One of my favourite jobs, is writing about innovative companies that do good things, either at a macro level or in a community.
This week, I read about Inaru, who took the well intentioned framework behind Fairtrade, and fixed it so that it worked better, in particular for smaller farmers. The company is getting attention after it recently raised $1.5m, to realise their plan to create a sustainable Cacao production network in the Dominica Republic, using a clever corporate and capital structure, that is going to be fairer to producers. The plan is to fully test the business model in Cocoa, before applying the same approach to coffee farmers in the country. But first.
Who are Inaru?
According to Crunchbase, it’s two sisters, Janett, and Erika Liriano, working out of New York. These girls changed the cocoa farming model in their home country of the Dominican Republic, and people are paying attention.
The annual list chronicling the brashest entrepreneurs across the United States and Canada.
Forbes Magazine about 30 Under 30
In fact in 2019 Forbes Magazine named Janet Liriano the 30 under 30 for Manufacturing and Industry. The annual list chronicling the brashest entrepreneurs across the United States and Canada.
The company’s website describes themselves as:
A movement in modern, ethical agriculture. Based in the Dominican Republic, Inaru is building a vertically integrated ecosystem for the production of organic cacao, from farming to fermentation, refinement, and product development.
More than 300 farmers have been certified organic by the company, with 1,800 more on a waiting list, and exclusive contracts for 500 tonnes of cocoa have been signed.
An interesting fact about the sisters is that their father has a Cocoa farm in the Dominican Republic which originally made them curious about the reasons why he received so little for his crop.
The Problem with Fairtrade
Janett talks directly of the issues she’s experienced with the other certification schemes, including, but not limited to Fairtrade.
As we know, to become Fairtrade, the producer has to pay. Yet, the majority of farmers cannot afford to pay perhaps $5,000 for certification, which might be what they would make in a year from the harvest.
Big exporting company’s might offer to help at this stage by funding the fees up front. The problem with that, is that the certification will be owned by the exporter, not the farmer. The farmer is now locked in to that company, and when the premiums are paid, they will go to the exporter, and it becomes unclear at this stage if the farmer will see any reward.
Inaru’s New Model
Inaru can really prove beyond any potential doubt that the farmers are being paid what they are owed.
Janett Liriano, chief executive officer
The Liriano sisters knew they had to break out of the orbit of the traditional certification company and do their own thing. So Inaru will be a brand to stand for quality in the same way as an Organic label.
The difference will be that the NGO’s doing the certification will enter into a Joint Venture with Inaru, so that they benefit from the growth of the business.
The farmers will have a commercial contract with the company, that sees them getting paid a regular sum of money throughout the year, based on production estimates. The premium which they should have received for being Fairtrade certified, will now go 100% to them, and possibly a little extra on top. Liriano told reporters, ‘Inaru can really prove beyond any potential doubt that the farmers are being paid what they are owed.”
The company is clearly doing something right. When you look at the investors who are backing them, they include Mars, Hershey and Soylent.
