CHIANGRAI TIMES -Doi Chaang coffee has come a long way from its humble beginning. Hathaichanok Phisailert has made it her mission to nurture the spirit of social enterprise, where coffee growers are treated more like kinsmen than clients, sellers or ordinary villagers.
A university graduate in accounting from Yonok University, Ms Hathaichanok is the youngest daughter of Piko Saedoo, the founder of Doi Chaang Coffee Original Company. Also known as Miga, she is part of the Akha community in the village of Doi Chaang located in a mountainous region of Chiang Rai in northern Thailand, which has been growing coffee beans for about 30 years.
Her university study is also the outcome of what began when her father, Mr Piko, whose face is on every bag of Doi Chaang coffee, led the family to start cultivating coffee. He became inspired after His Majesty the King in 1983 began the royal initiatives to encourage crop substitution to eliminate opium cultivation and slash-and-burn horticulture in the North.
As the village head, Mr Piko had encouraged his fellow villagers to follow His Majesty’s directive and join him in cultivating coffee. After 20 years, the beans flourished under the leaves of plum, peach and macadamia nut trees and in the nutrient-rich soil of the region.
But the road to success was not always rosy. In the early years, the prices of coffee beans were pushed relatively low by middlemen.
Most Akha tribesmen acted independently, lacked business experience and had limited access to markets. They were not allowed Thai identification cards and their lives had barely improved during that period, prompting several members to abandon coffee.
Despite all odds, Mr Piko remained committed. By sheer luck, he met Wicha Promyong, a globe-trotting entrepreneur and trekker, in 2003. Mr Piko asked Mr Wicha for guidance on developing and marketing the Doi Chaang Coffee brand.
It was Mr Wicha who helped resurrect Doi Chaang coffee into a promising product. First, he encouraged the villagers to unite and form their own independent company to represent all Doi Chaang farmers.
With initial capital of 320,000 baht, a small company was set up to handle the production and distribution, eliminating the middlemen.
Mr Wicha, now president of Doi Chaang Coffee Original Company, has not only been instrumental to Doi Chaang’s coffee development. He also helps raise the standard of living and self-respect among the Akha people. He now lives in the Doi Chaang community as a well-respected, trusted member.
In no time, Mr Wicha has come to embrace the Akha way and dedicated his life to improving the well-being of the Akha people and making Doi Chaang Coffee the best coffee in the world.
A group of Canadians later approached to establish an equal partnership for international distribution, including John M. Darch, an entrepreneur who had been doing business in Thailand for more than 20 years.
After that, Doi Chaang Coffee Company became a unique partnership between the Akha hill tribe of Doi Chaang Village and outsiders.
The villagers cultivate and process the beans, while the company finances, roasts, markets and distributes the coffee.
Since the Thai farmers own 50% of the joint venture, they receive a price higher than the Fair Trade level for their beans, as well as half of the organisation’s overall profit.
More than a thousand households of ethnic minority groups now have a better life. Some growers now earn up to 1 million baht a year from less than 100,000 baht when the company was first set up by selling their unmatched coffee beans.
Several families can send their children to study for a doctorate degree both locally and overseas.
The company also set aside 30% of its yearly profit to the Doi Chaang Foundation, which takes care of education, health care, the environment and culture of the local community.
Through the foundation, the community is setting up a community bank to offer financial services with low lending rates not only to the Akha tribesmen as well as more than 10,000 families from 25 other tribes in the area.
It took Doi Chaang Coffee only five years to become the world’s top-class brand. But what puts it in international limelight is not profit but rather its business model, which contributes income to people in the community.
Doi Chaang Coffee was awarded the GI certification from the Intellectual Property Department in July 2006.
The department has also sought the same vote of confidence for Doi Chaang and Doi Tung coffee from the European Union to promote Thai products.
The community-based business model now becomes a case study at several leading universities around the world.
The coffee is now a pride of Thailand. It is also the only foreign brand in 60 years to be available through Harrods, the world’s most famous luxury department store based in England.
A joint venture is also planned in the United Kingdom with Canadian and local partners to expand its presence there.
In Thailand, Doi Chaang plans to spend about 60 million baht to acquire new machinery and expand the coffee drying ground.
Mr Wicha said the company not only sells Doi Chaang coffee, but also forest civet coffee at 3,000 baht a kilogramme. Lotions and cosmetics made from coffee by-product would be made available in the near future through the new company, Doi Chaang Coffee Cosmetic Co.
However, the bright prospect comes with a new challenge. Mr Wicha said a short supply is likely, as production is estimated at only about 500-600 tonnes this year, a sharp drop from as many as 1,000-2,000 tonnes earlier.
Mr Wicha explains participating farmers are free to sell their beans to middlemen or a third party if they get higher prices.
“We’re focusing more on quality control. Direct purchase from farmers and having a single production and processing facility will enable us to control and stabilise the quality of coffee,” he said. “We expect over the next three years our production under the scheme would reach 5,000 tonnes a year.”