Changing the Kenya Small Estate Sector

In specialty coffee, as we know, single-farm coffees often fetch higher prices. In recent years, opportunity for direct-trade, which favors single-producer coffees, has expanded significantly, giving small estate owners a chance at establishing long-term direct-trade relationships and building name recognition for their farms. Small estate farmers who focus on quality can fetch top prices and can receive an unparalleled return.  

It is surprising, then, that the small and medium estate sector in Kenya has, until now, been frequently overlooked. Especially when it comes to dry milling, small estate owners have found themselves unable to mill their parchment and maintain traceability, which lowers their overall returns and removes potential for name recognition and direct-trade relationships.  

Selling coffee under a single farm name can make a big difference. While cooperatives require fees for management and maintenance, the small estate farmer can hold onto 95% of the FOB price that they are free to invest in any way they see fit. Our sister company in Kenya, Sucafina in Kenya (Kenyacof), recognized this potential. When they opened operations, in 2014, small-to-medium estates were a top priority.   

Sucafina’s Presence  

The Kenyan specialty coffee industry has long been renowned for its quality. It is also an enormous entity that has been slow to change. Though the harvest coming from Kenya continues to be strong in quality, yields are declining annually, and we believe that Kenyan coffee could do with at least a measure of disruption.  

Sucafina began investing in the small and medium estate sector from the moment they opened operations in 2014. They didn’t own a dry mill, but they had a lot of expertise, so initially much of the outreach was in agricultural extension work. They began helping farmers not only to improve yields but also to engage farmers with Good Agricultural Practices that prioritize the health of the farm as a whole. They also focused on training in processing for quality, teaching farmers the best way to operate and maintain their pulpers, use grading channels effectively and methodologies for drying.   

Signs of Change 

Sucafina is involved in the many stages of the coffee supply chain that lead up to the final milling. In order to help increase quality on small estates, Sucafina offers a suite of services to farmers in the supply network to help them garner the best quality premium possible.   

One key project is teaching farmers cupping skills. Attaining cupping skills can be a great way for farmers to have a better sense of what their coffee is worth, understand the value of quality improvement and much more. “The cupping and all of that instilled a lot of confidence with me in what they’re doing there,” Danna Wasserman, Trader at Sucafina North America says, displaying the trust and admiration we have for our in-country partners at origin.  

To understand why Sucafina’s focus is transformative, a little background might help. 

Beginnings of the Current System  

During colonial rule, Kenyan nationals were only allowed to start planting coffee in the 1950s, and in the beginning, they were only allowed a maximum of 100 trees. If a farmer proved their proficiency in coffee farming, they may have been allowed to add more trees.   

The cooperative system formed as a natural response to small yields. The Kenya Planters Cooperative Union (KPCU) for many years was responsible for all dry milling and marketing of the crop. This system remained in place until fairly recently.  

Beneficiaries of the Current System  

The cooperative run ‘Factory Model’ (as washing stations are called in Kenya) is a key factor in enabling the country’s 700,000 smallholder coffee farmers to produce reliably high-quality coffees year after year. The system works incredibly well for farmers who may not benefit greatly from operating their own wet mills. According to the model, smallholder farmers deliver their cherry to a cooperative-owned washing station. Their cherry is combined with other members, and the factory then sorts, pulps, ferments, grades and dries their coffee.   

A good factory applies very strict controls to post-harvest activities, preserving cup quality at one of the most precarious junctions in a coffee bean’s life. Smallholder farmers, many of whom only have 250-500 trees, are saved time and labor and can entrust their cooperative to sell their coffee (combined with other members’) at a good price. The profits from the sale are then passed on to the farmer based on the volume each delivered during that season.  

This system, while not perfect, worked reasonably well for smallholders until the late 1980s and 1990s, when many began calling for alternative systems.    

Around this time, due to calls for change, farmers of a certain size (2,500 trees) were given the opportunity to obtain a pulping license to start their own mini factory (located on the farm) for the first time. The small estate sector was born. Eventually, private millers were allowed to operate, presenting additional opportunities for Cooperatives and Small Estates, alike. 

The Rise of the Small Estate  

Despite the changes to the system in the 90s, change was slow to take hold. Despite being a significant contributor to national coffee production, small coffee estates in Kenya continued to fall through the specialty coffee processing cracks.  

Despite the new regulations for pulping, many farmers who qualified for pulping licenses continued to deliver cherry to a centralized cooperative-owned factory, where their production was combined with that of others from their region. Some simply did not have the resources to purchase equipment, and in cases where they did, many did not have access to information on operating a small factory effectively. 

Even for farmers who may have had their own processing set up, the dry-milling set-up within the country did not well serve small-to-medium size farmers. Traditional dry mills in the country have lot minimums, which are usually about 50 bags of parchment per lot. As with the factory system, combining many farmers’ yields into a single lot serves a practical purpose for the dry mills.  However, these quantities are often unattainable for smaller farmers, necessitating that they merge their lots with others, losing traceability.  If a lot is smaller than the minimum, factories may be faced with extra fees or be unable to mill the parchment without first combining with other lots to meet the minimum.    

Due to these two factors, many farmers with landholdings between 5-50 acres continued to be underserved by a system geared to very small or quite large farmers.  

When Sucafina opened operations in 2014, they recognized that small factories already existed on many farms of 5-20 acres. While many of these farmers are very strong in their approach to farm management, they lacked experience with the processing side of the business. Lot separation and traceability were possible. The system just needed disrupting. 

Innovative Solutions to Traceability and Transparency  

Sucafina began expanding opportunities for traceability and profit for small estates in 2016 with the Slopes of 8 producer group. Without their own mill Sucafina and the producers they worked with still needed to meet the minimum bag count. To increase traceability and minimize quality disparities between combined lots, Sucafina partnered with small estate owners to find lots that would work well together when combined. Thus, Slopes of 8 combined eight small estate producers in Kirinyaga, Kenya and provided better traceability and quality assurance than the typical blended lot. Above all, the group worked together to advocate for their needs, working cooperatively to make decisions that benefited all of them and sharing information that would help all of them to continue to improve their production.   

The Final Piece: Disrupting the Dry Mill

Sucafina realized that to truly benefit producers, they needed to complete their services and offer access to a dry mill. The establishment of Kahawa Bora Millers in 2017 furthered Sucafina’s work to highlight small estates by making it possible to mill smaller lots. In 2019, Kahawa Bora Millers purchased a micro gravity sorter (the only one in use in Kenya, at the time), and 2019/2020 is its first season in use. The line has a smaller capacity than larger lines and allows the staff to run multiple smaller lots through the mill in between the larger lots while still maximizing the capacity of the machinery.   

The microlot grading line and Kahawa Bora Millers’s focus on smaller lots actually increases efficiency in the milling process. On normal lines, there is usually a stoppage at the gravity sorter every 200 bags or so where employees must remove particulates that have clogged up the gravity sorter and other machinery. At Kahawa Bora Millers, they run the microlot sorter and process microlots during the times when the regular line is stopped for cleaning. Unlike most other mills, at Kahawa Bora Millers there is no complete halt during the cleaning process.    

Thanks to Kahawa Bora Millers, small estates can now mill their coffee without the need to meet a size minimum. And specialty coffee roasters can purchase unique lots directly from the farms that they love. Furthermore, by ensuring full lot traceability, the ‘feedback loop’ between producers and roasters is closed: Roasters have a better understanding of producers’ needs and constraints and producers have a better understanding of market demands. 

One key project is teaching farmers cupping skills. As we’ve written about before, attaining cupping skills can be a great way for farmers to have a better sense of what their coffee is worth, understand the value of quality improvement and much more. “The cupping and all of
that instilled a lot of confidence with me in what they’re doing there,” Danna Wasserman, Trader at Sucafina North America says, displaying the trust and admiration we have for our in-country partners at origin.

This Year’s Kenyan Coffees

This year in Kenya has, like many other origins we work with, been facing increasingly unpredictable weather. This harvest has been incredibly wet due to changing weather patterns. This poses a challenge for drying.   

Thanks to our unique sourcing network and service delivery on the ground, the farmers we work with have greater access to the tools needed to achieve the right moisture content and the know-how to do so. With the support of our sourcing team and the mill we’re able to help farmers with financing so they can invest in their farming enterprises, soil sampling and proper input practices. Our team also provides advice on harvesting, processing and proper drying during such an unusually wet season. As we face an uncertain future, we have trust in our Kenyan colleagues that they will continue to support and complement farmers and small estates through thick and thin.