When she was a child growing up in Kenya, Margaret Nyamumbo learned about a custom that took place on her grandfather’s coffee farm: every few weeks, the women who worked there would gather around a table and drop money into a large pot. Anyone who had contributed had the right to later retrieve funds in the form of a small loan.
This so-called “table banking” system, which is a custom in Kenya, helped women involved in the coffee trade support one another. Kenyan women, who historically are denied land ownership and therefore the ability to take out loans, provide 90% of labor on coffee farms but own just 1% of the land.
A decade after she immigrated to the US, Nyamumbo launched her own coffee startup that takes table banking one step further – by bringing overseas coffee drinkers to the table. “I thought, what if we could have consumers pitch into this ‘virtual pot’ and then farmers can have money to go around?” said Nyamumbo, who lives in New York City.
Named after the Swahili word for coffee and the year that commercial coffee production took off across Africa, Kahawa 1893 sources beans directly from collectives and family farms in Kenya, Tanzania, Rwanda and Congo. It also supports female coffee farmers through a bitcoin-powered tip fund. Through a QR code printed on each bag of beans, buyers have directly contributed $45,000 to the “virtual pot”. The company matches the funds, which have made their way to more than 500 women and girls in Africa.
Kahawa 1893’s collection of roasted beans, packaged in bags with colorful renderings of African savanna wildlife, quickly took off among US coffee aficionados. Home-brewed coffee boomed in the last few years thanks to the rise of remote work culture. In 2021, the company became the first Black woman-owned coffee brand to be sold at Trader Joe’s, enabling Nyamumbo to pay herself a salary for the first time since her company’s launch four years earlier. Last year, the startup brought in $3m in revenue, two-thirds of which came from wholesale channels. An appearance on Shark Tank led to Nyamumbo, 36, securing a deal with Keurig, whose single-serve coffee makers are in 40m US households.
Kahawa 1893’s launch coincided with a significant shift in American coffee culture, driven by the so-called third-wave “specialty coffee” movement, which prioritizes small producers and premium beans. Specialty coffee, which accounts for 50% of the global value of traded coffee, brought coffee consumption in the US to a 20-year high. Meanwhile, Starbucks-inspired coffee chains have proliferated across the country, particularly in the historically under-caffeinated south and midwest. The coffee market, now valued at an estimated $28bn, is expected to surpass $33bn by 2029.
But Nyamumbo is pouring her attention into lifting up the farmers at the root of the coffee boom. “Our focus on equity means we lose some short-term profitability,” she said. “But we see this strategy working in the long term.”
How did you come up with the idea for your company?
After my MBA at Harvard, I covered consumer goods at an investment bank on Wall Street. I was keen to build something tangible in the real world that could directly impact people. The specific idea was inspired by my days at the office, where I drank very bad coffee. Sometimes, I would drink up to five cups a day. I knew we had really good coffee in Africa and I wanted to figure out a supply chain that would make it possible to have our coffee more conveniently available.
Your website allows consumers to tip the farmers directly, and your company matches their contributions. Can you talk through this strategy?
In the fair trade model, we pay a premium that goes back to farming communities. Tipping is a similar mechanism of giving money back to farmers. Right now we have a QR code on the back of our packaging and we’ve incorporated that in our online checkout system. So far we’ve helped around 500 women, 200 in Kenya. People have contributed close to $45,000 in tips, which we matched for a total of $90,000.
The specialty coffee market rests on the idea that consumers will pay a premium for quality beans. How do you balance production quality with fair compensation?
The current [coffee trading] system is more commodity-driven, where prices fluctuate based on the stock exchange. If farmers have to stick to this commodity system, they’ll get the same low price regardless of quality, so they’ll not invest in quality processing of the crop. A holistic approach is to buy from small farmers year after year and work with them to invest and improve quality. Because of the “speciality grade” of our coffee, we’re able to incentivize farmers to invest in quality by promising them a higher premium price than the commodity price. They essentially have a promised market. Kahawa 1893 pays farmers nearly double the minimum fair trade price of $1.80 per lb of coffee.
Kahawa 1893 has made more than $7m in sales since your appearance on Shark Tank last year. What’s your next step?
My dream is to open a coffee shop. I’d love to have flagship stores in different cities, starting in New York City – but definitely Kenya, in Nairobi, as well. It would be fun to bring the tipping system to the store. If someone tips the barista, for instance, some of that will go to the farmer.
