After a nice cup of coffee and a pastry, we learned all about Coopedota’s cooperative model. The video that we watched and our tour guide were very informative. Up until this point, we haven’t explored the cooperative possibilities in the coffee industry.
In traditional companies, like Doka, the company has to spend a lot of time, effort and money on research and development, harvesting, transportation, and quality control. Doka has a large amount of land. With all of that land, comes a lot of additional costs. In the cooperative, the harvesting/growing phase is out of Coopedota’s hands. It is the farmers’ responsibility to produce quality coffee. If they don’t produce the necessary amount of quality, Coopedota won’t accept the order and will send it right back. In Doka’s case, if they don’t produce the quality that they were expecting, they lose a lot of money. Also, Coopedota is not responsible for the transportation from the farmers’ plantations to their facility. Again, if the batch of coffee is somehow ruined, Coopedota has every right to deny the batch and send it back. They set strict and clear guidelines to ensure that farmers know the expected standard ahead of time to avoid any miscommunications/mistakes.
Another advantage is that the cooperative helps support nine hundred local families. As members of the cooperative, you receive a vote. You can use this vote to elect a board of directors. This board of directors is responsible for hiring the GM and overseeing the day-to-day operations of the company. These votes give the local members of the community a voice in the business that they are conducting. This promotes trust throughout the supply chain because Coopedota is allowing the suppliers to have a major “say” in the co-op. Our tour guide explained that she feels as though she isn’t the boss, the GM isn’t the boss, the 900 families are the bosses. She expressed that she works for them. For a retailer that markets to the local Tico market, I believe that this is a successful strategy for keeping the suppliers happy and giving consumers a reason to buy the product.
As always, there are some disadvantages/challenges to overcome. One main disadvantage is little/no incentive to innovate or produce a higher quality product. Today, we learned that Coopedota provides compensation based upon delivery volume. As stated before, there are standards that Coopedota has, and if they are not followed, they have the right to send the product back. This creates a standard of product. This method basically standardizes quality and lacks incentive to harvest top quality. I understand that (obviously) this is not a focus of Coopedota. Their main focus is contributing to/supporting their local community. In my opinion, if I was running my own company (not a co-op), I would provide economic bonuses for higher quality product to motivate suppliers to constantly improve in efficiency, sustainability, and quality control. I believe that this strategy would allow a corporation to collect higher quality product (if that’s what they want).
All in all, I think that this strategy is beneficial to Coopedota because they seem to have a mission to support local farmers and create a “socialistic” environment. They don’t seem too concerned with top-grade quality and marketing themselves as a gourmet/premium product. That being said, I would personally choose a different business model, but this method seems to be working for them.