Focus Media (Kigali)
8 July 2009
Initially, the Rwandan coffee sector focused on quantity rather than quality. Yet in the early 2000s, a new strategy for the sector was introduced which led to a boom in coffee washing stations being built to improve the quality and add value to the coffee. Moreover, farmers switched to varieties that were more appropriate for the so-called "specialty coffee" market.
As a result, Rwandan Arabica coffee began fetching high prices on the US market. Having a nose for good coffee, Starbucks quickly became interested and set up activities to help farmers further improve coffee quality through disbursing knowledge to farmers, introducing them to best practices as well as ensuring they make a fair profit from coffee sales.
According Howard Shultz, the president and CEO of Starbucks who was recently on a visit in the country to open the enterprise's first office on the continent, the business model used by the company ensures that it makes profit but also gives back to the community.
However, Starbucks has been hit by the economic downturn which has led to reduction in profits and the closure of hundreds of its coffee shops in the U.S. "There is no doubt that America has been affected and that consumers have changed their behavior," Shultz admitted, adding however that this played in Starbucks' hand. "Consumers want to be associated with companies that give back to the community," he said.
He indicated that that is how Starbucks has been operating since its inception forty years ago, and therefore expressed optimism that the current economic situation is going to reverse, hence allowing Starbucks to maintain the fabric of what it stands for.
"Business is very healthy despite economic hard times," Shultz assured, pointing out that Starbucks intended to continue its long term business relationship with Rwandan coffee farmers.
Shultz indicated that it was the company's intention to keep offering fair prices and at the same time returning 10 cent per pound sold to the coffee farmers as a way of helping them overcome poverty.
To further emphasize his point, Shultz pointed out that Starbucks would never set up an office in the country if it found that there was no economic reason to do so.
The new Starbuck office in Kigali will be the first of its kind on the continent and it is expected to collaborate with coffee growers in the entire region.
Regarding the amount of coffee Starbucks buys from Rwandan coffee farmers, Schultz declined to mention the exact figure. "Our company has competition, so there is certain information that we cannot divulge," he explained.
Starbucks has invested US$ 3.7 million loans in Rwanda to facilitate coffee farmers, and more than US$ 20 million across the globe. It operates in 50 countries, buys coffee from 30 producing countries, employs 170,000 people and owns 17,000 stores across the world.
Apart from the Rwandan coffee, Starbucks also helps market other Rwandan products such as baskets in all its stores.
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