University of Minnesota Alumni Association

Alumni Stories

A Stimulating Success

Lee Wallace helms Peace Coffee with a commitment to growth and its fairtrade mission—even during COVID-19.

Photo courtesty of Peace Coffee

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.”

Many of Peace Coffee's offerings support the public good. This particular variety benefits local pollinators.

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 organic coffees.

“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.”

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