Business and Finance
Businessman, Andrew Rugasira who woke up and smelt the coffee
Annabel Palmer talks to Andrew Rugasira, the Ugandan entrepreneur with a new book and a Good African story to tell
THE lives of 14,000 farmers in the Ugandan Rwenzori Mountains have been transformed since Andrew Rugasira had his lightbulb moment in 2002. At the time, he was running a prosperous marketing and events company in Uganda, but he felt unfulfilled. And so came the epiphany: he would build a business growing, processing and packaging coffee in Uganda (it had historically only been exported as a raw commodity), transport it to countries in the region and beyond, and share any profits 50/50 with the farming community. So Good African Coffee was born.
Rugasira thinks the Western view of Africa as a “hopeless continent” has made penetrating the British market more difficult. In 2003, he thought that getting support – from both investors and retailers – would be fairly straightforward, as he was certain his was a good product at a good price. But he was stunned by the troubles he encountered trying to convince decision-makers in the retail market to endorse his pioneering product. “Retailers weren’t prejudicial, they just hadn’t dealt with an African businessman before, and were concerned about the risk involved.”
He made 14 trips to the UK before getting a response. A Waitrose contract came first, and Sainsburys and Tesco followed soon after. Along with the Co-op, Tesco is now Rugasira’s company’s biggest retailer – with Good African Coffee available in 600 of its stores.
Rugasira believes that entrepreneurs across the world face many of the same challenges – the most universal of which is trying to raise capital. He informs me that, according to the World Bank, for every 1,000 entrepreneurs seeking capital on the African continent, only 28 can get access to it. It remains unclear whether Rugasira will be in that fortunate 2.8 per cent. When he discovered banks were unwilling to help, he used up his savings, put his house on the market, and exhausted all the goodwill he could find.
He did carry out one round of funding in 2010, raising $500,000 (£327,000) – largely from people he knew previously who believed the business could succeed. In a sense, those supporters have been vindicated – the response to the product itself was positive and “we’ve proven that the business can perform to the expected standard and quality”. Good African Coffee has built credit co-ops in the local villages, so farmers can get out of the clutches of rural loan sharks. It now has 110 members of staff in Uganda. And last year its gross profit was $1.3m.
But there is still uncertainty over whether this business model actually works. The company is operating in a very small and narrow geography, and desperately needs more capital if it’s going to succeed on a large-scale. A lack of investment meant the company was unable to meet the rate of sales at Waitrose and Sainsburys. It has since been delisted at these outlets.
TAKING A BREAK
Nonetheless, the business has been growing at 10 to 15 per cent year-on-year since 2005 (with spikes in 2008 and 2009 due to larger sales of the coffee as a raw commodity). So it may seem strange that Rugasira opted to take a two year sabbatical in 2010 to complete a Masters at Oxford. He also used this time to write his newly-released book, A Good African Story, that he hopes will add some much needed empirical evidence (“very few African businessmen write about their experiences of business”) to the development debate, as well as inspire future African entrepreneurs. “In Africa, three quarters of the population is under the age of 25. So if the continent wants to know where future prosperity lies, they’re it.”
But I suspect there may be a third reason: the book gives Good African Coffee some much-needed exposure, as the company lacks the resources necessary for promotion and marketing. And consumers often view products with a story behind them more favourably than a faceless brand.
I ask what 2013 will bring. “I’m currently on a UK book tour, but once that’s finished, my mission will be to scale up and raise additional capital.” So in many senses, this Good African story is far from over and its ending is still uncertain. Rugasira acknowledges that other business ventures would bring him more personal financial gain. That is why you can’t help but be impressed his perseverance, and his unwavering determination to make this business succeed.
CV ANDREW RUGASIRA
- Company name: Good African Coffee
- Founded: 2003
- Company profit: $1.3m (2012)
- Number of staff: 110
- Job title: Chairman and chief executive
- Age: 44
- Born: Uganda
- Lives: Uganda
- Studied: BA Law and Economics, School of Oriental and African Studies; MSc African Studies, Oxford University
- Drinking: Coffee
- Eating: Local African cuisine
- Reading: What it is like to go to war, by Karl Marlantes
- Favourite business book: Losing my virginity, by Richard Branson
- Talents: That’s for others to say
- Motto: “Today I am a better person than I was yesterday, and tomorrow I will be better than today”
- First ambition: To become a priest
- Heroes : Nelson Mandela, Amilcar Cabral, Martin Luther King