#PeoplePower
The world drinks over 2 billion cups of coffee a day. It’s a trillion-dollar industry, yet less than 1% of that value reaches the farmers who actually grow the stuff. That’s the absurdity Wakuli is taking on. Their approach is straightforward: de-commoditize coffee by sourcing specialty coffee directly from farmer cooperatives, cut out the unnecessary layers, pay a higher and fair price, breaking free from global coffee price, and sell straight to consumers. Simple in theory, radical in practice.
Founded in 2019 by Yorick Bruins and Lukas Grosfeld, Wakuli has grown from a first shipment of Tanzanian coffee to a company working with over 16,000 farmers across 12 origin countries, serving more than 100,000 customers monthly through subscriptions and 20+ coffee bars.
Wakuli’s vision is to move the industry towards a Sustainable Living Income for coffee farmers worldwide. Wakuli decommoditizes coffee supply chains by unlocking origins and farmers previously disconnected from and unknown to direct trade and higher value markets, thereby creating higher income for a larger share of the harvest. By entering long term partnerships, Wakuli enables these smallholder farmers to get closer to a living income and a more sustainable livelihood.
Coffee is an important agricultural commodity and export product for more than 40 countries in Latin America, Africa, and Asia. Farmers are often price takers, with less than 1% of earnings in the global coffee industry remaining in the hand of coffee farmers. An estimated 12 million farms and 25 million families depend on coffee for their livelihood. Many smallholder farmers live in poverty, with roughly 40 to 50% earning far below a living income. Due to the transactional nature of buyer relationships and fluctuating prices, farmers are unable to invest in their farms to get to profitability and are caught in a vicious cycle of underearning and underinvestment.
Wakuli acquires ever growing volumes of green coffee beans at specialty prices directly from smallholder farmer cooperatives who were selling most of their harvest as commodity before.
Farmers get paid a significantly higher (as much as 2x) price, resulting in increased income for smallholder coffee farmers, bringing them closer to a living income. Long term partnerships lead to a more sustainable livelihood of farmers by allowing investment in the farm and facilitating their access to finance and crop improvement projects.
Smallholder farmers that depend on coffee for their livelihoods are Wakuli’s primary beneficiaries. They are currently underserved because they are often forced to sell at commodity prices and operate at a loss, not earning a sustainable living income. Lack of volume offtake security leads to a negative spiral as there is no or little funding for investment in farm inputs, sustainable agricultural practices, and farm management, resulting in decreasing quality and yields, leading to an even lower income.
Parents, children, and other dependents of these farmers also benefit directly. By targeting a minimum 25% income increase, Wakuli’s impact reaches entire households and communities.
Other specialty roasters also buy at high prices directly from farmers, but Wakuli has significant additionality because Wakuli finds farmer groups and cooperatives that are currently not connected to direct trade and decommoditizes their coffee. Most specialty roasters have limited volume offtake due to their price point and scale. Wakuli has additionality with a price positioning, sourcing model and distribution model that can really scale up volumes at high prices with smallholder farmers.
Wakuli aims or decommoditization of an important agriculture crop, unlocking value that was previously unseen and showing that this can be done for large volumes, which can push more of the industry to adopt this approach. Wakuli has the ambition to start reporting on closing the living income gap, showing that it is possible to close the gap and pushing the industry to start to take responsibility for their farmers and report on this.
Number of smallholder farmers and dependents where Wakuli has increased their coffee income of the last twelve months by at least 25% (cumulative).
Calculating truthful and transparent farmer income and prices may be too difficult or costly. Too much of the income does not always reach the farmers and stays at the cooperative level, which is partly mitigated by only working with cooperatives who adhere to the 7 democratic principles of good cooperative governance. This is further mitigated by Wakuli’s daily efforts to work with their partners to ensure farmers end up with the best possible price. Further coffee market price volatility may make it harder for Wakuli to sustain a sufficient premium to have a meaningful impact on living income. If coffee market prices rise significantly, the impact problem may go away without Wakuli’s intervention. Price volatility remains a structural risk for the company.
Wakuli contributes to SDG 1 (No Poverty) by paying a higher price per kilogram and improving access to finance, reducing the number of people living in poverty.
