1. Headline
  1. Headline
updated 4/30/2012 5:53:17 PM ET 2012-04-30T21:53:17

When Paul Rice launched Fair Trade USA 14 years ago, it wasn’t easy. He didn't draw a paycheck for six months. The second year, he went without for another six months. But the early struggles, he says, were cake compared with the challenge he faces shifting an already successful business model.

  1. More from TODAY.com
    1. 'What I always wanted': 'Paralyzed bride' expecting first child through surrogate

      Now happily married for three years, Rachelle Friedman Chapman is about to become a mother.

    2. 9 things this family learned by giving up junk food
    3. Angelina Jolie and Brad Pitt's marriage: Are the odds in their favor?
    4. See the NYC loft newlyweds Adam Levine & Behati Prinsloo hope to call home
    5. Abercrombie dropping logo to boost brand

“Once you have actually built something, once you have a successful venture that is creating value and creating jobs,” he says, “there is so much more to lose.” But, he adds, to grow you have to be willing to think critically about your assumptions and existing systems.

Fair Trade USA is a non-profit, third-party certifier of sustainably produced goods, often coffee, tea, and chocolate, in the U.S, branding 95% of fair trade products sourced directly from farmers in countries across Latin America, Central America, Africa, and Asia. The Oakland, Calif.-based organization works with about 800 companies. Last year, U.S. sales of Fair Trade certified goods reached $1.5 billion. Fair Trade has entered agreements with such companies as Whole Foods, Dunkin’ Donuts, Green Mountain Coffee, Sam’s Club and Starbucks. 

Related: Green Power: A Low-Cost Boost to Your Brand and Bottom Line

By cutting out the middlemen, farmers get more of the profits directly. Also, fair trade companies pay an additional premium fee that goes into a separate bank account for social and environmental programs, such as build schools, roads, hospitals, or other local infrastructure. The certification is good for companies here because consumers are willing to pay more for ethically sourced goods.

The program's success has led to growing pains. Traditionally, the fair-trade movement has connected cooperatively-owned farms -- where independent farmers collectively own small plots of land -- directly with manufacturers and distributors. But now Rice is seeking to make the same opportunities available to farmers outside co-ops.

In part, the move is to expand sustainable supply as demand for fair-trade goods increases. Also, Rice wants to extend the program to farmers already working with larger brands. Rice launched a pilot program to source from larger plantations and estates, not just small co-op farmers. The move has proven controversial. Critics say that the competition from the larger estates that small co-op farmers will have to face will make it hard for them to survive.

Related: Starbucks Is Into Them. But What Exactly Are CDFIs?

Changing the model is a risk. Not only is Rice dealing with pushback from the fair-trade community, but his organization is responsible for the livelihoods of 60 employees, in addition to farmers across the globe that depend on his organization’s services.

“It is very much like the start-up phase. There is kind of a leap of faith involved in reinventing your business, and if you don’t have total conviction to that new vision and total commitment to that new vision, there is no way to prevail in the face of all the obstacles,” says Rice.

The first products to be awarded the “Fair Trade” brand that are produced from a larger farming estate will be hitting the shelves of Whole Foods sometime in June. Because of the increased revenue flow, some of the elderly farmers on the Brazilian coffee estate were able to get the glasses they need to be able to see clearly, according to Rice.

It's been key to communicate his message effectively to those involved in and dependent on his organization. Rice says he has had to “go a little slower” to be sure to keep his stakeholders involved in his move. “That is really hard for me," he says. 

Related: Entrepreneurs: 'One Percenters'?

This article originally posted on Entrepreneur.com

Copyright © 2013 Entrepreneur.com, Inc.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

More on TODAY.com

  1. Rachelle Friedman Chapman

    'What I always wanted': 'Paralyzed bride' expecting first child through surrogate

    8/28/2014 6:08:47 PM +00:00 2014-08-28T18:08:47
  1. 9 things this family learned by giving up junk food

    8/28/2014 8:03:26 PM +00:00 2014-08-28T20:03:26
  1. President Obama on ISIS: ‘We Don’t Have a Strategy Yet’

    President Barack Obama on Thursday pumped the brakes on the prospects of U.S. airstrikes against Islamic militants in Syria, saying “we don't have a strategy yet” to deal with the growing threat to the Middle East.

    8/28/2014 9:10:40 PM +00:00 2014-08-28T21:10:40
  1. Cindy Ord / Getty Images file

    Joan Rivers in stable condition after she stopped breathing during surgery 

    8/28/2014 3:45:04 PM +00:00 2014-08-28T15:45:04
  1. Jason Merritt / Getty Images

    Before Brangelina: 7 other celeb couples who secretly tied the knot

    8/28/2014 7:04:52 PM +00:00 2014-08-28T19:04:52
  1. Shanee Gibson Hart/Facebook

    Little boy wins our hearts with response to mom’s baby news: ‘This is exasperating!’

    8/28/2014 2:25:46 PM +00:00 2014-08-28T14:25:46