Rumi Spice: Soldiers Turned Entrepreneurs Fight Opium With Saffron

Speaker 1:

Next on PJA Radio's The Unconventionals.

Kim Jung:

One of the questions they ask us is, "What will you do with your one wild and precious life?" I remember that hitting me and I'm thinking, "What do I want to do waking up every day and feeling good about what I'm doing?" It doesn't even matter if it's really big or really small. It's got to be something that's worth doing.

Speaker 3:

One way to start a business is you find a problem that can't be solved and then you try to solve it. For instance, what about opiate addiction in the United States? That's a pretty big problem. Poppies are a major cash crop in Afghanistan and Afghan farmers produce 92% of the world's non pharmaceutical grade opiates. How do you change that? The whole cycle of opiate addiction, from poppies to painkillers to heroin, that feel pretty intractable, right? Our latest Unconventionals guest saw this as a business opportunity.

Rumi Spice was founded by a number of army veterans, including our guest, co founder Kimberly Jung. They attended Harvard Business school after their tours of duty and had this basic insight. You could get farmers to grow saffron, which is more valuable by weight than gold, instead of poppies. This is simple to say but super complicated in practice. You've got infrastructure, the Taliban, complexity of saffron harvesting all standing in the way.

I recently saw David Gurgan give a speech. He's a guy who served 4 presidents on both sides of the aisle, Nixon, Reagan, Bush and Clinton. This guy has seen everything and he called himself in his speech a short term pessimist but a long term optimist. It was surprising for someone who comes off as world weary as he does. Someone asked him, "Why the optimism?" He says it's because of the millennials, specifically some of the returning veterans he works with. They're battle tested, for sure, but also idealistic, committed to using their talents to tackle the worlds big problems. This is who you experience when you talk to Kim and Rumi Spice.

Kim Jung:

I served in Afghanistan, I served one tour there as a route clearance platoon leader, which means that I was clearing roads of IED's with my platoon of 40 soldiers. I also served a brief stint as part of a Provincial Reconstruction Team from the Army. Going out to interact with the Afghan population to help serve their needs and maybe give them some health care supplements or try to figure out some sort of political representation for Afghan ruled women. From those experiences, I realized that a lot of our efforts in Afghanistan I think were not directly tied with the very people who we're trying to empower.

I was a first year student at Harvard Business School and I was interviewing for consulting gigs and investment banking and it just didn't feel right.

Speaker 3:

That's what you do though, right? Those are great gigs.

Kim Jung:

It's supposed to be what you're doing at HBS, but it just didn't feel right for me. It didn't feel right for my personality and what I stood for. One of the questions they ask us is, "What will you do with your one wild and precious life?" I remember that hitting me and I'm thinking, "What do I want to do waking up every day and feeling good about what I'm doing?" It doesn't even matter if it's really big or really small. It's got to be something that's worth doing. Coincidentally, I was talking with Keith Alaniz, who's the co founder, on the phone and he was in Afghanistan at the time. He's calling from a fob, one of those telephones, calling home and of course, he's calling me as his friend and he's in the Wardak province as an advisor to provincial governor and he's telling me how he knows these farmers who are just sitting on saffron with no where to go. I thought to myself, "It's so simple and yet it's such an amazing business idea and nobody's doing it and why not because they have all these challenges, but I think we can do this." I told Keith this and he said, "Yes, let's do it.

Speaker 3:

We want to take a second here to explain saffron for listeners who don't know much about it. Saffron is expensive, it will cost you around $300 an ounce at your grocery story, so it's not in most people's kitchen for that reason, but Rumi Spice thinks there's a lot of good reasons to change that.

Kim Jung:

Saffron is actually the stigma of the crocus flower, which is purple, and if you've seen pictures of it and you can look on our website for the pictures, it's beautiful.

Speaker 3:

The filaments, right?

Kim Jung:

The little filaments, yes, there's actually 3 to 5 stigmas per flower, so it takes 175,000 flowers to make one Kilogram of saffron and it all has to be hand picked, which is why it's so expensive. People realize that it takes very, very little saffron to go a long way because it's so concentrated and the rule of thumb is you use 3 or 4 strands of saffron per person, per dish. Saffron grows extremely well in Afghanistan. It's the same growing region as Cashmere, which is currently recognized as the world's premier saffron agricultural land, so Afghanistan is the exact same climate. It's hot dry winds over arid lands and it also doesn't interfere with the farmer's other crop cycles with wheat and barley, which is what they use to feed their families. It's the perfect crop for Afghan farmers, not only because it doesn't interfere, it's also very high margin for them, so they can make up to six times more income growing saffron than they can growing poppy and it's light so it can be transported very easily.

Speaker 3:

When you first hear that Rumi Spice story, part of you thinks, "Of course, this is such a great idea. Trading out really bad poppies for really great saffron. How could this not succeed?" No surprise, this is hard on a lot of levels. Kim's story of an Afghan farmer who is doing all the right things and still couldn't make it work sheds a little light.

Kim Jung:

This guy, Hadjijoseph, actually went to, and I won't name the specific organization, but it was your typical foreign intervention US state government agency, something like that, with his saffron and he was trying to get into one of their programs that was trying to connect him to US buyers. He had a CD full of pictures, he actually took a video of himself, interviewed himself, talked about his business. This guy had the initiative, he had the guts, he went the extra mile to make this happen and at the end of the day, nothing happened because the person who was his point of contact ended up going back to the States because her stint was done. We all thought this was such a shame. I'll mention that when I went back to Afghanistan last summer, I had met with a group of Pashto farmers and they didn't even shake my hand at first because they're not allowed to, but at the end of the day we sealed the deal. I bought saffron from them and they gave me some of the most gorgeous and fragrant saffron I've ever seen.

Speaker 3:

These are farmers that were already growing saffron?

Kim Jung:

They just started growing saffron, so Hadjijoseph actually has been growing saffron for several years and he's one of the leaders in his community and he goes around and he teaches his fellow farmers in the Wardak province how to grow saffron. Saffron hasn't really been going on for very long in the Wardak province. The farmers that I met in Harrat, which is all the way across the country, which has a little bit more saffron production, these farmers are actually much more new at it, so we buy 1 to 2 kilo's per farmer. We have a network of 7 to 8 farmers and that's growing right now.

Speaker 3:

One to two kilo's, what does that represent at retail?

Kim Jung:

Wholesale would be maybe about $2500 to $3000 per kilo, so let's say you were to sell it in increments of 1 gram. One gram on the market goes anywhere between $10 to $40 a gram.

Speaker 3:

Most valuable spice in the world, right?

Kim Jung:

Absolutely, and some places it's as valuable as gold by weight.

Speaker 3:

Hadjijoseph had already figured out how to grow saffron. He's in the minority. To make saffron a major crop, Rumi Spice has to convince poppy farmers to switch and that means over coming tradition and the economic arguments around poppy growing.

Afghanistan is a huge player in the global opium trade.

Kim Jung:

Absolutely, in 2014 it peaked, unfortunately for everybody else, but I think there's a misconception out there that Afghan farmers are doing this because they actively want to contribute to the drug trade and that's completely not the case. These Afghan farmers, their average income is $500 a year to support themselves and their families and sometimes they have 1 maybe 2 wives and couple of children. Supporting an entire family off of $500 is really hard, really tough. For example, when we buy 2 kilo's from one farmer, it septuples his income, also add that saffron gives farmers up to 6 times more income than growing poppy for opium. The reason why they do grow poppy is because the seeds are very easy to get. It's a source of steady income because they know that organizations like the Taliban will buy it from them and sometimes they enter into agreements ahead of time and it's also what they know and it's something that can give them for sure income.

Speaker 3:

There's a market for it.

Kim Jung:

There's definitely a market for it. Where as saffron, it's much harder to get the corms, which are the seeds and not very many farmers know how to farm it outside of the Harrat region.

Speaker 3:

When we come back, we'll continue our conversation with Kimberly Jung of Rumi Spice. We'll talk about just how hard it is to start a business in Afghanistan and why something called Wasta is key to making it work. That's coming up after the break on PJA Radios The Unconventionals.

Speaker 1:

You're listening to PJA Radio's The Unconventionals. To learn more about the show and join in on the conversation, check out our Facebook page, Facebook.com/unconventionalsradio our academic sponsor for the Unconventionals is the center on Global Brand Leadership at Columbia Business School, which turns the research of academia's foremost thinkers on branding into practical tools and insight for real world application. For more information, visit globalbrands.org

Speaker 3:

Welcome back to The Unconventionals. We're talking to Kimberly Jung, co founder of Rumi Spice. Founded by army veterans turned entrepreneurs, Rumi Spice provides saffron to US consumers sourced directly from Afghan farmers. Saffron is an alternative to poppy farming, which is one of the primary sources of income for the Taliban, not to mention the source of raw material behind the global opium trade.

Rumi Spice faces challenges on the supply front, convincing farmers to grow it, the demand from, getting US consumers to buy it, and pretty much everything in between. One major thing standing in the way is the Afghan brand. Quick, what do you think of when you think of Afghanistan? I'm sure a great place to start ups isn't on the list.

Kim Jung:

There are a lot of challenges in this business and I think the first one is simply that Afghanistan doesn't seem like a safe place to invest in and I would agree at first, but there have been so many historical examples of how people have been able to make business work in these developing countries and it's actually helped lay a foundation for peace in the future. Another thing is that transportation networks are very underdeveloped in Afghanistan. There's one road, Highway 1 and while I was a platoon leader, this was the road that I was actually looking for IED's on, which is ironic.

Speaker 3:

This is where you're shopping for customers or shopping for farmers.

Kim Jung:

It's still pretty dangerous, but at the end of the day, there's a lot of people who live in Afghanistan and they're doing just fine. It's just a matter of connecting the saffron to the international market. Another reason why this isn't booming is that the saffron market in the US is actually quite small. It's $200,000,000, it's growing, so it has a compound annual growth rate of 13% since 2009, but I really think that saffron can become the next Madagascar vanilla or the next quinoa, next kale. It's just a matter of educating the public on how awesome saffron is because it's loaded with antioxidants, it's actually an antidepressant and many studies have shown that and supported that.

Speaker 3:

Is that part of what you guys want to tackle as a company, is growing a market in the States?

Kim Jung:

I absolutely think so, because I think Afghanistan can supply some of the world's best saffron and I think these farmers who make up 85% of Afghanistan, it would really benefit them. Goods don't cross borders, armies will. It serves a dual purpose, which is, it helps Afghanistan and it could be Afghanistan's core competency and president Ashraf Ghani actually has a saffron role out as part of his economic development plan. Secondly, we have countries like India who use saffron in almost every dish everyday. I think it just has all the elements of becoming a great product in the US.

Speaker 3:

Another challenge we talked about is how to convince farmers to grow saffron. Turns out it's a painstaking farmer by farmer effort and it can't be done without building trust and standing in the community. Not easy to do, especially when you're an American army vet.

Kim Jung:

We do this the traditional way, the tried and true way in Afghanistan which is by word of mouth and by wasta, which is basically an Afghan word for your reputation and your clout in the community, so we start with a group of farmers that we know and I have all their names, I know their families and their pictures. I've met them in person and they've been telling their friends and family's how they know this American business woman who came and visited them and who's buying saffron from them and they've told us now that they're doubling their production of saffron next year. They're telling their friends the same thing. These are very grassroots way of doing it and I think in first world countries, we're more used to more traditional marketing methods and maybe social media, digital advertising, but in Afghanistan it's really about building good wasta, which is really what we're trying to do.

Speaker 3:

Is that a concept that applies to you, too?

Kim Jung:

Absolutely, I think at first we have to be on someone else's wasta, so one of the guys who is our contact on the ground, who works directly with the farmers, we have to leverage his wasta in the community in order to reach these farmers, but since I've been there myself I start to build my own wasta.

Speaker 3:

You're developing your own wasta, your own clout. How does your status as an American, a former army officer and a woman, are those neutral? Do they get in the way?

Kim Jung:

I don't like to put forth the military experience as much when I'm talking with the farmers, although I will say that being a business woman is definitely different for them, at the end of the day it's about closing a deal and making income. They don't care who it comes from and I think it really builds relationships. I could have three ears and five hands and I think if I gave them income through Rumi Spice, that they would treat me fairly and they would treat me well and I think this is actually the foundation of our entire business and what I really think business is all about and how I can help with social impact.

Speaker 3:

Kim brought up social impact and that's where we're going to go next. You can trace the modern movement around business and social mission to the early 1990's when groups like Business's for Social Responsibility emerged, but it wasn't until recently that the notion of two bottom lines, money and mission, was formalized legally.

Kim Jung:

We actually just recently became a benefit corporation, which is a legal entity that's only been in effect for the past few months. Basically, we have a double bottom line. We have both your normal income statement with profit and then you also have your social impact, which we are supposed to report every two years. Initially, as a start up what we do report would be how much saffron we buy, so actually the dollar value of the saffron we buy, how many kilograms we bought from each farmer, which because we have a very strong change of custody paperwork we know exactly where it's going. Another thing would be the processing facility in Afghanistan. We're hiring this many people, with this wage, at this time and there's going to be a marketing person in Afghanistan, or we hire a video production firm in Afghanistan run by Afghans, so this to me all counts as social impact because it goes back directly to Afghans and helps develop their economy. Eventually, as we get big, I think some of the indicators for what would be is if farmers are coming to us to ask, "Hey, can we be part of your network?" Which is actually already happening, which is amazing.

Speaker 3:

How many farmers do you have that you work with?

Kim Jung:

Right now we have 9 and we've already gone back to 2 or 3 of them to buy more saffron and as we scale up, we are gathering a list and interviewing these farmers and getting to know them and having our contacts in their communities kind of figure out what their wasta is, because that's the most important thing. I will say that we have actually talked to a few farmers and co operatives who at first seemed like really good contacts and we wanted to work with them, but after digging around the community a little bit more we found out that they weren't paying their farmers, or they were treating people the wrong way, or they just weren't living up to their commitments, so we decided not to work with them.

Speaker 3:

I suppose if you bet on the wrong person, you could really go the wrong way.

Kim Jung:

Absolutely, I think that's actually one of the key things that plagues both the saffron industry and Afghanistan because you have a lot of well meaning organizations with lots of money come in and they want to do good, but they don't do enough due diligence to figure out who's who and who's actually in it for good.

Speaker 3:

Kim told me a bit about her background. She was an idealistic 17 year old from L. A. growing up with immigrant parents who wanted her to go to an ivy league school and become a doctor or a lawyer. She decided on West Point instead, to serve her country, to be a leader. In short, she was signing up for something bigger than herself. Her military background can be tricky, particularly on the ground in Afghanistan, so she doesn't lead with it. To quote Kim, "Leading soldiers is one of the best privileges I've ever had in my life." In her mind, Rumi Spice is part of the same longing to serve, to make a difference.

Kim Jung:

I had no idea what I was going to do. I just knew that there was kind of a hole, just feeling very disconcerted about the world. The deployment changed my outlook on life and how I really believe in trying to equalize opportunity where ever you can, so when I went to business school, actually that's where I feel like you can do the most impact because the world runs on numbers, it does. As much as I hate to say it, what counts sometimes can't be counted. That's [inaudible 00:21:00]

Speaker 3:

We talk about that on the show is interesting disruptive businesses often times have to come up with new ways to measure their impact and maybe the traditional Harvard Business School, in fact one of the principles that comes out of Harvard Business School gets credit for is that if you can't count it, it doesn't count, right? Your point about the world runs on numbers, but you're talking about some stuff that maybe can't be counted in the traditional sense.

Kim Jung:

Absolutely, and I think this is where the benefit corp comes in because we have that double bottom line and we're accountable not just for the traditional dollar numbers, but also for the social benefit part. This is where I think we have a little bit more leeway. Public social benefit actually translates into numbers.

Speaker 3:

This is still early days for Rumi Spice and there are many early successes. They're signing up farmers, building their wasta, and selling product in the US. You can get Rumi Spice saffron at Market Basket groceries in New England and lots of other places. Here's a plug, you can buy a great saffron mother's day gift from RumiSpice.com but Rumi Spice's mission is still an uphill battle, in part because it doesn't compute for most of us. Afghanistan is something we don't really want to think about and they don't have the typical start up stories. The Rumi Spice team has dodged fire fights when transporting their saffron, but the challenge, the sense of doing what can't be done is central to Rumi Spice. The things that many of us work hard to manufacture in our companies, passion that stirs employees and customers, derives directly from their mission.

Kim Jung:

Definitely have gotten phrases that we're crazy or that we're really, really brave, a lot of support, too.

Speaker 3:

Which is meant to say you're brave but maybe kind of stupid?

Kim Jung:

Exactly, especially knowing that me and my co founders go back to Afghanistan voluntarily as civilians, I think people think that we're just crazy, but the people who are afraid of that, again it's that lack of engagement with people. When you really get to know Afghanistan, it's not that dangerous. There's areas in Chicago I would say, or Detroit that could be a lot more dangerous. It's about knowing the people in Afghanistan, and knowing the culture, and knowing the environment. When you just have assumptions about what it could be, that's where it's going to stay that way. It takes our company, people like us in Rumi Spice to say, "No, I think those assumptions are wrong." I think that there's other ways of laying a foundation for peace or reaching people that don't involve guns and don't involve billions of dollars funneled through NGO's and maybe I'm being a little harsh, but really going by a very simple way, which is business and it's been tried and true for thousands of years.

They can say that we're crazy, but this is at the tip of the spear and this is why people think it's crazy, otherwise everybody would be doing it. That's the same thing for all companies. When people say, "It's a bad idea." That's when you know that you should probably do it.

Speaker 3:

Kimberly Jung is co founder of Rumi Spice. Thanks for listening. Join us next time and we'll take a look at the sharing economy, but it isn't cars or apartments. Everybody talks about those. This is about airplanes. Open Airplane aims to make renting an airplane as easy as renting a car. Don't forget to ask yourself this question.

Kim Jung:

What will you do with your one wild and precious life?

Speaker 1:

The Unconventionals is written and produced by Mike O'Toole and Reid Mangan. Post production and technical direction by Reid Mangan with Anthony Gentles. Promotion and Social Strategy by Greg Straface and Graham Spector. Our Creative Director is Aaron Dasilva. Our Executive Producer is Phil Johnson for PJA advertising and marketing. I'm [inaudible 00:25:21] To hear more episodes of The Unconventionals, visit PJAradio.com.