Kenya targets Starbucks for direct coffee sales

By John Muchira in Nairobi October 11, 2023

Kenya is hoping to enter into a deal that will see its coffee farmers sell directly to Starbucks, a development that has the potential to double their earnings by eliminating middlemen.

Deputy President Rigathi Gachagua announced that as part of ongoing reforms of the struggling coffee sector, the East African nation hopes to secure a deal with the world’s biggest coffeehouse chain for direct exports.

US Ambassador to Kenya Meg Whitman, who has been marketing Kenya as a strategic US trade and investment partner, is facilitating talks between Nairobi and the Seattle-based giant for the agreement.

“We are soon meeting with Starbucks officials to fine-tune details of this deal,” Gachagua told a local radio station. “The deal will be groundbreaking for our farmers as it will eliminate the middlemen and allow them to sell directly to the largest coffee chain in the world.”

The push for the Starbucks deal comes when Kenya's coffee production has also been on the decline in recent years owing to farmers switching to other crops due to plummeting earnings.

The fact that more than 800,000 smallholder farmers and another 5mn Kenyans are employed by the industry has prompted the government to instigate widespread reforms, part of which are geared at dismantling “cartel” in the coffee value chain.

Kenya National Bureau of Statistics data show that during the first half of this year, coffee earnings stood at KES 25.5bn ($171.1mn) compared to KES 26.6bn ($178.5mn) in the same period last year.

As the world’s biggest coffeehouse chain, Starbucks boasts 36,170 stores globally with the US and China comprising 61% of its global portfolio with 15,952 and 6,090, respectively. Its total revenues for the fiscal year ending October 2022 stood at $32.2bn.

The US chain is heavily reliant on independent farmers for its coffee supply, buying from about 400,000 farmers across 30 countries.

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