The Doi Tung Development Project, one of the four flagship projects of the Mae Fah Luang Foundation, is ramping up its exports, especially for coffee, seeking to reduce its business risks and provide local coffee farmers with sustainable income and better quality of living in the long run.
A hill tribe woman picks coffee beans at a plantation in Chiang Rai province.
According to ML Dispanadda Diskul, chief executive of Mae Fah Luang Foundation, Doi Tung coffee is now famous not only for its rich flavour and aroma but also its long history.
The Mae Fah Luang Foundation was founded in 1972 by the late Princess Srinagarindra, the Princess Mother of the late King Bhumibol Adulyadej, as the Thai Hill Crafts Foundation under the Royal Patronage of Her Royal Highness.
Following visits to remote areas of the country, the Princess Mother discovered that ethnic minorities in northern Thailand were disenfranchised -- poor, lacking citizenship and the right to live on the land they farmed. They were often preyed upon by opportunists and caught in a vicious cycle of sickness, poverty, and ignorance.
The Princess Mother was aware of their skilled craftsmanship and wanted to help market their work to supplement their income. Her initiative was successful, with northern handicrafts becoming popular at home and abroad.
In 1979, the Thai Hill Crafts Foundation initiated an eight-month training course for hill tribe youth at Rai Mae Fah Luang (today known as the Mae Fah Luang Art and Culture Park), instilling the skills and discipline necessary for daily living such as the literacy, basic mathematics, health education, honesty and independence.
This training then expanded into the Hill Tribe Youth Leadership scheme in collaboration with the United States Agency for International Development.
In 1985, as the Thai Hill Crafts Foundation began to incorporate rural development into its activities, the Princess Mother granted permission for the foundation to be renamed the Mae Fah Luang Foundation under the Royal Patronage of Her Royal Highness the Princess Mother.
It was not until 1988 that the Mae Fah Luang Foundation undertook a comprehensive development project in the Doi Tung area to tackle opium cultivation at its root cause -- poverty and lack of opportunity.
The foundation was also designed to increase local employment by helping farmers grow coffee beans and macadamia nuts instead of opium, improving and stabilising the local standards of living.
Coffee beans from Doi Tung are known for their high quality, while the Doi Tung coffee shop chain was rolled out to help distribute coffee to Thais.
This project has become a recognised model for sustainable alternative livelihood development in Thailand, Myanmar, Afghanistan and Indonesia.
The Doi Tung project now runs four businesses covering food, crafts, agriculture and tourism, employing 1,700 people including younger workers who are highly educated in international languages and computer skills. They hail from 29 villages of six ethnic minorities: Akha, Lahu, Thai Lue, Lawa, Shan and Chinese descendants of the Kuomintang 3rd Army.
The project, which generates 400-500 million baht in revenue a year, has been self-reliant since 2000. It runs two coffee shops in Japan and supplies coffee products to Japanese retailer Muji. In 2011, it started supplying woven products to Swedish furniture giant Ikea.
Villagers have also gained experience in developing standards from Ikea, which worked with the project for nine years before becoming a partner.
"We're now putting more focus on coffee quality development from farm to harvest to increase coffee yield," said ML Dispanadda. "We keep seeking new coffee varieties to develop new and outstanding tastes. The foundation also collaborates with coffee experts from Japan, Guatemala and Panama, who have been offering advice on coffee plantation and processing practices."
Doi Tung is capable of producing up to 250 tonnes of green bean coffee from over 800 coffee-growing households. To accommodate future expansion, the organisation will not increase the coffee planting area but will provide new techniques to improve productivity per tree for Doi Tung's coffee growers.
Presently, Doi Tung sells about 30-50 tonnes of coffee to Japan every year, mainly to the University of Tokyo Communication Center, and Cafe and Meal Muji.
"It is exciting for a local brand like Doi Tung to be sold at stores that are very selective,'' said ML Dispanadda.
He said global coffee consumption has continued to grow well, particularly in the US, where speciality coffee especially has become popular over the past several years. This creates an avenue for Doi Tung to enter the US market with quality coffee over the next couple of years, he said.
It is estimated that the US spends at least US$4 billion (132 billion baht) importing coffee each year. The average coffee drinker spends $165 on coffee a year. There are over 100 million daily coffee drinkers in the US, a figure that grows continuously.
"We are looking for partners who understand our role as a social enterprise and are flexible when doing business together,'' said ML Dispanadda.
He said the organisation is strengthening its operation process, team capability and critical marketing strategy for future ventures.
In addition, the foundation also plans to expand other Doi Tung businesses such as homewear, and ready-to-wear handicraft products in North America, Asia, Australia and Europe, where they have varying geographies and seasons.
For the domestic market, Doi Tung recently joined hands with Muji, the popular Japanese chain store, to sell Doi Tung ready-to-wear products at Muji branches in Thailand, and in Japan in the near future.
The foundation is gearing towards the opening of a new Doi Tung Coffee concept store at the Mae Fah Luang Foundation Headquarters on Rama IV road next year along with a coffee roasting facility. It will offer speciality coffee products and services including coffee training and tasting sessions.
"There is huge potential for the coffee business in the Thai market to grow, as speciality coffee becomes more popular,'' ML Dispanadda said.
There are 11 Doi Tung cafes in Thailand, with sales of over 80 million baht last year.
