America.gov asked finalists from among the more than 700 African immigrants who submitted business plans to the “African Diaspora Marketplace” to blog about their ideas. Sponsored by USAID and Western Union Company, the African Diaspora Marketplace is a contest that will award seed money to approximately 15 winners to help them bring their ideas to life in their home countries.
ABESSAW ASSEGUED, entrepreneur:
Ambessaw Assegued, on left, and Sammy Guma.
Once, the forests of Ethiopia supported a great diversity of plants and animals. But not today. In Anfilo, I saw an intact coffee forest – rainforest with wild populations of coffee bushes – that stretches far across the mountain ranges. This sight stood in sharp contrast to the depleted mountains I usually encounter throughout Ethiopia.
In Anfilo, farmers manage small plots of coffee forest in the traditional way. They harvest coffee berries beneath the hardwood trees, but leave the forest intact. Unfortunately, these forests are threatened by timber harvesting and clearing for farming and settlements.
ASCE produces and markets a shade-grown coffee under the trade name ANFILO™. We focus on strengthening traditional coffee harvesting by bringing new capabilities in quality control, farmer training, eco-friendly processing technology, expansion of the existing plant nursery, re-forestation of cleared areas and introduction of soil conservation measures. Our plan is to expand production and export the coffee to the U.S. market.
To this venture, I bring skills acquired in running a successful habitat restoration company in California; Sammy brings extensive knowledge of the Ethiopian coffee market. I am convinced that this unique combination of skills and abilities will lead to a successful venture.
TOM LENAGHAN, business expert:
This is an interesting proposal. What we have seen in other areas where wild-type crop shade-grown coffee cultivation practices prevail is that the key to preventing deforestation is ensuring that farmers receive an attractive price for their coffee, since as soon as they lose enthusiasm for coffee growing, they usually harvest the trees and plant crops such as beans or corn that need sunlight and tilling on a regular basis—which is basically the end of any possibility of maintaining forest cover.
But shade-grown coffee, while it may be quite good in the cup if it is treated correctly, will almost inevitably have low yields from low planting densities and low input use. This means that the price received by farmers must be quite high to compensate for the low volumes and to justify the necessary investments in improved processing technology.
So I would suggest that the heart of ASCE’s approach should be on creating commercially viable systems for improving coffee quality and establishing direct sales relationships with buyers/importers—all with the aim of getting the highest price possible.
Drying coffee berries at the Anfilo company.
It is often hard for a private company that is buying the coffee to support the start-up costs to establish these upstream processing and quality control systems on a purely commercial basis.
What I would suggest is that ASCE investigate working with local farmers in Anfilo to look into the feasibility of using a Global Distribution Alliance (GDA) where each party is assigned roles and responsibilities in order to come up with a project and where some of the capital costs (mainly processing technology) and costs of training the farmers could be covered by a GDA match.
It would also make a lot of sense to involve a downstream importer or roaster in the U.S. or Europe in the concept. They could also be a source of training expertise or even financing, the latter perhaps in conjunction with a specialized coffee financing firm such as Root Capital if there is a firm forward sales contract with a known buyer as part of the package.
THOMAS H. CARR, business expert:
This project aims at producing coffee with some really good unique selling points. Protecting the rainforest utilizing (semi-) wild growing populations of coffee bushes, which stretch far across the mountain ranges, is definitely very appealing to roasters and consumers. On top of that, there is the impact on the livelihoods of the local farmers.
Some key questions come to mind:
1. The productivity of wild forest coffee can be as low as 200 kgs per hectare annually. They will have to focus on a broad geographical area to gain volume and a profitable economy of scale.
2. Due to cupping defects as a result of drying problems, the project must include a solid quality plan with the involvement of cupping assessments in various stages of the production process. Forest coffee won’t sell well just because it sounds eco-friendly – there will be no market if it doesn’t taste good. The coffee has the potential to score on quality at 81/82 (on the scale of 80-100 set up by the Specialty Coffee Association of America; the highest score the
better quality).
3. Linked to the previous point, the project must establish sound processing protocols. Sun-dried natural coffee should be compared to eco-friendly wet processing pulping options.
4. Community partnership cannot be over emphasized on a project such as this and several issues need to be considered:
a. There are thousands of Anfilo wild coffee farmers working in
isolated areas without any real connection to each other, or the
coffee industry. Although the forest land is owned by the local
government, citizens have the right to harvest the land and
receive income from those goods. Today, local community earns
a living by selling honey, spices, coffee and a small number of
livestock.b. The project must demonstrate collaboration among several groups
including public and nonprofit organizations, conservation groups,
industry, academics, and local government, state, and federal
agencies to implement forest habitat restoration projects. To
proceed, the project must have formed working relationships with
these groups.c. A “Participatory Forest Management” (PFM) initiative should be
planned from the start of the project. The recognition and
acceptance of the role of local communities in forest management
and conservation is important to the success of the project.
5. Branding is important although experts disagree over the importance of certification. The general view is that an “organic” or rainforest certification may assist in the marketing process although there are examples where “conservation coffees” are sold without such certification.
6. The main challenge for the project is the export limitations for specialty coffee under the current market structure of the Ethiopian Commodity Exchange (ECX). The ECX is, however, working on a direct specialty trade platform that the project would have to access in order to benefit from traceability. The project managers must be current on all export regulations. The marketing plan must focus on telling the story of Anfilo. A website with video segments and pictures will tell a thousand words! The assistance of a broker in the early stages is highly recommended. The managers should organize cupping sessions in San Francisco, Seattle and New York and tell the story. The coffee will be extremely popular with small- and medium-sized roasters provided that it scores at least 84 points.