Farm Mountain have been making coffee enthusiasts happy for nearly ten years, but have been struggling to make serious profit. But now things have changed. This year they won the “Børsen Gazelle-award” for economic growth and have become a good example of how small Danish companies can do sustainable business in Africa.
It’s not that the Randers-based coffee company Farm Mountain Coffee is unfamiliar with winning awards for their work. Five years ago they won the prestigious Danish CSR award and their coffee is widely regarded as one of the best on the market. But now, they have managed to turn their likeable, if slightly naïve great-coffee-begins-with-happy-farmers-in-Africa-approach into a sustainable and commercial success.
It’s all about the farmers
Farm Mountain Coffee is unique among coffee producers in the way that all their coffee derives from a group of around 100 farmers in the Mount Elgon area in eastern Uganda. In order to ensure consistent access to the best beans, Farm Mountain Coffee has been paying overhead of premium prices for the beans and invested heavily in the farming community.
“I quickly realised that if I wanted the best beans, I had to make sure that the farmers had the knowledge and the capacity to grow them and the financial enticement to do so,” says Farm Mountain founder and CEO Lars Bendix.
This means that the company has helped and educated the farmer families in many other ways than those strictly related to coffee production. Over the years, the company have invested in schools, education, electricity and even other sources of revenue for the farmers – including chicken production and other projects that have included the access2innovation network to boost the farmers’ livelihood.
CSR is obvious –and irrelevant
The close connection with the farmer group led to Farm Mountain Coffee using the farmers’ faces on the finished packages. With the relatively small quantities of coffee that the company handled, they were able to trace each sack of beans to each individual farmer – making it an obvious choice to let the consumer know exactly who had produced the coffee he or she was drinking.
“Storytelling was a vital part of our marketing,” says Lars Bendix. “This is the real stuff. This is the farmer who grew your coffee. And it took a long time for us to realise that you don’t primarily sell coffee to coffee drinkers because they find you sympathetic and want to do good. They buy coffee because it tastes good,” he explains.
“Yes, CSR is at the core of our business, but if we didn’t do it, we wouldn’t be able to produce the kind of quality coffee that we do. It all connects in that way. So as a selling point, the CSR is irrelevant - or at least much less important - than the taste and quality of the coffee.”
No business no nothing
Lars Bendix first went to Africa driven by an urge to do good. And he soon found that doing good was the only way to be able to get his hands on first quality coffee beans.
When asked to pick between business, coffee and CSR as the most important piece of the Farm Mountain equation, Lars Bendix is not hesitant to reply.
“Business. Absolutely,” he says. “And I say this as someone who has build the entire company on the note that you should do good in the World. I was losing money for almost a decade and I was about to fold many times,” he says.
New adjustments means that he has had to trim the overhead payments to a reasonable amount. Farm Mountain still pay the farmers more for their beans than any other coffee company, but percentages have been cut and bonus schemes set up to make the business model profitable.
“You really have to get the business part to work,” says Lars Bendix. “How else are you going to fund the coffee and the CSR?”
A rare but good example
Farm Mountain is an example of a small Danish company who has managed to do sustainable business in Africa. But the list of successes is far too short, says access2innovation CEO Jacob Ravn.
"The reason why Farm Mountain has succeeded and continues to succeed is that they have a very holistic approach to doing business," he says. "And they have kept going. The Danish system ought to be better at supporting small companies like Farm Mountain. That way it wouldn't nescessarily have taken them ten years to succeed."
Read more about Farm Mountain Coffee at: https://farmmountain.com