Monday, 6 April 2020

Mamacoffee preparing to build premium coffee processing facility in Uganda with CzDA support

By Filip Šebek | Czech Development Agency |
23 January 2020

Uganda ranks among the poorest African nations, with high infant mortality rate and the lowest average age in the world, a mere 16 years. At the same time Uganda is the 8th largest producer of coffee in the world. And yet the agricultural community of local farmers unfortunately lacks the necessary knowledge and equipment in terms of planting, harvesting, and subsequent processing. For this reason mamacoffee, with the support of the B2B Program of the Czech Development Agency, has decided to build a business plan whose purpose is to map the options for building a processing facility for premium coffee in the foothills of the Rwenzori mountains in Western Uganda and to thereby support local farmers.

Mamacoffee was established in 2007 after a trip by founders Marta and Daniel Kolský to Ethiopia. From the very beginning of the company’s operations it has sought to connect consumers and coffee lovers with coffee farmers and their communities. In 2008 mamacoffee opened the first fair trade coffee roasters in central and eastern Europe and the company has subsequently worked to expand its overall capacity primarily by building other coffee shops, the capacity of its coffee roaster, and expanding trade. From 2009 to 2015 the company opened 7 of its own coffee shops, a certified bakery, and their own warehouse and packaging facility. As part of the B2B Program, mamacoffee has already carried out numerous projects, for example the recent project Agricultural innovations and technology in Myanmar with an emphasis on planting coffee.

“Our project in Uganda builds on our activities in Indonesia, Brazil, Nicaragua, and other countries. We are trying to share our knowledge with the other coffee farmers we are working with in long-term partnerships. At the same time we are seeking additional vendors and new partners and trying to build their knowledge, capabilities and capacity. Our approach is based on the conviction that greater competency in our partners will become our added value. We also believe that commercial cooperation can be the best method of development cooperation,“ says mamacoffee founder and executive Daniel Kolský. In addition to “fair trade” with coffee, mamacoffee also supports various disadvantaged groups within the Czech Republic. In 2010 they founded the social enterprise fair balírna s. r. o., which employs people with special health needs.

Motivating farmers for long-term collaboration

From the perspective of export, coffee represents a fundamental and strategic commodity for Uganda. In recent years the technical infrastructure has been built to the level of specific facilities thanks to a number of development projects. Donors of these projects primarily include Lutheran World Relief and Enabel – Belgian Development Agency. These individual projects have led to Uganda being able to build several high-quality facilities where they have partnered with international companies. “And yet coffee from Uganda still has not been successfully promoted and a specific space created on the market for premium coffee. On the contrary, it can be said that for a number of multi-national companies Uganda currently seems like a location that produces a large volume of inexpensive coffee without additional interest in increasing overall awareness of Ugandan coffees and their potential and opportunities,” Daniel Kolský explains.

In order for coffee to be designated as “premium” it has to achieve 80 points or higher based on a sensory evaluation. The difference in the price of commodity coffee and premium coffee can range in the tens or even hundreds of percent. For premium coffee the characteristic designations include information about region, varietal, and often other specific details that commodity coffee lacks. And yet it is premium coffee that represents the fastest growing segment of the coffee trade. The government and above all the Uganda Coffee Development Authority in recent years have gained awareness of this potential and sought to work more with promoting, increasing the quality, and differentiating the individual segments of the coffee market. At the same time they are trying to partially motivate the entry of foreign investors.

Mamacoffee is planning this year during the first harvest to verify in practice the theoretical basis of a business study. Upon evaluating this harvest they will proceed with the investment phase and the project itself. This will be carried out on farms in the vicinity of the Rwenzori mountains. The farms have rather the character of small gardens, ranging in size from approx. 500 – 5000 m2, which are mostly a combination of coffee, beans, and other products. In terms of financial impact, however, it is coffee that is the key commodity for most farmers. Unfortunately, in terms of their planting, harvesting, and processing knowledge these agricultural communities are practically entirely lacking in technical equipment and essential information about modern agriculture. Coffee plants are harvested by hand and often without regard to ripeness. “Along with inadequate management of farms and coffee crops as such, this leads to significant decreases in the quality of the coffee. It is the combination of these factors, along with the significant natural quality of local coffee, natural conditions, and above all the culture, which is very open, friendly, and focused on improvement and collaboration, where we see significant potential,” adds Daniel Kolský.

One of the main goals of the project is its development impact on local farmers. Support and knowledge transfer between collaborating farmers will lead to increased volume and overall quality of the planted and processed coffee. Greater yields and above all the higher quality of coffee will lead to an overall improvement of the economic situation of individual farmers. This change of course will not take place from one day to the next, but rather it will be necessary to gradually develop the entire community on a general level, such as in ecological behavior, so that the project can be sustainable over the long term. Farmers will be motivated by higher profits, but they will have to actively contribute to the entire process themselves.