Climate change and deforestation mean your morning cup of coffee may face extinction by 2050 according to reports from the Fairtrade Foundation, this comes at a time when the world’s demand for coffee is already outstripping supply.
Logistics support for a booming Kenyan coffee industry has never been more critical to ensure the world’s demands for its morning cuppa are met, but also to grow the Kenyan economy.
“Moving a coffee bean efficiently from a farm in rural Kenya to a coffee shop in central London is critical for the revival of the Kenyan coffee industry,” says Zaid Khammash, Managing Director, Operations, Kenya, at FedEx. “In Kenya, we are endowed with this incredible national asset that the world craves. We need to ensure we can supply the world and reap the rewards for the Kenyan people”.
Globally, the demand for coffee continues to outstrip supply, which opens significant growth potential for the Kenyan coffee industry, which is showing signs of emerging from a period of declining production thanks to better harvests, training initiatives, and government stimulus programmes.
The arabica coffee shrub C.arabica – which produces the most popular type of coffee – is native to the highlands of Kenya, as well as neighbouring Ethiopia and Sudan. Coffee production and exports from Kenya are expected to increase by about 6.7% in 2023/24, and exports by 5.5%, as higher production increases exportable supplies.
Coffee is indigenous to Africa, and coffee culture has deep roots in the eastern region of the continent. The modern coffee tradition is founded on the trade of coffee beans between Africa and the Middle East, dating back to the 1500s.
As coffee culture captures the world, Kenya is well positioned to capitalise on the growing fascination with Africa’s home-grown beverage.
From East Africa to the world
What counts in favour of Kenyan coffee growers is that the country’s coffee varieties enjoy speciality status among global coffee connoisseurs. Beans grown in the home of coffee are much sought after.
“Another opportunity would be to develop the market for processed and value-added coffee, instead of the raw, bulk beans, which currently account for most of Kenya’s coffee output,” says Khammash.
Kenya’s coffee trade system is quite unique. About 90% of coffee sales go through the 80-year-old Nairobi Coffee Exchange (NCE). The remaining 10% of Kenya’s coffee exports are handled directly through special licenses.
In January 2023, the Kenyan government made a change. They put the NCE under the control of the Capital Markets Authority (CMA). This means that licensed brokers, not private millers, now handle tasks like classifying coffee and getting it ready for sale.
“This small Kenyan direct coffee exports market specialises in direct trade of freshly roasted beans between SMEs in Kenya with industrialised nations. This provides major opportunities for Kenyan coffee in the European coffee import market, which accounted for a substantial 57.6% of the global total of $36.1 billion in 2021,” explains Khammash.
He outlines the need for logistics providers to supply invaluable support in streamlining this process. “Customised logistics solutions include temperature-controlled platforms and flexible shipping options, consolidation of smaller shipments, and packaging solutions that meet the standards of global coffee enthusiasts”.
The logistics sector can also provide access to new trade routes and untapped markets. A reliable logistics company, with well-established global air and road networks, and a bird’s-eye view of global supply chains and trends, can also overcome navigation, coordination, and supply-chain disruptions. A global logistics provider like FedEx can connect small and large coffee exporters to new possibilities without requiring substantial investment in logistics infrastructure.
Additionally, the digital platforms provided by logistics providers offer end-to-end visibility of shipments, real-time tracking and monitoring, and online trade-document management, ensuring the integrity of the coffee beans, saving time and money on shipping, through best route planning, shipment consolidation, efficiency gains, and transparent cost management.
Partners for export success
Logistics providers can even offer value-added services such as product labelling, packaging, and quality control. These services can help enhance the overall quality and presentation of coffee products, strengthening brand image. FedEx is geared to support the Kenyan coffee industry through capacity building by offering training and help in logistics and supply-chain management, equipping SMEs and coffee exporters with the ability to navigate the complexities of global trade.
As the world’s interest in Kenyan coffee grows, and industry output expands, logistics providers are set to play a critical role in helping coffee marketers and SMEs unlock new business opportunities. Especially when we consider that coffee is becoming an ever-scarcer commodity with ever-growing demand.
Efficient logistics support is a critical enabler in the journey to Kenyan success in the global coffee industry.