Mountain Harvest Sees Coffee as Vital Driver
Kenneth Barigye, Managing Director, Mountain Harvest, talks to World Business Journal about increasing its role in coffee value addition as the company moves into untapped potential in the African coffee market.
Could you offer a brief summary of your company’s role and mission within Uganda’s coffee industry?
Founded in 2017, Mountain Harvest’s approach emphasises the need to boost productivity and improve profitability at the farm level, farmer group level and at the enterprise level. Mountain Harvest has grown into a green arabica coffee exporter, producer, and farmer services provider dedicated to consistent and innovative specialty coffee supported by transparent and reliable export services. The company is actively cultivating direct relationships between impact conscious buyers and communities to improve terms of trade while building resiliency of the farmer and farmland through regenerative agriculture, financing crop diversification, providing financial literacy programs and access to micro-loans.
The company buys coffee from smallholder farmers on Mount Elgon and Mount Rwenzori, and grows its own coffee in Kisoro, Kabalore and Bunyangabu districts with a total of 200 acres of Arabica single estate coffee where we are experimenting with innovative farming and processing methods. The company is certified organic by Ecocert. Our coffee has consistently rated between 84 to 87 points on the Specialty Coffee Association (SCA) cupping score, which reflects our commitment to quality control, encompassing the right selection of cherry, managing pH and moisture, and controlling temperature and humidity during processing and storage. Staying competitive involves prioritising better prices for farmers, offering services to farmers and ensuring buyers are getting top-quality coffee from a transparent and traceable supply chain.
How do you plan to increase your role in coffee value addition in light of the government’s emphasis on this area?
By elevating the quality to specialty grade and the associated export prices from $3 to a minimum of $7.40 per kg we are able to pay the farmer 30% above the prevailing market price while doubling tax revenues per kilogram. We are currently producing coffee steeped bags to influence domestic consumption habits with each kilogram of coffee produce 50-55 bags, amplifying the value of a kilogram nearly 12-fold. However, transitioning from raw coffee exportation to roasting and processing presents challenges. Entering established supply chains, understanding their dynamics and addressing the financing needs for a prolonged year-long processing cycle are critical considerations. Despite these challenges, untapped potential exists in the African market, where processed soluble coffee imports nearly match raw coffee exports. Leveraging regional trade agreements could create opportunities for local coffee products and challenge conventional market dynamics based solely on demand and supply.
What are the primary challenges you currently encounter?
Climate change and the associated changing rain patterns significantly affect our coffee production timelines, impacting financial planning due to delays and costs associated with these climate variations. Farmer investments in improving quality face limitations due to financial constraints, compelling us to finance agroforestry initiatives to enhance quality. Inconsistent quality perception about Ugandan coffee hampers market success, compelling the company to negotiate lower prices initially, only reaping benefits after proving quality over time. Accessing suitable financing remains challenging due to policy restrictions, forcing collateral requirements beyond the capacity of specialty producers, such as our own company. Additionally, the dominance of multinational buyers, accessing cheap finance abroad, creates an uneven playing field for Ugandan exporters, necessitating government support for export finance and stricter enforcement of coffee quality regulations to enhance our market presence.
What specific business plans or strategies are in development for the next two years?
Our objectives include raising quality to a minimum of an SCA score of 86 points and prices to a minimum price of $10 per kg in the next two years, increasing female suppliers in our supply chain to 50%, which is currently at 31%, and diversifying markets. Initially, 90% of our exports went to the US; now, we are expanding to other markets. Additionally, we focused on quality improvements from our farms to enhance brand value for the country and generate better prices for farmers. Coffee plays a crucial role in Uganda, employing nearly 8m people across 1.7m households. It is more than just a crop; it is a vital economic driver.
