A Stimulating Success
Lee Wallace helms Peace Coffee with a commitment to growth and its fairtrade mission—even during COVID-19.
Long before social entrepreneurship
became an established concept, Lee
Wallace sought a way to engage in a purpose-driven business that makes money
and does good. She found that combination at
Peace Coffee, the Minneapolis-based roaster and
wholesaler of fair trade, organic coffee.
As CEO since 2007, Wallace (M.P.P. ’05) has
guided Peace Coffee through steady growth and
brewing competition in the coffee industry. Today,
she’s focused on steering the company through
rough and uncharted waters, where uncertainty
abounds in the age of COVID-19. But thanks to
some of her decisions in the past couple years—
including expanding Peace Coffee’s roastery—her
business has been withstanding the pandemic
shocks. Peace Coffee’s four Minneapolis coffee
shops were still shuttered in mid-May and coffee
bean sales to other coffee shops and restaurants
had plummeted, a hit to 25 percent of its business.
But on the brighter side, e-commerce and sales of
roasted beans to grocery stores, natural
food shops, and big box retailers were
up 20 to 30 percent.
Wallace says that like many in the
hospitality business, the company had
to lay off its coffee shop employees, but
many were able to find work on a new
second shift at Peace Coffee’s roastery.
Navigating through this uncertainty
hasn’t been easy. “I’m a very empathetic
and compassionate person, and the
hardest thing for me is that people are
having a tough time,” Wallace says.
“You have to stay flexible and know that
things are going to change. We have
to narrow our field of vision to shorter
chunks of time and think about the next
30 days, not the next six to 12 months.”
Fortunately for Wallace, she can build
on Peace Coffee’s expertise and experience that dates back to 1996. A for-profit
company, Peace Coffee enjoyed an early
entry into the ethically sourced market,
powering up inside the Institute for
Agriculture & Trade Policy, a nonprofit
focused on developing sustainable food,
farm, and trade systems locally and globally. When Wallace took the baton, she primed the
company for a strong future.
First, she aligned employees behind a new mission to grow as much as possible without sacrificing
its core values. Wallace also created a culture where
people want to come to work. Calling themselves
starry-eyed dreamers, Peace Coffee employees
embrace each other’s individuality and appreciate
generous pay and benefits. They are devoted to the
company’s environmental sustainability, including
its eco-friendly building and staff that deliver more
than half of its beans by bicycle.
“I think a key to our success has been building
on our base of early adopters,” Wallace says.
“We’ve built this thing to be a force for good since
day one. That’s something to be proud of.”
Last year, Peace Coffee imported 760,000
pounds of green coffee from nine countries and
was on track to hit 900,000 pounds in 2020, before
COVID-19 interrupted business as usual. Revenue
in 2019 was $7.9 million, and Wallace says it was on track pre-pandemic to reach $9.4 million this
year. It’s too soon to tell how things will shake
out, with all elements of its business in flux.
She is grateful that Peace Coffee’s previous
growth prompted it to launch the roastery
expansion, which tripled its capacity. That was
an accidentally well-timed decision because
its roasting business is now booming.
In 2018, Peace Coffee’s strong growth
led the Institute to sell the company, and
Wallace and an investor partner stepped up
to buy it. In short order, she established it as
a B-Corporation, a for-profit structure with
commitments to social and environmental
accountability and performance. Wallace
then launched other new initiatives, including
rebranding, launching a coffee truck, and
opening a fourth Minneapolis coffee shop.
The shops are a love letter to Peace Coffee’s
hometown and a fruitful way to stay connected to consumers, she says.
Wallace developed her life’s goals while
growing up in upstate New York, with the
influence of her father, an attorney, and grandfather, who worked for the State Department.
They stressed cultivating a global mindset
and supporting small businesses and farmers.
“There’s a side of me that’s always really
interested in making the world a better place
and having an impact,” Wallace adds.
She came to Minnesota to attend Macalester College, then stayed to work at the
nonprofit Resource Center for the Americas,
a nonprofit that provided information
about Latin America and globalization. She
received her master's degree in public policy
from the Humphrey School in 2005.
When the Center closed, Wallace again
pursued that sweet spot of mission and
money. It led her to consult, then become
CEO of Peace Coffee.
Wallace champions growth with wholesale
customers and in coffee-growing countries.
Since 1999, Peace Coffee has benefited from
its membership in Cooperative Coffees,
an importing collaboration of 20-plus likeminded companies. Together, they purchase
coffee directly from farmers, at fair prices,
while supporting environmentally sustainable
and ethical practices.
This structure has made a difference
globally. Peace Coffee’s steady purchase of
ethically sourced coffee year after year gives
farmers the consistency and stability they
require to improve and expand. In 2019, 98
percent of the beans Peace Coffee and the
co-op purchased were from partners they’ve
had for more than five years.
“That’s incredibly important and very
unique thing about Peace Coffee’s model,”
Wallace says. “We know that if you purchase
from a community year after year, that’s how
you truly have impact.”
Peace Coffee’s fair trade history and deep
support of farmers has endeared the company to retailers and consumers in natural food
markets, grocery stores, and mass retailers.
Julie Griffin, director of private brands for
regional grocery chain Lunds & Byerlys, says
Peace Coffee is both its top-selling organic
coffee brand and its roaster of private-label
“Lee is so open, and she’s so trusting and
trustworthy,” Griffin says. “It’s easy to pick up
the phone and call Lee and work through an
idea with her. You don’t always find that in
a supplier. It’s also the team that she’s built.
If there’s something we need, they will just
instantly get that done for us.”
Wallace finds challenge and satisfaction in her work, whether it’s pivoting while leading a growing business, learning about sustainable coffee farming practices, or building community with employees and customers. On top of successfully blending Peace Coffee’s mission with financial success, “I enjoy employing people,” she says. “We spend so much time at work. If you can create a place where people really enjoy going to work, that might be the greatest achievement I ever have.”