Page 318 - Social Enterprise A New Business Paradigm for Thailand

economic aim: to operate coffee businesses in order to generate revenue and profits that can
be reinvested in achieving their intended social and environmental outcomes.

Their operational models fall into two main forms: 1) as businesses and/or social enterprises
formally registered under Thai law, including both those registered as social enterprises and

those that are not. These may take the form of spin-offs, flexible hybrid models, or
independently established entities. Most continue to operate primarily within the downstream
segment. A few have built networks that span the entire coffee supply chain, while others use
their coffee shops as centers for community-based volunteer activities. Some enterprises,
although commercially driven, engage in practices that align with the principles of social
enterprise; and 2) as projects within businesses and/or social enterprises, not in the form of
traditional CSR, but as initiatives that use coffee as a vehicle to address social and environmental
challenges. These include conserving and restoring upstream forests, enhancing the knowledge

and quality of coffee producers, and employing disadvantaged groups. In some cases, these
initiatives have evolved into fully developed social enterprises.

In addition, this study found that:

1. Coffee serves as a catalyst for social enterprise development, particularly those focused on
forest conservation, as it can be cultivated alongside forest ecosystems. It also provides a
pathway for generating income and employment for ethnic communities living in highland
areas, as demonstrated by companies like MiVana and Akha Ama Coffee. Coffee shops also
create employment opportunities for vulnerable groups such as the hearing impaired and
the elderly, making them a favored CSR vehicle for many large corporations, including those

in the PTT Group. Moreover, coffee shops can function as shared community spaces for
collaborative activities, as in the case of Café Can Do. However, in a highly competitive
market, dominated by international franchise networks and major energy companies, social
enterprises must compete based on quality, location, and their ability to effectively convey
social value to consumers, a strategy that remains underutilized.

2. An analysis of revenue distribution across the three tiers of the coffee supply chain, based
on a single cup of freshly brewed coffee, reveals that roasted coffee contributes
approximately 7.50 to 9.00 baht per cup in cost. Of this, farmers receive around 3.75 to 4.50

baht per cup, about 50% of the roasted coffee cost borne by the coffee shop. The analysis,
supported by literature from Nan Province, indicates that a coffee shop’s profitability largely
depends on its ability to set attractive selling prices by creating a compelling atmosphere
and brand, while managing both variable and fixed costs. In contrast, the income of other
supply chain participants, particularly farmers, depends on their production costs and
prevailing market prices, which are generally unaffected by the pricing strategies of coffee
shops. This is because the quantity of coffee used per cup is minimal and fixed, making it

difficult for downstream operations to influence upstream prices.

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