Written by Brian Burrell - Horizon Ethiopia Staff Writer
Thursday, 25 September 2008
The quality is indisputable. Anyone who has sipped on some the rich varieties of Ethiopian coffee knows it. The debate, however, is now turning to how best capture the value from sales of these superior highland beans. Arguably the most highly developed sector of the Ethiopian economy is no longer primarily concerned with altering the burst of flavour from the coffee itself, this has been mastered over generations. It is now up to the lawyers, consultants and marketing experts to fight for the proper packaging and branding rights.
Columbia did it with flying colours. Images of the mythic South American farmer Juan Valdez gave a face to boost sales and amass a following even for the inferior robusta beans that are found behind many of the plastic containers donning the smiling moustached face. But Ethiopia is not trying to create an image of Kaldi, the legendary goat herder whose tale of discovering coffee dons the walls of the upscale Addis café bearing his name, to sell its superior Arabica blends.
The government has rather outsourced the job of creating a catchy logo for the country’s leading export to a small London-based design firm, Brandhouse. Similar to the place of origin recognition France enjoys with its wine or premium prices Italian designers can charge in the fashion industry, Ethiopia hopes this simple “e” pictured below can help create a following among the growing hordes of coffee devotees and similarly capture more export earnings.
But where and who will see this simple but multi-connotative (in this, the age of the web) symbol is yet unclear. Getting them on the burlap sacks used to transport in bulk the export that earned the country over 350 million dollars last year will be an easy task. But to get the symbols into the heads of the end users, the estimated over one billion coffee consumers in the world and thus put a source to this addictive drink, will be a more difficult task.
The much-publicized Starbucks affair is a prime example. Though the efforts of the Ethiopian government, with the backing of the vocal British charity, Oxfam, has resulted in the Seattle-based retail giant agreeing to license, market and promote Harar, Sidamo and Yirgacheffe coffees, the details of the deal are mysterious. Though Oxfam has pushed the monetary value of the deal to a 75 million dollar boost to annual export revenue, it is unclear if and where Starbucks will be using the logos Brandhouse develops for the three specialty varieties.
In fact, industry experts generally agree that the most important result of the whole ordeal has been the free press Ethiopia has received from the row covered by every media outlet from the Ethiopian Herald to the Wall Street Journal. While Starbucks is a visible international player whose standardized service and nuanced blended drinks neatly packed and bearing the infamous circular green label, the share it nabs from Ethiopia is miniscule – probably less than two per cent – though the company is notorious discreet about specifics.
Abdullah Bagersh, general manager of Bagersh, a company with around 60 years of experience in exporting Ethiopia’s famous coffee, shares the view that no matter what the specifics of the Starbucks deal, the positive publicity is the lasting impact.
“The beauty of coffee is that it is like fine wines with a variety of flavours that mesmerize the palate with a rainbow of differentiation,” says Abdullah in his Addis Ababa office surrounded by sample beans and black and white photos detailing every step of coffee production. “The Starbucks branding specifics are peripheral but the affair is good for Ethiopian coffee as it helps consumers appreciate the unique tastes from different regions.”
At the helm of company started by his grandfather and still using one of the warehouses found in Legahar, Abdullah distinguishes his company’s approach as one of going to the small niche areas where the finest beans line hillsides of the highlands rather than waiting for coffee to come to Addis Ababa. His sun-dried varieties, particularly the Idido Misty Valley variety from the highest reaches of the Yirgacheffe Mountains have bestowed wide acclaim on his exports.
“Ethiopia must continue to focus on producing unique and high quality coffee,” says Abdullah who is consistently in the top ten of exporters.
No doubt this is the only way for the country to survive the newly competitive world markets that has seen countries like Vietnam go from negligible production a decade ago to becoming the second highest volume producer. But these new developments have pushed down the value of the average bean, as quality control is not stressed in many of the new producing countries. Even though the last couple of years have been comparatively better for world coffee prices that now hover around $1.40 on the New York Mercantile Market, this comes after successive low price years.
Other farmers have turned towards different strategies to differentiate their product from the millions of tonnes produced annually worldwide. A group of 678 family farms around Jimma recently became the first African group to receive certification from Rainforest Alliance.
Led by ASK International Trading, the farmers are now able to stamp the Rainforest Alliance seal on their product to let consumers know coffee production is in line with a variety of criteria including wildlife conservation limits on chemical usage and worker rights.
But there is seemingly a long road ahead for Ethiopian farmers to get their cut as estimates of shares farmers receive for beans they produce and fetch upwards of 25 dollars (55 dollars a kilo) on the retailers’ shelves hover around 20 cents per kilo. This is from arguably Ethiopia’s most developed industry where an estimated 15 million people, or just under 20% of the population, directly or indirectly earn a living and around 40% of export revenue accrues to this booming economy.
The formalized nature of the industry explains Ethiopia’s leading commodity has not yet wound being shouted out in the trading pit of the newly developed Ethiopian Commodity Exchange. This revolutionary project of the government headed by Eleni Grebre Medhin currently trades wheat, maize and pulses but seeks to branch out to other commodities soon.
For now the tireless efforts from every angle, including embassies such as the DC office led by Dr. Samual Assefa that helped in the Starbucks negotiations, to tourism outfits such as Paradise Ethiopia Travel that markets coffee safaris to the growing regions (see Travel section) are leading the way in the quest to fetch higher prices. But it will take more massive showings like that seen at the Coffee Association meeting in Minneapolis three months ago for one of Ethiopia’s true gifts to the world to receive the recognition and prices it deserves.
