BCTA MEMBERSHIP STATUS
Active

SECTOR
Agriculture, Food & Beverage

HEADQUARTERS
United Kingdom

REGION OF INITIATIVE
Latin America & Caribbean

SDG CONTRIBUTION

The Impact Goal 

Caravela joined Business Call to Action in December 2020 and made a commitment to educate a total of 3,000 coffee growers in Mexico, Guatemala, Nicaragua, El Salvador, Colombia, Ecuador, and Peru in costs of production and help them reduce their costs of production through the use of Arabica App by 2023. Caravela also guarantees that they will pay the minimum living wage calculated for each country, to their 192 (100%) employees in Mexico, Guatemala, Nicaragua, El Salvador, Colombia, Ecuador, and Peru by 2023. Caravela also commits to becoming carbon neutral by 2025.  

The Market Gap 

In the early 2000s. the quality of coffee that was being produced in the Latin America region was not good enough for roasters to pay premium prices. The coffee industry had been facing threats to its long-term survival for quite some time - higher costs of production in great part due to the shortage of labor, climate change, and higher input costs. The long-term sustainability of the coffee industry had to start with improving the incomes of the millions of coffee producers and incentivizing them with a market-driven approach to produce higher quality products. 

The Business Solution 

As a solution to the market gap, Caravela’s business model enables them to buy coffee directly from small-scale producers in Latin America based on quality. By doing this, they maximize their income while providing hands-on education to improve their product. Caravela situates itself in remote towns, close to these coffee growers to develop long-term relationships, educates them, pays high prices for quality parchment, and limits the farmers’ travel for the sale of their coffee.  

At Caravela, coffee farmers get paid on average 88% above the market levels. They have access to vocational education and receive price transparency and feedback to understand the value of their coffee in the marketplace. Additionally, and most importantly, Caravela builds long-term relationships between producers and roasters, through which the three parties sign a contract committing to paying a price that generates income security for coffee growers and not depend on market volatility.