In 2004, Ugandan entrepreneur Andrew Rugasira founded Good African Coffee, with a vision to become the first African to collect, roast, market, and sell quality coffee direct to supermarkets globally. By his example, Rugasira hoped to demonstrate that trade, not aid, was a viable, sustainable strategy for driving Africa’s economic and social development.
Good African Coffee had its first breakthrough, when the company launched its roast and ground coffees in South Africa through the Shoprite Checkers supermarket chain. In 2005, Waitrose became the first UK supermarket chain to list Good African roast and ground coffees. The following year, the company’s coffees were listed in Sainsburys. Today, the company supports more than 14,000 farmers and gives 50 percent of its net profits back to the community through investing in sustainable community empowerment projects. Rugasira’s remarkable entrepreneurial journey is captured in his book, A Good African Story A Good African Story: How a Small Company Built a Global Coffee Brand, out this year. In this interview with the Africa Book Club, he talks about his experience, the challenges he experienced, and what he learned.
Tell us about Andrew Rugasira. Who are you and what has been your life journey?
I grew up in Uganda and went to the University of London for my undergraduate degree in Law and Economics and later to the University of Oxford where I completed a master’s degree in African Studies. I started my first company, VR Promotions, in 1995 and built it to become Uganda’s leading promotions and events management Company. VR established a strong track record in designing and managing a diverse array of events- from large international concerts to public health awareness initiatives, ranging from small rural health promotion campaigns to large World Bank and UN project launches. Later on, I expanded the company to include advertising, media buying and PR. In 2003, I divested my interests in the company to set up Good African Coffee, and I began on a journey in agriculture that I had long cherished. I have a wonderful wife, business partner and best friend Jackie and we’ve been blessed with five amazing kids.
What is the basic premise of your company, Good African, and what makes it different?
Good African Coffee is essentially social enterprise that started out with a vision to bring quality coffees to the global market and use trade to transform our producers and their communities. In a modest way, our business model contributes to poverty eradication by addressing two critical aspects of the rural economy- quality production that leads to higher farm gate prices and institutional capacity building in the area of rural savings and credit. The quality of farmer output is supported through agronomy training in coffee harvesting and processing methods. Our field extension teams support farmers to produce the best quality coffees that fetch the highest prices on the market. This has resulted in the farmers earning a good return on their harvest, and increasing their household incomes. On rural savings and credit support, to date we have helped set up 17 SACCOs in Kasese district and trained farmers in savings and credit initiatives that enable them to pool their money together and resist a historical vulnerability to rural loan sharks who mortgage their farms for very little value and at exploitative interest rates. Today, our farmers can access small loans using their pooled resources to address critical needs. Obviously, these SACCOs need greater capitalization to become stronger. Now, when we integrate these supply side empowerment initiatives to our roasting and packing operation, we have the potential to establish a sustainable transformational enterprise model. Of course, we still have a long way to go and a lot more to learn but nevertheless, I believe that our model has established its conceptual viability and with scale can have a much larger impact on the rural economy.
Your recently released a book about your experience. What inspired you to tell your story?
I wrote A Good African Story A Good African Story: How a Small Company Built a Global Coffee Brand to capture the realities of trying to build an African coffee brand. Very few African entrepreneurs write their stories and most material written on business is by outsiders or so called African experts. We have also become importers of business models and experiences rather than develop our own. This denies our largely youthful generation the intellectual capital to innovate and persevere. My book essentially gives language to what many entrepreneurs go through on a daily basis, the starting up, exploring markets, seeking capital, self-motivation and dealing with disappointments, etc. The book is also about our experience in the African rural economy and here I was privileged to be somewhat of a stenographer, capturing the transformational stories that we have witnessed in farmer communities. Also, I wanted to expose the tension between business theory and practice. The private sector is always presented as the engine for growth but seldom do we visit the engine room; making the conversation largely theoretical and dominated by non-practitioners. I also wanted to give encouragement to many young entrepreneurs who are on the frontlines of change and innovation. Approximately 95% of start-up businesses close within a year because the entrepreneurs just give up. I have learnt that perseverance draws strength from testimonies and shared experiences. Our stories can encourage, inspire and teach.
How has the book been received so far? Where can readers find it? Is it available in any African markets?
The book has been well received so far. It is available on amazon and most leading bookstores.
Selling roasted coffee grown in Africa directly to the leading grocery stores in Europe and the USA seems a daunting challenge for any entrepreneur. What was your experience?
Building any export based business will always present significant hurdles. For us, it was the cost of market access- the constant travel and market development costs that come with selling to supermarkets in the UK. For the UK, it took me over 14 trips before we were finally listed on the shelves of Waitrose. This was pre-revenue and before any commitment from the retailers themselves. I used to think that being the only African owned brand on the shelves of UK supermarkets was a badge of honor but the reality is that most people consider these market penetration costs just too high and abandon any export initiative. Now, when on the shelf there are huge marketing costs needed to maintain brand presence on the shelf. But I think above all, access to affordable, patient and long term capital is the biggest hurdle. This is not a problem peculiar to Good African but to most SMEs in Africa. I read somewhere that only 1 in 10,000 SMEs seeking capital in Africa actually get it. This leads to a high mortality rate for business startups. However, in our case, I think that the added challenge of our business model the re-engineering of the coffee value chain- from exporting green coffees to exporting coffees processed at origin. The local institutional environment doesn’t help. Our financial institutions are primarily focused on funding the trading and services sectors. Only about 4% of total loan portfolios go to agriculture projects in the country. Banks also tend to fund historical performance and not future growth prospects and there are few venture capital opportunities available locally. Where they exist, they are looking for more mature businesses as opposed to start ups. Interestingly, these hurdles were faced by many of the currently successful South east Asian companies like Daewoo, Hyundai, LG and Samsung over 30 years ago. Through deliberate and targeted capital injections by the state in Korea, Japan, China, the governments addressed these market failures and their enterprises were empowered to surmount their early-stage capital needs. This is how the Korean Development Bank got started, and the Ministry of International Trade and Industry funded industrialization in Japan. China today is emblematic of the power of state sponsored capital to fuel rapid economic transformation. There is no other way through which rapid industrialization was achieved in the developed world.
What advice would you give to other African entrepreneurs looking to break out into big markets?
You are important to the economic growth of your country. Don’t give up; no matter what others say about your project. Do your homework, and always be flexible to adapt with new knowledge. There are always options. Failure is part of the learning process; reflect on what isn’t working and try and shift strategy. The export market is attractive but so are our regional and domestic markets. Anyone, who has ever produced an innovative product, service or solution has paid a price for that- Thomas Edison had to fail thousands of times before he finally got his electric bulb to work and so did many other leading entrepreneurs today. Never lose faith.
Is there anything you would do different if you had to start all over again?
This isn’t a realistic question so I can’t give a realistic answer.
What is the message you want readers to take from the book?
Africa is more than what is captured in the western press. And the solution to Africa’s economic challenges will only be met by Africans innovating and creating valuable products, services and brands at source.
Are you into reading? What’s the best book you’ve read recently?
Recently, and only one of my current favourites Team of Rivals: The Political Genius of Abraham Lincoln by Doris Kearns Goodwin
Who are your favorite African writers, and what books would you recommend to anyone interested in doing business in Africa or learning about the continent generally?
Chinua Achebe, Ousmane Sembene, Ayi Kwei Armah, Wole Soyinka and Dambudso Marechera and Chimamanda Ngozi Adichie. Any of those will bless the reader.