Muungano has just been coached by the Trade for Development Centre (TDC). After two years of working together, Daniel Habamungu, director of the coffee cooperative, and Belgian Raf Van den Bruel sum up a “valuable” experience.
We are here in the Democratic Republic of Congo (DRC), the largest country in sub-Saharan Africa, with more than 2,300,000 km2. The Muungano cooperative is located south of Goma, in the direction of Bukavu. This is the Great Lakes Region, especially Lake Kivu. “I arrived in Muungano in 2014, but, I was born in the café, I studied thanks to the café and learned in the field,” explains Daniel Habamungu, director of the cooperative.
A cooperative in continuous development
When it was set up in 2009, the cooperative wanted to provide two important answers to farmers’ problems. Firstly, it was necessary to prevent farmers from taking big risks by crossing Lake Kivu to sell their coffee in Rwanda, where prices were better. “These crossings caused many drownings and deaths,” says Daniel, “We needed a solution. Another observation: “Everyone was working on their own at the time, without organisation, without coordination. This had a negative impact on the quality of the coffee produced, from the coffee to the whole. And ‘lack of coherence between producers left the buyers free to impose a ridiculously low purchase price’.
From 600 members in the beginning, Muungano (meaning “trade union” in Swahili) has grown to more than 4,200 members today, including 1,736 women. The cooperative is present in sixteen villages, its head office is located in Kiniezire and its services to its members are varied: sales of production, distribution of coffee plants, training in agroecology, leadership, savings and credit, etc. “Parallel to the number of members, the evolution of green Arabica coffee production is also exponential. Sales follow: from three tonnes in 2009, Muungano has grown to more than 112 tonnes sold in 2017,” says Daniel Habamungu. The exported coffee would be “fully washed”: it goes through washing stations where the harvests are processed by fermentation, washing and drying. It is a very high quality coffee, also called K3, for which Muungano has obtained Fairtrade and organic certification. “And we are in the process of getting Rainforest certified, but it’s not easy, it’s expensive, there are a lot of files to fill in and everything takes a lot of time. It will take three years.
However, there are threats to obtaining the following certificate: “In our country, there is a risk that certifiers will no longer come to inspect. According to them, there are too many risks of insecurity or Ebola-related”. These sustainability certificates are necessary for Muungano because the vast majority of customers demand them.
In the foreground: Daniel Habamungu, director of the cooperative. In the background: the parchment (the coffee retains a shell or ‘parchment’ after the washing process) is removed during drying, just before export.
Who is the coach?
In less than ten years Muungano has built up an international reputation. “I knew them from my previous work”, says Raf Van den Bruel, the Belgian coach of Muungano. This consultant, who works for the TDC among others, has more than 15 years of expertise in the sector: “I started building up this expertise at Oxfam Fair Trade at the beginning of 2000. I was developing the fair trade coffee chain through direct purchasing and product development, in collaboration with major Belgian roasters,” he says.
In 2014 he started his own consulting adventure and founded Coffee Lab Independent to offer expertise to the various players in the sector. His first clients are cooperatives and development projects in the coffee industry. “Now I also have the opportunity to work with others, from producers to end customers, importers, coffee brands and major distributors. In short, the whole chain!
A sector with complex issues
What are the main current trends in the sector? “On the basis of new fermentation techniques, producers are increasingly distinguishing themselves in terms of the quality and taste profile of the coffee. Moreover, over time, sustainability has become very important for the entire chain, including companies. The purchase and especially the production of certified coffee has exploded. As a result of these developments, some producers are able to receive higher prices in specific markets. Unfortunately, some things are not changing: poverty and the weak position of producers, especially in Africa, remain very problematic. Certification has a positive effect, but it is not enough to change the situation. The base price for green coffee in the world is again too low and the concentration of purchasing power around large conglomerates continues to rise rapidly, causing prices to fall,” Raf describes.
In the east of the DRC, the context is even stranger: “After years of war and great instability, the Arabica coffee trade chain had broken down. Between 2008 and 2010, most of the coffee was sold illegally to neighbouring countries. But since then a real company has emerged and large companies like Starbucks are buying in the region, even if it is sometimes still complicated to work there,” Raf analyses.
Coaching, a participatory approach
This extensive knowledge and understanding of Raf was necessary to help Muungano move forward: “How to find new customers, how to present yourself according to your profile, how to inform yourself about the international and regional coffee market, or how to calculate the cost of a container before signing a contract. These are all things Raf has brought us in two years”, sums up Daniel. “Coaching is one of the best approaches because it involves us directly as a beneficiary”. Raf adds: “Many support programmes and budgets continue to focus on increasing productivity and are carried out by the major traders and buyers themselves. We have to be realistic: the interests of the producer/seller are not always the same as those of the buyer/exporter. That is why the TDC intervention, which is aimed at market opportunities for producers who are independent, is quite unique and of great value”.
In this type of “fully washed” coffee, the drying process is crucial. It requires a lot of attention and work and is crucial for quality. During the brightest hours of the sun, the coffee is covered to protect it from the sun’s rays, delay drying and improve its quality.
The first challenge: a better understanding of the context and buyers
Muungano is already well established at regional level with an English partner-customer. One of the main challenges for the cooperative in 2017, when the coaching began, was to expand its customer base while maintaining a privileged relationship with its historic English client. “The catch was that they didn’t know the market well. So the first thing was to inform them and tell them how and where to look for information. You always have to be aware of what is happening worldwide and in the region,” explains Raf.
In addition, you need to know how to talk to buyers: “The aim is to establish relationships with potential customers and to stay in touch with them in the future,” says Raf. “The cooperative also had to understand that the relationship does not end after sending a sample and an e-mail”. Also to better understand who Muungano is dealing with: “In June 2019 we made a journey to Europe that was very important for us. We were in direct contact with several coffee importers in Belgium. We also visited a trade fair in Berlin. It was very interesting and it gave us the opportunity to learn how to introduce ourselves to the buyers”, says Daniel. “In Europe, buyers are sometimes afraid to buy directly from cooperatives,” Raf admits. “They are afraid of delays, communication problems. Thanks to these meetings, Muungano has understood that it is not only the quality of the coffee that is important to convince customers.
Good results already achieved thanks to the coaching
Since 2017 Muungano has acquired two new customers: “Despite the complicated market context, they have managed to develop strong partnerships,” says Raf, “Their business plan is realistic and they have gained insight into what it means to be a coffee buyer. The trip to Europe gave them a lot of information they could digest to take their next business steps. These prospects are an important basis for their future”.
“We also felt that diversification was important: we had K3 (the whole crop) and now we are working on K4 as well,” says Daniel. K4 is a coffee made by the producer, which doesn’t go through the washing stations and is therefore of inferior quality and cheaper. “And then there’s the ‘natural’ one, made from dried beans. This is very important for a niche market, mainly in the United States”.
Now Muungano is aiming at the world: “We are positioning ourselves in Germany, Switzerland. The European market is favourable for K4 coffee. But we also want to reach the Asian market, especially Japan, with K3. There are good buyers there.