Good African Coffee: Trading out of poverty

Andrew Rugasira’s new book A Good African Story starts off as anything but the happy tale the title leads on. The first chapter ‘What’s Wrong with Africa’ begins with an account of a childhood encounter with drunk and violent soldiers. The chapter moves into a political essay on the warlordism, corruption, and repressive regimes that have long haunted Africa.   Yet those already familiar with the story of the coffee brand Good African Coffee know of the eventual happy ending. The roasted coffee brand that Rugasira founded in 2003 is now being sold by hundreds of retailers across Uganda and the United Kingdom, and via one of the largest online distributors in the United States. In an environment not conducive to business, Rugasira has managed to persevere, resulting in the most popular African-branded roasted coffee sold directly in Western markets. As Rugasira tells Global Coffee Review, providing the historical context for his personal journey from start-up to success was an important part of writing his book, released in early 2013 by UK publishers Random House. “There is a lot of information that comes out of Africa that’s taken out of context,” he says. “It’s important to take a step back, and get a sense of that historical context. Not only to understand the story of the company, but also because I have grown up in this history, and it has shaped my own thinking.” Rugasira’s success has not only been shaped by the politics of his upbringing, but from a business-minded background. Far from being an umpteenth generation coffee farmer, Rugasira comes from a family of business entrepreneurs. His father started a manufacturing plant to produce chalk in 1973, and was one of few Ugandan businessmen at a time when Asian migrants largely controlled the commercial affairs of the country. Rugasira studied law and economics at the University of London, and went on to work in research positions looking at the industrial sector. He took over his father’s business when he passed away. Rugasira then went on to found and run a promotions, logistics and events management company, expanding into advertising and communications services before starting up Good African Coffee. Rugasira largely credits this strong branding background for his eventual success. With coffee an important part of the Ugandan economy, Rugasira had plenty of resources at his disposal to fuel his coffee efforts. Marketing knowledge, however, was scarce in a country with a limited number of international brands. “One of the big challenges I’ve found by the way of roasted coffee is the need to develop this brand,” he says. “Brand appreciation in Uganda is not at a high standard, but this is a vital element when working on the global stage. This was something I could bring to the game. I understand what global brand standards are, and what people expect. I could develop a road map to communicate that brand in a way that would get consumers to pick up our product from the retail shelf.” With limited resources for advertising or promotion efforts, Rugasira says this brand appreciation became especially important, as the only communication tool he had with customers. “I think if anything my limited knowledge of coffee and my background in branding was certainly an advantage,” he says. “I came to this industry with a fresh set of eyes.” This is not to say that Rugasira’s learning curve wasn’t a steep one. He remembers being especially caught off guard in his initial interactions with farmers. When he launched the company, one of the first steps he took was to meet with farmers, and explain to them his plans to purchase their coffee at a higher price, and incorporate them as shareholders in the company. Expecting a warm welcome, Rugasira admits now that he didn’t expect the level of cynicism he received. Farmers were initially quite sceptical of Rugasira’s intentions. “This reaction really caught me by surprise,” he says. “The farmers didn’t feel they were being paid the correct price for their coffee, and felt like they were being cheated. That surprised me, but I quickly came to understand where they were coming from.”
As the business progressed, Rugasira says that sharing Good African Coffee’s vision and objectives was helpful in winning farmers over. This vision in its context was simple enough. With the majority of the profits in coffee being gained in the roasting process, the idea was to roast coffee in Uganda and then sell it directly to Western consumers at the retail level. By incorporating farmers as stakeholders in the company, they could profit from this final sale, and not be as vulnerable to the fluctuations of market prices. In his book, Rugasira points to the historic challenges farmers have faced in receiving only the market price for their coffee. He points out that from 1994 to 1995, the country exported 2.7 million bags of coffee, earning more than US$430 million. During the coffee price crisis at the turn of the millennium, that figure dropped to US$108 million, despite an increase in volume. His main argument is that aid money will do little to help the country, and indeed Africa in general, compared to profits from commercial activities. It’s the “trade not aid” philosophy that is a strong underlying theme throughout Rugasira’s book, and indeed his business model.  While simple enough in its vision, the actualisation of Rugasira’s social enterprise was no easy feat. Interestingly enough, he says the company’s early trials and tribulations, in the form of financial troubles and strife, were helpful in gaining farmers’ favour. “As tough as it was at the beginning without sufficient resources, one lesson we learned was that our vulnerabilities were a demonstration of our depth of commitment,” he says. Rugasira laughs as he recalls the farmers cheering when the company finally had enough money to purchase a utility truck, rather than drive out on their old motorbikes. “It was that humility that helped farmers see our situation, they felt like they were connected to us,” he says. Lessons in humility were something Rugasira had in abundance. In his book he describes the frustrations of trying to access capital in a country with financial policies not conducive to business credit. It took a personal visit to the governor of the Central Bank to acquire initial support. When Rugasira did finally secure a loan, he and his family faced incessant phone calls, letters and eventually foreclosure notices, when a deal with UK retailer Waitrose fell through. Fortunately for Rugasira, a deal with Sainsbury’s came just in time to salvage the company. However, even that deal didn’t come easy. Although several positive meetings – and expensive trips to London – seemed like they were going to bear fruit, Rugasira received almost a flat no from the company via email. Desperate to save all his work, he emailed Sainsbury’s chief executive, with a plea that if the company was serious about fairer trade, it should reconsider its decision. The tactic worked, and a few weeks later he received a reply that the retailer would be stocking Good African Coffee. Different to the company’s UK entry, Rugasira recounts that the move into the US was much more fortunate, and incidental. In actively seeking out business connections with religious organisations, he was invited to a leadership event. On this trip he was partnered with Jerry and Jan Kehe who would serve as his hosts. He recounts to Global Coffee Review that it wasn’t until two days into his visit that he asked about their business, which turned out to be one of the largest online retailers in the US. “That was rather fortuitous,” he says. “That happened to be my way into the US.”  Religion has helped Rugasira in more ways than just connections. He largely credits his faith for guiding him throughout his journey – from foreclosure notices to neglected promises. He says he was also encouraged by a belief that pursuing such a grand vision could only be achieved through some sacrifice. “I figured maybe it’s this tough, because the potential impact is so great,” he says. “At the end of the day, what I went through was nothing compared to the lives of these farmers.” Rugasira’s book is an inspiring and highly educational account into the context of Africa’s economic environment, as well as his lessons learned in the process of setting up his business. While many memoirs like these are written years after a person retires, Rugasira is still in the height of his success, with plans for further expansion. He says this was important for him, to write the book while the experience was fresh in his memory. With 70 per cent of Africa’s population young, he says the possibilities for local entrepreneurship in the very near future are endless. The key will be to unlock the institutional and infrastructure hindrances that have made the journey so difficult for Rugasira. “The sooner we remove these constraints, we’ll unshackle all these entrepreneurs,” he says. “The book is intended as a source of encouragement.” He advises other entrepreneurs, especially in countries like his with environments less conducive to business, to seek out their own approach depending on their product or service. “The most important thing is just don’t give up,” he says. “The journey is as important as completing the objective.”