G.I. Could be Location for Specialty Coffee Distribution from Kenya Farmers

A trade delegation from Kenya is in Grand Island this week to discuss opportunities to market coffee directly from family farmers in the African country to U.S. consumers.

Laban Njuguna of Aurora is a local entrepreneur working to bring Kenyan coffee directly to Grand Island from the farmers who grow it there. The Grand Island Area Economic Development Corp. is working with Njugana on the project.

At a welcoming breakfast Monday at Borders Inn and Suite, Njuguna said he and GIAEDC have been working on the project for six months. Their goal is to set up a specialty coffee marketplace.

“We want to make the supply chain more efficient for the benefit of farmers in Kenya,” Njuguna said.

Kenya has put in place measures aimed at increasing annual coffee production from 40,000 metric tons to 48,000 metric tons, a government official has revealed. Kenya is the world’s 16th largest coffee producer. Small family farmers produce about 70 percent of the crop.

According to a recent story in www.news.cn, Kenyan farmers are starting to put more land into coffee production. According to the article, Kenya’s coffee production has declined from 129,000 metric tons in 1987-88 to 40,000 metric tons currently.

One of the factors in the decline is volatile markets.

The project Njuguna is working on would have farmer coffee cooperatives directly ship their raw coffee beans from Kenya to Grand Island, where it would be distributed as a specialty product.

More and more independent coffee shops are now roasting coffee beans for the benefit of their customers, who are demanding better coffee.

According to Bloomberg News, coffee demand is growing in the U.S. as millennials ages 19 and 34 are pushing U.S. demand to historic records. The United States is the world’s biggest consumer of coffee.

Often, coffee grown by farmers is blended with poorer quality coffee to improve it for mass distribution. By eliminating the middleman, farmer coffee cooperatives can directly ship their beans that are not roasted to Grand Island.

With a specialty coffee sold directly by Kenyan farmers, the producers could capture a more significant market share and increase their profitability.

According to a recent study in Kenya, coffee farming costs more than farmers are paid. That is one of the reasons coffee production has declined in Kenya. Farmers turned to other crops, such as corn.

According to the National Coffee Association, during the last 18 years, the number of daily drinkers has increased. In 1999 only 9 percent of U.S. adults were drinking specialty coffee. Last year, that market segment was 41 percent.

For Njugana, cashing in on America’s demand for specialty coffee is profitable for both for him as an entrepreneur and for farmers in his native country. He said has relatives working the land in Kenya as a coffee grower, including his 102-year-old grandmother.

“That is why we are primarily targeting specialty coffee,” he said.

Njugana said Grand Island is an excellent place for efficient logistics and a supply network for the rest of North America.

He said small Kenyan coffee farmers belong to cooperatives. Each farmer has a wet mill to process berries into raw beans after harvest.

“If you are only farming one or two acres of coffee, that is not enough to fill a container to bring here,” Njugana said. “Through a co-op, they have a way to access this market directly.”

He said the U.S. African Growth and Opportunity Act allows Kenyan coffee to come to the U.S. tariff-free.

“That is good for the market, a good business opportunity and good for the farmers,” Njugana said. “We will be dealing with it on a wholesale level. It is something exciting and good for Grand Island. It will be good jobs.”

John Mutunga is a member of the Kenya National Assembly and the delegation’s leader. He serves on the Agricultural Committee of the National Assembly.

“We want to have an avenue here to market our coffee,” Mutunga said. ” Kenya produces some of the best coffee in the world.”

Because of Kenya’s fertile volcanic soils, coffee from there has a unique aroma and desirable taste.

Africa is the home of coffee. When the British colonized Kenya in the 1800s, they established the coffee industry that continues there today.

Dave Taylor, GIAEDC president, said this is an excellent economic opportunity for Grand Island. “It is a great diversification of our current economy,” Taylor said.

The Kenya trade delegation is made up of about 15 people. Along with the members of Kenya’s National Assembly, the delegation includes local government officials, agriculture specialists and farmers.

Taylor said the delegation spent Monday touring Grand Island and talking with local officials and business people. They will then travel to Lincoln to meet with Gov. Pete Ricketts, Lt. Gov. Mike Foley, State Sen. Dan Quick of Grand Island, Nebraska Department of Agriculture Director Steve Wellman and Nebraska Department of Economic Development Director Dave Rippe.

Njugana said this project could lead to other collaborations with small farmers in Africa and other places around the world.

“We need to develop a relationship,” he said. “We need to develop trust and confidence in each other and opportunities will open up.”

Taylor said he hopes this enterprise will turn into an excellent import and export opportunity for Grand Island and Nebraska businesses.

“We hope to know more at the end of the week,” he said. “Laban has got such a handle on this project, and with his entrepreneurial spirit, he is going to push this in the next four to five months to where we will have solid commitments for imports coming in.”

 

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