How Gora Coffee by Moyee Ethiopia’s New Business Model Impressed IKEA

After hundreds of mugs of coffee that got the full approval of the business developer Cristiana at IKEA, Gora Coffee by Moyee Ethiopia, the largest roaster and exporter in Ethiopia, will now be available at IKEA bistros in Sweden from May onwards.

But it’s not just the taste; the business model of Gora Coffee made it a good fit for the IKEA Social Entrepreneurship initiative. Over the last ten years, this IKEA initiative has generated work for more than 30,000 people. Last financial year, close to 50 products made in partnership with social entrepreneurs were sold on 54 markets.

When it comes to Gora Coffee, it is a real FairChain coffee, says Cristiana.

FairChain refers to a business model that creates a fairer distribution of returns in the production chain for all those involved – farmers, plantation workers, processing units and others involved at various stages.

Gora Coffee has adopted the FairChain concept by roasting, mixing and packaging coffee beans in Ethiopia instead of letting them go to other regions like the U.S. and Western Europe, which is a common practice. This business model helps retain the value of “value-added activities” in Ethiopia and helps make farms profitable and better wages for the farmers.

“With Gora Coffee, we can tell who the farmers are that are making our coffee. Its focus on creating social impact sits in the prices it offers to the farmers. Gora Coffee pays more than the market by 20 per cent or so, depending on their agreement with the farmer, by removing middlemen and having efficient production closer to the farmer,” says Cristiana.

Ethiopia has a population of about 110 million people, and 1 out of 5 livelihoods depend on coffee, which means 25-30 million people’s livelihoods rely on coffee farming. Gora Coffee makes a positive livelihood impact by paying the farmers 20 per cent higher than the conventional market.

But how is that achieved? Gora Coffee has fewer middle players, say 2-3, whereas the conventional business model has eight layers. Gora also focuses on sustainability and better care for the environment.

It supports its farmers through different training programs to safeguard the quality of the coffee. In simple words, Gora Coffee helps its farmers get a good yield by making sure the beans are shade-grown, that the soil gets proper nutrients, and that pollution-free water is used.

“If the quality goes up, we can charge a bit more, and then we can pay our farmers more, too,” says Ahadu Woubshet, founder and CEO of Gora Coffee by Moyee Ethiopia.

Gora Coffee works closely with its farmers, and currently, it sources directly from 1,800 small holder farmers. It plans to grow to 3,000 farmers by 2025, impacting 6,000 more people in the community.

As a result of this collaboration with IKEA, over 500 small scale certified farm holders will gain livelihood opportunities in the first year alone (2022). The impact and opportunities will further go up in future. 

Besides transparent pricing, the company offers jobs to those who need them most. 48 per cent of their employees are women, who typically have no access to job opportunities or get poor monetary compensation due to gender discrimination.

“I believe if you give a person a fish, you feed him for a day, but if you teach him to fish, you feed him for a lifetime. We want to help people be in a position where they can generate a decent livelihood for themselves. It makes all the difference in their life. They feel empowered; I think that is important,” says Cristiana.

Source: IKEA