Finally, One Blockchain Solution That Deserves The Buzz

An African woman sits at a counter holding a mug of coffeee.

<figcaption><fbs-accordion><p class="color-body light-text">Margaret Nyamumbo is the child of Kenyan coffee farmers and a graduate of the Harvard Business School, making her the ideal woman to reimagine Fair Trade for the digital era. </p><small>Kahawa 1893</small></fbs-accordion></figcaption></figure><p><br></p><p>In the first wave of coffee, Folgers was the real winner. People of a certain age can still sing their jingle and remember when coffee came in a tin can. In the second wave of coffee, Starbucks came out on top. Howard Schultz’s empire didn’t just reach ubiquity, but also changed the role of coffee in society. The victors of the third wave have yet to be decided. Many would argue that Blue Bottle is taking the crown. When Nestle acquired a majority stake in the company in 2017, it was <a href="https://techcrunch.com/2017/09/14/nestle-acquires-a-majority-stake-in-blue-bottle-coffee/?_ga=2.220675224.1256545127.1565362516-1788707339.1565099542" target="_blank" class="color-link">valued at $700m</a>. But with the winners of this wave yet undecided, Margaret Nyamumbo is working so that the farmers can share in the spoils. </p><p>Nyamumbo’s experiences are likely unique among alumni of the Harvard Business School. She is a third-generation coffee grower born in the Western highlands of Kenya. She has fond childhood memories of picking ripe coffee berries with her mother. Her unique experiences give her the ability to break down the economics of any supply chain and simultaneously feel what it’s like to be at the beginning of it. “I witnessed the struggle of farmers to earn a living wage despite producing what is regarded as the best coffee in the world,” she said.&nbsp;</p><p>The average coffee farming household in Kenya <a href="https://trueprice.org/wp-content/uploads/2015/04/Assessing_Coffee_Farmer_Household_Income_Report_2017_updated.pdf" target="_blank" class="color-link">earns $1120 annually</a>. Even when the poverty line is adjusted for purchasing power parity (i.e. how far a dollar goes in a specific country), Kenyan coffee growers still fall below the poverty line of $1692. Women are particularly unjustly treated in this supply chain. According to Nyamumbo, the “women who performed over 90% of the labor, owned only 1% of the land and went mostly uncompensated.”</p><p>Armed with her family ties to the growers and her U.S. education, Nyamumbo set out to fix this. She founded Kahawa 1893 to share “distinctive Kenyan coffee and to build a better supply chain that allows farmers to earn a sustainable income.” She does this by removing the middleman and working directly with the farmers. While that may help reduce inequalities in the supply chain, it doesn’t particularly help women. That is why Kahawa 1893 also commits 25% of their profits to provide access to credit for women so that “they can participate in trade and empower themselves financially.”&nbsp;</p><p>Although the company is named after the year that coffee was first planted in Kenya, it is more about designing the future of the coffee supply chain than honoring the status quo of the past. This year Kahawa 1893 is bringing blockchain into their processes delivering to consumers the first fully traceable coffee from Kenya. Even more exciting, they are also using blockchain to let consumers tip their farmer. When a consumer buys coffee at a coffee shop or grocery store, they can scan a QR code and <a href="https://kahawa1893.com/tip-the-farmers" target="_blank" class="color-link">send a tip</a> to a farmer’s e-wallet. Through Mpesa, Kenya’s ubiquitous mobile money provider, the farmer gets that money instantly.&nbsp;</p>

<figure class="image-embed embed-5" role="presentation">

The back of a package of coffee beans.

<figcaption><fbs-accordion><p class="color-body light-text">Kahawa 1893 coffee drinkers can scan a QR code on their bag of beans and send a tip directly to their farmer. </p><small>Kahawa 1893</small></fbs-accordion></figcaption></figure><p>This can be life-changing for a farmer. “If you pay 5 cents tip for each cup of coffee, it doubles the farmer’s income. Through traditional Fair Trade, for each $1 premium you pay, only 5 cents reaches the farmer with the rest lost to the supply chain,” said Nyamumbo.&nbsp;</p><p>So far, Blue Bottle Coffee has created the most value in the third wave of coffee, but by working directly with farmers, empowering women, and committing to transparency, Nyamumbo hopes to share the wealth. That’s a cup of coffee we can all feel good drinking.</p><p>You can buy Kahawa 1893 coffee from their <a href="https://kahawa1893.com/shop" target="_blank" class="color-link">website</a>.</p><p><em>Margaret Nyamumbo is a member of the Harambe Entrepreneurs Alliance. If you are an African Entrepreneur and want to join the Alliance, you can apply </em><a href="http://www.harambeans.com/become-a-harambean/" target="_blank" class="color-link"><em>here</em></a><em>. Applications are open until November 11th, 2019.&nbsp;</em></p>”>

In the first wave of coffee, Folgers was the real winner. People of a certain age can still sing their jingle and remember when coffee came in a tin can. In the second wave of coffee, Starbucks came out on top. Howard Schultz’s empire didn’t just reach ubiquity, but also changed the role of coffee in society. The victors of the third wave have yet to be decided. Many would argue that Blue Bottle is taking the crown. When Nestle acquired a majority stake in the company in 2017, it was valued at $700m. But with the winners of this wave yet undecided, Margaret Nyamumbo is working so that the farmers can share in the spoils.

Nyamumbo’s experiences are likely unique among alumni of the Harvard Business School. She is a third-generation coffee grower born in the Western highlands of Kenya. She has fond childhood memories of picking ripe coffee berries with her mother. Her unique experiences give her the ability to break down the economics of any supply chain and simultaneously feel what it’s like to be at the beginning of it. “I witnessed the struggle of farmers to earn a living wage despite producing what is regarded as the best coffee in the world,” she said. 

The average coffee farming household in Kenya earns $1120 annually. Even when the poverty line is adjusted for purchasing power parity (i.e. how far a dollar goes in a specific country), Kenyan coffee growers still fall below the poverty line of $1692. Women are particularly unjustly treated in this supply chain. According to Nyamumbo, the “women who performed over 90% of the labor, owned only 1% of the land and went mostly uncompensated.”

Armed with her family ties to the growers and her U.S. education, Nyamumbo set out to fix this. She founded Kahawa 1893 to share “distinctive Kenyan coffee and to build a better supply chain that allows farmers to earn a sustainable income.” She does this by removing the middleman and working directly with the farmers. While that may help reduce inequalities in the supply chain, it doesn’t particularly help women. That is why Kahawa 1893 also commits 25% of their profits to provide access to credit for women so that “they can participate in trade and empower themselves financially.” 

Although the company is named after the year that coffee was first planted in Kenya, it is more about designing the future of the coffee supply chain than honoring the status quo of the past. This year Kahawa 1893 is bringing blockchain into their processes delivering to consumers the first fully traceable coffee from Kenya. Even more exciting, they are also using blockchain to let consumers tip their farmer. When a consumer buys coffee at a coffee shop or grocery store, they can scan a QR code and send a tip to a farmer’s e-wallet. Through Mpesa, Kenya’s ubiquitous mobile money provider, the farmer gets that money instantly. 

This can be life-changing for a farmer. “If you pay 5 cents tip for each cup of coffee, it doubles the farmer’s income. Through traditional Fair Trade, for each $1 premium you pay, only 5 cents reaches the farmer with the rest lost to the supply chain,” said Nyamumbo. 

So far, Blue Bottle Coffee has created the most value in the third wave of coffee, but by working directly with farmers, empowering women, and committing to transparency, Nyamumbo hopes to share the wealth. That’s a cup of coffee we can all feel good drinking.

You can buy Kahawa 1893 coffee from their website.

Margaret Nyamumbo is a member of the Harambe Entrepreneurs Alliance. If you are an African Entrepreneur and want to join the Alliance, you can apply here. Applications are open until November 11th, 2019. 

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