ifinca
Coffee is the second most traded commodity in the world after crude oil. Globally, people pay unreasonable amounts for high-quality coffee and beans. In the United States alone, the 2023 coffee market has amounted to $11 billion in revenue.1 Americans love their coffee. It might surprise people to know, however, that the farmers who grow the beans that end up in their coffee make very little compared to the revenue generated for US exporters and coffee companies. They have no control over pricing and are strong-armed into taking whatever price the co-op gives them. Over the last decade, however, there’s been a stronger push for fair trade coffee in the United States and more democratization in coffee production. This is where iFinca comes in.
iFinca’s goal is to digitize the supply chain of soft commodities, specifically coffee. Before iFinca, there was no true connection all the way down to the farm level. The only information available about the beans and their production came from the exporting countries and exporters themselves. With the increased regulation of the coffee industry, the problem became how to ensure adherence. For the first time, a company has connected the entire supply chain from farmer to consumer. iFinca can communicate to customers who the farmers are while ensuring adherence to regulations and verification of the data.
iFinca was started by Alexander Barrett around 2018. Before iFinca, Alexander worked with a few successful startups and was one of three partners running a real estate development company in Georgetown. After completing his executive MBA at Georgetown University in 2017, Alexander needed a break. After consulting with friends and advisors, he decided to spend his year-long sabbatical from work in Colombia. During his second weekend there, he participated in a Spanish immersion class in a small town. On the third day, the class took a trip to a local farm, referred to as a Finca in Spanish. Following the tour, the owners invited Alexander to have lunch. He took the opportunity to ask questions, such as how they set their prices. He was told that they didn’t. The co-op takes their beans and tells them their price. The farmer knew nothing about whether the prices were fair or how they were determined. As he continued his Colombian Finca tours, Alexander discovered a pattern among farmers: they’re all forced price-takers. They have no agency over the compensation for their labor.
This told Alexander that there was something there. At another Finca tour in the mountains of Medellín, he met a Finca owner who’d become a cofounder and COO of iFinca. He asked questions, took notes, and, following this tour, went on a deep dive into the coffee industry. He familiarized himself with the exporting scene, meeting the people who run the mills and the exporters. This helped him understand every aspect of the supply chain. This Colombian sabbatical that was only meant to last a year turned into almost six. In late 2019/early 2020, app development began. In 2020, iFinca won Best New Product in the tech division at one of the biggest coffee conferences in North America.
Despite all this early success, the biggest thorn in Alexander’s side was the technical implementation of the idea. App development was frustrating and slow. Several development shops in India and Colombia were contracted to help, but results were poor. iFinca lacked a CTO, which meant that getting the app off the ground was going to be challenging. Mistakes were made and progress stagnated because such challenges proved tougher than anticipated. In early September 2023, Alexander contacted Vertex Labs, who understood his frustration and stepped in to help steer the ship, advising and directing iFinca toward an upward trajectory.
Aside from these technical issues, the most pressing challenge for Alexander and iFinca is marketing. The present goal is to “get people interested in iFinca and get them to realize that this is something they want.” While Alexander recognizes that mistakes were made along the way, the future looks increasingly bright for iFinca, because the market is ripe for such products. Other popular soft commodities, such as chocolate and tea, are screaming for a solution like iFinca. Once iFinca can prove themselves to be the leader in this wide-open market, the next step is moving toward those other commodities. Yet despite how lucrative the market seems, the ultimate goal is to provide a product that helps people like the Colombian farmers earn a fair wage.
Reference
1. Statista. 2023. “Coffee – United States.” Updated August 23, 2023. http://www.statista.com/outlook/cmo/hot-drinks/coffee/united-states#revenue.