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BD IMPORTS purveyors of exceptional quality specialty-grade coffees.

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Presentation on theme: "BD IMPORTS purveyors of exceptional quality specialty-grade coffees."— Presentation transcript:

1 BD IMPORTS purveyors of exceptional quality specialty-grade coffees

2 2 agenda A Closer Look At Coffee From the Crop to Your Cup: the Kenya Road Kenya, Coffee and the World Selecting the best for BD Imports

3 3 a closer look at coffee The Business of Coffee in the US Where Coffee Grows The World of Kenyan Coffee  Botanical Species  Grades  Crops: Growing Seasons, Regions & Harvest 

4 4 the business of coffee in the US Second largest US import, after petroleum Two types  Robusta  National brands, e.g. Folger’s, Maxwell House  Arabica  Specialty coffee houses, e.g. Starbucks, Peets Imported from more than 80 different origins Fewer than 100 US-based importers of specialty-grade coffees 

5 5 where coffee grows The Americas Southeast Asia The Middle East East Africa 

6 6 kenya—botanical species Five different botanical varieties  K7- older plant  SL28 – older plant  SL34 – older plant  Ruiru 11- newer more pest resistant, higher yield  Blue Mountain 

7 7 grades of kenyan coffee Up to 8 different grades of coffees marketed Largest bean size (7.20 mm screen); highest prices Smaller bean size (6.20 mm screen); good prices Smaller than AB Light, ragged beans separated from other grades “Elephant”—two beans joined together Grows as one bean in a single cherry; 10% of crop Smallest, thinnest beans; chipped, broken, flawed Not wet-processed, fell from trees; 7% of crop Buni T PB E TT AB C AA 

8 8 marketing confusion Brand names given to Kenya AA by exporters and/or importers  AA Top  AA+  AA FAQ  AA Minus  Private label name 

9 9 growing seasons janfebmaraprmayjunjulaugsepoctnovdec 60% of total crop main crop to auction harvest main crop harvest fly crop fly crop to auction 40% of total crop 

10 10 growing regions Nyeri, Kirinyaga, Embu, Muran’ga  Location: from Slopes of Mt. Kenya N & NE  Altitude:1500m – 2100m  Varieties: SL28, SL34, Ruiru (>1.5%)  Rich volcanic soil  Main-crop coffees  20% of produce is top category 

11 11 growing regions Meru  Location: Slopes of Mt. Kenya  During 1987/88 coffee price recession, farmers abandoned crops 

12 12 growing regions Kiambu, Ruiru, Thika  Location: N/NE of Nairobi  Altitude: 1500-2100 m  Rainfall: 1000m 3  Climate: 7-32 degrees C  Varieties: SL28, SL34, Ruiru 11  Typically, average main-crop coffees  Ruiru planted on a large scale will soon come to market 

13 13 growing regions Machakos  Location: Eastern Region  Altitude: 900-1400m  Semi-arid climate  Early Crop coffees 

14 14 growing regions Makuyu, Donyo, Sabuk, Mitubiri  Location: E/SE of Nairobi  Semi-arid climate  Early Crop coffees 

15 15 from the crop to your cup— the kenya road The Business of Coffee in the US Purveying Specialty-grade Kenyan Coffee  The Market Today: Critical Times for Kenyan Coffee  From Crop to Cup: the Kenyan Road  Our AA From Kenya to Consumer 

16 16 purveying kenyan coffee— the Kenyan Coffee Auction All Kenyan coffee sold at auction on Tuesday mornings by authorized marketing agents ±100 licensed buyers/exporters Buyers get samples 10 days prior to auction 

17 17 from the crop to your cup— the kenya road 7 changes of hand within country of origin * Relative to crop and conditions Farmer Cooperative Society Miller Exporter KENYA 3 – 9 months* Union of Cooperative Society Marketing Agent Auctioneer 

18 18 from the crop to your cup— the kenya road 7 changes of hand within country of origin * Relative to crop and conditions Farmer Cooperative Society Miller Exporter KENYA 3 – 9 months* Union of Cooperative Society Marketing Agent Auctioneer Moves coffee from Nairobi to port of Mombasa via rail or truck Loads 44,000 lbs (300 x 132-lb bags) onto steamship container Prepares appropriate documentation for US Customs  Certificate of Fumigation  Bill of Laden  Certificate of Origin  Commercial Invoice  Phytosanitation Certificate Exporter 

19 19 from the crop to your cup— the kenya road 7 changes of hand within country of origin * Relative to crop and conditions Farmer Cooperative Society Miller Exporter KENYA 3 – 9 months* Union of Cooperative Society Marketing Agent Auctioneer 

20 20 from the crop to your cup— the kenya road AND Up to 4 changes of hand before arrival in US Farmer Cooperative Society Miller Exporter KENYA 3 – 9 months* Union of Cooperative Society Marketing Agent Auctioneer CONSUMER 3-4 weeks Importer Distributor Roaster Coffee retailers and distribution channels (e.g. restaurants, grocery stores) * Relative to crop and conditions 7 changes of hand within country of origin 

21 21 our AA from kenya to consumer After auction, 10 lbs of each purchased lot from Nairobi At departure, 10 lbs from port of Mombassa On arrival, 2 lbs from our warehouse (CA/NY) We make sure that the coffee we get is the coffee we bought. Our quality assurance process 

22 22 kenya, coffee and the world Kenya and Coffee The Market Today: Critical Times for Kenyan Coffee Prognosis: Positive 

23 23 kenya and coffee Coffee represents 20% of Kenya’s exports  2000/1: 1.2MM 60K bags = ksh 10.2bb  2001/2: imports up marginally Coffee employs ±250,000 Kenyans 60% small scale growers 40% plantations Coffee production presently in decline 

24 24 kenya—export trade matrix 20002001 Germany387,166430,018 Netherlands137,339132,129 Belgium98,93695,990 Sweden86,43889,158 UK66,67744,305 US63,56781,713 Importer Kenyan Coffee Exports (60-k bags) 

25 25 the market today: critical times for kenyan coffee MY 1999/ 2000 MY 2000/1 MY 2001/2* 101.000 MT produced 51.700 MT produced 50% decline 53.000 MT estimated marginal increase Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton 

26 26 Ongoing national coffee reforms  Kenya Coffee Act (April 2002) completes first phase of liberalization of coffee industry; seen as promising the market today: critical times for kenyan coffee Low farmer morale Poor market prices Seedling prices rose from ksh 10 to ksh 20 1 —small farmers can’t afford new plants 2 1 USD 1 = ksh 78 2 Source: GAIN Report, US, 2002 Exceptional-quality Kenya AA will be more prized and more rare in the future Reasons for production decline 

27 27 Investment ops in coffee farm inputs and value-adding equipment (coffee roasters, milling)  Stabex Funds have facilitated important strides at farmer level 10 April: EAFCA’s first internet auction fetched record price (Ueshima Coffee Co. of Japan; USD 453/50k bag) 1,2 2002/3—a positive prognosis 2002/3: estimated production 70.000 MT—up 20%  Good weather, improvements in husbandry and higher market prices all support high expectations  Prices USD/50K bag green: 1999/2000: USD 84 2000/1: USD 68 2001/2: USD 120 LAST WEEK >USD 200/50k bag 1 EAFCA = Eastern Africa Fine Coffees Association. 2 Source: GAIN Report, US, 2002 Co-op Bank of Kenya Limited considering wiping out coffee farmers’ old interest (12-13% interest rate) 

28 28 selecting the best for bd imports Our Eyes and Ears At Auction Exceptional Kenya AA Socioeconomically Responsible Coffee The BD Imports selection process 

29 29 our eyes and ears at auction Native-born, world-travelled professional 50+ years in Kenyan coffee industry Represents BD Imports exclusively Is a primary part of our direct link to source 

30 30 our strategy “Cost+profit” model vs “C-market” model Study auction reports to determine age of coffee Sample coffees throughout the process Purchase small auction lots from top growing regions Purchase 95% Main crop coffees Further sort lots at origin if necessary to remove broken/discolored beans, shells and chips 

31 31 our standards The real thing—as fresh as can be Within 1 week after purchase coffee leaves Kenya No blending of lots No re-naming of lots  We use Lot number and Cooperative Society name as per auction; eg, Lot 157/Mushagara-Kirinyaga 

32 32 exceptional kenya AA Mushagara/Kirinyaga 132-bag lot fetched highest price at mid-March auction and was most sought-after by many aggressive buyers Mushagara grown by cooperative society in Kirinyaga region on the slopes of Mt. Kenya  Altitude: 1500-2100 m  Climate/ Rainfall: 1000 m 3 per annum  Temperature: 7-32 degrees C  Varieties: SL28, SL34, Ruiru 11(>1.5%)  Production: 8852 tons per annum 

33 33 the bd imports selection process Our buyer sends us a sample of each of the best exceptional AA crops We send cupping samples to each of our clients, and we cup the same ourselves We set purchase guidelines for buying fresh green beans based on the individual preferences and needs of our clients, and import them directly ourselves Each shipment is warehoused for distribution in our facilities in CA and NY Experiencing the best Kenya AA should always be like a safari in a cup. bd imports believes The very best roast always starts with the very best beans. Consistently and honestly purveying the best Kenya AA makes the BD difference. 

34 34 BD Imports and you— a winning partnership Sole US importer of many distinctive crops of Kenyan AA  Larger importers shun smaller producers who can afford to devote time and attention to superior crops  Niche created for dedicated specialty importers while cornering specialty crops among few competitors Competitive pricing model permits profit while not outpricing product  Quality is our object, not quantity Purveyors of “socioeconomically responsible” specialty green coffees 

35 35 changing the world one cup at a time— socioeconomically responsible coffee We view growers as an extension of our business, therefore also of yours Specialty coffee imports provide vital means for sustenance and progress for small- to mid-size growers Importing specialty produce means “giving back” to coffeegrowers directly, since much of the profit from export does not reach growers Supporting specialty growers promotes clean agriculture and “quality over quantity” in export coffee While bringing specialty Kenyan coffee to the world, we also bring the world to Kenyan coffeegrowers Information is power 

36 36 summary More and larger roasters are discovering the quality difference BD offers Direct link to origin Solid relationships with buyers and growers of our product assures supply and integrity Socioeconomically responsible product and practices Specialty coffee attracts exceptional clients, like ours and yours more individualized services expanded focus of target imports more individualized services expanded focus of target imports bd imports ’ forecast 

37 BD IMPORTS THANKS YOU!!

38 BD IMPORTS

39 39 kenya coffee act Implemented April of this year Coffee Board of Kenya relinquished marketing to private agents (subsidiaries formed by millers, Mt Kenya farmers) Kenya Coffee Producers and Traders Association to manage central auction system MinAg has de-registered Nairobi Coffee Exchange and dissolved Coffee Farmers Bank Careful implementation of reforms can reverse downward trend in production and marketing (industry image)


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