Companies count losses as bid to sell processed coffee flops

Poor marketing and stiff competition from well-known brands to blame for huge losses.

Sachets of expired coffee at Gikanda factory in Nyeri on August 28, 2018. PHOTO | JOSEPH KANYI | NATION MEDIA GROUP 

IN SUMMARY

  • Some of the cooperatives that have tried to process the produce are stuck with it due to lack of market for the end product.
  • Cooperatives have been adding value to their produce and selling at Sh1,000 a kilo and Sh100 for 100g.

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Farmers in Nyeri are stuck with processed coffee due to lack of domestic and international buyers, bringing to question the viability of a bill by Gatundu South MP Moses Kuria to ban the export of raw coffee.

The Crops Amendment Bill 2018 proposes that Kenya bans export of raw coffee and instead counties be compelled to ensure they process the produce first.

But some of the cooperatives that have tried to process the produce are stuck with it due to lack of market for the end product, poor marketing and stiff competition from well-known brands with bigger marketing and distribution budgets.

In Nyeri, Mathira-based Gikanda Coffee Society’s quest for higher pay for farmers through processing of its coffee has come to a cropper.

FAILED PLAN

In April 2016, the firm bought 30 bags of clean coffee from millers to be processed and packaged for sale locally. A 50kg bag of coffee cost the cooperative Sh18,000.

But the produce now lies unsold. The society managed to sell 10kg of the 600kg of coffee that was processed and packaged.

More than 500kg of processed coffee expired in their stores four months ago.

“When we bought the coffee from the millers, we projected we would sell it in a few months. Our plan was to sell to farmers and through farmers,” the society’s secretary Joseph Mukuha explained.

But it seems that even coffee farmers did not consume their quota.

MARKETING STRATEGY

According to the society's chairman John Ngure, the lack of a market and strategies to earn from their produce led to the expiry of the coffee that has been stashed in 10 cartons in their stores.

“We also did not have a marketing strategy that would promote the consumption of our coffee,” he said, adding that the society suffered a loss of more than Sh700,000.

“Once the coffee is processed, it ages and that is why buyers want to do it themselves. More so, the coffee buyers blend the coffee from different parts of the world to get a distinct taste,” Mr Joseph Njau, a coffee expert in Nyeri, said.

Barichu Coffee Society has been processing 16 bags of coffee annually but they too complained of low sales.

VALUE ADDITION

The chairman, Mr Wachira Mwango, said they invested in a coffee house to promote consumption of their product but the uptake has been sluggish.

Retailers have also asked the societies to package the produce in small sachets for convenience, which the societies d not have the capacity to do.

Cooperatives have been adding value to their produce and selling at Sh1,000 a kilo and Sh100 for 100g.

Nyeri Agriculture Executive Henry Kinyua said cooperatives societies should first identify a niche market.

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