James Corrigan
Case Western Reserve University - Weatherhead School of Management
Chris Laszlo
Keep this story going! Share below!
It is widely estimated that more than 2.25 billion cups of coffee are consumed in the world EVERY DAY. That incredible number makes coffee the second most valuable commodity export in the world, only behind crude oil.
Yet, the 25 million small producers that rely on coffee for a living only see a fraction of that value and are handcuffed by a volatile global coffee market.
But over the past few decades, the desire for specialty coffee has taken root and is transforming the market. Once considered solely a commodity—an economic good where demand has no qualitative differentiation across a market—the “third wave” of coffee has created a specialty market where variety, quality, transparency and traceability is highly valued.
This trend in the market is better for farmers as fair trade certifications have been established, ensuring farmers more money for their crop, but Café Nor—an economically viable, and socially and environmentally sustainable coffee company out of Matagalpa, Nicaragua—is working to do much more.
Café Nor focuses on giving technical assistance for improvement of production output, sustainable farming and certification in order to improve the socio-economic and environmental sustainability of the participating farmers and their communities.
These efforts not only give farmers above fair trade prices for their goods, but also the opportunity to learn the broader scope of the international business and give opportunities for Nicaraguans to develop their owns businesses with access to micro-financing in an industry mostly owned by Europeans.
Owner and Danish national Frederick Zeuthen launched Café Nor in 2013, with a progressive business model—especially for an aged industry steeped in traditional ideas. His business model aims to be economically sustainable at all aspects of the value chain.
“We provide decent payment for quality coffee and build long-lasting relationships which creates sustainability through time,” Zeuthen said. “We mix that with making growers more aware of how their product [coffee] can be made more valuable, while also taking environmental effects into account." Zeuthen partners with several Non-Governmental Organizations (NGOs), such as Technoserve, Fundesar and Ecami, to help execute aspects of educating farmers and providing micro-financing, while he focuses on the core coffee business.
He personally educates farmers on coffee production and processing, and has created collection centers across the mountainside dramatically improving accessibility for small farmers to deliver their crop to Café Nor for payment. After further processing the coffee, Café Nor exports from Nicaragua and imports into other countries such as Denmark, the United States of America and Australia, where it sells directly to roasters. This practice cuts coffee traders and wholesalers out of the value chain, creating more profit for Café Nor, allowing the company to pay their farmers more than “fair trade” wages. The agricultural education and access to micro-financing allow farmers to raise better yielding plants, and higher quality and more valuable beans which earns more profit for both parties.
The Café Nor business plan created by Zeuthen is the culmination of years of experience both in Denmark and Central America.
“Both of my parents, and especially my mother, have always been socially invested, so ever since I was young I’ve wanted to do something that helps other people,” Zeuthen said. “I also like to do things that are not so easy.”
After becoming disillusioned working with the Denmark Ministry of Foreign Affairs, Zeuthen took a position with Xoco: Fine Cocoa Company, a Central American cocoa exporter. There, he worked to micro-finance small farmers and learned the ins-and outs of the agricultural industry in Central America. He built relationships with many of the NGOs he currently partners with and saw how practices would be improved upon.He took his experience and the strengths of his now former employer and combined them to create Café Nor. The three-year old company is a culmination of many proven strategies that work together to form a sustainable and profitable business.
In only three years, Café Nor’s impact is already being felt in the large coffee-growing regions of Matagalpa and Jinotega in Nicaragua. Last season, the company purchased, processed and exported coffee from 200 small- and medium-sized growers and reached out to approximately 800 farmers and their families.
“The most important thing we do is to teach farmers about coffee; what it is and how it should be harvested. It’s not just a commodity production.” Zeuthen said. “We maintain good relationships,bring increased awareness of what quality coffee really is and bring more money to the table—changing the economy for whole families of farmers.”
Technoserve, a partner NGO offering agricultural assistance, has been consistently offering 18 month seminars containing crop diversification and trials with different fertilizers and seeds. This invaluable assistance affords farmers to get more out of their land in the short-term and long-term.
In a short time, coffee quality has already increased with wages that follow. “In the first year, quality was way lower than this past year and surely we’ll see improvements,” Zeuthen said. “We’ve opened up to a new area of farmers that we’ve just started working with and this year they sold us a [shipping] container of coffee between them.”
Café Nor has built a strong reputation for it’s willingness to work with any coffee farmers who want assistance, but these farmers are not forced to commit to anything or sell their coffee to Café Nor. It’s this trusting relationship and connection between Café Nor and it’s farmers that make the sustainable, reinforcing loop work so well.
By building strong connections with farmers and families who have generations of coffee-growing knowledge, Café Nor has been able to turn a profit in its third year. They’ve leveraged their resources and business experience with experienced and hard-working farmers to begin to create a flourishing business and region.
“What has worked for us has been searching around for good suppliers that recognize an inherent value of their own product, but also recognize that inherent value is not infinite,” Zeuthen said. “These are good farmers that have experience producing with booms and busts in the market and know what to reasonably expect for their product.”
Working so closely with farmers allows Zeuthen to monitor production techniques and quality, and also allows him to clearly communicate the kind of coffee he is specifically looking for for his clients abroad.
Zeuthen is the go-between for the grower and roaster; transparency that is now sought after in the coffee market. Unlike 20 years ago, roasters and coffee consumers now are interested to know exactly where their coffee came from and the people who produced it—details Zeuthen can easily share with his growing list of clients.
“It’s like a ‘mom and pop’ shop; business where you buy something and the person you’re buying it from knows farm and farmers,” Zeuthen said. “Roasters like that because it shows solidity of product and feeling that they can get what they’re paying for and it isn’t just some replaceable commodity.”
Not only is Zeuthen offering a quality, transparent and traceable product, but he’s creating value for Café Nor in the value chain by cutting out profit-takers along the way. His expansive business expertise is invaluable in that it allows him to control the coffee from the time it is picked to the time is arrives overseas at the client’s (the roasters) warehouse. This keeps quality high and profits higher, as traders and wholesalers are not needed to export, import and sell.
This business model seems simple, but is difficult to pull off with the expertise that is needed in each step along the value chain. Zeuthen’s willingness to build a foundation, put in the groundwork and connect with farmers and roasters along the way makes it sustainable and potentially highly profitable.
Not only does Zeuthen do good business for his company, but he’s doing good business for people and the environment as well. It’s been clearly illustrated how his business model benefits the local economy as farmers make more money and learn better business practices for their farms. But it’s helping improve the natural beauty of the mountainous region, too.
He partners with certification programs that provide reforestation assistance and Technoserve works with farmers to improve crop rotation practices, improving both income and soil health.
As previously stated, Café Nor also has created collection houses throughout the mountains so farmers no longer have to haul truckloads of coffee long distances to the dry mill. This saves them time and fuel costs, while also improving carbon footprints. It’s estimated that this practice has decreased exhaust by 50 percent in the first three years of the company’s existence.
When asked about where he sees the company in 2026, Zeuthen shared a large-scale societal benefit he hopes to see—a vision that shouldn’t seem so improbable.
“Ultimately, it would be great to see the world of specialty coffee in Nicaragua mainly run by Nicaraguans,” he said. “It’s why I believe in sharing information and tricks-of-the-trade. It’s not about me being a genius; it’s just about people not having access to information. And people don’t have access to this information because of a lack of financing and resources to break into the international market.”
Get stories of positive business innovations from around the world delivered right to your inbox.
Frederick Zeuthen, Owner
