Superficially, Cabbages &
Condoms is a successful small
restaurant
chain operating in a dozen locations in Thailand. Each branch serves
traditional Thai cuisine with chemical- free vegetables and herbs, with
some food sourced from farms run by PDA and the rest purchased from
nearby farmers and local fresh markets. Several of the
restaurants also include gift shops, with handicrafts sourced based on fair trade principles, and made by villagers throughout Thailand.
It’s the grand design of Cabbages &
Condoms
that is truly unique. Mechai calls his approach “BSP,” or Businesses
for Social Progress, where a nonprofit like PDA sets up one or more
for-profit subsidiaries to help underwrite its activities. In 2005 his
Bangkok branch alone donated nearly $1 million to PDA, and by 2007 that
amount had reached $1.7 million. “The establishment of a variety of
BSPs, where profits are dedicated to social and economic development,”
explains Mechai, “is a new strategy to mobilize and accumulate resources
for income generation in Thailand’s poor and rural areas.”
The C&C
restaurants are expensive for the average Thai but no more so than most middle-range
restaurants.
A plate of pad thai costs THB 120 (US $3.50) versus THB 40 (US $1.25)
at a roadside stand or a local store. For foreigners, these prices are
very reasonable, especially since the quality of the food is excellent.

The customers vary from location to location. The seaside resort and
restaurant
in Pattaya caters mainly to holiday goers and families, both Thai and
foreigner. The majority of visitors to the Sap Tai Resort and
Restaurant,
in the vicinity of the Khao Yai National Park, are families; groups
attending seminars and company retreats, including corporations and UN
agencies; and retirees. The other northeastern branches, such as Nang
Rong and Chakkarat, are used primarily for youth trainings and local
guests, including local administrative officers who usually hold
meetings and seminars.
The
restaurants are
legally registered as a separate private entity from PDA, bound by an
internal regulation to only use their profits for three purposes:
reserves, business expansion, or donations to a charitable cause (in
this case, PDA). “For twenty-one years,” Mechai says, “the
restaurants have been making profits. We reached break-even in the tenth month after the opening of the first
restaurant
in Bangkok, where the annual growth rate in terms of revenue is around
eight to ten percent. The main reason for this growth rate is that we
are careful about raw food material costs. We have opened twelve
branches and not one has been closed down.”

Several factors have contributed to the profitability of the
restaurants. First, all the
restaurants
operate without rent, either on PDA-owned or privately donated land.
“Our major investments are just initial building construction,” says
Boongit Gongthongluk, director of the office of PDA’s president. “We run
the business the Chinese way, by starting small and growing as we can.”
Another key to keeping costs low is local sourcing. Much of the
produce, for example, comes from PDA farms near each location. The farms
are growing mint, chili, basil, lemongrass, fresh pepper, morning
glory, Chinese kale, eggplant, papaya, and bananas. Cabbages, however,
must be bought from the markets, where possible from local farmers.
Mechai pays very close attention to every detail in the businesses.
He advises, for example, “Don’t make the bathroom an afterthought
because it should be as beautiful as any other room.”
He is also a relentless marketer. “Doing business for social progress
is fun,” he declares. “If you want to make money or lose money, go to
the stock exchange. If you want excitement, join us.” Mechai’s
connections from his work, both as a government official and in the
business sector, and the visibility of the PDA also helped bring in
business associates to the first C&C branch, which in turn made it a
phenomenon for tourists and foreigners. The social mission has made
marketing easier. According to Boongit, “We have conducted a survey and
found that customers love the green environment, the fun in the
decoration, the taste of the food and the mission of the
restaurant:
that the income goes to helping poor communities in the rural areas.
And the latter is the main reason the customers come again and again.”
Location has also played a role in the model’s success. PDA only
sites new locations in communities where they have already built
relationships and have identified community needs. This generates
support and a customer base for whatever business service they are
offering. And they have strategically placed their most expensive
restaurants
and resorts, which provide a variety of amenities, in locations already
receiving high traffic from vacationers and businessmen.

The Bangkok branch now employs 105 people, the Sap Tai resort
provides jobs for 34 (7 PDA staff and 27 local contractors), and the
other branches employ another 150 people. They all prioritize hiring
women; the Bangkok
restaurant
staff is 60% women. In Sap Tai, they have also trained a group of young
environmental guides who are now experts in local ecology. “Whenever
our customers need a bush walking leader, we can arrange it for them,
and the youngsters can have extra incomes,” says Tittaya Metha, manager
of the Sap Tai Cabbages &
Condoms resort.
In addition to
restaurants
and resorts, PDA has established other BSPs in construction, research
and consulting, health clinic management, and trading in both
agricultural produce and handicrafts. Two examples include manufacturing
cooperatives in the northeastern province of Buriram, and a café setup
with help from KPMG (Thailand) which, along with the Pattaya Birds
& Bees Resort and Cabbages &
Condom Restaurant, supports the Lamplaimat Pattana School in Buriram.
Cabbages &
Condoms
strives to integrate its social mission into its labor practices. It
avoids hiring job-ready professionals from distant regions or countries.
Instead, it actively recruits from the surrounding rural population and
provides on-the-job training.
C&C also tries to hire HIV-positive employees. According to
Boongit, “If there are two applicants for a position here and one is
HIV-positive, we give the one who is HIV-positive a chance. For one
HIV-positive employee who has been with us for a long time, but does not
have the strength to work anymore because his condition has worsened,
we have provided him with half of his latest salary every month.”
C&C pays its staff a living wage and provides benefits such as
housing, health, and dental programs. At the Sap Tai resort, local
contractors are paid THB 170 (US $5) a day plus three free meals (the
average wage in the area is THB 120 or US $3.50).
Mechai is now working to franchise Cabbages &
Condoms
restaurants
outside Thailand. In 2008, the first C&C franchise launched in
Kumamoto, Japan. Rather than require all profits to come to PDA, Mechai
is asking the franchisee to contribute just 3% of revenue. Another
franchise is in the works in Bordeaux, France, with an owner who is
HIV-positive and wants to deliver the sex education messages of the
C&C
restaurants.
“We want to beat McDonald’s,” declares Mechai. “And among the best
strategies are to be active in finding new markets, and to have our
staff trained in special skills to be professionals. Right now we are
looking for new joint ventures in Singapore, Australia, the United
States, and Europe. With an increasing demand for chemical-free
vegetables, we plan to have local farmers provide for us in all these
areas. We have also now launched Coffee &
Condoms where you can get
condoms with your coffee, so watch out Starbucks!”