Pillars of a Coffee Ecosystem

What Gets Measured Gets Done

We've all heard the saying, “What gets measured gets done.” It means regular measurement and reporting will keep the industry focused. Information must be researched and validated andused to make decisions to improve industry results.

The critical measurements are called Key Performance Indicators which must be identified industry-wide. The Key Performance Indicators (KPI’s) are a small number of agreed-upon measurements that should reflect the coffee industry’s critical goals for success as a numerical snapshot. They must be measurable, objective, and actionable.

KPI’s are a quick and useful tool for industry diagnosis of strengths and weaknesses. Used properly KPIs can aid in making strategic decisions, and ensuring the industry is moving in the correct direction and as such should be used as one of the measurement techniques in the industry arsenal.

It is however important to remember that the real value is in the discussion of results with the industry, not the numbers themselves.

“Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted.”
Albert Einstein

To Use KPIs Effectively:

Ensure all players understand the KPIs.
Determine what indicators are important.
Assess which data elements can be collected easily – if it is too difficult to calculate / not understood, players may lose interest.
Express KPI as a formula (e.g. cost/cup). Ensure calculations are executed the same way every time.
Create a simple “industry dashboard”
Discuss the industry performance results on a regular basis with the industry players and make changes to the KPIs if necessary
Analyze the KPIs for industry planning efforts.

Create a Collaboration Model

Great importance must given to the formation of collaborative networks at the multilateral level that promote cooperation, internationalization and exchange not only of goods but information. In-country, regional and global collaboration is important in optimizing resources, sharing best practices, and achieving joint development of the regional coffee sector.

Organizing an Ecosystem

To strengthen and develop domestic consumption the coffee ecosystem must be deliberate, with clear relations and inter-relations.

Here are three suggested ways to organize an ecosystem:

Around a Supply Chain

Ensure attention is focused equally along he value chain with the varying tiers of suppliers, producers, suppliers, systems, subsystems that must be integrated into the delivery of final coffee product

Around a Common Cause / Platform

Guidelines with regards to who does what and who gets paid what ensuring fairness and balance along the entire chain

Around a Centrally Managing Industry

Members have relationships with each other and the role of the agencies, associations and entities to orchestrate these relationships, lobby, and help players co-exist

Building the Sides

The coffee business network can be a multi-sided platform, a key consideration when designing the network. There are three questions regarding the sides

(examples – social media platforms are one-sided platforms where users are on one side of the network, interacting with one another. Marketplaces such as Amazon are considered to be two-sided platforms seeing both buyers and sellers. A 3-sided platform is one such as Google where advertisers taking the third seat on the platform

1. How many sides does the network have?

2. Where does the network advantage lie?

3. What transactions are facilitated, or, what is the money flow?

Growing the Ecosystem

If not nurtured ecosystems will either grow or die. For healthy growth, you must think about the sequence of growth will take place.

Scaling Effective Partnerships

For a business ecosystem to flourish, the right players are needed. Agencies, Associations and Governments need to take a critical look at the players making considered efforts in encouraging effective partnerships.
Partners to create advantage in the marketplace with components and systems working together and complementing each other. This is where the ecosystem designer needs to think of the complementarities between the players.

The more players within the ecosystem, the larger the value created and the larger the network advantage.

Industry Players & Partner Selection

The combination of partners has to give the overall network a competitive edge in the marketplace. To select the right partners to grow and encourage domestic consumption ask:

What kind of players are needed within the industry and why?
What capabilities does each of the players bring to the table?
How will these players and partners interact with each other?
What does the domestic structure / governance structure look like?
How will these investment be attracted?
How will special groups (such as youth) be attracted? What motivates them? In what order should they be onboarded?

Managing Cooperation & Competition

When considering domestic consumption within a large ecosystem with multiple players, it becomes complicated to manage internal competition and cooperation. To manage this:

Operate under good partnership management principles- clear KPIs, clear goals, constructing well-crafted contracts, relationship management, strong communication channels and trust building
Determine the degree of exclusivity or exposure - this will speak to the marketing campaigns and strategies to be designed and executed
Will the ecosystem be opened or closed - for example, is the effort to create a closed ecosystem that creates a united and unique experience or do we seek to create different experiences but has scaled to a larger proportion of the market
Launch and scale a communications platform – the ecosystem needs to deliver a combination of value and players to scale.

Sharing the Industry Benefits

Within the coffee business ecosystem the considerations include:

1. What is the overall value created by the being a part of the industry and ecosystem
2. Bargaining power and each player’s share of total value

The value shares are not static, and often are not what is expected when persons initially enter the industry.

Competition

Within an ecosystem, there will be many competing interests. What matters is that this industry is composed of the right players, is organized well, and has a strategy to encourage competition to the benefit of the consumers and the nation.

Other Critical Considerations

Activate "Private Sector & Youth Engagement"

In the creation of the ecosystem involving the private sector with national consumer promotion programmes together with other national industry bodies and simultaneously establishing dialogue is critical. It is also important to intentionally ‘activate’ youth. The validation of a common strategy coupled with dialogue encouraging consensus to be generated with the local industry which would not otherwise be achieved.

Involve

Ensuring appropriate levels of involvement of all players is key. All players along the value chain inclusive of government, agencies, associations, private sector, investors and the consumer must be incorporated. Participatory work allows consensus to be generated in action plans and resource contributions to activate campaigns and programmes

Educate

The value of educating not only consumers and industry players but also the nation at large about coffee cannot be over-emphasised. The education will take various formats and content sharing information and educating consumers about national coffee, health, highlights of farmers consideration, taste and experiences.

Training of SMEs

The training of SMEs will be especially important in the development of the domestic coffee industry.

Marketing

The development of multi-tiered marketing campaigns is a critical element of domestic consumption. The focus here is now to excite and entice the market-players towards a robust and sustainable industry and ensuring domestic consumption.