Cause Study
rP os t
HKU933
MARTA DOWEJKO
GILBERT WONG
op yo THE LAO COFFEE INDUSTRY: IMPLEMENTING
VERTICAL INTEGRATION FOR A SOCIAL
CAUSE AT BOLAVEN FARMS
Their hope is our joy.
-Bolaven Farms about its resident farmers
tC
Founded in early 2007 by Sam Say, a Lao refugee who lived in Canada and Hong Kong,
Bolaven Farms was a coffee business with a social purpose. With an office in Hong Kong and a farming facility in Laos, the venture’s mission was to provide high-quality coffee to the worldwide public while helping to alleviate poverty among coffee farmers. To achieve this lofty goal, Say developed a business model that involved a full integration of the coffee supply chain, from planting the coffee seed to selling the final branded product to wholesale and retail customers. The model hinged on Say’s ability to raise Lao coffee production to international standards, both in its quality and quantity. Once a stable supply of coffee was achieved, Say had to find customers who were willing to pay a premium price for the coffee he produced.
No
To achieve this, Bolaven Farms trained its own cohort of local farmers in modern production techniques on its farm. The original idea was to provide farmers who graduated from the programme with a US$5,000 loan so they could set up their own farms and start supplying high-quality coffee to Say’s venture. However, it quickly became apparent that the farmers lacked the necessary skills to properly invest their loans.
Do
On the other side of the supply chain, Bolaven Farms began to test the market while its own farmers were setting up for production. Say obtained high-quality coffee from a local cooperative run by a French non-governmental organization (“NGO”) and distributed it through his own channels. However, he had a hard time finding customers who were willing to pay a premium price for his coffee in the mature and highly competitive coffee market.
Marta Dowejko prepared this case
HKU933
MARTA DOWEJKO
GILBERT WONG
op yo THE LAO COFFEE INDUSTRY: IMPLEMENTING
VERTICAL INTEGRATION FOR A SOCIAL
CAUSE AT BOLAVEN FARMS
Their hope is our joy.
-Bolaven Farms about its resident farmers
tC
Founded in early 2007 by Sam Say, a Lao refugee who lived in Canada and Hong Kong,
Bolaven Farms was a coffee business with a social purpose. With an office in Hong Kong and a farming facility in Laos, the venture’s mission was to provide high-quality coffee to the worldwide public while helping to alleviate poverty among coffee farmers. To achieve this lofty goal, Say developed a business model that involved a full integration of the coffee supply chain, from planting the coffee seed to selling the final branded product to wholesale and retail customers. The model hinged on Say’s ability to raise Lao coffee production to international standards, both in its quality and quantity. Once a stable supply of coffee was achieved, Say had to find customers who were willing to pay a premium price for the coffee he produced.
No
To achieve this, Bolaven Farms trained its own cohort of local farmers in modern production techniques on its farm. The original idea was to provide farmers who graduated from the programme with a US$5,000 loan so they could set up their own farms and start supplying high-quality coffee to Say’s venture. However, it quickly became apparent that the farmers lacked the necessary skills to properly invest their loans.
Do
On the other side of the supply chain, Bolaven Farms began to test the market while its own farmers were setting up for production. Say obtained high-quality coffee from a local cooperative run by a French non-governmental organization (“NGO”) and distributed it through his own channels. However, he had a hard time finding customers who were willing to pay a premium price for his coffee in the mature and highly competitive coffee market.
Marta Dowejko prepared this case