Ms. Zamda Shaban Mwebea, founder and director of Tausi Coffee, tells us about the challenges she faces as coffee processor and the steps she takes to grow her business.
Coffee regulations in Tanzania are undergoing major changes, can you tell us something about it?
“The government has banned the purchase of coffee at the farms. They want famers to sell their coffee to cooperatives, who collect the coffee and deliver it to an annual coffee auction for purchase. They say the goal is to ensure that farmers are paid at market price for their crop and to stop the coffee smuggling to foreign countries. However, in the past, cooperatives paid the farmers with delay (far more than a month later) which caused huge problems for the coffee growers. So we have to see how things will work out. At the moment this new regulations don’t affect my business, since I still receive the coffee from traders. Maybe next year when the government is stricter, I will have to buy the coffee beans through the auction. Not only do I have to pay then a higher price for the coffee beans but also the delivery time will be much longer (about a month).”
What made you decide to sell Robusta instead of Arabica coffee?
“Tanzanian people prefer the strong and bitter taste of Robusta coffee. This coffee has more caffeine in it, less sugar and is less sensitive to insects than Arabica coffee. Robusta also has a greater crop yield, so it is cheaper to produce. We blend the strong Robusta beans with a small amount of Arabica beans, which has a sweeter taste, to get the best flavour.”
How do you outshine your competitors?
“Our biggest competitor is Tanica Coffee Company, which produces instant coffee. This Tanzanian company, established 50 years ago, has become a famous brand in Tanzania. As newcomer in the market it’s a challenge to compete with a leading brand like Tanica. We try to outshine them in several ways: by serving the strongest coffee at a lower price and by delivering our coffee to wholesalers, so they don’t have to come to our factory with their truck. Another thing we do differently, in compare to our competitors, is that we visit all towns in the area to let people taste our product. In Tanzania lots of people buy coffee on the street, from street vendors who sell freshly black coffee mixed with water in a piping hot kettle. So we let those coffee vendors taste our product, since they are our main target audience.”
Are you still facing problems with transportation, finding new markets and costly energy sources, like you did a few years ago?
“I already found solutions for most of these problems. Transport is no problem anymore since I have now one truck and a small distribution car. Furthermore, I hired a marketing manager to explore the market and who visits lots of villages in this area, especially cookers who sell our coffee on the streets. Our strategy is face-to-face communication to build a network and relationships. We also let as many potential buyers as possible taste our product to convince them of the quality. I still use the costly energy source charcoal at the moment but in my new factory I will use biogas which will save me a lot of money.”
How do you grow your business?
“The plan is to grow our business through market expansion, from serving nearby markets in this area to regional markets. Though, we first need to arrange a certificate of the Tanzania Food and Drugs Authority (TFDA), before we are allowed to do that. Our dream is to have an entire marketing team travelling all over the region to find new markets and to have a shop in each town. In order to expand we first need to move to a new location: an industrial area which offers more space for machinery and storage. Building a larger facility is a big investment and takes a lot of time. We already started building the foundation and also invested in a (new) packaging machine. I first like to see how these things develop and also the coffee market, before I take a new step. Perhaps next year I will apply for another loan at SME Impact Fund to buy a new roasting machine. I’m proud of the growth we already realised in the past 14 years, partly due to the support of the Fund. The production increased from 30 kg per month in 2004 to 15,000 kg per month this year (2018) and from 15 employees to 27.”
What are the most important business lessons you’ve learned in the past years?
“To watch other entrepreneurs in my business. I learned from them and followed their example, but also discovered what I can do better. Persistence is also an important quality that helps you as entrepreneur succeed. Strong entrepreneurs never give up and take on the challenges along the way. Don’t be afraid to take risks or to make mistakes. And least but not last, make sure you are visible and invest in marketing your products and brand.”
