2009? Vortex of Doom; Or Not.

In 2008 the financial services industry spiraled into a vortex of doom. How are we doing?

Well so far, at Equal Exchange the seas have been much calmer. We closed 2008 with over $34 million in sales, up from $29 million in 2007, keeping our 23 year record of growth intact. We got a little nervous in November and December as the economy dramatically slowed, but orders kept coming in. Like everyone, we’ll be affected by the recession but here are three reasons we believe we have a good platform on which to navigate 2009.

1: Good Products and Distribution
Our coffee is of excellent quality, is less expensive than many specialty coffees, and is an important part of people’s daily rituals. In fact we expect to hold on to most of our customer base – and maybe pick up some folks who find our competitors a little expensive for the times. Our chocolate bars, however, are a premium product and a discretionary purchase, so we’ll be watching this line closely. Chocolate and cocoa are now 16% of our business.

We also have varied distribution through food coops, natural food stores, cafes, universities, religious congregations and mainstream supermarkets – a diversity which offers security if (when) one group starts to decline. We’ll definitely have to manage our cash and expenses closely in 2009 to ensure an unexpected event doesn’t put the squeeze on our cash flow, but we have the means to do that, and we will.

2: Access to Credit:

Growth takes money; we need credit to purchase the millions of pounds of
coffee we buy each year. Fortunately the three main banks that provide us credit appear to be sound. Naturally the banks will be keeping a closer eye on us, and we on the banks. That’s good because Equal Exchange benefits from increased transparency. The more partners learn about us the more committed they are. And supporting it all are the investments made by people and organizations  committed to our mission and vision. That’s a great foundation.

3: Our Co-op Structure:

This is key. Equal Exchange is a worker co-op with two decades of experience, and because of that is an intrinsically prudent organization. The 90 or so worker owners have invested over $700,000 of our own money in Equal Exchange. If we make a loss, that money is at risk, which is partly why we’ve only made a loss once in the last 20 years. Being a worker co-op means we manage expenses personally and we take the mission personally. This is not just business, it is our livelihood, and as an economic democracy we have the means to set the co-op’s direction and work together to make it succeed.

So, is the catastrophic failure of international finance a time to be cautious or bold?

Both! The world can be changed for the better in good times and bad.  We will be frugal, but we don’t intend to step away from the breach, and in the company of those of similar heart and mind, we look forward to advancing the common good in 2009.