At This Coffee Startup, Farmers Share Profits From Roasting

Paso Paso, a company jointly owned with coffee farmers in Africa and Central America, was founded by Bram de Hoog in September last year. The company aims to provide value to producers by allowing them to profit from roasting, which is where the real money is found. De Hoog, who also runs a small coffee farm in Costa Rica, set up a Hanover-based roastery owned by producers in Ethiopia, Costa Rica, Nicaragua, and El Salvador. They sell their produce to the LLC, allowing them to share in those profits.

The farmers are involved in strategy, marketing, and other decisions, attending monthly meetings held remotely at which de Hoog updates their financials and discusses other issues. The venture took six months to establish the structure, working with a notary public in Germany and Chat GPT. There are now nine growers and five farms, with shares based on how much they have invested in the venture.

De Hoog approached potential farmer-partners first by approaching a grower in Nicaragua he had known for many years. He also developed relationships with hundreds of coffee farmers, many of whom were good friends. The 10 or so farms he approached were all interested, although some couldn’t participate for various reasons. Since then, many more have expressed interest in signing on, but the venture’s complicated structure makes it difficult to accept more people for now.

Hester and Dawit Syoum, owners of Farm Bette Buna, a small farm in southern Ethiopia, have provided valuable feedback through Paso Paso, helping them add value to their coffee and providing training in processing techniques and equipment. They are also trying to create a rural entrepreneurial ecosystem to develop the local economy by educating small farmers and providing equipment.

De Hoog’s expansion plans include expanding to the Netherlands, Czechia, Denmark, Malta, Spain, and the U.K. He has started turning his attention to other areas likely to help him expand, such as increasing the efficiency of the company’s operations, building a circular system, and building connections with clients. Once the company has expanded, de Hoog might need to change its structure to incorporate more people.

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