Improving the Coffee Supply Chain for Women

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2:07Margaret Nyambumo:But farmers in the world's top grower are in no hurry to sell beans, squeezing supplies in consuming countries. This is according to a recent story from our colleagues at Bloomberg News. Margaret Nyamumbo watches global coffee prices closely. She's founder and CEO at Kahala 1893, with partners with co-ops in Kenya, Rwanda, and Congo. She joins us here at Uncharted. Welcome, welcome. How are you?

2:29Businessweek Daily:Yeah, thanks for having me. I'm great. It's great to be here and talk about Kahawa.

2:34Margaret Nyambumo:Yeah, we want to talk about premium coffee and just the niche that you have carved out. It's such a really interesting category, given that the way that people consume it around the world, it's different in many parts of the world, but also the way that you've been able to partner with these local co-ops for this socially responsible product. How did you do it?

2:53Businessweek Daily:Yeah, so I had a background having grown up on a coffee farm in Kenya. So my grandfather started a farm and I'm a third generation coffee farmer. So I migrated to the United States and saw the culture of coffee. But there wasn't a brand, like an African brand, that was essentially building the story about coffee. Because coffee is originally from East Africa and we produce some of the best coffee in the world. And so Kahawa T93 is that brand that's really bringing East African coffee and the stories of the growers with it to the global world.

3:28Margaret Nyambumo:You know, coffee, there's like so many choices today. Tell us what makes Kenyan coffee so special and so particular.

3:36Businessweek Daily:Yeah, so Kenyan coffee is considered the best in the world by coffee connoisseurs. And the reason for that is because it's a very special microclimate. So we have Mount Kenya. It's right on the equator. and we have amazing soil. So all these factors converge to produce some of the best coffee, but also the farmers do an amazing job of making sure they're picking only the ripe cherries and the way that they process. Kenya has a special processing. It's called double washed. So they ferment the coffee for 24 hours, wash it again twice, which is unique. It's a Kenyan unique metal called double washed.

4:13Businessweek Daily:produces some of the cleanest coffee that any coffee connoisseur, when they taste them on the table, they're able to tell that they're Kenyan coffee.

4:20Margaret Nyambumo:I don't know if you know, but this one is a bit of a coffee connoisseur. Yeah, Carol warned me this morning. She's like, you're not going to like the coffee that they have on offer. I will drink just about anything, but this one I'm like, no, no, no, no, no. But Carol actually brings up a good point, which is about educating the consumer. Does the consumer realize that the Kenyan coffee story, how good that coffee is? We got put in Costa Rica, and they're like, this is the best coffee.

4:45Businessweek Daily:So, like, help us. Yeah, so, I mean, that's part of the reason we have the brand with Kahawa. We're really educating the consumers. And one easy way is when they taste their coffee, they can really taste the difference. So one distinct thing about Kenyan coffee is because it's grown at such high altitudes because it's mountainous, we can roast it really dark without burning it. So you know how people say, like, burns coffee, right? Yes. So our darkest roast, which we call our Serengeti blend, when people taste it, they're like, oh my god this like tastes like very rich and and you know and dark but it's not burnt um so that's how you know that like it's a very dense bin because it also grows for like nine months um out of a year so you get a very like super high quality people don't always know of course because you know kenya is a newer and smaller country for coffee production right but once they taste it they're able to like tell the difference yeah so there's one thing your

5:36Margaret Nyambumo:mission of providing a product right um but you're also you know it's a giving back and helping your farmers. Tell us a little bit about what you guys are doing there.

5:45Businessweek Daily:Yeah. So essentially, one of the reasons I founded Kahawa was when I was growing up on the coffee farm in Kenya, I saw that a lot of the labor came from women. So up to 90 % of farm labor in general for coffee comes from women, but they're not always compensated because coffee prices are always fluctuating. Sometimes they're too low. So I wanted to find a way to make sure that the women behind the coffee are compensated. So we have a QR code on the back of the bag that you can scan and tip farmers. And we have people, people love doing that.

6:14Margaret Nyambumo:So they give tips to farmers. Yes.

6:16Businessweek Daily:The way that you can tip your barista or server, you send in an extra$2,$10, and that money goes back to the women farmers.

6:24Margaret Nyambumo:Because it wouldn't be economically viable for you to raise the prices to then account for what you think the tips should actually be.

6:32Businessweek Daily:Yes. Yeah. So it's a sense of modern fair trade. Yeah. Because in the traditional fair trade, third party, the money goes back through the chain. But if we're able to study direct and we match the tips, all that money goes back. So it's very, very effective.

6:46Margaret Nyambumo:You shared with us some of your story. You left out parts of your story, too, which is that you left an investment banking career after graduating from Harvard Business School to start this coffee company. What was the moment that you were doing the investment banking work and you said, I want to go out on my own and do this thing that's completely different?

7:01Businessweek Daily:Yeah. I'll go back to your roots, it sounds like. Yeah. So I was doing, you know, after business school, I started out my career in investment banking and I was covering consumer companies. So I got really interested in building my own brand, building something from scratch. And so coffee for me was a natural because I had grown up around it. And I really saw that gap between like bringing an African coffee brand to the market, but also being able to solve the equity, the gender and racial equity part of it. Yeah, so it was a very, it was a problem that I wanted to solve. and I saw that my skill set coming from banking, which has been amazing to be able to utilize that as I build a company.

7:41Margaret Nyambumo:You know, talking to someone like you, it always, you know, the perspective that you give us because, you know, looking at the notes that your team shared with us, the farmers who get the tips, I mean, they're doing that, obviously for supplemental income, right? To help out their families. But it's educational costs for schools, for girls in particular.

7:59Businessweek Daily:Like that's what this money goes for. Yeah. So one of the things I'm really proud of, and, you know, last time I was Kenya, I was able to witness is a scholarship program. So the women in the community, you know, decided to use the funds to make sure that the young women in the community stay in school. So sometimes, you know, when a girl drops out of school, even for like something as little as 20 cents, it's harder for them to catch up. Right. So this fund is really to make sure that the women, the young girls in school stay in school. and this fund helps them make sure that they don't drop out.

8:33Businessweek Daily:And, I mean, I used to be in that position, right? And so being able to help the next generation of women not, you know, be picking coffee, but actually be in school so that they can develop the community has been such an amazing privilege to be able to do that.

8:47Margaret Nyambumo:Before we let you go, the distribution strategy for Kahawa 1893, what is it?

8:51Businessweek Daily:Yeah, so we're nationally distributed. So, you know, we're Trader Joe's, you know, Target, Sprouts, Online. We're the first blackened woman on coffee brand to have national distribution. Of course, we're on Shark Tank, and we also have a direct-to-consumer business. We actually do serve offices in all over the New York area as well, and we're available online as well. So we're pretty diversified, and you can find us pretty much anywhere.

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