Varacco Coffee's journey: From farmers to farmer-scientists

“Aries, napag-iwanan na tayo.” In 2015, Aries Asilo, President of Varacco and ThinnkFarm, learned from his mentor, the late Dr. Ernie Gonzales, about the Cultural, Natural, and Economic (CNE) theory. This concept highlighted how the Filipino quality of life was once deeply rooted in cultural and natural aspects before World War II, with a shift towards economic dependence afterward due to industrialization and population growth. Inspired by this, Aries reflected on his approach to Nutrition Entrepreneurship and Human Ecology, deciding to focus on creating a business model that integrates social, cultural, and environmental impact.

This holistic approach defines Varacco’s business model. As Aries and his team emphasize, sustainability goes beyond monetary gains—it involves fostering a harmonious relationship with the environment while driving practical development. Aries' ongoing doctoral research highlights the need for businesses to shift from a supply chain mindset to a value chain perspective, where sustainability is not just a goal but a process that encompasses productivity, product quality, and profitability.

Varacco’s value chain begins at the nursery and ends with the consumer, exploring how diversity, equity, and inclusion (DEI) play critical roles. For diversity, Varacco and ThinnkFarm aim to build a diverse workforce while sourcing from various origins. Their COFFEE program (Coffee-based Farming and Entrepreneurship Engagement) trains farmer-scientists to adopt nature-positive agricultural practices, like Integrated Pest Management (IPM) and nano-biofertilizers, despite the higher costs. This investment in sustainable practices raises crucial questions about how far farmers and communities are willing to go to ensure sustainability.

On equity, Varacco ensures fair prices for smallholder farmers, while digitalization provides market access through climate-smart technology. This not only helps farmers grow their businesses but also connects them with consumers who value transparency and sustainability. Varacco explores how the Internet of Things (IoT) and big data can promote inclusivity, ensuring that no one is left behind in the coffee value chain. With IoT, they have Miss Analiza Cominguez in Bansalan, Davao Del Sur where her farm size doubled and her confidence increased with new technology. Miss Analiza said, “Tumaas ang aking confidence at puwede na ako mag-retire, ipapasa ko na sa anak ko.”

Presently, Varacco is implementing Smart FARM (Farmers Adopting Responsible Management) at Pangantucan and Talakag in Bukidnon. It aims to create the first accredited digitalized coffee nursery that uses Internet of Things technology and nano-biofertilizers and to hasten the production of coffee seedlings by 30% thereby doubling its production a year. Capacity-building enables this project through their farmer-scientist model.

At every level, from the farm to the national stage, Varacco is revolutionizing the coffee industry with its innovative business model. Partnering with Packetworx, Varacco is leading efforts to improve coffee productivity and quality in the Philippines by creating an interconnected IoT network that helps over 200,000 smallholder farmers make climate-smart decisions. Their efforts have garnered attention internationally, with Food Navigator Asia calling Varacco a challenger in the instant coffee market and Africa Business predicting the company as "the next big thing."

With the integration of IoT to monitor environmental parameters, land productivity is expected to rise, allowing farmers to market their surplus and increase income. This in turn fosters further investments in agriculture, innovation, and community development, thereby uplifting living conditions and fueling economic growth. The Varacco model, through its climate-smart and value chain strategy, opens the door for new green development opportunities, both for local farmers and the nation. However, as Packetworx, CEO Arnold Bagabaldo said, “IoT is just a tool, it is not magic.” Varacco ensures that the farmers are given the leverage to decide for their farms through the data provided by IoT, enabling them to become farmer-scientists.

At its core, Varacco’s social enterprise is a balance between theoretical knowledge and practical impact. The dual approach—grounded in theory and refined by on-the-ground experience—empowers Varacco to reflect on essential resources and data to drive sustainable development. Their journey creates not just a business, but a constellation of communities, each interconnected, thriving, and working together toward a shared future of sustainability and prosperity.