C Dorman Rwanda Ltd (Dormans) sources, processes and sells / exports green coffee to domestic and international buyers. All the coffee cherries processed comes directly from smallholder farmers and Dormans operates a Service Delivery Model (SDM) to be able to better engage with them. To scale its business and improve its profitability, Dormans plans to setup more washing stations and expand the number of farmers it sources from.
Taylors of Harrogate (Taylors) is an independent, family-owned tea and coffee business based in the heart of Yorkshire, UK with internationally recognized brands such as Yorkshire Tea and Taylors Coffee. With a global supply base of over a million producers across the world, Taylors aims to ensure that their relationships with tea and coffee producers enables economic growth, supports thriving communities and strengthens environmental resilience within the communities and the landscapes they source from. Taylors buys independently certified, high quality Rwandan coffee from Dormans and partners with them in a way that aims to enable a decent life and sustainable livelihood for farmers in the Taylors value chain.
By offering a comprehensive bundle of services (including training, seedling, inputs, access to markets, post-harvest services and community services) Dormans is able to increase annual production per farmer by 3 times (both by increasing number of trees and yield per tree), thereby significantly boosting household incomes within 5 crop seasons.
This report analyses Dormans strategy and business model; the financial performance of both company and farmers; and identifies opportunities in overcoming barriers to scale and mitigating business and farmer-level risks. The main recommendations to improve the business model and reach intended scale are for Dormans to:
- Supply fertilizers to farmers and share some of the costs with farmers: One way to significantly increase the coffee yield of farmers while also limiting the cost burden on Dormans is by supplying sufficient fertilizers to farmers. CDL can implement 25% of fertilizer cost share by farmers with minimal impact on farmer net income. After farmers realize the benefit of increased yields and thereby increased income (farm income from coffee projected to increase more than twice from 2020 to 2023), CDL can graduate to 50% of fertilizer cost share by farmers
- Implement and expand providing cows to farmers: Farmers who have been provided with a cow have the potential to make significantly higher incomes. Cows provide 3 different revenues sources – milk, manure and calf sales.