Ethiopian based Tomoca Coffee is competing with Starbucks

(Editor's choice Top News from Last Month)

Source: Reporter

Wondwossen Zewdu, Operations Director of Tomoca Coffee

The 50-year old Tomoca Coffee PLC is a pioneer in roasting, grounding and selling coffee in Ethiopian. Even though the company has been in business for half a century it only started exporting coffee a decade ago. According to the owners, the company has been honored for its quality produce.

Dawit Taye of The Reporter spoke with Wondowossen Zewdu, operations director, on the current performance of the company.

Tomoca is well known for roasting coffee. However, the place where it sells coffee [the coffee shop] is very small. Why is that?

The intention Tomoca had when it started was to roast, ground and distribute coffee. When customers came to buy coffee from us we served them with a cup of coffee free of charge. We did that because we wanted the customers to taste the type of coffee they bought. Apparently we were prohibited from serving coffee free of charge at the time on the ground that this harmed coffee shops. After that we acquired the license to run a coffee shop and started operations. It was not our initial plan but we had to do it. Back then we used to sell a cup of coffee for 25 cents.

What is the price of one cup of coffee now?

We sell it for five birr. But mind you that is not our primary business. We are focused on roasting coffee and that is what we want to be known for. That is our business.

The business of exporting roasted and grounded coffee is not common. Why is that? And when did you start exporting roasted and grounded coffee?

It has now been 10 years since we started exporting roasted and grounded coffee. It was difficult before but now the market is better and we have also increased the volume of our export.

To which countries do you export roasted and grounded coffee?

Our key market is Europe. This is because of the proximity of the market. And like flower, roasted and grounded coffee needs assiduousness. Also the price is lesser. We also export to some Asian countries and Australia, though to a lesser extent than to the European market. However, it is difficult to export to the US.

Why?

Basically it is because the transportation cost is high. If the cost becomes less we will consider exporting to the US as well.

Do you have enough equipment to roast and ground coffee?

We have our own roaster. Taking into account the expansion of the market we have installed a fully equipped roasting, husking, winnowing, grounding and packaging machine. It cost us about 10 million birr. And for one to have quality product there should be quality equipment. That is what we plan to achieve.

What is your annual output for both local and international markets?

We usually work by taking orders and as you may know you don’t get coffee whenever you want it. But generally speaking we have the capacity to produce 34,000 kilograms annually.

What is the competition like in both the local and international markets?

We have stayed in business for long but there are new competitors emerging. Exporting ground coffee is challenging than exporting the coffee beans. We are not only selling ground coffee but we are also selling the Tomoca brand. Usually customers want to know how long you have stayed in business, who your other customers are and what your label is. It is not an easy business. We are competing with Starbucks in the European market and when looking at the capacity of the both of us it is incomparable. However, there is one area where we outshine; we have been in business longer than them and can offer high-quality roasted coffee. There are other companies engaged in similar businesses locally and we recently established the coffee roasters' association.

If you have strong faith in the quality of your product and if Starbucks is your competition, why is the export of roasted coffee small in volume? Why can’t you export more?

The main reason is lack of finance. We need to be strong financially. There is a sizeable market in the countries we export and we are not exploiting that. The other problem is the National Bank of Ethiopia. It does not accept the price we set for our products. It suspects us of underinvoicing. This has hindered us from operating at full capacity and earning more foreign currency. We believe that our product is better than that of Starbucks.

You recently won an award. Can you tell me a little bit about that?

The award was given to us by a Spanish organization called Business Initiative Directive (BID). We were awarded for the high quality of our product.

They don’t tell you how they pick you. They have their own way of conducting things. They come to your company without your knowledge and observe the way you do things and grade you using their own measurement.

This award will highly benefit Tomoca. Mainly, it will give us international recognition, which is a big encouragement for us.

Were there other Ethiopian and African companies that won this award?

One Ethiopian company, Wegagen Bank, did. Its category is different from ours. It won the leadership quality award. There was also another coffee beans exporter who won for exporting quality coffee beans.

Generally, there were companies from 118 countries that received awards. From Africa companies from Ethiopia, South Africa and D.R. Congo were given awards. Most of the awardees were from Europe. 

Taking over family business and running it successfully is not common in Ethiopia. Have you faced any difficulty in that regard?

Yes, it is not common to take over and run it successfully. However, we have not faced any problem in that. For instance, I am the third generation in this family business and I believe that the business will continue for generations to come.