You never know exactly where a bit of traveling might ultimately take you in the grand scheme of your life.
Just ask Crawford Hawkins. In January 2019, near the end of a long weekend visit to a UVA friend in Colombia, he found himself trekking to a coffee farm in the town of Jardín. That experience—and its effect on him—extended far beyond what might otherwise have resulted from a few hours of agritourism.
Upon coming home to New York, Hawkins, an experienced portfolio manager, met with investors about potentially starting a new fund. But something unexpected happened.
“I spent three hours talking about opportunities in the coffee market instead of the long-short equity hedge fund strategy that I had managed,” he recalls. “It was at that moment that I realized something in me had changed.”
The change was real, and it involved the focus of his passion: He had a newfound desire to make a substantial positive social impact on the coffee market by helping those who grow and harvest it.
Hawkins returned to Colombia, deciding to live on a coffee farm while performing extensive due diligence in advance of launching his next planned venture. A rather extreme change of lifestyle, but one required for tackling such an exceptionally pervasive problem.
Describing his motivations to get involved, Hawkins explains that the global coffee market is rife with inequalities—dangerous ones. The inefficiencies of its trade generate economic imbalances that endanger peace, cause instability, force migration, threaten the environment, and diminish prospects for sustainability.
For these reasons, he was compelled to do his part to solve a global coffee crisis that threatens the livelihood of millions. Those who depend on a good crop yield barely catch a whiff of what amounts to a splurge of spending on the espressos, lattes, and other coffee drinks the world demands every day. Despite a $200 billion global market, income within the income-producing countries accounts for only 5%, and the prices for it have plummeted, with 2019 commodity coffee prices below the cost of production for the longest stretch since the Global Financial Crisis.
“In Colombia, there are over 540,000 coffee farms, the majority of which are owned and managed by smallholder farmers on less than three acres of land,” Hawkins says. “More than 2 million people in Colombia rely on the coffee crop for their daily needs.”
How to address the issue? Hawkins’ social entrepreneurial spirit led to the creation of his own company, Grupo Crawford, and more specifically, propina. The app, which means “tip” in Spanish, is just that—a tipping and traceability platform, allowing coffee drinkers to immediately and directly send money to coffee farmers in any producing country. By offering direct, transparent, and traceable destinations via blockchain for those funds as crop insurance or savings accounts, the company works with all stakeholders on the value chain to address two major issues facing the coffee market: economic viability of smallholder coffee farmers and the effects of climate change.
He believes that consumers crave a deeper connection to the producers, and propina is facilitating beneficial relationships that didn’t previously exist.
We spoke to Hawkins more about the app, the responsibilities he shoulders in combating such an extensive problem, and how his McIntire education prepared him for such a daunting and important challenge.
The propina app helps coffee farmers and workers by collecting funds that go toward crop insurance. Why do you believe the endeavor will be successful, and how do you see it changing the global coffee market in the long term?
We identify three subsets of end users on the platform, (1) producers, (2) consumers and (3) roasters, or supply chain businesses. The consumer-facing app in store brings a low-cost, effective medium for all on the value chain to provide a fair compensation to farmers, saving time and money for each partner business. We leverage the consumer’s growing willingness to pay and participate in the supply chain. Over 500 billion cups of coffee are consumed each year around the globe. Sixty-three percent of Americans drink coffee daily. I would bet UVA students are clocking in at an even higher rate!
According to the Fairtrade Foundation, more than 80% of the world’s coffee is produced by 25 million smallholder farmers who depend exclusively on the coffee crop for their livelihood. One container of coffee from Colombia can hold the work of more than two dozen families. In the fragmented coffee markets of East Africa, one container of coffee can hold the work of up to 1,000 families. Our platform also transcends coffee and can be implemented in other products, like avocado or cacao, around the world. The multiplier effect embedded in our digital platform provides enormous scalability, especially considering the scale and universality of parametric insurance.
The tip is traceable and transparent, so consumers can be confident that their money is supporting the family that produced their coffee. We will continue to push engaging content to consumers, showing them the ongoing impact of their purchase and contribution to the families.
Our mission is to provide economic viability and climate protection to the smallholder coffee farmers around the world in the midst of coffee price and climate change crises. Propina brings financial innovation and technology to underserved and vulnerable smallholder farmers in Africa and Latin America.
How did you find the right people to join you in your effort to advance the mission of Grupo Crawford and the propina app?
My Chief Financial Officer, Viviana Salazar, attended Columbia Business School with me five years ago. She is originally from Bogota, Colombia, and used to run Debt Capital Markets for the large Spanish bank BBVA in Colombia. I am lucky to have her passion, organization, and management skills to keep me grounded!
Our Chief Operating Officer, Gabriel Chait, ran sustainability at the large roaster Stumptown Coffee, bringing an expertise in coffee, supply chain, and sustainability to the team. He just finished advising one of the largest coffee traders in the world, Sucafina, on a major blockchain and sustainability venture. I met Gabriel through a mutual friend who started the well-established Colombian coffee company, Azahar Coffee.
Our CTO, Amit Kurani, spent more than six years managing a large team at $38 billion hedge fund Elliott Management, where we both worked together for many years.
Our senior adviser and a board member, Valentin Sierra, is the first in his family in Colombia to graduate from college. I met him through a documentary film producer I know while he was completing a master’s degree at the Harvard Kennedy School. He has a promising political career that I think could take him to the highest office in Colombia.
Passion, dedication, networking, and most importantly, luck can bring unexpected and lasting connections as you start a new venture.
What are your day-to-day responsibilities? And what aspect of launching your startup have you found to be the most challenging thus far? What do you enjoy most about it?
My day-to-day is absolutely unpredictable and riveting. Three weeks ago, I was having coffee with a group of ex-FARC (the Colombian guerrilla force) members in Cauca, Colombia, who are learning the coffee trade to rejoin society after the peace treaty in 2016. The past two weeks have been spent meeting with owners of coffee roasters in the States, including senior management at Nespresso and Starbucks, as we set the stage for in-store launches and partnerships. We have a team spread across the United States and Colombia, with a technology team in India. Today, I spent the afternoon at a coffee cupping in Brooklyn, NY, with a partner roaster, sampling coffees from East Africa and South America. I am learning something new every single day!
As a McIntire student, you were undoubtedly well prepared for your previous career managing hedge funds, but how did the Comm School develop your skill set for an entrepreneurial, social impact venture? What do you continue to draw on from your time at McIntire as you advance your philanthropy startup?
Although I focused on finance during my time at McIntire, the School challenges you to learn, think outside of the box, and master different disciplines. I had to work on diverse teams and seamlessly adopt different roles. One of the most important skills that McIntire directly helped me develop is the ability to identify the needs of a project and build a team.
My due diligence involved everything from building rapport with the head of the third largest coffee broker in the world and the former Finance Minister of Colombia. However, the most impactful part of my due diligence was actually living on a farm, picking coffee and meeting smallholder farmers. At the end of the process, I knew exactly the kind of person I needed for each role in the new venture. I understood my own weaknesses with more clarity and humility. I had a more profound understanding of our mission and formed an actionable plan. I still have work to do and additional capital to raise, but the team I have been able to assemble is extraordinary and able to execute. McIntire prepared me to bring together people with diverse backgrounds to solve complex problems.
The School is intent on showing the wealth of potential for its student through the idea of using “commerce as a catalyst for change.” Your startup certainly embodies this ethos. What do you hope your efforts can inspire in current McIntire and UVA students? What can they learn from you?
Original and disruptive ideas come from outside of industry. Sometimes you have to leave everything, go off the grid, and live in the jungle to discover a new passion. Well, not everyone can have such a “luxury,” but I truly believe that this kind of thinking is necessary to unlock creative solutions to the world’s most pernicious problems. I responded to serious and unexpected life events by channeling my energy and passion. Had I stayed in my lane, I would never have discovered the inequity and inefficiencies in the coffee market. There are more chapters to be written, but for the first time in my career, I feel like I am in control of the narrative.