Posted on Fri, Jul. 22, 2005

BUSINESS

Contra Café stirs critics on the left

A New Hampshire company selling coffee grown by Nicaragua's former contra fighters has found that the political terrain is rattling its marketing efforts.

BY JIM WYSS

jwyss@herald.com

Tom Kilroy knew breaking into the U.S. market with organic Nicaraguan coffee would be a struggle. But ever since the 27-year-old Dartmouth graduate launched Contra Café -- Wake up with Freedom Fighters!, he's been taking his coffee with flack.

The beans are grown in the highlands of Nicaragua by former contra guerrillas -- the U.S.-backed fighters who tried to topple the country's Marxist Sandinista government in the 1980s.

While the contras were a cause célbre for many during the Reagan era, their legacy is tainted by the Iran-contra scandal and accusations of human rights abuses.

''When we first launched [in April], word spread more on liberal blogs,'' Kilroy said. ``I've gotten a fair amount of unhappy e-mail . . . to the effect that this is a really bad idea.''

So far, Kilroy's Hanover, N.H., company is struggling, averaging sales of just 15 pounds a week.

FAIR TRADE?

Retailing for $10 a pound on its website www.contracafe.com, the company pays the farmers $1.50 a pound -- more than market rates and more than what's known as fair-trade, or socially responsible, prices.

In addition, Contra Café gives 50 percent of its profits back to the farmers.

Mixing coffee and causes isn't new, but in Nicaragua the cause has usually been on the other side of the political spectrum. During the height of the Sandinista-contra civil war -- which eventually killed between 30,000 and 50,000 people -- American and European volunteers formed coffee-picking brigades to help the Sandinista government bring in its harvest.

Even today, some of the country's best-known coffee cooperatives are run by former Sandinistas.

''Fair-trade coffee [in Nicaragua] has always been in the hands of the left,'' said José Adán López, the president of the farming cooperative that supplies Contra Café. ``We decided why not try to sell to those on the right? In Miami, there are a lot of former contra [supporters] that can help us by buying this coffee.''

So far, the company hasn't cracked the South Florida market, but the region's thriving Nicaraguan community makes it a prime target.

Contra Café underscores its conservative credentials by also giving 2 percent of its profits to the Freedom Alliance, a foundation started by Lt. Col. Oliver North.

North rose to fame during the Iran-contra hearings as the architect of a network that sold arms to Iran and used the profits to covertly fund the contras. Although his three convictions in that case were later overturned, both the arms sale and the funding were against the law and violated the Reagan administration's public policy at the time.

It's that kind of political baggage that has had liberal and conservative websites in a frenzy, taking turns boosting and blasting Contra Café. Although marketers dream about that kind of buzz, ''We haven't seen a big spike [in sales],'' Kilroy said. ``But I don't know what's reasonable to expect.''

ON THE WEB

Marketing has been limited to sites like rightwingnews.com and rightwingstuff.com, where it's advertised alongside bumper stickers that read ``My SUV [loves] Iraqi Oil.''

But Kilroy and his partner, fellow MBA graduate Ryan Myers, hope to hit conservative conventions later this year and are mulling the idea of buying ads in a national conservative magazine.

Whether Contra Café ultimately succeeds probably depends more on its marketing, distribution and quality rather than its politics, says Jerry Haar, the director of the Institute for Family Business at Florida International University's Eugenio Pino and Family Global Entrepreneurship Center. Even so, message does matter. 'A company tying a product to a political cause, policy or statement runs a risk because they are introducing a noncommercial variable into consumers' buying equation,'' he said. ``You're opening up the proverbial can of worms.''

For Kilroy, Contra Café is more about the people than the politics. After visiting Nicaragua in 2003 as a volunteer with TechnoServe, a U.S. nonprofit group, he was moved by the economic plight of the coffee farmers in the northern province of Jinotega and decided to help.

The farmers hope to use the profits from Contra Café to build houses and provide healthcare for some of their 250 members.

Kilroy is using the slow start to gather ammunition for his marketing campaign. Just 10 at the time of the Iran-contra hearings, he admits not knowing as much about the contras as he should.

``I've been reading more books and I think I'm pretty convinced that I'm supporting a good cause. The [criticism] hasn't changed my mind.''