The nonprofit lender Root Capital and publicly traded coffee and beverage giant Keurig Dr Pepper today announced a partnership to support small-scale agricultural coffee businesses that have been negatively affected by the COVID-19 pandemic.
The three-year program, called the Partnership for Sustainable Supply Chains, involves a $35 million loan guarantee from the U.S. International Development Finance Corporation (DFC). The DFC, which was formally established in 2019 through the bipartisan BUILD Act, is designed to facilitate financing for U.S. businesses in emerging markets overseas.
Root Capital said the DFC loan guarantee will improve its lending capacity in the three-year Keurig Dr. Pepper supply chain resiliency project, which is designed to affect some 150,000 farmers in 12 countries throughout Africa, Latin America and Indonesia.
“With the onset of COVID-19, the ability of small and growing businesses in the agriculture sector to provide critical employment, continued income generation, protection of vulnerable ecosystems and essential services to rural communities has never been more vital,” Root Capital Founder and CEO Willy Foote said in an announcement put out by Keurig Dr Pepper today. “From Peru to the Democratic Republic of Congo, these enterprises are under enormous strain. Yet, with support, they have met the challenge head-on — not only maintaining their business operations, but also protecting both the lives and livelihoods of their farmers and employees.”
Publicly traded Keurig Dr Pepper generated more than $11 billion in revenue last year, and the company recently reported strong Q3 financial results, with a net sales increase of 5.3% over the same period last year. The company has told shareholders that home coffee systems (K-cup machine) sales and packaged coffee sales have been strengthened during the pandemic period.
Building upon a previous development partnership between Root Capital and Keurig Dr Pepper called the Partnership for Sustainable Coffee, the new Partnership for Sustainable Supply Chains will incorporate Root Capital’s advisory services for smallholder farmers, and it will involve small grants responding to cash flow restraints and emergency needs. The organizations said the project will also involve flexible credit, interest rate relief and debt forgiveness for the most at-risk agricultural businesses.
The project is also being supported by the US Agency for International Development (USAID) and the Africa-focused funding foundation, the Ezrah Charitable Trust, based in North Carolina.
Said Keurig Dr Pepper Chief Sustainability Officer Monique Oxender, “By leveraging our longstanding partnership with Root Capital, we were able to quickly pivot to support those in our supply chain most vulnerable to the threats of COVID-19 and ongoing challenges such as climate change and food insecurity.”