Episode 2: Why Does Good Food Sell Out?

A man and a woman play a stacking block game

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Episode Transcript

Intro:0:02Everyday grocery store items like bananas, chocolate, coffee, these are global commodities. They pass through a lot of people’s hands on their way from the fields to your grocery cart. This is the stories behind our food podcast, the podcast where expert guests share insider knowledge about every step along the process. I’m Danielle Roberto and I’m Kate. Chess and we’re your hosts. Hi. Welcome to the stories behind our food podcast. I’m Kate Chess and I’m here today with Daniel fireside. Hi. Thanks for having me on. Thanks for coming. Daniel is the capital coordinator here at Equal Exchange and we’ll be talking with him about something we don’t always think about when we think about the food system, the role of capital, and how a company can use financing to actually support its social mission instead of undermining it. All right, we’re rolling. Who are you and what do you do here at Equal Exchange?

Daniel Fireside:0:59Yeah, so I’m Daniel fireside. I’m and I’m the capital coordinator at Equal Exchange. So what that means is I’m in charge of raising all the outside capital that the company needs and managing the investor relations. Uh, the one part I don’t deal with this sort of our conventional banking relationships which are getting us to be a smaller and smaller piece of what we do.

Kate Chess:1:27For those of us who aren’t in finance, would a company the size of Equal Exchange normally have a, a person in your position have a capital coordinator?

Daniel Fireside:1:36Probably not by that name. I’m not aware of any other company that uses that term. And when, when I was offered the job I was told I could be a, I could come up with whatever name I wanted, I could be head of investor relations or a finance something or other, uh, but we’d often use the term capital coordinator. And what I liked about it and why I decided to keep it was because it’s so unusual and it like everything equal change does, reflects our unusual approach to business.

Kate Chess:2:11All right, great. Yeah. We want to talk to you about what the role of capital is in a food business.

Daniel Fireside:2:18So you know, capital is generally a company needs capital for longterm expenses in general. So your buildings, we own an 80,000 square foot warehouse and roasting facility with offices. We lease a lot of, a very expensive equipment. So those are normal capital expenses. A lot of other expenses are finance through your normal sales. So a payroll and for most conventional companies, inventory wouldn’t necessarily be a huge expense, a capital expense, especially for a coffee company of our size. They would just be having a very, as little inventory as possible, buying from brokers, uh, or contracting from a coffee producers and getting the coffee delivered whenever the roaster needs it or they’d be buying futures contracts. We decided that that whole system really puts the growers, the farmers at a huge disadvantage and they’re the ones least able to carry that cost. So our whole model, our business model from the start flips that around. So we arranged months in advance with the farmer cooperatives for basically a year supply of what we’re going to buy. And as soon as they’re ready, once they’ve milled it and sorted it, and once they’ve mailed it and sorted it and are ready to ship it, we settled on a final price, which is always above the market and is very favorable to the farmer co op. And as soon as those containers hit the water, I’m on the ships, we pay for the entire contract, we pay upfront and as soon as we own the coffee and then it’s a great deal for the farmers. A lot of other companies pay months, many months later, um, or they force them to sell at a huge discount. It’s great for the farmers. It creates a problem for us that have our own making where we suddenly have a huge amount of inventory that is sitting around. We can store our co ffee unrested coffee for a long time, but we, we’ve paid for it and it’s a capital expense. So as the company grows, that volume of inventory grows. So we’ve always needed a capital coordinator to really figure out how to do this kind of financing basically from the start.

Kate Chess:5:03So it’s really just, you’re talking about the cost of the coffee itself, it’s the building block of the business and the cost of that product is what you’re raising capital for that. That’s the unusual capital we’re talking about. Is that correct?

Daniel Fireside:5:14Well, we have the usual capital expenses that any other business would have, uh, the, the buildings and the equipment and so forth. But the other stuff is a, is a problem that we’ve created because if we don’t take it on, it’s pushed onto the farmers. And, and that’s we, you know, one of the really crazy things about the modern food system is that the big businesses that are the multinationals that are making all the money and all the profit, uh, take on as little risk as possible and push and basically have the farmers financing all the inventory costs as much as possible. And the farmers are the weakest link in this whole. And there are the ones who have the least amount of power. So we’re trying to flip that equation that creates a problem for us. And instead of just, uh, getting the financing from some deep pocketed venture capitalist, we early on figured out that we need to have our financing reflect our cooperative fair trade business.

Kate Chess:6:23Yeah. Gotcha. It seems like there are other people in the world who have these types of ideals who would like to be doing the right thing and treating farmers fairly and paying them well or doing good work in other parts of the food system. But it seems like whenever. It seems like a lot of food companies seem to be being bought up these days and the ownership changes in the way they do business changes. Can you answer in your opinion why food company so often seem to sell out?

Daniel Fireside:6:56Yeah. And especially, I mean, I think a conventional food company, it’s a, what their goal is from the start is to sell out, you know, build up the business, get it to a certain scale, whether it’s profitable or not, doesn’t really matter. You just sort of build the brand and done the legwork. And then your. If you get bought up by coke or Pepsi or General Mills, that success, you get a pile of money, you can move onto your next thing. Um, if you’re, you know, have a social impulse in the social goal when you created the whole business. Uh, that’s where our heart kinda breaks when we keep seeing these businesses that are in the same universe that we are really concerned about the equity issues and how the farmers are doing, the producers are doing and trying to create a business that changes that power dynamic. And then they get to a certain scale and they sell out as well. So why do they keep doing that? Well, in, in, in my view, because I talked to a lot of people in startup phases and, and, and a little bit beyond that early startup capital, it’s the hardest to get. And they go around talking to a financial backers and you know, venture capitalists and Angel Investors and they sign these deals because somebody hands them a wad of cash that they needed that moment and they’re just not thinking about the fine print and the implications that go down the road. And so the first question, the businesses I always ask is, what’s your exit strategy? How are you going to sell this business? Either either sell it to big whatever or go public where it’s sold to investors and it’s going to get eaten up by big whatever, uh, in five to seven years. And if you don’t have an answer to that, they’re not gonna put their money in because they want 10 times their original investment. It’s crazy. It’s just a total casino. I, I think the greatest PR job was done by people who label themselves angel investors because they’re really anything.

Kate Chess:9:05But that’s just the term everybody uses fitness. Yeah.

Daniel Fireside:9:09Oh, the angel came in with a pile of cash and it’s like, no, it’s the other kind of angel. Then you’ve got to read the fine print. I’m so people are just like, oh, that’s the deal. You know, the, the laws are also written to really privilege, really wealthy people to invest and the finance laws, investing laws were written that way to protect small investors, especially after the Great Depression. And then after every scandal where were some. Somebody rips a bunch of people off the. They try to write new laws, protect against the last scandal and the problem is you know that that’s all well and good, but it also has created such huge barriers for anyone who isn’t a millionaire to invest directly in a regular company. Some of those laws are changing now and some of them have certain exemptions that equal change has used to reach out because only about two minutes, two percent of the US population fits the criteria that the securities laws are written for. That says you can invest in anything. Ninety eight percent of us were, were not allowed legally to invest except in rare circumstances. So equal is using those exemptions. And uh, some of those laws have have eased up a little bit. And I hear from companies all the time, how can we follow Equal Exchange his path to avoid this other a trap. I call it the exit strategy trap. You know what, if you’re trying to build a company, not for an exit, but to stick around.

Kate Chess:10:46So to connect the dots here a little bit, even if you’re a company with a social mission, it’s hard to find investors or to get around the laws too. Utilize investors who aren’t huge dollar amount, big dollar investors and those people. What’s the disadvantage of going with a big investor?

Daniel Fireside:11:04Well, it’s not necessarily that are they all evil or is there something more there? No, it’s more that the investors, people who are investing for a living or investing other people’s money for a living have created this game plan that says, uh, you pick, you know, seven companies you put money in with the expectation that within five to seven years they’re going to return your money times 10. Now you actually figure that six of the seven are going to fail, but one is going to pay off. That sounds to me a lot like gambling. And it basically is, they don’t really care about those other six companies. They just care that enough of their bets, they’re going to pay off that they come out ahead and then they sound like geniuses. This is a system that works to keep making really rich people richer. It helps get some companies off the ground, but it doesn’t further the interests of people who, you know, back when Equal Exchange was founded. I, I’ve, I’ve often heard from our three founders, Jonathan Michael, and a rink that, um, you know, back in the mid eighties when they got into the coffee business, I said, any idiot could make a lot of money in coffee. And that wasn’t really their goal because first off the end of the day, if it works, they’d be above another bunch of idiots who made money in coffee. And if it didn’t work, then they’d be the real idiots who couldn’t even make my own coffee. They said, no, they’re, they’re a goal from the start was to really change the food system and empower workers and empower consumers, uh, in a food system that wasn’t allowing them to do that. And coffee was the vehicle that they used and that’s great because now we’ve added chocolate and tea and bananas and mangoes and all sorts of other wonderful things to eat and drink. So if your goal is to make change and not, and within the system, within the financial system that we have, your goal isn’t to maximize profit, it’s to maximize all these other things. You want to be profitable and keep growing and doing more good. Keep the lights on. But it’s hard to find people and institutions that say, well, if there’s other things are really valuable and when we’re making crazy returns, when we’re making crazy profits, it’s at a certain point, it’s a zero sum game. You’re, you’re, you’re making profits on the back of the farmers. You’re making profits on the back of the workers, you know, if, if everybody keeps their expectations reasonable than everyone can come away better off.

Kate Chess:13:46Yeah. It seems like we’re talking about money here, but we’re also talking about power and control. Um, and those are some of the strings that seems to be attached when you use a more traditional way of raising capital. Can you talk about how Equal Exchange has raised capital without giving up control? How we’ve stayed independent and democratic?

Daniel Fireside:14:06Yeah, absolutely. That’s really, besides that expectation of crazy profits, what companies, entrepreneurs, whoever are giving up when they’re dealing with these so called angel investors is control more and what those people in control are always demanding is increased profits at whatever. Hey, if you can do it and put a happy face on it and you know, not not exploit the farmers, that’s great, but when it comes down to it between the farmers and me always going to pick me and I’ve just heard so many stories of Oh, even successful companies, so six out of those seven are going to fail and the investors are fine with that. Well that seventh guess what does founders got pushed out anyway? Maybe they got some money but they lost their company because they weren’t making money fast enough or it sold out and general mills didn’t want you or starbucks didn’t want you. And, and you know, some people walk away with like a million dollars and they’re really unhappy and that just seems crazy. So equal said we need to raise money and it’s been a real problem for Co ops more than any other business because a cooperative, whether it’s a consumer co op or a producer or a worker co op it control stays with the members, the farmers, the producers of the customers, the, the workers, and you can’t give it up. So it’s been really limiting, uh, in cooperatives business, a cooperative businesses ability to raise capital. What equal figured out was you can offer a kind of investment vehicle that doesn’t give up power and you can offer a financial return. We’re not a charity, but the way we wrote the rules said, you, uh, you, the investor, don’t get to say how we run the company. And I often say like, look, if you invest in the conventional stock market, you bought some Microsoft, you might get a proxy statement in the mail asking you to vote on something. No one’s counting your proxy statement. Bill Gates out votes you a trillion to one, a google. They have special shares where they don’t even count outside shareholders. So it’s a myth that shareholders, the average shareholder actually has some say in how companies are run. We sort of say, first off, we don’t think just because you have money, you should get to say how you run the company. If you work here and you’re a member here and you get voted in and you contribute your labor and your time and your energy. Yeah, you have a say an equal say, but you don’t get to sell the company. If you’re an outsider, you can be a partner, you can be a stakeholder and we’ll offer return. It’s a variable return between zero and eight percent. So any given year will give you zero percent. And that’s part of the deal. Uh, we say the target is five and if everything goes right and we’re treating everyone well in the businesses in good shape, we’ll, we’ll pay you five, but it’s decided by the workers on the board. Um, if things are going gangbuster, we’ll, we’ll pay a little more and we’ve treated everyone else, right? Um, things are going terribly. You’ll get less and maybe zero. And that’s, it seems pretty reasonable. And over the long haul, uh, we’ve done really well, we’ve done well by our investors. And what I tell people is, look, we can’t guarantee you’re going to make any money. I can’t guarantee you’re not going to lose your money. I can guarantee whether you made it or lost money. You feel good about it. And you can’t really say that about anything else you invest in.

Kate Chess:17:54So you were saying that investors don’t actually have a say in traditional businesses either.

Daniel Fireside:18:00Yeah, I think that’s a real myth Uh, it’s, there’s two myths. One is that companies, publicly traded companies are democratic because shareholders get to vote, one share, one vote, and whoever has the most shares gets the most votes. So that’s already a kind of anti democratic thing. Then the way companies are structured, it’s incredibly hard to vote on companies and change them. There’s a whole industry of social activist organizations and really wonderful places that have pushed companies to enact a environmental goals or social goals through shareholder resolutions. And whenever they’re successful, the company’s just changed the rules to. They say, Oh, you need higher and higher threshold.

Kate Chess:18:48Yeah. So

Daniel Fireside:18:50I, I love those groups that are doing that, but it’s a real myth that, that is democracy and that it’s possible. And then the other sort of myth that everyone believes so much that it’s basically become true is that the only focus accompany can legally have is to increase its profits for shareholders. And there, there’s a great writer who just passed away recently. She was a law professor at Cornell Lynn Stout who, uh, wrote some. She looked into that and said it’s a myth. Actually. Case Law doesn’t back it up. Uh, companies have great discretion in terms of what they consider their longterm, uh, a greater good. You know, they can say, no, we’re not going to maximize profits this quarter because we’re thinking in the next 10 years or something. But the reality is people have bought into that so much that they just say, whenever a company faces a dilemma, where on one side is making more money and the other side is any kind of social good, you have to go with the money. And so we say, look, we’re not going to be pressured by shareholders. Ben and Jerry’s was forced to sell out because shareholders were saying, uh, if you don’t sell to Unilever, we’re going, sue you. Other companies have seen that and they’ve just, they’ve capitulated without even a fight. Uh, we said we’re writing it into our bylaws were making sure nobody invests with any thought that we’re ever going to sell. We basically created a rule that said, if we ever sold, we have to give all the profits away.

Kate Chess:20:24Do you have to set this up from the start? When you’re, when you’re starting a business, do you think that companies that have this kind of motivation can transition to a similar structure?

Daniel Fireside:20:35It’s tricky. It’s definitely easier before there’s piles of money on the table. Everybody always, you know, easier to be generous. You don’t have anyone, you don’t have any money there. Uh, and then change as everybody knows when there’s piles of money. Wait a second. I worked hard for that. Um, should be up to me. I came up with the idea. So I always advise people, set up the rules before you’re profitable, set up to the game plan, you know, and you can set a different ways. A solar company in Colorado, namaste solar that, that I helped convert to being a co op. They said if they ever sold a part of the money has to be given away. Part of it has to go back to the outside shareholders. Part of it goes back to the workers in the company. Uh, you, you can, you know, we’re the more extreme version. We said 100 percent of the assets have to be given away. I think as long as you put some roadblocks in there, that just takes away that incentive and it doesn’t depend on people being good. The other thing is, if you’ve taken some of that early, you know, it’s a fallen angel money, let’s call it. They often write in, um, uh, protections for them against you, changing the rules. So be careful with that money. We actually just a w we have, you know, a great story where there was one point when we were about to get into coffee roasting. We used to outsource everything and we want, wanted to ramp up the business. We needed some big infusions of cash to be able to, to go into roasting and, and expand on our own. And one of these self-styled social investors came up and said, well, you’ve been doing all this great hippie stuff for so long and that’s fine, but now you’re talking real money. You want my big investment, a quarter million dollars a, I need a special sheriff, a special class of stock where I get a special return. Uh, I’m protected from any losses and I want to see it on the board. And he was just changing the whole roles. And I know it was before my time, but I saw the document and I’ve talked a lot of people who are around. When that offer came through and there was a lot of people were like, well, is this what we’re supposed to do? We need to grow. This is our big shot. And I saw some, some other letters that went when they were passing it around that said, you know, it’s because of people like this that I got out of Wall Street and they use a little more colorful language than that. I’m sorry, who were the letters? Friends? Well, they were from advisors that we had internal people who, you know, the founders and the board. Whereas like you know, we don’t know is this what you’re supposed to do when you get to a certain scale? And so we asked them some, some more wiser financial hands and they said, these are the terms that will under your business if you take this money, you’ve, you might succeed financially but you’ll have failed and all your other goals. And that was really one of the missions of the company was to show you could succeed in a different path. And here’s what happened. It took us a lot longer. We could have, we could be a much bigger company. We could have grown a lot faster if we had just cut all the corners and taken that quick money and cut all the social stuff. But we decided that doesn’t prove anything that, that we ended up being the idiot who made money in coffee. And so we took the harder road and here we are over $70,000,000. We’ve been profitable for almost our entire history. We’re doing right by everybody. And we have over $17,000,000 in outside investment. We have millions of dollars in loans from alternative lenders and everybody, you know, if, if we started returning crazy returns, 10 percent returns, our investors would go, wait, this is too much money. Who are you shortchanging who you’re exploiting like that. We’ve built up this whole community and now these people are out there. They’re like, what else is out there? Whereas the next Equal Exchange. So that’s really exciting. Now we have companies coming to us saying, how can we copy your model? It’s taken awhile to be an overnight success, but 30 years. But, um, I, I think, you know, the, the Wall Street crash 10 years ago was really a big turning point because people used to think, oh, you guys, I don’t know, how are you a charity? Are you a business? I can’t quite figure it out and, but you know, my smart money goes in Wall Street and goes into my 401k into. I’ll close my eyes. I don’t know how that money’s made. Well, what happens, you know, 2007, 2008. The whole system collapses. People’s portfolios disappear. Uh, the bastards on Wall Street and made out like bandits anyway. And we kept chugging out, our little five percent returns it because it was based in our actual sales and our profits and how we were treating everybody. And people were like, oh my God, this is a real thing. I was able to send my kids to college because you guys. And uh, I think that woke up a lot of people that actually the system really is rigged and we are building something much more sustainable that is built for the long term and is built for all the stakeholders.

Kate Chess:25:43In a way you can actually appeal to people’s self interests because this can be, like you said, more sustainable and a steadier way to.

Daniel Fireside:25:50Yeah, I mean, I think, look, people need to save money. People need to invest, then they need to park there. They’re extra money and earn some kind of return that beats inflation for future longterm goals, retirement, college houses. Uh, I, that’s how our system is built. We don’t have a real effect of safety net in this country. So, um, if you’re fortunate enough to be able to do that, that’s reasonable. It’s reasonable for equal change to be using other people’s money to help build our business and to pay a cost for that. But that shouldn’t be the focus of the entire economy of just turning money into more money and not paying attention about all the costs that are passed off onto people and the planet that can least afford it.

Kate Chess:26:41Now, that Equal Exchange has become at long last and overnight success. What I mean you, you were talking about how people approach you and they, they ask you where else can I invest? Or they ask you, how can my business use this model? Do you have answers for those questions?

Daniel Fireside:26:58It’s tricky because a lot of the securities law, it’s still built around a treating every company that wants to reach out to the general public as potential crooks and every person who isn’t a millionaire as some dupe waiting to be ripped off and you know, and a certain level, that’s great because there are a lot of crooks out there and a lot of people who could get ripped off, but you know, they don’t mind if you go to the casino or spend all your money on the parable. So there needs to be some sort of a middle ground and you know, whenever we offer stocks, so the company I would work with, there’s full disclosure that all the financials, we’re not guaranteeing anybody anything. We’re saying this is the risk, you know, it’s like when you look at your lottery ticket and here are the odds. Okay? Um, you know, we can also say, look, besides even if you didn’t make money, here’s all the good things that you’ve accomplished with this investment. And we’ve tried really hard and an equal. We actually, the workers in the company put half of our profit sharing or patronage into back invested into the company, so we have a lot of money tied up. So the problem is a, it’s very hard to. You can’t just slap labels on your products and say, hey, invest in us. There’s restrictions and, and roadblocks. Some of them are coming down. The hard truth is you have to do a little homework. You have to research, you have to talk to the companies that you’re really like. You have to sort of network. You have to.

Kate Chess:28:29You’re saying as an investor, you’d recommend talking to companies that you think are doing good.

Daniel Fireside:28:32Yeah. And you know, talk to me, talk to other places, talk to your local food co op. Um, you know, like it would be nice if you could just go down the supermarket and look at the labels and go, oh, these are the good guys or bad guys. Here’s the easy thing to do. I fill up my shopping cart and what we’ve learned. The sad truth is the labels only went so far that you can say anything on your package. And that doesn’t mean there aren’t some really great companies out there like Equal Exchange, but you got to do some digging, um, to, to really learn about it. So

Kate Chess:29:04yeah, same thing with this analogy, with this investing stuff.

Daniel Fireside:29:08You know, what the hard part is, you got to do some research, you got to dig in, really look at what the companies are talking about, what are the terms say what happens if you succeed or you going to sell out to big whatever, you know. Um, and if they say no, then that’s a really good sign.

Kate Chess:29:27Yeah. So, um, companies that, it seems like it would be difficult to distinguish as an investor between companies that are genuinely, that have built protections the way that Equal Exchange has that are still doing good and companies that are sort of now owned by someone else and not like that at all. Uh, is it easy to distinguish if you, if you’re willing to put in the time and do the research?

Daniel Fireside:29:53Well, cooperatives are a great start and you know, I’m out there working with cooperatives all the time when you to say, hey, you don’t have to. If you don’t, if you want to stay small, that’s great, but if you want to get bigger and you need to raise capital, follow our model because you’re not giving up control and you’re signaling to people out there that are really hungry for this kind of stuff. I would say in the public stock markets, the publicly traded stocks, you’re going to be really hard pressed to find anything that is really good. If you. Even if you look at these socially responsible mutual funds, so called look at what they’re actually investing in and nine times out of 10 it’s Microsoft and apple and comcast and they pick one bad thing. We don’t do that, but that doesn’t mean we’re not doing all these other bad things. So it’s, it’s really frustrating because that, that people want to do good and there’s a lot of money in those funds, but they’re, they’re just not quite doing what you want. So, you know, a lot of cooperators are starting to go out there and raised in this way. Um, these direct public offerings actually you can advertise in your own state, you can open it up to people who are not millionaires and if other bigger companies are following our model, there’s always space for, for average investors as well. Uh, there’s also a couple of loan funds that kind of do it for you. So the cooperative funding New England is one where you can put money in with them, they pay you a return on it and then they loan the money out to cooperatives all throughout the Northeast. There’s a, the impact capital cooperative and uh, the Midwest and they lend all over the place. The same thing also RSF social finance. They have our mortgage and you can put money in with them. They’ll pay a return and then they loan money out to really cool businesses. One other is a calvert social impact. They, they created a fund with us, a special program where you can put in as little as $20 or many thousands if you want and direct that that money backs Equal Exchange and they will loan all of the money that’s directed that way to Equal Exchange for us to help with our coffee buying. Um, they, they take a little, make a little profit on the difference between what they’re paying out in interest and what they’re charging us. But it’s really very minimal. They want to open this stuff up. And so these loan funds are one way to sort of consolidate these things. If you want to go deeper. It’s really about building relationships. We don’t necessarily want money from people who don’t know about us and are just saying five percent and I don’t have to worry about it. No, that’s not the deal. We want, we love the investors who, you know, sell our coffee, their church or synagogue basement who, uh, by our chocolate for all their family. Or we had one guy up in Vermont who bought a, one of our bulk bags of minis, you know, 888 pieces and gave it away to everybody in the neighborhood to give out to trick or treaters. So those are what we call committed participants. People who are really in it, they get excited and we feel good about paying interest and dividends to those folks because we know that they’re putting their money back into the same things that, that we believe in.

Kate Chess:33:17What I’m getting out of this is that there’s no shortcuts that work. There’s no easy way out whether you’re a company or whether you’re an individual is looking to invest. You sort of, you can’t get around informing yourself and thinking about eventualities and even protecting yourself from yourself in the future.

Daniel Fireside:33:35Not Shortcuts, uh, you know, equal. We make, I sort of think of us just having a lot of planned to inefficiencies. And that’s, that’s where our strength is. We don’t run our coffee roasters 24 slash seven in part because it’s really not good for people to be working in the middle of the night.

Kate Chess:33:50Do some people do that?

Daniel Fireside:33:51Sure. You know, um, and, and some efficiency expert would probably tell us, you know, we’re wasting all this capacity, but we’d also have a ghost workforce that would never be able to participate in our meetings. We shut the whole company down when we have all company meetings. We shut the cafe down. We, um, we say, you know, what, we’d rather lose some money, lose some profits, and pay people to not be working to help actually be co owners and run the company and sit and collectively make really important decisions. So often the things that are, you know, like many things in life that the best ones take a little more effort and time. Um, but that’s, that’s how we’re going to change thing is yeah, there is no quick fix, but there are longer fixes that are really much more satisfying.

Kate Chess:34:42It’s nice to know that people are out there looking for that.

Daniel Fireside:34:44Oh, I see a huge potential for this. I, I talked to investors all the time. I mean, and I see all these people putting their money into these socially responsible mutual funds and they’re not getting what they think they’re getting, but they want that. I see all these companies that are trying to do really wonderful things there, you know, have this crazy entrepreneurial spirit they’re seeing, hey, what if we just sold this product and got this stuff from here and we could help all these people that’s, you know, this real dynamism and they’re dying to get money from investors who believe in what they believe in the. So it’s a market that needs to happen. What we’re slowly seeing are some regulation changing. We’re seeing some lawyers that you can go to that understand this. You’re seeing some financial advisors that can help people shift money with larger amounts or family foundations. Um, so I’m seeing sort of ecosystem in creation. You need all these different elements to come together at equal. We’re doing our part, uh, and it, it’s, it’s happening, it’s there. There are dozens and dozens more companies today that are following this path. And there were when I started nine years ago, so that’s exciting, but there should be, you know, I, I talked to rick about it, our co founder Co president, and he said, well why aren’t there thousands? I’m just like, oh, you’re right. Why aren’t there so that, that’s our challenge to make this the norm.

Kate Chess:36:10Very cool. Anything else that you wanted to talk about or want to say that you didn’t get a chance to?

Daniel Fireside:36:16You know, it just, if you’re thinking about starting a company or you have one with a social mission, think about carefully about how you’re getting your money. If you’re investing, think about what happens if this company is successful, is it going to sell out to big whatever and lose all of its social mission? How can we protect that from happening and still make it financially viable? If you’re supporting companies, find the ones that are doing the harder thing and figure out how to support them and buy their stuff, even if it’s maybe a nickel more than than the product next to it. If we want these kinds of changes, we have to think strategically about having different outcomes and you know, we’re, we’re the proof that it can happen.

Kate Chess:37:00All good things to keep in mind. We want to thank you again for joining us today. Daniel.

Daniel Fireside:37:05Thanks for having me.

Kate Chess:37:06Yeah, thanks.

Daniel Fireside:37:07It’s really helpful to have you break all that down and it sounds like you do have one more message for our listeners.

Daniel Fireside:37:12Well, our lawyers say that I would be remiss if I didn’t mention that all the descriptions of the company performance and the securities that we’ve offered and how they’ve done all relate to the past. As we know, past performance is no guarantee of future results. We’re not offering any stock at the moment. If we were, there would be all sorts of, uh, extensive disclosures. So don’t make any financial decisions based on a quick podcast or radio description.

Kate Chess:37:43Thanks for listening to the stories behind our food, a podcast by Equal Exchange inc. A worker owned cooperative. Loved this episode. Please subscribe, rate and leave a review. Be sure to visit Equal Exchange.coop to join the conversation. Purchase products. And learn more about small scale farmers and the global supply chain. This episode was produced by Equal Exchange with hosts, Kate Chess and danielle rabickow. Sound engineering provided by Gary Goodman. Join us next time for another edition of the stories behind our food.


  1. Charles Simpson | 25th Apr 19

    A clear and interesting analysis of the investment dynamic related to small, socially-conscious businesses.
    On the pushing back of the cost of inventory to the producer from the processor, I recall riding in lumber trucks taking logs from the Adirondacks to the Domtar paper mill over the border in Quebec. At one point there were mountains of logs at Domtar; then almost none. The difference was that the company decided to adopt a supply-as-needed approach and told the loggers to store the wood themselves until the company needed it. Thus pay lagged, truckers lost scheduling flexibility, the risks to the quality of the wood, the space for storage, all were costs passed onto the most marginal of workers while the company held on to capital for as long as possible.

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