Slide 1

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 2

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 3

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 4

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 5

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 6

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 7

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 8

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 9

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 10

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 11

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 12

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 13

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 14

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 15

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 16

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 17

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 18

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 19

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 20

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 21

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 22

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 23

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 24

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 25

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 26

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 27

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 28

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 29

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 30

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 31

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 32

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 33

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 34

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 35

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 36

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 37

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS


Slide 38

BD IMPORTS
purveyors of exceptional quality
specialty-grade coffees

agenda
A Closer Look At Coffee
From the Crop to Your Cup: the Kenya Road
Kenya, Coffee and the World
Selecting the best for BD Imports

2

a closer look at coffee
The Business of Coffee in the US
Where Coffee Grows
The World of Kenyan Coffee




Botanical Species
Grades
Crops: Growing Seasons, Regions & Harvest



3

the business of coffee in the US
Second largest US import, after petroleum
Two types


Robusta
 National brands, e.g. Folger’s, Maxwell House



Arabica
 Specialty coffee houses, e.g. Starbucks, Peets

Imported from more than 80 different origins
Fewer than 100 US-based importers of
specialty-grade coffees



4

where coffee grows
The Americas

Southeast Asia

The Middle East

East Africa



5

kenya—botanical species
Five different
botanical varieties







K7- older plant
SL28 – older plant
SL34 – older plant
Ruiru 11- newer more
pest resistant, higher
yield
Blue Mountain



6

grades of kenyan coffee
Up to 8 different grades of coffees marketed
AA Largest bean size (7.20 mm screen); highest prices
AB Smaller bean size (6.20 mm screen); good prices
C

Smaller than AB

TT Light, ragged beans separated from other grades

E

“Elephant”—two beans joined together

PB Grows as one bean in a single cherry; 10% of crop
T

Smallest, thinnest beans; chipped, broken, flawed

Buni Not wet-processed, fell from trees; 7% of crop



7

marketing confusion
Brand names given to Kenya AA by exporters
and/or importers






AA Top
AA+
AA FAQ
AA Minus
Private label name



8

growing seasons
jan

feb

mar

apr may jun

jul

aug

sep

oct

nov

dec

main crop to auction

60% of total crop

harvest main crop

fly crop to auction

harvest fly crop

40% of total
crop



9

growing regions
Nyeri, Kirinyaga, Embu,
Muran’ga







Location: from
Slopes of Mt. Kenya N & NE
Altitude:1500m – 2100m
Varieties: SL28, SL34, Ruiru
(>1.5%)
Rich volcanic soil
Main-crop coffees
20% of produce is
top category



10

growing regions

Meru



Location: Slopes of Mt. Kenya
During 1987/88 coffee price
recession, farmers abandoned
crops



11

growing regions
Kiambu, Ruiru, Thika









Location:
N/NE of Nairobi
Altitude: 1500-2100 m
Rainfall: 1000m3
Climate:
7-32 degrees C
Varieties: SL28, SL34,
Ruiru 11
Typically, average
main-crop coffees
Ruiru planted on a
large scale will soon
come to market



12

growing regions
Machakos





Location:
Eastern Region
Altitude: 900-1400m
Semi-arid climate
Early Crop coffees



13

growing regions

Makuyu, Donyo,
Sabuk, Mitubiri




Location:
E/SE of Nairobi
Semi-arid climate
Early Crop coffees



14

from the crop to your cup—
the kenya road
The Business of Coffee in the US
Purveying Specialty-grade Kenyan Coffee




The Market Today: Critical Times for Kenyan Coffee
From Crop to Cup: the Kenyan Road
Our AA From Kenya to Consumer



15

purveying kenyan coffee—
the Kenyan Coffee Auction
All Kenyan coffee sold
at auction on Tuesday
mornings by authorized
marketing agents
±100 licensed
buyers/exporters
Buyers get samples 10
days prior to auction



16

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



17

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin
Moves coffee from Nairobi to
port of Mombasa via rail or truck
Loads 44,000 lbs (300 x 132-lb bags)
onto steamship container
Prepares appropriate documentation
for US Customs

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer

Exporter
Exporter

Certificate of Fumigation
 Bill of Laden
 Certificate of Origin
 Commercial Invoice
 Phytosanitation Certificate


* Relative to crop and conditions



18

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

3 – 9 months*

KENYA

Auctioneer
Exporter

* Relative to crop and conditions



19

from the crop to your cup—
the kenya road
7 changes of hand within
country of origin

Farmer
Cooperative Society
Union of Cooperative Society
Miller
Marketing Agent

AND

3 – 9 months*

KENYA

Auctioneer
Exporter
Importer

Coffee
retailers and
distribution channels

3-4 weeks

Up to 4 changes of hand
before arrival in US

Distributor
Roaster

(e.g. restaurants,
grocery stores)

CONSUMER
* Relative to crop and conditions



20

our AA from kenya to consumer
Our quality assurance process
After auction, 10 lbs of each purchased lot
from Nairobi
At departure, 10 lbs from port of Mombassa
On arrival, 2 lbs from our warehouse (CA/NY)

We make sure that the coffee we get
is the coffee we bought.



21

kenya, coffee and the world
Kenya and Coffee
The Market Today:
Critical Times for Kenyan Coffee
Prognosis: Positive



22

kenya and coffee
Coffee represents 20% of Kenya’s exports



2000/1: 1.2MM 60K bags = ksh 10.2bb
2001/2: imports up marginally

Coffee employs ±250,000 Kenyans
60% small scale growers
40% plantations
Coffee production presently in decline



23

kenya—export trade matrix
Kenyan Coffee Exports (60-k bags)

Importer
Germany
Netherlands
Belgium
Sweden
UK
US

2000

2001

387,166
137,339
98,936
86,438
66,677
63,567

430,018
132,129
95,990
89,158
44,305
81,713



24

the market today:
critical times for kenyan coffee
MY
1999/
2000

101.000 MT
produced

110
100
90

MY
2000/1

51.700 MT
produced
50% decline

80
70
60
50

MY
2001/2*

53.000 MT
estimated
marginal
increase

40
30
20
10
0

Metric Tons per Market Year

Source: GAIN Report, US, 2002. NB: MY = market year, MT = metric ton



25

the market today:
critical times for kenyan coffee
Reasons for production decline
Low farmer morale
Poor market prices
Seedling prices rose from ksh 10 to ksh 201
—small farmers can’t afford new plants2
Ongoing national coffee reforms


Kenya Coffee Act (April 2002) completes first phase of
liberalization of coffee industry; seen as promising

Exceptional-quality Kenya AA will be more
prized and more rare in the future
1 USD 1 = ksh 78
2 Source: GAIN Report,

US, 2002



26

2002/3—a positive prognosis
2002/3: estimated production 70.000 MT—up 20%




Good weather, improvements in husbandry and higher
market prices all support high expectations
Prices USD/50K bag green:
1999/2000:
USD 84
LAST WEEK
2000/1:
USD 68
>USD 200/50k bag
2001/2:
USD 120

Investment ops in coffee farm inputs and value-adding
equipment (coffee roasters, milling)


Stabex Funds have facilitated important strides
at farmer level

10 April: EAFCA’s first internet auction fetched record price
(Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2
Co-op Bank of Kenya Limited considering wiping out coffee
farmers’ old interest (12-13% interest rate)
1EAFCA

= Eastern Africa Fine Coffees Association.

2

Source: GAIN Report, US, 2002



27

selecting the best for bd imports
Our Eyes and Ears At Auction
Exceptional Kenya AA
Socioeconomically Responsible Coffee
The BD Imports selection process



28

our eyes and ears at auction
Native-born, world-travelled professional
50+ years in Kenyan coffee industry
Represents BD Imports exclusively
Is a primary part of our direct link to source



29

our strategy
“Cost+profit” model vs “C-market” model
Study auction reports to determine
age of coffee
Sample coffees throughout the process
Purchase small auction lots from top
growing regions
Purchase 95% Main crop coffees
Further sort lots at origin if necessary to
remove broken/discolored beans, shells
and chips



30

our standards
The real thing—as fresh as can be
Within 1 week after purchase
coffee leaves Kenya
No blending of lots
No re-naming of lots


We use Lot number and Cooperative Society name
as per auction; eg, Lot 157/Mushagara-Kirinyaga



31

exceptional kenya AA
Mushagara/Kirinyaga
132-bag lot fetched highest price at mid-March
auction and was most sought-after by many
aggressive buyers
Mushagara grown by cooperative society in
Kirinyaga region on the slopes of Mt. Kenya







Altitude:
Climate/ Rainfall:
Temperature:
Varieties:
Production:

1500-2100 m
1000 m3 per annum
7-32 degrees C
SL28, SL34, Ruiru 11(>1.5%)
8852 tons per annum



32

the bd imports selection process
Our buyer sends us a sample of each of the best
exceptional AA crops
We send cupping samples to each of our clients, and
we cup the same ourselves
We set purchase guidelines for buying fresh green
beans based on the individual preferences and needs
of our clients, and import them directly ourselves
Each shipment is warehoused for distribution in our
facilities in CA and NY
bd imports

believes

Consistently
Experiencing
The
very bestand
the
roast
honestly
best
always
Kenya
purveying
starts
AA should
the
always
with
the
bevery
like
amakes
safari
beans.
in aBD
cup.
best
Kenya
AAbest
the
difference.



33

BD Imports and you—

a winning partnership
Sole US importer of many distinctive crops of
Kenyan AA



Larger importers shun smaller producers who can
afford to devote time and attention to superior crops
Niche created for dedicated specialty importers while
cornering specialty crops among few competitors

Competitive pricing model permits profit while
not outpricing product


Quality is our object, not quantity

Purveyors of “socioeconomically responsible”
specialty green coffees



34

changing the world one cup at a time—
socioeconomically responsible coffee
We view growers as an
extension of our business,
therefore also of yours
Specialty coffee imports
provide vital means
for sustenance and
progress for small- to
mid-size growers
Importing specialty
produce means “giving
back” to coffeegrowers
directly, since much of the
profit from export does
not reach growers
Supporting specialty
growers promotes
clean agriculture and
“quality over quantity”
in export coffee

While bringing specialty
Kenyan coffee to the world,
we also bring the world to
Kenyan coffeegrowers

Information is power



35

summary
More and larger roasters are discovering the quality
difference BD offers
Direct link to origin
Solid relationships with buyers and growers of
our product assures supply and integrity
Socioeconomically responsible product and practices
Specialty coffee attracts exceptional clients, like ours
and yours

bd imports’

forecast

•more individualized services
•expanded focus of target imports



36

BD IMPORTS
THANKS YOU!!

BD IMPORTS