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At harvest time in Nicaragua, trees are usually laden with coffee cherries at farms across the country, waiting to be picked. But these days, most of the coffee falls to the ground, wasted.
Coffee farmers have been hit so hard by low market prices in the past three years that it is no longer worth their while to harvest the crop. This, combined with political turmoil, means many coffee buyers are staying away.
“You just see coffee falling off the trees,” says Molly Laverty, director of sustainability at Farmer Brothers, a Texas-based coffee company supplied by these farmers. “The market price is so low that they can’t afford to hire seasonal workers to pick it.”
The uncertainty farmers face each year is mostly driven by changing weather patterns and the volatility of the coffee market. Ms Laverty is working to address this, using the business skills she learnt in her online MBA degree to improve the sustainability of the coffee supply chain and build a stronger partnership between her company and the coffee growers.
“Through direct sourcing we can have longstanding buying arrangements with groups of farmers, and commit to a full year of production — letting them know how much we will need, what price we will pay, often with a premium on top of the regular rate, direct to the farmer, to incentivise selling,” she says. The goal is to ensure the company has a reliable supply and that the farmers continue growing coffee.
Having built up expertise in different supply chain and sustainability roles at Farmer Brothers, Ms Laverty realised that an MBA would enable her to “get a grasp on the financial and supply chain concepts that drive our business, and help me perform my job better”. In 2018 she enrolled in the online MBA at the University of North Carolina’s Kenan-Flagler Business School.
In January, a month after completing the two-year online course, Ms Laverty took on additional responsibility for the company’s commodities hedging function. She now speaks directly with customers about the risks involved with the coffee market and hedges on their behalf, confident that she has gained the technical expertise and financial tools to back her knowledge of the market.
“I would not have been able to have those types of conversations with our financial partners about the details — how the hedging will work, how we track it, how it gets charged — without the MBA,” she says.
Now aged 32, she joined Farmer Brothers in 2009 straight out of university, initially as a Spanish translator to help the company set up programmes with coffee farmers.
“It was a fun entrance into the coffee world,” says Ms Laverty, whose undergraduate degree was in Spanish literature and anthropology.
Travelling to coffee farms, from central and south America to Africa and Indonesia, sparked an interest in sustainability. “I started seeing the real impact of environmental sustainability on coffee growing conditions and the volatility of the coffee market on a farming family’s ability to predict what their income will be.”
Finding an MBA course with a focus on sustainable business seemed a logical step. She already knew she wanted to keep working full-time while studying, rather than taking two years out, and Kenan-Flagler’s course was the only one she came across that covered sustainable enterprises. “That really sealed it for me,” she recalls.
“I liked that I could get the same degree as if I were on campus; it wasn’t a special online degree, but just their regular MBA.”
The finance, accounting and business modelling courses proved most valuable, though Ms Laverty had been nervous beforehand about taking these subjects. “What I do day-to-day is very open-ended and strategic, there’s no right or wrong — so sitting and working through a problem in a finance class was an interesting mental exercise for me.”
Getting to grips with business terminology — such as “how ebitda is calculated, or what discount rate we’re using when we are making long-term capital decisions” — has already proved useful in her work.
“It has made me understand our business so much better,” she says. “It has shown me how to approach the investments I want to make, and given me the financial acumen to make my case to senior leadership and the board.”
Ms Laverty initially worried that it would be harder to build strong connections with her classmates on an online programme than on a campus course, but this was not the case. “The community at UNC feels really close, because we are all making more of an effort — we’re not seeing each other every day.”
Students in the online cohort had lectures to watch and assignments to complete each week, logging into live classes via video. LinkedIn and Facebook groups helped Ms Laverty to get to know her classmates, but the programme also required at least two in-person meetups. One of these took place in Helsinki and Tallinn, giving the students insights into Baltic business culture.
Ms Laverty says the course involved “a real lifestyle adjustment”, with five to six hours per week of lectures and other work, plus two to three hours of live classes, all to be fitted in after work or during the weekend.
Meanwhile she bought a house with her partner and became stepmother to two girls. Other students faced similar challenges. “We had breastfeeding mothers, babies waking up during the night,” she says. “All the professors understood that life was happening around the demands of the course.”
Ms Laverty says the MBA has added an extra layer of credibility to her skills and experience. It has already opened up opportunities to expand into strategy, the supply chain and operations, but sustainability will remain at the heart of her work.
“It’s a personal passion of mine, and it’s becoming more and more relevant in the business environment,” she says.
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