Coming to terms with Kenya's potential.

Daniel Kanyugo, the area manager of the Kiambu District for the Coffee Board of Kenya, walks with obvious respect among the coffee trees of Mbugo Estate. This is an honor, because Kanyugo knows the full range of Kenyan coffee production, from the not so good to the impressive. His responsibility is for one of Kenya's richest coffee areas, lying just north of Nairobi. Kiambu District includes some 36,000 ha in coffee -- 13,000 ha in smallholder production, 23,000 ha in estate production.

Mbugo Estate, privately owned and expertly managed, earns Kanyugo's praise for several reasons. The most salient is that the small estate, with only 40 ha in coffee trees, is producing from 50 to 60 tons of premium AA beans each year -- strictly in classes 3, 2, or 1. "Look over at those trees, in the next estate," Kanyugo explains. "The difference in care is clear. These stands are impeccably clean and the pruning is flawless. There are 60,000 trees yet each one looks individually tended. You won't find better in Kenya. Yield and quality together, Mbugo estate has four times the return against its neighbors."

The farm manager is another asset at Mbugo Estate. He is a young man, Joseph Wahinya, whose dedication and professionalism go far in making the production a success. Wahinya attributes the high return in yield and quality to careful attention in all aspects of coffee tree husbanding and cherry processing. The estate has its own pulping station. After the fermenting stage, lasting from 24 to 60 hours, the beans are moved to electric powered drying houses. The production has a final screen drying in the sun and is hand sorted to a rather remarkable uniformity.

But in the final analysis, it is the tree population rejuvenation program that is most important at Mbugo. After a tree is picked for five to seven seasons, half of its stalks are cut back to almost ground level. The radical cut back is only on sunward stalks. By this method, half the tree remains to give cherries while the rejuvenated half grows back into a more vigorous and disease resistant fruitfulness.

Workers select the best sprouts to nurture and these are raised up by the uncupped multiple practice -- giving maximum internode structure to the new stalks so that the rejuvenated tree, while bushier and stronger, is also shorter and easier to care for and harvest from. The benefits of the program are self evident, at least as conducted at Mbugo. In only a few seasons of radical cut back and the uncupped-multiple practice, the estate has far better control of coffee berry disease, is using fewer chemicals, and has seen yield and quality prosper.

All the while, the Mbugo Estate tree population has been in classic SL 28 and SL 34 varieties -- the coffee selections that have helped give Kenya its world acclaim for cup qualities but which had been feared to foretell trouble in turns of an aging, weakened tree population falling victim to CBD and the nation's new farm economics. This makes Mbugo all the more exemplary in that the techniques used to garner its excellent production may well promise the overall rejuvenation of Kenyan coffee without turning to new and sometimes controversial varieties.

Earning It The Hard Way: Exporters

There are 64 companies with place names on the Nairobi coffee auction. These companies are buying, then exporting, virtually all of the Kenya coffee production. As an example of this, the auction records show 1,249,939 bags being acquired by the listed firms in the 11 month period October 1994 through August 1995 -- a veritable wealth in fine and coveted coffees being passed in a quite visible and free market system. The rub is that the system, as free as it, has been strictly administered and defined, controlled if you will; and capitalist energies always chafe at restrictions.

In Nairobi and Mombasa, one finds an impressive pool of trading talent, people with hands-on knowledge of coffee who are also savvy in the call of the trading wild. These people cup their coffees and turn a zealous eye on what they and their competitors are doing. Astute trading is a craft of the region, but as a group they seem loathe to turn a fast buck at the expense of their reputation. There are glaring exceptions, but one can't leave Nairobi without feeling that its coffee community is in many ways exemplary.

The Challenge of Greatness

Kenya's coffee production and industry is admired around the world. No origin has been more consistent in its producing and marketing policies during the past 25 years, or more dependable in shipping and cup standards. Now, various concems combine to cloud the margins of an otherwise engaging coffee scene in Kenya, fomented perhaps by a general uneasiness as the nation develops through a period of economic, social, and political tensions.

Such matters, along with drought and the crash in world coffee prices a couple of years back, are factors that Kenya coffee people cannot address by themselves. Nevertheless, the sharp decline in the nation's coffee production from 130,000 tons in the 1987/88 season to no more than 87,000 tons in the 1991/92 season gave real cause for alarm -- and did bring action.

In 1992, the Coffee Board of Kenya initiated direct sales to its auction market in Nairobi and direct payments to farmers in dollars. Since then, the marketing committee of the CBK has further acted to reinforce Kenya's position as a volume producer of premium coffees by eliminating the lowest grades from the auction. These measures, combined with the surge in prices and a reduction in Kenya's coffee stocks, have helped invigorate the sector in the past two seasons.

While production fell to 72,000 tons in the 1993/94 season, it is back up to 93,000 tons in the 1994/95 season (of which 63,000 tons were in the main picking, 30,000 in the secondary or fly crop). As an encouraging sign of continued favor by farmers, the hectarage in coffee is again increasing and has now passed 140,000 ha.

The key to Kenya's future as a major coffee origin is in the hands of the country's smallholders, who account for 55-60% of production, and 40-45% of estates. In general, the decline in production can be traced to disinterest and to agronomic and financial problems among the smallholders. This group reacts first and foremost to return in hand so as they find profit in coffee, so goes the fortunes of Kenyan coffee.

It was in part to serve the chronic agronomic needs of the smallholders that so much effort was placed into bringing Ruiru 11 into production. The marvel variety is a great achievement of agricultural research, and one Kenya should be proud of. Unfortunately, the world coffee market has apparently not shared the same enthusiasm for the variety's cup qualities in context of the high premium traditionally exacted (and so far willingly paid) for Kenya's coffee. Subsequently, an unofficial "go slow" approach as regards Ruiru 11 is seemingly being followed, and no more than 3% of the country's coffee is of the new variety, with indications that for the time being at least the national farm extension emphasis will be on other methods to renew and strengthen the tree population.

Another matter of concern is the future of the auction system itself. This is the crown jewel in Kenya's coffee industry and one that earns almost universal praise in coffee circles, although there is gaining support for allowing direct export sales by private Kenyan estates and companies. This movement is supported by the recent advent of privately sourced processing mills.

Formerly the sole processor for export, the KCPU has a capacity of 110,000 tons -- more than needed for current seasonal volumes. The Sofinaf mill, with a commercial capacity of 25,000 tons, devotes about 25% of this to processing its own coffee and keeps the remainder for now to a single working shift so that actual open market capacity is for 12,000 tons. Adding to this, the new mill in Thika is doing about 700 tons per week. These two independent mills, in combination with the KCPU',s give Kenya a processing capacity of 170,000 tons, which is obviously far more than required. If further market liberalization is granted, if more mills are built, then clearly something in the current structure will have to give.

Kenya Beans to Kenya Espresso

Christopher Wamai has the courage of a missionary -- bringing coffee to tea drinking Kenyans. But that, precisely, is what Wamai Coffee Company Ltd. of Nairobi is tasking itself to achieve. Although not the largest roasting firm in the country -- Wamai is positioning itself in the quality end of the market -- the company is arguably one of the most active and ambitious.

Kenya consumes about 15,000 tons of tea in a year, but only about 4,000 tons of coffee -- an unknown but sizable part of which is taken by the nation's booming tourist industry trade. There are 15 roasters serving this market.

Wamai Coffee started operations in 1988, with sales at first of no-name bulk-packed coffee to institutions. Its business prospered dramatically when it won the contract for supplying coffee to Nairobi's Intercontinental Hotel. Since then, the company has grown consistently with increased sales to the out-of-home sectors and now to retail stores as well.

Wamai roasts and packages in a variety of formats and brands, in whole beans and ground versions. Its Kawaida brand coffee, in a 100 gm pack, is targeted for the economy sector. The Kirinyaga Brand is an upscale product -- 100% Arabica -- in 500 gm packages. The newest brands are distinctly upscale: African Brew and African Dream Espresso. Both are packed in jute bag outers with Kenya theme art and, with the lucrative tourist trade in mind, are sold principally through gift stores and souvenir shops.

Christopher Wamai keeps to heart how he earned the Intercontinental Hotel account. "I went directly to the hotel's food & beverage staff," he explains. "It began by simply trying to inform them about coffee in general. They didn't know anything. So I took them to a farm, to the mill here in Nairobi, to my roasting plant. They loved it. People here are curious about coffee which still has something of a forbidden aura to it. In one sense tea is a colonial hangover, because in those times coffee could not be grown or drunk by Africans. Also, Kenyans know only to boil coffee, so when we show them other methods and let them taste the results we can win customers."

Wamai says all coffee market sectors are progressing well now in Kenya. He sees particular potential in the retail sector. Just recently, for example, one of the largest supermarket chains -- with 13 stores in Nairobi alone -- has placed Wamai coffee on its shelves. He says his company has gained coffee sales by aiming directly for student business. "Coffee can challenge tea in Kenya, in time," asserts Wamai. "This is still ultimately a price market for drinks, so when at times coffee is cheaper than tea in the stores we gain drinkers."

Wamai's top brands include the African Dream Espresso product, which he targets at Kenya's huge tourist trade. Exports began in 1993, to Tanzania. Results from this are encouraging and Wamai foresees an international business developing for his roasted coffee, which is not so brash a forecast as tourists are regularly toting home his coffee as one of the most vivid and congenial Kenyan memories they can enjoy.

Given the size and diversity of the nation's tourist industry draw, this means that Wamai coffee can probably boast one of the widest international clienteles known to any roasted coffee.

Christopher Wamai is himself a long time coffee professional, active for 17 years in green coffee trading. To this day, in addition to his roasting operation, he also operates a green coffee exporting business under the same name. His green coffee exports are mainly to Germany and the U.S., although he's expanded to Sweden and New Zealand. He handles all Kenyan grades but specializes in top AAs for the specialty trade.

Siros Farm

Many people know Simeon Onchere as the permanent overseas representative of the Coffee Board of Kenya, with offices in London and a suitcase that has traveled around the world many a time on behalf of Kenya coffee. But Onchere, when on leave in Kenya, is something of a different person. He is a coffee farmer. The dual roles give him a highly unique view of two worlds that rarely meet: the day to day struggle and sometime reward of bringing a good quality crop of beans to market, the international game of coffee supply and demand played by consuming, and producing interests with what amounts to survival stakes for both.

Onchere has 20 ha of land, 16 ha of which are in coffee. His Siros Farm is located about 120 km north of Nairobi, in the Kirinyaga area, virtually at the base of Mt. Kenya. The district is prized for small-farm coffee, combining as it does very high altitudes with coffee-friendly soils and rain patterns. Because Onchere is most usually abroad, Siros enjoys the ardent attentions of a young farm manager, Duncan Obulemire.

In size, Siros is representative of Kenya's medium sized farms -- too large to be part of the cooperative sector but not large enough to benefit as the estates do from direct access to credit and then to their own irrigation and pulping facilities. Actually, the lack of irrigation continues to thwart development of the farm's full coffee potential.

Onchere acquired the farm in 1989. Since then he has methodically proceeded section by section to repress the aged tree population that he inherited from the previous owner (the trees are at least 20 years old). The new plantings are given very deep holes and fertilizers to stimulate vigorous growth, even without irrigation. Onchere has managed to get cherries in three years from some of his new trees. His plantings are also delivering good yields of AA beans, so the increased volume and higher premiums earned will more than pay for the changeover. Siros yields are already well above the average for most middle sized farms. Onchere reports getting one ton per hectare vs. 630 kgs on the average. With irrigation, he'd fully expect a yield of 1.5 tons per ha, surpassing the average for estate production (1.2 tons/ha).

In addition to the new plantings, Onchere and Obulemire follow a program of garden-like management -- constant weeding by hand (no herbicides are used at Siros) and continual pruning. Although fertilizer is used, 20% is in natural manures. Siros trees are in varieties SL 28 and SL 34.

Despite all that good agronomy, experience, and nurturing care can bring to coffee farming, Siros has only recently made money. Two crops were lost to drought and then the crash came in world prices. Siros showed its first profit in the 1993/94 season. With prices still strong, the farm will have another profitable season at hand. The AA production went into class 4 last year, an excellent result. But class 3 is the goal and Onchere is confident it will be achieved, assuredly so if he can get irrigation to the farm. Siros coffee is not bulked into the mainstream of Kenyan production; it goes as an estate coffee through the system and the auction in Nairobi and is then exported as a branded green coffee.

This article was compiled from notes taken in about a dozen interviews with different companies in the various sectors -- in only one instance was an opinion voiced in favor of direct export sales. In all other cases, the speakers were strongly inclined to protect the existing structure.