Westrock Coffee Chases ‘Social Impact' in Rwanda

by Kate Knable  on Monday, Feb. 4, 2013 12:00 am  

‘A Very Bold Move’

During its first year in business, Rwanda Trading Co. gained a market share of 15 percent, Brogdon said. In year two, the trading company was profitable, he said. By 2012, the trading company bought more than 5 million pounds of coffee from Rwandan farmers.

While Brogdon wouldn’t reveal any financial data, the International Coffee Organization’s price-tracking system suggests that even the cheapest raw or “green” coffees cost at least $1 per pound. ICO data also shows that Rwanda’s coffee production has bounced around from 34 million pounds in 2009 to 53 million pounds in 2012.

Westrock Coffee began roasting Rwandan coffee in North Little Rock in 2010, where the plant currently employs 15 people. Rwanda Trading Co. is now Rwanda’s leading exporter of premium coffee, and Westrock’s coffee is sold from the shelves of more than 1,000 Wal-Mart and Sam’s Club stores across the U.S.

Next, company leaders want to expand export market share to 25 percent in Rwanda and develop operations in other countries, with Tanzania being the first new foray, said Matt Smith, managing director of Rwanda Trading Co.

“The one thing I have to say about the team at Westrock: They came into this with no knowledge of coffee,” said John DeMuria, managing partner of coffee merchant Volcafe USA LLC. “The knowledge that they’ve gained and the professionalism that they’ve gained is just phenomenal. … For a company like Westrock who has no coffee background whatsoever to go into a country like Rwanda and start a coffee export company is a very bold move.”

Volcafe is located in Somerset, N.J., and is a subsidiary of ED&F Man, a worldwide specialist merchant of agricultural commodities. Volcafe has purchased Rwandan coffee from Westrock since Westrock’s beginning, and Westrock is now Volcafe’s sole supplier of Rwandan coffee.

Rwandan coffee was well known in Europe when the Fords began exporting it, but the coffee was not used commonly in the U.S., DeMuria said.

“There was a need for someone to bring more exposure to the country and the origin in the United States. That’s part of their success,” he said.

The Business Model

Helping trading company employees and the coffee farmers improve their lives while operating a consistent, ethical business is key to Rwanda Trading’s business plan.

“I wouldn’t call it a social business, but it’s a business with a very positive social impact,” said Smith, who works in Rwanda. “A lot of our decisions aren’t financially justifiable.”

 

 

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