Market Reports

Painting Kenya’s portrait

Fenkil Asghedom isn’t actually from Nairobi, or even from Kenya. The coffee enthusiast and entrepreneur is from nearby Eritrea, a small country on the northern edge of Ethiopia. He came from a coffee family, though, and grew up in Eritrea’s coffee culture that treated coffee drinking as a ceremony and social gathering. This love for coffee stayed with him his entire life and eventually motivated his move to Nairobi to start a specialty coffeehouse. While his café and roastery, Kesh Kesh Coffee, was under construction prior to opening last year, he took a Q grader course at Utake Coffee Lab, East Africa’s first Specialty Coffee Association (SCA) premier training campus. He had met its instructor Mbula Musau in Uganda six years earlier and was encouraged to take a course at the soon-to-open lab in Nairobi. Musau, who is the first Coffee Quality Institute-accredited Q instructor in Africa, had quite a different story getting into coffee. “I like to say that I bumped into coffee, fell in, and never looked back,” she tells Global Coffee Report. Rather than growing up with it as Asghedom did, Musau was introduced to coffee during university. “What started as a part-time job turned into a wealth of learning, immense growth, and a fulfilling career.” In Utake’s Q grader course last September – its largest to date – Asghedom passed with flying colours. Today, he uses his training to educate his 15-person team and their customers on specialty coffee. “Every day, the staff and I do cuppings and I train them in basic know-how of coffee, roasting, and brewing,” says Asghedom. “And together we are teaching people and sharing our knowledge of specialty coffee and the differences between it and commercial coffee.” That commercial coffee is what Kenya coffee drinkers are accustomed to – and that group is even a small percentage considering Kenya is largely a tea-drinking country. According to the US Department of Agriculture’s Foreign Agricultural Service annual GAIN Report, domestic coffee consumption in Kenya has remained low at about three per cent of total production – a fraction of what many other producing countries drink. On top of its preference toward tea, coffee has historically been too expensive for the low-wage majority of Kenyan consumers. And because Kenya produces desirable high-quality Arabicas, the bulk is exported to and processed by countries with consumers who are willing to pay the associated premium. If Kenyans don’t know high-quality coffee, then the share who actually know about specialty coffee is even smaller. This is the driver behind Kesh Kesh Coffee’s educational component. “Most Kenyans don’t know what specialty coffee is,” Asghedom tells GCR. “They only know the commercial coffee, and with that, everyone has the same mentality: bitter.” Fortunately, domestic consumption is on the rise (albeit from a small base) for a handful of complementary factors, but particularly because of Kenya’s expanding middle class and its greater spending power. “There is a big gap between commercial and specialty coffee, and the middle class is finally discovering the difference,” explains Asghedom. “Also, the young generation is starting to discover and talk about coffee” – a trend consistent with the global industry as millennials embrace all things coffee. It’s these expanding demographics and the global Third Wave coffee movement that are supporting growth for entrepreneurs brave enough to open coffee shops in what is still a low-wage, tea-drinking country. Kevin Ashley, co-founder of Java House, benefited from these trends as his coffee shop grew from one location in Nairobi in 1999 to the East African chain it is today. “In five years time we [will have] a major presence in most of the major urban centers of Africa,” he told Reuters in 2015.
And expand they did. During the past few years, a swelling middle class, sustained population growth, increasing urbanisation, and an emerging coffee culture have helped the brand, which is now owned by growth markets fund Abraaj Group, launch more than 60 cafés across Kenya, Rwanda, and Uganda. Although Asghedom doesn’t place Java House in the specialty category, he does give it credit for helping develop the aforementioned coffee culture that is emerging in Kenya. “Java House is playing a big role in introducing the East African community to coffee,” he admits. “When it comes to coffee awareness, the middle class associate themselves with Java.” This initiation is not too different from what many small US roasters and coffee entrepreneurs credit Starbucks with. Just as Starbucks introduced American coffee drinkers to high-quality espresso beverages and coffee shop culture at the beginning of the Third Wave, Java House is doing the same for East Africa. Producers first and foremost Although output has also been increasing marginally during recent years, total production has declined overall since a record high of 127,000 tonnes in the 1987-88 season, according to data from the International Coffee Organization (ICO). Output dropped by 40 per cent the following year when the ICO did away with its global quota system that controlled market prices and competition. Over the next two decades, Kenya’s production volumes fluctuated before hitting an all-time low in the 2008-09 season with barely 32,500 tonnes. Although coffee is no longer the country’s leading crop and the nation only contributes about 0.5 per cent of total world production, it still represents big business for Kenya. According to the SCA, about 30 per cent of Kenya’s agricultural employees work in coffee at some capacity. The industry is made of about 800,000 smallholder farmers. While urbanisation and an expanding middle class have supported domestic coffee consumption, they have been detrimental to local production as major cities expand outward and wipe out nearby farms. Most of the larger plantations that dotted the hills between Nairobi and Mount Kenya have largely been shut down and sold to developers for new roads and residential and commercial properties. Meanwhile, the changing climate is also pushing farmers out as drought and pests wreak havoc on their plots. Many are leaving the industry for more profitable crops or to work in the service sector, which is Kenya’s largest contributor to gross domestic product. “Unpredictable weather has increased pests and diseases, affected production levels and [consistency], increased the cost of production due to need for irrigation and pest management, and reduced the quality of the produce,” explains Dr Elijah Gichuru, Director of the Coffee Research Institute within the Kenya Agricultural & Livestock Research Organization. In response, last year Fairtrade International established a Fairtrade Climate Academy outside Nairobi, in collaboration with Machakos Union Coffee Cooperative, to train farmers on techniques to cope with climate change, including water conservation, tree planting for shade, crop diversification, and using clean energy. “The idea here is to train farmers to become more resilient, to become better businesses,” says Wangeci Gitata, Fairtrade Africa’s Resource Mobilisation and Partnerships Manager. “This is a long-term project, so we are training farmers who can go and teach other farmers.” In another effort to combat climate change, some producers are planting new Arabica varieties that are resistant to pests. While some reports claim the new varieties have inferior in-cup quality, Gichuru is quick to quash those claims. “Use of improved disease-resistant coffee varieties has increased production without affecting coffee quality as long as the coffee is produced and processed in adherence to the best practices,” he tells GCR. “This has been confirmed in blind tasting by professionals.” Work in progress Despite the poor odds, coffee production has been slowly increasing since 2009’s all-time low, thanks in part, to heightened efforts from government and industry organisations. “The past year has seen improved production with expectations that we may finally hit 50,000 metric tonnes from the 47,000 we have seen for the past few years,” says Musau. “Concerted efforts by multiple stakeholders are helping make the situation better.” According to the SCA, Kenya’s Agriculture & Food Authority is subsidising fertiliser for farmers to help improve yields. It plans to help increase land under cultivation by 26 per cent with hopes of boosting production to 93,000 tonnes by 2020. Meanwhile, groups like the Association of Women in Coffee–Kenya Chapter are working to get women and youth more involved in the coffee industry to help reverse declining production, says Gichuru. The International Women Coffee Alliance (IWCA) has also played a role on this front. Musau’s Utake Coffee collaborates with IWCA, mentoring members from the various chapters throughout Africa. Additionally, Utake offers scholarships to qualified young coffee professionals who may not be able to afford the courses. Says Musau, “My mission as an instructor is to [not only] ensure I provide a professional space and opportunity for coffee people to take coffee classes at origin, but also reach those that would not easily get a chance to acquire world-class qualification, with the knowledge I was so privileged to receive.” She also notes that the Kenyan government recently created a coffee task force aimed at implementing measures to improve the industry. “The government is very committed to improving the policy environment for coffee,” she tells GCR. “The task force is mandated to gather stakeholders’ views, give recommendations that improve the environment, and then implement its recommendations.” According to the USDA GAIN report, national and county governments are launching projects to open new production areas and rehabilitate abandoned farms – a worthwhile effort considering Kenya’s ageing coffee trees and farm infrastructure. In fact, some farms’ trees are more than 100 years old, well beyond the average producing life of a coffee tree. Across the Atlantic, the US has enacted various initiatives over the years to help improve Kenya’s coffee industry. Since 2000, the US African Growth & Opportunity Act has allowed producers to export processed coffee to the US market duty free. The trade act has helped a small share of entrepreneurial producers collect higher premiums for their coffee by roasting and packaging it before export. In 2015, the act was extended through 2025. Resulting in a more immediate effect on trade between the two countries, the SCA featured Kenya as its “Portrait Country” at last year’s expo in Seattle, Washington. Every year, the SCA profiles an origin country’s local coffee industry throughout the four-day event.
Within six months of the event, the US became Kenya’s top coffee buyer, surpassing previous leaders Germany and Belgium. According to data from the Kenyan Coffee Directorate, exports to the US jumped 75 per cent last year, making it number one in terms of volume purchased and price spent per kilogram. The United States and numerous European countries have long desired Kenya’s high-quality Arabicas, though. “Kenyan coffee is renowned for its bright malic acidity, blackcurrant notes, cane sugar sweetness, smooth body, and refreshing taste. It is one of the most unique and complex in character, and can be enjoyed any time of day,” explains Musau. “But let me [also] describe the farmer’s diligent work on the crop and in growing and processing the bean, leading to more than 80 per cent of the greatness in that Kenyan cup. No mater how well we roast or brew the coffee, nothing replaces a well-grown bean.” In addition to the farmers’ hard work and care, as Musau says, the beans also benefit from the region’s high altitudes and nutrient-rich volcanic soil. The major coffee-growing regions are the hills around Mount Kenya, the Aberdares Range, and some parts of the Rift Valley. Given Kesh Kesh Coffee’s specialty status, Asghedom only uses the highest grade Kenyan beans. Currently, he sources the green coffee through local cooperatives, but as his business grows, he eventually hopes to work directly with farmers. His long-term plan is to expand outside of Kenya into Uganda and Rwanda, and then to the Middle East. For now, though, he’ll continue his push in the Kenyan market – one that is slowly but surely emerging thanks in part to numerous industry organisations, coffee shops like Kesh Kesh and Java House, and passionate coffee entrepreneurs like Asghedom, Ashley and Musau.

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