Tembo Coffee Company was established in 2012 in Mbeya, Tanzania. Our goal was to replicate and expand upon the business model built in 2009 by our sister company, Rwanda Trading Company.
We share a communal belief that profitable and ethical business should go hand in hand. We’re about sustainability – as our over-arching goal, not as a project. Sustainability is better described as shared value. It is the state in which everyone in the coffee supply chain is profitable; in which costs are understood and controlled responsibly; in which the full value of the product is realized and achieved, and profits are distributed to each party commensurate to the value it has added to the final, cupped coffee.
To achieve shared value, we focus on supply chain development. This involves finding solutions to problems that limit its performance, creating opportunities for everyone involved to become more profitable and working directly with farmers to address issues that extend past the farm.
We finance coffee purchasing and processing operations for the groups we work with, so transparency is not only valuable for the farmers, but intrinsic to Tembo’s ethos. Our coffee purchasing department is fully integrated with our farmer impact department, so that the team that finances groups, purchases coffee and monitors quality during the harvest, is the same team teaching the farmers business management and better agricultural practices.
Tembo’s team purchased from 10 producer groups in the Southern Highlands Region during our first season in 2013, and today we work with over 50 producer groups, exporting 2.9 millions green lbs in 2015.
Tembo has exclusive relationships with 5 independent washing stations and 51 total producer groups in the Mbeya Region of Tanzania’s Southern Highlands. Tembo’s group lending strategy and Agribusiness Training Program improve transparency, quality and fair price distribution among farmers and assure consumers worldwide that their coffee has been ethically sourced, whether it’s of the highest or most humble quality.
Ukimwi Tuwezishane Farmer Group
Yearly Season Yield Increase
Ukimwi Tuwezishane Farmer Group
Location: Isuto Village, Mbeya, Tanzania
Coordinates: -9.096191, 33.283340
Ukimwi Tuwezishane means “We Stand Together Against AIDS” in Swahili. It’s also the name of a farmer group an hour from the main road in Mbeya, and Tembo’s first business partner in Tanzania. Ukimwi’s 130 farmers are organized with the dual purpose of selling their aggregated coffee and supporting the battle against HIV/AIDS in their village.
The farmers’ first deliveries back in 2012 were of average quality and their trees yielded far less than Bourbon and Typica varieties should produce in the Southern Highlands – pretty typical for the area. However, Tembo knew their potential to deliver high volumes of Tweega with strategic investment. Meanwhile, Ukimwi was highly motivated by Tembo’s position as the only exporter in Tanzania to cup every delivery and pay farmers according to quality.
Ukimwi signed an exclusive volume contract with Tembo for the 2013 harvest, and in return, Tembo extended a working capital loan so that group members could be paid immediately for their deliveries to their group leaders. With Ukimwi’s access to finance and a market secured, and Tembo’s export volume from the group guaranteed, both parties were incentivized to improve coffee quality.
Tembo’s farmer advocate first worked with the group to improve organization and management. Group leaders were elected and trained on management principles. Next, Tembo trained farmers to use cost-effective strategies to improve tree health and to pick cherries selectively to maximize the value of their harvest. As expected, Ukimwi’s 2013 deliveries cupped better than their 2012 deliveries. Tembo had more Tweega to sell and each farmer had a second payment on each kilo of their A-grade deliveries.
In 2014, Tembo hired a field officer to train all of Ukimwi’s farmers each month on practices to maximize quality, increase yields, and manage their finances. The group’s 2014 yields were a direct reflection of the mutual commitment to this partnership.
In 2015, Tembo and Ukimwi Tuwezishane signed an agreement for an exclusive premium purchase price, of which a percentage is placed into a fund for HIV/AIDS education and medicine for farmers in Isuto village.
Tembo’s strategically evolving partnership with Ukimwi has optimized farmers’ yields and coffee income, and the export value of their coffee, ultimately making more money for everyone and cementing a loyal business partnership.
During their first season selling to Tembo, the group delivered 8 tons of parchment to Tembo, and its farmers produced little more than that.
Most of the yield from Ukimwi Tuwezeshane was of average quality but the group were excited and determined to improve the standard of their coffee and increase their production for the coming seasons.
Ukimwi Tuwezeshane was able to deliver 14 tons for the entire second season. There was clear promise for the future. The group managed to increase the quality of the coffee that they produced by improving parchment processing. Tembo could then pay more for the good coffee delivered.
During the third season, the group delivered 20 tons of Mutwari and AMEX grades. However, they also delivered 8 tons of Tweega and Supreme grades, again confirming their quality potential and commitment to improvement.
With a focus on quality based pricing, the farmers have concentrated on coffee nutrition and selective picking while the group leaders have refined their parchment sorting techniques. The result has been 26 tons of parchment deliveries from Ukimwi, 24 tons of which is Tweega and Tweega Supreme.
Having surpassed all quality goals, built a trusted business partnership and shared the significant financial benefits of Tembo’s Agribusiness Training Program, Ukimwi and Tembo are encouraged to expand our partnership. In 2016, Tembo will extend a CapEx loan to the group so that they can build a washing station. When complete, the group will no longer need to process their fully washed coffee on small machines in their front yards, which will exponentially increase their buying capacity and our joint profitability.
Ukimwi’s farmers have repeatedly expressed the need for inputs and their desire to be able to purchase them outright rather than borrowing the value against their coffee deliveries. Ukimwi will be among the first groups in Tanzania that Tembo trains to leverage a portion of their collective coffee income to save as a downpayment on the next year’s fertilizer needs and longterm savings. By following this plan, the group and its members will be able to pay cash for their inputs and basic farm equipment within five years. This may seem like too long time, but to the farmers who have almost never been able to pay cash for their annual input needs in their 40+ years of farming, five years is nothing.
When this new goal is met, Tembo and Ukimwi will again look at new opportunities to work together. Most likely this will include leveraging a portion of our shared profits to invest in further HIV/AIDS prevention efforts and other development initiatives to set up the village for self-sufficiency.