Until recently, Marc Mathieu's career path had little to do with fair trade or social entrepreneurship. He spent 12 years at Coca-Cola, most recently as the head of Global Brand Marketing. During his stint at Coke, Mathieu realized that sustainability and social purpose are must-haves in any brand and business.
"In today's world, you can't just tell people what to buy," he says. "You have to tell them what they're buying into. Coke was born with the idea of creating more happiness in the lives of people who drink it. Edison wasn't just about electricity; he was about progress. Ford's cars were about liberty and freedom. Most brands were born with a bigger purpose; we lost it a little bit in the 80s and 90s, but it's making a comeback. People are starting to understand that it's not just about consumption, but about making responsible choices for themselves and generations to come."
That thinking led Mathieu to co-found The Hoop Fund, a new type of marketplace that launched in August where consumers can shop while also investing in a sustainable supply chain. On The Hoop web site, you can make loans in $25 increments to support fair trade worker cooperatives in Peru, Thailand, and Indonesia. You can also buy a bar of chocolate or a wool sweater from the companies supplied by these co-ops. Once the loan is paid back, you can re-lend it to another Hoop project or use that money to make a purchase.
"We're linking two ends of the value chain," Mathieu says. "I like chocolate, I eat chocolate, but I also promote this chocolate among my friends because I am personally invested in the change that this chocolate is trying to create at the producer level."
The idea for The Hoop was first hatched by Deborah Hirsch, a fair trade expert who was struck by the success of online microlending platforms like Kiva. She partnered with entrepreneur Patrick Donohue, who had a track record of several successful enterprises in developing countries. "We thought, why can't this model be used for fair trade producers?" Donohue says.
Hirsch and Donahue were on track to start a modest business when Social Capital Markets (Socap) conference co-founder Kevin Jones offered them funding and introduced them to branding superstar Mathieu. While Hirsch and Donohue drove the logistics, Mathieu utilized his marketing expertise to come up with the logo and the idea of the lend-produce-enjoy cycle that The Hoop is named for.
Donohue acknowledges his platform's similarities to sites like Kiva and MYC4 but points to some key differences. "Kiva is a non-profit; most of their revenue comes from donations," he says. "Our business model is around driving sales for the products."
The Hoop takes a cut of all products sold on the site, and gets promotional fees from partnering brands to keep our loans at 0% interest. Because the suppliers are established coops, there is less risk of loan defaults. Ultimately, The Hoop aims to change the producer-consumer paradigm to something a lot more connected. "When people start looking at their products in a different way and think about where things come from, they start pulling that into everyday decision-making," said Donohue. "The impact we hope to have is a shift in consumer value where people can say, 'there's a shift because I invested in it.'"
The Hoop currently has 500 users on the system lending to five projects with three brand partners. Donohue hopes to expand to 10 projects with 10 partners each by the end of the year. Partnerships in the works include companies that make vodka, soccer balls, and fair trade chocolate. "One of the big questions we have going forward is how big do we go with the brands we work with?" asks Donahue. "Starbucks has some fair trade coffees, but some of the smaller brands are afraid of Starbucks. The excitement we get early on is from smaller passionate brands, but scaling will involve working with bigger brands."
So will The Hoop eventually partner with, say, Honest Tea, a 12-million-bottle-a-year beverage company partially owned by Coca-Cola? "It's a good question," Mathieu says. "Right now, we're working with 'enlightened brands' that are 100% responsible and ethical in the choices they make. But we also need to recognize the role that large corporations have: 45% of the wealth in the world is created by Fortune 500 companies.
"Even if these companies don't join The Hoop — if we just help them push the boundaries and create their own platform — we would have contributed significantly."