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Case 3 coffee text

Coffee : Export Crop Provides Food Security
convert methane to CO2, secure food and generate 50 million jobs This text is the basis for the article introducing the cascading of coffee waste at the farm and in cities as one of the 100 innovations that shape The Blue Economy. This article is offered as part of a broad effort to stimulate entrepreneurship, competitiveness and employment. The Market
In 2009 the world consumed 126 million bags of coffee, good for 7.5 million tons. Few
people realize that harvesting, processing, roasting and brewing coffee discards an
estimated 99.7 percent of the biomass. While only 0.2% acquires value on the market,
the remainder -rich in caffeine- is wasted. An estimated 12 million tons of agricultural
waste is left to rot, generating millions of tons of methane gas, contributing the climate
change. This makes coffee one of the most wasteful consumer products.
The world market for mushrooms -according to Professor Shuting Chang, the leading fungi scientist from Hong Kong- surpassed $17 billion dollars in 2008. Demand for mushrooms, especially tropical varieties that listen to names like shiitake, maietake, and ganoderma have enjoyed double digit growth for decades. Driven by consumer preference for cholesterol- and saturated fatty acid free food, it is expected that the average per person consumption of 175 grams of tropical fungi) in the US and Europe will increase to 500 grams within a decade. This is good for an additional $2.3 billion in sales. If the West would eat as much fungi as Hong Kong (17 kg per year), then we are looking at a staggering $120 billion. Tropical fungi would outpace coffee as a world commodity within a generation. The Innovation
Farming mushrooms requires bacterial control at high energy cost. However, either
through fermentation on the farm, to peal husks off beans, or through exposure of
ground beans to hot water when brewing a cup, bacteria are reduced to a minimum permitting the mushrooms to digest fibers. A stand-alone energy intensive process preparing substrates can be clustered with free energy needed to prepare coffee. Quality tropical mushrooms are farmed on hardwoods like oak. Hardwood trees are harvested, ground and converted into artificial logs. It takes up to 9 months to fruit shiitake or ganoderma. Prunings, husks, pulp and grounds are by-products from coffee, also a hardwood enriched with caffeine. While cows or pigs get stressed out by caffeine, this biochemical stimulates mycelium to the point that mushrooms pop out already 3 months after seeding. This generates a better cash flow. The third innovation is that the left-overs after harvesting mushrooms are enriched with essential amino acids, including lysine, a highly prized enzyme traditionally derived from sugar beets. Thus a waste without value is converted into a quality animal feed for cattle on the farm or pets at home. Professor Ivanka Milenkovic, (University of Belgrade, Serbia) provided scientific proof that underpins the financial logic of cascading nutrients and energy. The First Cash Flow
CarmenzaJaramillo, the Latino entrepreneur and Ivanka Milenkovic demonstrated this
business model by creating their own commercial mushroom farms. The strategy of
taking coffee waste and convert methane producing biomass into revenue generating
fungi proved to be a convincing model. After more than a decade tropical mushrooms
created new markets from Colombia to Serbia. It is no surprise that in 2009 over 100
companies emulated this business model in the Colombian coffee region El Huila.
Anyone with access to biomass rich in either caffeine or hardwood fibers, or both, has
the opportunity to start seeding mushrooms competitively. This generates jobs, provides
food security and creates revenues while reducing the stress on hard wood trees that
risk increased logging due to rising demand from vegetarians and gourmets alike.
The second opportunity to generate a first cash flow is the creation of a business whereby cafés and restaurants that today pay to dispose of coffee waste, could pay a symbolic fee to entrepreneurs who convert this waste to farm delicious mushrooms for sale to the local restaurants. The real opportunity is the design of a business model based on the “branding of waste”. Indeed, the brand “waste” has always been negative, and no company would like to associate its name with a specific waste stream that causes harm or is perceived as a nuisance. This is different now.
The Opportunity
Waste is not wasted. Waste generates quality food at lower cost, eliminating
transportation, offering fresh produce locally, while reducing the load on the landfill.
Well-known cafés like Les Deux Maggots in Paris or DoutorCoffee in Tokyo may be
delighted to have their quality image extended to the quality of the mushrooms farmed on their waste while generating jobs. If fair trade and organically grown coffees like MaxHavelaar were the base material, imagine the added value that could be generated for all partners. The entrepreneur enjoys a low barrier to entry since inner-city restaurants and cafes would even pay for disposing of the raw materials. The California-based coffee wholesaler Equator headed by Helen Russell takes this to the next level. Helen and her team created a special mixture of beans named Chidoʼs Blend, named after Chido Govero, the young Zimbabwean orphan who trains women around coffee farms to produce mushrooms on coffee waste, providing food security and jobs. This reduces abuse and helps contain the spread of AIDS. At the same time Equator secures its US clients that their waste in the San Francisco Bay Area ends up with BTTR Ventures, the start-up company created by NikhilArora and Alex Velez based two Berkeley University business graduates. Nikhiland Alex are the first ones to put a brand on mushrooms farmed on coffee waste. It is not a surprise that they were selected by Newsweek as one of the 25 entrepreneurs of the year under 25 in 2009. Helen Russell now generates more business for herself, more cash for Chido, and facilitates growth for Nikhiland Alex while coffee waste gets a brand. This new business model could proliferate from coffee shops in Istanbul and Cairo to coffee farms in Hawaii, Indonesia, Cameroon and Jamaica. Tea from Kenya and India, and apple orchards from South Africa or Chile struggling to compete enjoy a comparable opportunities for their biomass waste as the one described for coffee. They have one point in common: the need for entrepreneurs to take up the challenge.
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