Leveraging Direct Sales for Kenyan Coffee Producers and Exporters

The ongoing Coffee Reforms in Kenya present a unique opportunity for coffee producers and exporters to capitalize on direct sales to international markets. By forgoing traditional intermediaries, coffee producers and exporters can capture a larger share of the market and establish stronger relationships with international buyers.

Below are key strategies for Kenyan coffee stakeholders to effectively leverage direct sales and maximize their impact.

Understanding direct sales

Direct sales involve selling coffee to international buyers, by eliminating intermediaries such as brokers or agents.

According to The Crops (Coffee) (General) Regulations, 2019 a licensed grower or any other legal entity representing a grower that is Cooperative Societies, Estates, Unions and Associations can conduct direct sales

 This approach offers several advantages:

• Increased Revenue: Producers can secure higher prices by negotiating directly with buyers and avoiding commission fees.
• Improved Transparency: Direct relationships foster greater transparency and accountability in the supply chain.
• Stronger Brand Building: Direct sales enable producers to build their own coffee brands and establish direct connections with consumers.
• Enhanced Sustainability: Direct sales can facilitate the implementation of sustainable farming practices and traceability initiatives.

Rules for direct sales include:

• The prices offered at during a direct sale shall be competitive and bear a favorable comparison to those discovered at the Coffee exchange.

• Notification of Direct Sales must be done to the relevant authority that is:

• copy of the contract;

• the coffee grade;

• the coffee quantity;

• quality report;

• the coffee price;

• details of a certification scheme, where applicable

• mode of payment; and

• a dispute resolution clause.

• A certificate of inspection shall be issued by the Coffee Directorate on coffee to be sold under direct sales in the format prescribed under the Sixth Schedule.

• Direct sales shall be conducted according to the guidelines issued by the Authority

Building capacity and partnerships

To successfully implement direct sales, Kenyan coffee producers and exporters need to build their capacity and establish strategic partnerships:

• Training and Education: Undergo training on international market trends, quality standards, export regulations, and negotiation skills.
• Work through Cooperative Societies, Estates, Unions and Associations: growers and Exporters are encouraged to join cooperatives or associations to pool resources, collectively negotiate with buyers, and reduce transaction costs.
• Partnerships with Roasters and Importers: Develop relationships with international roasters and importers to secure direct purchase agreements.
• Government Support: Seek government support in facilitating market access, providing export incentives, and promoting Kenyan coffee internationally.

Developing a strong brand identity

A strong brand identity is crucial for differentiating one’s coffee in the global market. Therefore consider:

• Unique Value Proposition: Identify the unique characteristics of your coffee, such as flavour profiles, origin stories, or sustainability practices.
• Branding and Packaging: Develop a distinctive brand identity, including a logo, packaging design, and marketing materials.
• Storytelling: Craft compelling narratives about the coffee's origin, production process, and social impact.

Navigating market challenges

Direct sales are not without challenges. Kenyan coffee producers and exporters should be aware of the following:

• Quality Standards: Adhering to international quality standards and certifications is essential for market acceptance.
• Logistics and Export Procedures: Navigating complex export procedures and logistics can be time-consuming and costly.
• Financial Risks: Direct sales involve greater financial risk, as producers may need to finance production and export costs upfront.

Despite the challenges, direct sales offer a transformative opportunity for Kenyan coffee producers and exporters to increase revenue, enhance transparency, and strengthen buyer relationships. By investing in capacity-building, forming strategic partnerships, creating a compelling brand, and addressing market challenges, Kenyan coffee stakeholders can position themselves competitively in the global coffee market.