Coffee was first introduced in Kenya in 1893 and is currently grown in 33 counties. Kenya mainly produces the Arabica variety of coffee, although small quantities of the Robusta variety are also grown in some parts of the country .Since the introduction of the crop into the country, Kenya has grown to become the fifth largest coffee producer in Africa. About 70 percent of coffee in Kenya is produced by smallholder farmers under cooperative societies while the remaining 30 percent is produced by small, medium and large-scale estates. Coffee farming supports about 1.5 million Kenyan households either directly or indirectly through forward and backward linkages. The leading coffee producing counties are Kiambu, Kirinyaga, Nyeri, Murang’a, Kericho and Bungoma. The main coffee grades contributed 89.6 percent of the value of coffee sold in 2022/23. These grades include AA, AB, C, E, PB, T and TT. The miscellaneous grades contributed 4 percent of the value during the period under review. These grades are HE, SB, UG, UG1, UG2 and UG3. Unwashed coffee grades contributed 6.4 percent to the total value earned during the period. They are MH, ML, NH, NL, RH and RL.

Area under Coffee

The size of the area under coffee registered a comeback in recent years. In the year FY 2022/23, the area under the crop registered an increase of 2.29 percent from 109,384 Ha in FY 2021/22 to 111,902 Ha. The increase in area could be attributed to introduction of coffee production in non-traditional coffee growing zones. During FY 2022/23, Nandi County recorded the largest increase in area under coffee farming at 404 Ha.

The government has vowed to accelerate reforms in this sub-sector to increase coffee growing in the country and increase earnings for coffee farmers.

“The ongoing coffee reforms have streamlined the sector and ensured farmers get good returns for their produce by eliminating conflict of interest across the value chain and ensuring implementation of Crops (Coffee)(General) Regulations 2019 that eliminates multiple licensing,” says AFA Chairman Hon. Cornelly Serem.

The AFA Chairman was speaking during the International Coffee Day that was celebrated on October 1, 2024. The International Coffee Day is recognized by the International Coffee Organization (ICO), a global coffee organization based in London and is celebrated every 1st of October to encourage domestic value addition to stimulate production and local coffee consumption. The theme of this year’s International Coffee Day was ‘Coffee, our daily ritual, our shared journey’. The annual showpiece offers a platform to celebrate coffee in all its diversity, enjoying the passion that coffee brings as well as taking the opportunity to implore on coffee stakeholders the need for deliberate and collective efforts to increase Kenya’s coffee production and domestic consumption.

 “Additionally, implementation of the Capital Markets Authority (Coffee Exchange) Regulations 2020 which provides for licensing of brokers, has enabled farmer institutions to access the coffee auction while implementation of the Direct Settlement System has improved efficiency in farmers’ payments,” added Mr. Serem.

Coffee Production

Coffee production has been cyclic over the last five years, with the highest being 51,852 MT in FY 2021/2022. In the year FY 2022/2023, a total of 48,648 MT of coffee was produced, out of this, cooperative societies produced 34,488 MT while estates produced 14,160 MT.

The lower coffee production in FY 2022/23 is attributed to harsh weather conditions that accelerated the infestation of Coffee Berry Disease (CBD) especially in the central region of the country. The three counties that led in the production of the cherries were Kiambu, Kirinyaga and Nyeri respectively.

According to the AFA Chairman, more people, particularly the youth, should be involved across the coffee value chain to enhance job creation and maximize returns on the cash crop.

“I want to take cognizance of the low involvement of the youth along the coffee value chain. It is time we engaged the youth with a view to addressing their challenges or concerns to ensure their increased participation,” said Mr. Serem.

He further added that youth may contribute effectively at the coffee value addition stage and digitalized extension services among other segments of the value chain. The sustainability of the coffee industry, he added, may be jeopardized unless the youth are brought on board as the current average age of a farmer is 60 years.

Coffee Productivity

The Kenya coffee production per bush is currently ranging between 2 Kgs to 15 Kgs. During the year FY 2022/23, coffee yields dropped to 0.44 MT/Ha from 0.47 MT/Ha recorded in the FY 2021/22. This was mainly attributed to harsh weather conditions.

Market Performance

Nearly 80 percent of coffee produced in Kenya is sold through the auction at the Nairobi Coffee Exchange (NCE) while the remainder (20 percent) is sold directly to buyers. The total quantity of coffee sold under auction in FY 2022/23 dropped by 15.8 percent to 32,652 MT compared to 38,790 MT sold in FY 2021/22 MT. This drop was caused by changes in the regulations in the period under review. Similarly, the quantity of coffee sold under direct sales decreased by 21 percent from 11,841 MT in 2021/22 to 9,350 MT in FY 2022/23. The total quantity of coffee sold under both auction and direct sales was 42,001 MT valued at USD 176.43 million in the period under review, a decrease of 17 percent from 50,631 MT valued at USD 311.88 in 2022.

“Our favorite brew is the result of wide collaboration, often unseen, among numerous actors across the global value chain, all working together to bring us that perfect cup, every day. The national government is committed towards driving the coffee reform agenda and putting in place appropriate policies and regulations for the coffee sub sector growth,” said Mr. Serem.  

Earnings from coffee are determined by quality and quantity of the coffee. In FY 2022/23, a total of 27,682.68 MT worth USD 114,524,670.94 of main coffee grades were bought.

This marked a 19 percent decline from 33,975.73 MT worth USD 210,425,903.30 of similar coffee category that were bought in FY 2021/22. The decline was attributed to a decrease in the overall quantity of coffee produced in the year under review. Similarly, a total of 1,946.50 MT worth USD 5,095,919.60 of coffee under miscellaneous category were bought in FY 2022/23 compared to 2,368.78 MT worth USD 8,803,121.08 of the same commodity that were bought in FY 2021/22. The total weight bought for the unwashed coffee category in the period under review stood at 3,022.81 MT worth USD 8,241,172.20 while 2,424.43 MT worth USD 8,011,773.44 were bought in the previous year.

Coffee Exports

Most of Kenya’s coffee is exported to the global market where it is in high demand. In FY 2022/23, coffee exports increased by 5,099 MT from 42,858 MT worth USD 298.56 million in FY 2021/22 to 47,957 MT worth USD 252.12 million. This coffee was exported to 52 destinations globally. Despite the increase volume of the coffee exported, the value in dollars decreased because of exchange rate variations in the period under review. USA, Belgium and Germany remained the top leading coffee export destinations for the two years buying 11,228 MT worth USD 59.20 million, 5,026 MT worth USD 29.12 million and 8,347 MT worth USD 39.34 million respectively in FY 2022/23.

Coffee Exports by Form

Coffee was majorly exported in the form of green coffee totaling to 46,428.78 MT valued at USD 241.53 million in FY 2022/23. Earnings from green coffee exports are further tipped to continue to increase in the coming years as global coffee consumption rises.

“I want to assure you that the coffee industry has a great future with global consumption surpassing its production. The value generated by the market should be efficiently translated to coffee farmers,” said Mr. Serem.  

Domestic Coffee Consumption

While most of locally produced coffee is exported to the global market, domestic coffee consumption has been rising rapidly in recent years. Domestic consumption of the beverage increased by 19 percent to 2,051 MT in FY 2022/23 from 1,722 MT that was recorded in FY 2021/22.

This growth is ascribed to the promotions conducted within universities, trade fairs and field days in various counties targeting the youth. However, there is still plenty of room left to grow local consumption of coffee, and the Coffee Directorate is leading this drive through various initiatives.

These include actively organizing coffee consumption campaigns in universities and colleges with the aim of cultivating a coffee culture among the youth and establishing coffee houses in universities, starting with Egerton University as a pilot project and expanding to Kenyatta University. This was done with support from the International Coffee Organization (ICO) and the Inter-African Coffee Organization (IACO).

The Directorate is promoting the Kenya Coffee Mark of Origin, which was created to establish Kenyan coffee as a globally recognized brand and is currently in the process of registering the mark with the World Intellectual Property Organization (WIPO) to enhance its global recognition. To raise public awareness through advertising and public engagement, the Directorate also seeks to educate Kenyans about the health benefits, quality, and cultural significance of consuming locally produced coffee.

It also conducts a bi-annual survey to assess coffee consumption trends and carries out a census of coffee houses across major urban centers nationwide, which is crucial in mapping the coffee consumption landscape, identifying emerging patterns, and gathering data on consumer preferences. To further boost local coffee consumption, the Directorate has in recent years supported a variety of coffee-related events, such as local and international barista competitions, International Coffee Day celebrations, and coffee festivals. These gatherings offer coffee enthusiasts the opportunity to experience a diverse range of Kenyan coffees, engage with local roasters, and participate in barista competitions.

Number of Coffee Houses

The growth in local demand for coffee, coupled with a consistent supply of high-quality processed coffee, has led to the creation of more coffee consumption outlets. The number of coffee shops and the parties involved in roasting and packaging coffee have both increased significantly in the country in recent years.

The number of coffee shops more than tripled from 231 in 2019 to 791 in 2023, indicating that local demand for coffee is rising. Moreover, the increase in the number of stakeholders involved in packaging and roasting from 25 in FY 2019/2020 to 35 in FY 2022/23 indicates that the coffee supply chain is becoming more active and competitive. Major hotels and coffee shops especially seem to be driving the growing domestic consumption.

In the long-term, the Directorate aims to make coffee a household staple in Kenya. This effort is designed to shift coffee consumption from being seen as a luxury or export-only product to an everyday beverage enjoyed in homes and social settings across the country.

This will have major benefits for local coffee farmers. This is because encouraging local consumption provides Kenyan farmers with an additional market beyond exports. This domestic demand could help stabilize their income, reduce dependency on the often-volatile global coffee market and offer more reliable economic opportunities. This diversification not only enhances farmers' financial security but also strengthens the overall coffee industry. This has been done through encouraging coffee cooperatives to roast a portion of their coffee for sale to their farmers.