Kenya's speciality coffee growers hit as lockdowns close global coffee shops

Like many specialty coffee growers, Kenyan exporter Jackson Kanampiu has been hard hit by the coronavirus crisis as consumers are barred from the coffee shops that serve niche brews and opt for shop-bought offerings.

Kanampiu spent four years building a business in specialty coffees as the price of basic beans fell, only to see the cafes he supplies canceling their orders due to coronavirus lockdowns. "We have almost ground to zero," said Nairobi-based Kanampiu. "The corona has really affected us."

Global consumers are still drinking coffee, but few are visiting cafes. Instead, they are buying medium-quality supermarket beans to drink at home, foregoing high-end coffee shop offerings and spelling disaster for specialist suppliers. Half of Kanampiu's sales have disappeared as customers in China and the United States have canceled orders from his company Eagle Crown Coffee since the pandemic hit.

It's not just a problem in Kenya. Matthew Harrison, a buyer at specialty coffee sourcing company Trabocca, said global demand for specialty coffee has plummeted in recent weeks. "We have clients in Asia who have reported 60% reductions in volumes in the first three months of the year," Harrison said. "This is likely to be the case for Europe over the next few months."

One prominent European specialty trader who declined to be named said the coronavirus had driven down specialty coffee demand in the United States and Europe by 40%.

SUPERMARKET QUALITY

Another Kenyan exporter, who was not authorized to speak to the media, said his specialty coffee shipments to Asia especially small-batch consignments made by air had been canceled. Top importers have stockpiled supermarket quality beans, but not speciality offerings, dealers say.

For the Kenyan economy, it's a particular blow. Kenya is only the world's 21st-largest coffee producer, according to data from the U.S. Department of Agriculture (USDA), but around half its sales are specialty-grade coffee, according to the Speciality Coffee Association. That makes it especially vulnerable to the specialty bean crash.

About 800,000 Kenyans grow coffee, according to the International Coffee Organization, and the sector is one of Kenya's top five foreign exchange-earners. There's little domestic demand, so more than 95% of production is exported, USDA data shows. Now coffee, along with Kenya's other top earners - tourism, and exports of flowers and fresh produce - is getting hammered.

Coffee was already struggling: production costs are too high for producers to compete with mechanized mega-growers like Brazil. And climate change is pushing up temperatures and making rainfall patterns more erratic, reducing productivity and forcing many farmers out of business. Low global coffee prices had added to the sector's woes - arabica futures touched 13-year lows in 2019 - but prices had begun to rebound.

"We were just starting to smile with coffee prices going up," said Kanampiu. "And then here comes corona."