Wakuli is transforming the coffee market: a win-win for farmers and consumers

Many people know that something is not right in the coffee industry, but few coffee lovers truly understand the issues. As a co-founder of Wakuli, Grosfeld knows it well. 'Farmers in countries like Tanzania and Ethiopia often have high-quality beans but lack buyers. When buyers do come, they often purchase all the beans at once for a low price. There is no long-term relationship between the farmer and the buyer. However, by investing in a partnership, the farmer has the opportunity to improve the bean quality. At Wakuli, we remove the role of the trader, someone who buys cheap and sells expensive. This benefits both the farmer and the consumer, as the consumer gets to enjoy better coffee. It's a new way of thinking about coffee.'

Wakuli started in 2018 as Wakulimarket, a kind of marketplace, explains Grosfeld. 'We wanted to connect farmer cooperatives with coffee roasters in Europe. However, that model didn't work well. It requires large volumes to be profitable; a container can transport 20,000 kilograms of coffee, but we could only convince a few roasters to buy around 50 kilograms. It didn't work well in terms of unit economics. So in 2019, we transformed Wakulimarket into a consumer brand: Wakuli. After all, we need to convince consumers to drink coffee in a different way - one that is more delicious for them and better for the farmers.'

'What sets us apart from other sustainable coffee brands is that we’re involved in every step. Many companies work with traders who buy coffee, store it, and maintain the relationship with the farmers. While some traders are excellent, others are less reputable. We eliminate that role from the supply chain; we search for the best beans ourselves. In some cases, we spend up to two years working with a farmer before buying and collaborating. It's a significant investment, but one we gladly make. We have a team on-site overseeing everything. That's how we make a difference.'

Grosfeld continues: 'It's all about how we can improve even further. There are two aspects to consider. On one hand, there's the social component - farmers earning more and consumers enjoying great coffee. On the other hand, there's an economic aspect: consumers paying a bit more so that farmers can invest in sustainable solutions, such as regenerative agriculture. It's a farming method focused on developing a healthy soil. By planting various crops, plants, flowers, and trees, the farm resembles a small forest. This is beneficial for coffee production because the coffee cherries thrive in the shade. It's also good for the environment as more carbon is stored. Our goal is to transition the entire supply chain to this model. However, these are long-term projects. It's not something you can achieve within two years.'

Rabobank has been a great partner for Wakuli in terms of sustainability. 'We share a passion for Agri & Food. We received financing from Rabobank early on, which is quite remarkable for a startup. It shows that Rabobank truly supports our mission.' Robbert Lut is involved with Wakuli as Startup & Scale-up banker at Rabobank. 'What appeals to me the most is Wakuli's business model. They play a role throughout the entire supply chain. And unlike many cases where coffee quality declines as farmers get paid better, that's not the case with Wakuli.'

Rabobank provided an early-stage subordinated innovation loan to Wakuli. They also provided various other loans, including financing through the EIF InnovFIN scheme. Lut explains: 'It's a kind of state guarantee, but at the European level. The advantage is that it allows for larger financing, up to 7.5 million euros. Wakuli qualified for it because they have a sustainable, innovative business model. However, our collaboration goes beyond financing. We share knowledge and insights from the market and connect Wakuli with our network of farmer cooperatives worldwide through the Rabo Foundation.'

With Rabobank's support, Wakuli continues to grow sustainably. Grosfeld says, 'Helping farmers remains our primary goal. We use the funds from the loans to support pilots for farmers in their sustainability efforts. But thanks to the financing, we were also able to open our first physical stores. On December 23rd, we opened our fifth specialty coffee bar in Amsterdam. We are no longer solely visible online but also on the streets. In 2024, we plan to open stores outside Amsterdam, and by 2025, we aim to expand internationally. By doing so, we are expanding the movement beyond just Amsterdam or the Netherlands. We want to show to the entire world how the coffee industry can do things differently.'

Thanks to Rabobank's support, Wakuli was able to grow further in the early stages. Curious about what we can do for your startup or scale-up? Explore our various financing products and innovation funds for sustainable growth at every stage of development. In addition to financing, the Startup & Scale-up team is eager to leverage its knowledge and network for your benefit.

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