Joint marketing and business services for coffee producers in Africa

Twin’s Joint Marketing Initiative (JMI) builds marketing capacity and opens new markets for producers of high quality coffees in Africa.

The JMI provides a number of key marketing and business services which enable producer organisations to access the speciality coffee market, negotiate higher prices based on differentiated products, improve service and develop durable trading relationships.

The sole mission of the JMI is to promote and develop the marketing of its members’ coffee on the most advantageous terms.  It earns its keep from the value it adds to producers’ businesses.

With this initiative, Twin aims to enable smallholder farmers of high quality coffees to sell their produce on secure, sustained and significantly more remunerative terms.

It has been successfully piloted over a three-year period with the Gumutindo (Uganda) and KNCU (Tanzania) cooperatives. It will now become the chief marketing vehicle for Twin’s current and future African coffee producer partners.

Background

The last 20 years have seen dramatic and accelerating structural shifts in the coffee industry at all levels. Speciality coffee, traceable and certified coffees have moved from being marginal niches to major, fast growing and high-value market sectors.

Today the availability of coffees from Africa which meet the demands of this sector falls well short of supply. This puts producers who are able to meet the requirements in a strong position. However, the barriers to entry and sustained success in this sector are significant: requirements for coffee quality and for levels of customer service are very high, bringing a need for excellent systems and skills in management, communications and buyer relationships. Few African organisations or individuals currently possess them.

How the JMI works

Through their participation in the JMI, producers benefit from in-house coffee market analysis which informs their strategic planning and operational priorities. The marketing managers and staff receive training, mentoring and accompaniment from both JMI personnel and experienced counterparts from other producer organisations. 

Producers benefit both from marketing economies and, critically, from not operating in isolation. They share in strategic discussions, in the development of the JMI brand and in the implementation of specific activities. Given the highly personalised nature of commercial relationships in the international coffee trade this means that participation in the JMI provides the prospect of operational continuity when there are changes in key personnel, which can often be lost when organisations operate in isolation.

Achievements

Between 2007 and 2010 Twin and the coffee cooperatives Gumutindo and KNCU worked together to pilot the JMI initiative. The results were impressive. Gumutindo added four new buyers and KNCU added eight during the course of the pilot. The quality of relationships, and terms of trade with existing customers were also significantly improved. Buyers have all placed repeat orders for larger volumes of coffee.

Direct export volumes more than doubled at each organisation:

• Gumutindo’s exports rose from 225 tonnes in 2006-07 to 525 tonnes in 2008-09 -  a rise of 105%
• KNCU’s exports rose from 437 tonnes in 2006-07 to 893 tonnes in 2008-09 - a rise of 133%

Taking export prices achieved by the two producer organisations in 2007/08 as the baseline, JMI added the following value:

2007-08   $230,000
2008-09   $540,000
2009-10   $750,000

Next steps

The JMI currently includes producer organisations from Malawi, Uganda, the Democratic Republic of Congo (DRC) and Tanzania, with plans to expand the membership to further producer organisations from Uganda and the DRC.