SoloCoco: Utilizing Fair Trade to Create Economic and Social Value
Following the 2016 Lewis Institute Changemaker Award reception, I had the chance to sit down with our Alumni award winner Daniel Dalet ‘03. I was interested in learning more about Daniel’s path: from Babson to the hedge fund industry to co-founding a business in the socio-economic space. Daniel co-founded SoloCoco, a value-added production company, with his cousin Abel Gonzalez four years ago. Below is a recap of my conversation with Daniel last spring:
Emily – What inspired you to start SoloCoco?
Daniel – I come from the Dominican Republic and the main issues in our country are definitely socio-economic development issues, particularly, upward social mobility. Progression from being an average citizen to something on the higher end of the social spectrum is almost impossible. We wanted to make a difference, and that is why our company is a value-added production company. This is atypical for the Dominican Republic because very few companies add value. The pristine resources of cacao, coconuts, plantains, and bananas that are available enables power brokers to export these as raw materials. But this is not really creating economic development because this is essentially a zero sum game. So I started this four years ago coming from the hedge fund industry, which is the complete opposite.
Emily – Wow! From where you are now, that’s a little different.
Daniel – Yes and it was my experience in the hedge fund industry that directed me towards a more socio-economic, development-oriented business plan because I did not like the zero sum game. So then we looked at this product, virgin coconut oil, by accident.
Emily – What do you mean that you identified this opportunity by accident?
Daniel – Well, I have an uncle who is a doctor who never believes in any natural remedy. But, at dinner one night, he started talking to me about coconut oil. He said that he read in one of his medical journals that “virgin coconut oil is one of the best things for your biology. The best oils, best fats to consume for your biology.” I was shocked because he never recommends anything. Then a light bulb went off. I connected the dots that I’m surrounded by coconuts. Another accident was the way we got into our social development initiative for single moms.
We decided to hire unskilled workers and when we opened the factory doors we got a line of about 250 people – mostly women – who wanted the job. At least three of every four women shared the same story, “I didn’t graduate. My husband left me. I live in abject poverty. I don’t know how to do anything, but I need your work. My kids need to eat. I need to be able to pay for uniforms and textbooks so they can go to school.” From that day forward I decided to only hire single moms. It grew from there. For instance, we were Fair Trade certified by the Fair Trade Sustainability Alliance, but most people don’t understand what this really means.
Emily – My understanding of Fair Trade is that it’s a brand.
Daniel – It means that a portion each product sold is deposited into a social development fund. These funds are designed by the workers, who participant in the value-added chain. They say, “Well, we want a new school,” or “We want to be able to pay for housing,” or “We want medicine.” Then a decision is made by a board representing the workers and a member of management team.
Emily – So, what has SoloCoco’s social development fund been focused on?
Daniel – Step one was making sure if you or your kids are sick, you’re going to get the treatment. Without health, education does no good. Step two is school supplies. The vast majority of our population lives at or below the poverty line. Kids are held back because they don’t have the right shoes or textbook. This is a setback for alleviating the poverty problem. Kids need to be educated to create progress. This could help reduce the criminal rate and give the country the chance it needs to become a civilized and developed cooperative society.
Emily – I’m intrigued and want to hear more about the way you look at the bigger ecosystem.
Daniel – I ask myself questions like how do we really make this better? Creating jobs and opportunities for single moms is only a start. Eventually, we want to provide an English classroom that will help 18 year-olds access more possibilities like teaching English or getting better paying, honest work from a tourist center. These are lasting impacts. I want people to see a jar of SoloCoco, and say, “These people are doing something different.”
Emily – Do you have any push back as to how you’re doing work?
Daniel – Other business people look at me and say, “This will never work,” but it’s working and we have very low employee turnover. We’ve got 60 single moms working for us, and I think we’ve lost 3 or 4. I’m very proud. We still focus on production and workers learn a craft. It’s just, in my mind, a better form of capitalism.
Emily – I understand that you do a lot of work with current Babson students. What do you share with these millennials that maybe you had hoped someone shared with you 13 years ago?
Daniel – I wish that I had been able to speak to a Babson entrepreneur when I was a student, because that would have given me a lot of perspective. 13 years ago doesn’t sound like a long time for me, but it turns out that in maturity and development, it’s a lifetime. I have immense support from the faculty at Babson. They’ve grown to be my personal friends, and it is something I am so grateful for. I don’t know if this is typical in the college, but I hope so because it is a unique experience. I think that is one of the greatest things Babson has. If you give the faculty a chance as a student they will really get involved in your life for the better. There’s always some exceptions, but my experience was amazingly positive.
Emily – What we really do here at The Lewis Institute is work to cultivate the whole person. You certainly need to know your functional competencies like how to read a balance sheet, how to market your product, etc. But what we talk a lot about here is, “Who do you need to be to go out and create change in the world?”
Daniel – I think that the faculty represents that very, very well. Every year we participate in the family business classes in the entrepreneurship department. So they assign four or five undergrads to be SoloCoco interns, basically remote interns for us. Every year I say, “These kids couldn’t possibly get more productive and smarter.” And each year, they do! We have beautiful market studies done by Babson students. I still get emails and online orders from these students that tried SoloCoco when they were doing their project and they fall in love with it. They ask, “Where can I buy a bucket of this stuff?” That’s my experience with Babson. Babson for life here.