Our company is founded on the principle of 'Farmer Owned Coffee'. We choose this as our tag line to underscore how much importance we give to this and showcase our unique business model. But, what does farmer owned coffee actually mean?
Company Structure
Paso Paso is registered in Germany at the court of Hannover as Istmo Producers Collective GmbH, a Limited Liability Company. The owners of the company are the coffee farmers together with our founder and director Bram de Hoog and our strategic partner for branding and marketing Jasper van Gils. Finally, after selling us his coffee roastery, Thomas Brinkmann retained some shares in the company too. Below is a breakdown of our ownership by department.
What does Farmer Owned Coffee mean?
Farmer Owned Coffee means that the coffee farmers providing the coffee hold shares in the company roasting and selling those same beans.
As owners of the company the coffee farmers form an integral part of the decision-making process and governance of the company. In monthly meetings pending issues are discussed and decisions about the direction of the company are taken. These topics include the management of the budget, sales and marketing efforts as well as brainstorming and the development of ideas to push the industry forward. Upon our foundation we laid out the division of power and decision-making process in our statutes.
Additionally, ownership means that the shareholders are entitled to the profits of the company. This means that after reinvestment in the company, taxes and other deductions the profits are distributed as dividends according the percentage of shares held.
How do we buy coffee?
At Paso Paso we of course roast and distribute the coffee of our shareholders. As part of our statutes each purchase of coffee must make economic sense for both parties involved. The roastery is not allowed to subsidise the coffee farms or vice versa. The goal is for the coffee farmers to make profit twice, first upon export by selling green coffee and then again after it has been roasted and sold in Europe.
Below is a visualisation of this process. The supply chain of each farm works slightly different which we will discuss in a separate blog post. The important takeaway at this point is that the green coffee is paid for in full at time of export. We use different parties to facilitate this credit to us.
How much do we pay for coffee?
The prices we pay for green coffee are set in dialog with the farmers and based on the market segment we pursue with each coffee. We are currently preparing a transparency report to share these numbers publicly with the necessary context and depth.
How did this group come together?
Bram has worked in the green coffee trade for over seven years before starting Paso Paso. As the sourcing manager for green coffee importer Ally Coffee he held relationships with hundreds of coffee producers around the world. The group represented in Paso Paso is a curated selection of farms and people that excel in coffee production as well as personal character and drive to innovate. To obtain shares in the company the farmers invested money and received shares in return for their investment. The investment was used to purchase a coffee roastery and a commitment to purchase their green coffee exclusively as long as Paso Paso exists.
What falls under 'operations' in the company structure?
Bram de Hoog is the managing director and employed to run the company. Having developed the idea and invested much personal time to form the company he was awarded with 20% of the shares of the company. Today Bram runs each element of the company including roasting the coffee.
Additionally, we grouped Thomas Brinkmann's shares under 'operations'. To kick-start our company we purchased an existing coffee roastery in Hannover. Bram met Thomas Brinkmann in 2018 in Nicaragua whilst judging Cup of Excellence. Thomas has been operating a coffee school and roastery for over twenty years and is a former coffee roasting champion. Now, he wants accomplish his dream of starting his own coffee farm in Nicaragua in. To achieve this he had to let go of his roastery and found the perfect match in Paso Paso.
Thomas retained a small percentage of shares in the company and is our neighbour with the coffee school in the same building as the roastery. He has also been a great help in navigating the bureaucracy of having a roastery in Germany.
What falls under 'Branding' in the company structure?
When we developed the idea for Paso Paso we agreed that we had to build a strong brand around us. In a competitive and saturated market it was very important to assure we could get our message across. We found a perfect match in Jasper van Gils and his company Groowup from Breda.
Bram met Jasper way back in 2016 whilst working as barista at Kamu in Breda. Here Jasper was a daily guest and enjoyed drinking specialty coffee. In 2021, Bram sold the first batch of his own coffee farm: Finca La Suegra. Jasper gracefully bought a bag and commented on the nice design. This conversation led to Bram approaching Jasper to do the design for Paso Paso. Jasper responded willingly, but wanted more - Jasper wanted to form part of the company. This idea was well-received by all the coffee farmers, who saw the value of having someone outside of this coffee industry on board - with loads of experience in branding.
Consequently, we hired Jasper's company to develop our brand and design our packaging. To this day they support us with design requests and fun ideas! This effort paid off in full by winning the 'SCA Best Branding' award at World of Coffee in Copenhagen.
Questions?
There are many layers to our model and we love talking more about it! Write us an email or visit us in Germany or around the world,