) Eleanor Harrison, chief executive of the Fairtrade Foundation, told reporters: 'The people growing our tea should be able to live with dignity, to be safe at work and to earn enough to feed themselves, their families and to be able to plan for the future. 'Making systemic changes to the tea sector to deliver fairer incomes and wages, safer working conditions and protecting our future cups of tea with investment in climate resilience is something within our collective control and agency. 'We can through both demanding and enabling fairer trade at scale, working together, improve employment, women's empowerment and rural economies for 39 million people globally.' In a report released alongside the campaign launch, the organisation urged the UK Government to follow the EU by introducing legislation that ensures businesses protect human and environmental rights in their supply chain, and to support producers through international climate finance commitments. Mr Murugaraj, a member of the Fairtrade PremiumCommittee at Stanes Amalgamated Estates, South India (Fairtrade) Fairtrade is also calling on ministers, industry, retailers and brands to deepen collaboration over sustainability, supply chain transparency and fairer prices. Meanwhile, British shoppers are encouraged to support farmers by buying Fairtrade products and signing Fairtrade's 'Brew it fair' petition, launched on Wednesday. Ms Harrison said: 'Frankly speaking, it's not okay to turn a blind eye during such an important window of opportunity. 'Tea reflects so much of what is going on in the world right now, the power imbalances, growing inequalities and the lack of transparency, accountability, and the cuts to vital funding that should support the most vulnerable.' She added that the role of trade has 'never been more central to rebalancing the world we all share'. 'We have a long history both good and bad in terms of the global tea trade,' she said. 'This is one where the UK could genuinely show global leadership.' Gacharage Tea Factory in Kenya, which takes care of 5,000 farmers and their families, is among those who have benefited from the Fairtrade Premium, which they recently spent on education and helping producers diversify into avocado and dairy farming to supplement their incomes. Farmer Jacky Wangari, a Gacharage Premium Committee member, said: 'We have about nine students enjoying full scholarships through Fairtrade funds… [with] two of them working; one is a teacher and the other one is doing a business in town. 'If Fairtrade was not there, these bright students in need would not have joined campus.' Sherrie Silver, Rwandan choreographer and Fairtrade Foundation partner, said: 'Being based in Rwanda – a major tea-producing country – I have seen firsthand how tea has the potential to change lives through employment, women's empowerment and improving the quality of life for people in farming communities. 'Fairtrade is such an important cause as it ensures people around the world receive better prices, decent working conditions and a fairer deal for all.'
