An ethical coffee company brought in more than $3 million last year, founded by a 36-year-old who left Wall Street.
Margaret didn't have her first cup of coffee until she left for college.
In Kenya, where she grew up on a coffee farm, the traditional morning drink is chai. This is due to both cultural and economic reasons. Kenya's tea culture stems from colonization, with the British introducing leaves to the country from India. Additionally, coffee is more expensive than tea, making it an easy choice for money-conscious farmers.
Nyamumbo, 36, recounts to CNBC Make It how we used to send coffee for export and then consume tea as children.
Nyamumbo recalls asking her sister for advice when she was flying to the U.S. to start her undergraduate studies at Smith College. Her sister advised her not to order coffee as it was too bitter, but Nyamumbo still chose to order it, feeling the need to fit in.
As Nyamumbo grew into life in the U.S., she developed a deep interest in coffee and the culture surrounding it.
"As I delved deeper into the world of coffee, I became increasingly intrigued by it. One of the reasons I became so fascinated was by the idea of starting my own coffee company."
Kahawa 1893 is a coffee brand launched by Nyamumbo in 2018, which combines the Swahili word for coffee with the year coffee was first commercially grown in Kenya.
"Coffee's rich origins in Africa are celebrated with Kahawa 1893, even though it originally comes from East Africa and traveled globally before returning to Africa in 1893."
Nyamumbo, a child of coffee farmers, realized she could build a coffee business while giving back to the farms that raised her after studying at Harvard and working in investment banking.
Kahawa sources its coffee beans from growers in Kenya, Rwanda, Tanzania, and the Democratic Republic of the Congo. Each bag of coffee contains a QR code that enables customers to tip women farmers, who Nyamumbo estimates perform 90% of the labor in the coffee industry but own none of the land. Kahawa matches customer tips, which have totaled $45,000 so far. In total, the company has delivered $90,000 to some 500 African farmers.
In 2023, Kahawa sold over $3 million in coffee, a mission that resonated with customers.
"Nyamumbo describes his job as a dream come true, something he enjoys doing and couldn't imagine doing anything else if he wasn't in this position."
Changing careers: 'I wanted to build something from the ground up'
Nyamumbo landed a lucrative and intellectually stimulating job in investment banking after earning her MBA in 2016.
"Being able to perform at that level was very exciting, competitive, and cutthroat. It was a great skill set to build on," she says.
Nyamumbo intended to remain in banking and progress up the corporate ranks, but her work analyzing consumer goods companies appeared to be drawing her in a different direction.
"As I learned more about the industry, I realized I wanted to start something from scratch."
Due to her upbringing, coffee was a natural choice for her. She gradually began to investigate the requirements for launching her own coffee brand.
"Nyamumbo explains that his side hustle began as a way to earn extra money, but it was challenging to balance it with his demanding job. He found it difficult to dedicate time to his side hustle during the week, and even on weekends, he felt like he was pushing it."
In 2018, Nyamumbo requested a sabbatical to give the fledgling Kahawa 1893 her full attention. She planned to leave for about a year. If things didn't work out, she thought she could return to investment banking, although she would be a little poorer. For the then-31-year-old Nyamumbo, it was a risk she was willing to take.
"Not attempting it would have made me regret not trying it at all when I'm 60."
Building the business: 'It was around the clock'
From the outset, Nyamumbo claims that the startup was financially stable, and she reinvested all her earnings into the company's expansion.
Despite facing challenges, Kahawa managed to overcome obstacles. Nyamumbo reveals that she spent countless hours considering various aspects, ranging from marketing her brand and coordinating with farmers in Africa to addressing minute details.
"I wake up, thinking about it. I drop off packages at the post office. I roasted and did tastings at night. I send emails and post on social media. It was a non-stop day."
By 2019, she had relocated her business from New York to San Francisco and was generating most of her income by selling her coffee to Bay Area tech companies, including Facebook, Airbnb, and Twitter, for use in their offices.
Overnight, that business disappeared due to the pandemic, according to Nyamumbo.
Kahawa had not received any outside investment or taken on any debt, but Nyamumbo had. She funded the startup costs from her savings and did not pay herself a salary until the business got off the ground. By 2021, Nyamumbo had accumulated $50,000 in credit card debt and was considering taking on a part-time job to supplement the business.
A stroke of good fortune: 'We have something here'
In that year, Kahawa received a stroke of good fortune when Trader Joe's expressed interest in bringing it into their stores. This was a rare departure for a store that had traditionally stocked its own house brands. "That was a big break," says Nyamumbo. "But the scale of it was so big," he adds. "That was the first time I felt, like, 'Oh my god. We have something here.'"
Nyamumbo secured investors through her personal networks, who invested $285,000 in her coffee business. This funding allowed her to pay for the coffee, roast it, package it, and ship it to Trader Joe's shelves.
Kahawa, a Black- and woman-owned coffee brand, first gained prominence on grocer's shelves before expanding to major stores. Now, the brand generates most of its revenue through wholesaling.
In 2023, Nyamumbo sought further investment from the team of famous investors on ABC's "Shark Tank." In the episode, Nyamumbo accepted an offer from guest shark and Good American CEO Emma Grede, for $350,000 in exchange for 8% equity in the company.
"Nyamumbo describes their relationship as amazing and life-changing for the business. They attribute the success of their business to the exposure they received from the show, which went viral in Kenya."
Nyamumbo started earning a salary in 2021 and paid off her debt. Currently residing in New York City, she admits that her work has cooled down somewhat, but she still works about 50 hours a week. Nyamumbo reveals that Kahawa has been profitable since its launch, but she declined to disclose its profits or margins.
Our goal is to enhance the value we provide to women farmers.
Kahawa is now accessible to over 40 million households worldwide due to a recent deal with Keurig. Nyamumbo has big plans for expanding the brand's presence in mugs globally.
"Nyamumbo explains that growing the distribution of their brand is important because it allows them to make specialty coffee more accessible to households. He notes that when he started the brand, he realized that many people found specialty coffee difficult to approach, and his brand has been working to bridge that gap."
The more coffee Kahawa sells, the more farmers can benefit from Nyamumbo's goal to increase the profitability of the crop. Kahawa pays above the minimum fair trade price of $1.80 per pound, with farms receiving between $3.50 and $5.50 for their specialty coffee beans.
"We aim to increase the percentage of coffee's value that remains in farming communities, which currently stands at less than 5%."
The objective, she states, is to further empower women farmers and enable them to invest in their communities. Kahawa customer tips have led farmers to establish a scholarship for Kenyan girls to stay in school. Additionally, they have reportedly invested in a maize mill, livestock businesses, and tailoring enterprises.
She has been encouraged by both the financial and social benefits that Kahawa brings to the communities it serves.
"Seeing these women's satisfaction of being seen was one of my favorite things," she says. "I believe they were thrilled to see me, another woman representing them globally."
"The emotional connection built with women is an intangible benefit of being able to build a brand beyond money and physical satisfaction."
CNBC has the exclusive rights to air "Shark Tank" off-network.
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