'Another feel good story': 'Shark Tank' fans question Kahawa 1893 Coffee's claim to support women farmers
LOS ANGELES, CALIFORNIA: Kenyan Maggy Nyamumbo entered the Tank this week, hoping to persuade the Sharks with her own brand of coffee. During a brief bidding battle, she was able to strike a deal with our Guest Shark Emma Grede, but the fans have had some concerns about the brand's claims since the pitch.
Margaret "Maggy" Nyamumbo presented her Kenya-produced coffee business Kahawa 1893 Coffee in Season 14 Episode 14 of ABC's 'Shark Tank,' attempting to emphasize its ambitions as "coffee beans with a purpose." Maggy recognized that about 90% of Kenya's coffee is farmed by women who have no property, patents, or enterprises to their names. Most coffee fans are aware that African-grown coffee beans are the best in the world, and they command a premium owing to their exceptional quality and flavor. Yet, the producers' wages, which were primarily women, were poor, and their efforts went unnoticed. Even though she has said that her firm is dedicated to improving the livelihood of these people, fans have some concerns.
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What does Kahawa 1893 Coffee promise to its workers?
Maggy came in looking for $350,000 for 5% of Kahawa 1893 Coffee. Consumers have the option of tipping the brand's female coffee farmers. There is a QR code on the back of the bag where customers may leave their tips. Although it is not common for women in Kenya to receive their share from farms, Maggy promises that the share she sends is especially for the women farmers and that their men respect it. Kahawa 1893 Coffee matches every cent received as a tip for female farmers.
Kevin O'Leary was quick to call the company's high value into question. Maggy claims that they have done $2 million in the previous 12 months. Year to date, the firm has made $1.2 million, and they expect to complete the year with $4 million in revenue, and they want to make $10 million next year. Grocery and wholesale account for 85% of the company's revenue, with the remainder coming from direct-to-consumer sales. Last year, they became the first coffee company owned by a black woman to be carried in Trader Joe's. Later she joined Target and Sprouts.
In terms of profits, the company sells the goods wholesale to the grocery shop for $8. Kevin is unimpressed by the $5 cost price. The company expects to generate $600,000 in pre-tax revenue from the $4 million. She earned $150k on a $2 million stake.
Kevin does not see much of a profit, so he walks away from the deal. Emma offers $350,000 for a 12.5% interest rate. Shark Robert Herjavec does not want to be the lead investor in a woman-run firm, so he promises to pay $350,000 for a 12.5% stake in exchange for Emma accepting her offer. Maggy is hesitant to give away 25% of her business. Shark Mark Cuban walks away, as he does not see the company grow organically. Shark Lori Greiner claims she won't be able to compete with Emma and Robert, therefore she will sit out.
Maggy counters the offer with $350,000 for 8%, which Emma declines. She later requests $150k for an 8% ownership and a loan of $200k, which Emma, Robert, Lori, and Mark agree to. Robert lowers his bid to $350,000 for an 8% share. Emma matches Robert's offer. Maggy eventually chooses Emma.
Fans question 'what % of profit actually goes to farmers?'
Bored of the cause products, a fan wrote, "Bored of every episode having multiple businesses that are more about a social cause (This one and the recycling bag from this episode alone) than creating something new or interesting. These "cause products" are boring." Questioning the company's claims, a fan asked, "but what % of profit actually goes to farmers? otherwise it's just another coffee company." Another person quipped, "There is no exploitation or corruption in Africa..."Trust Us!!!" Calling out the story behind the business, a fan wrote, "This is but a pipe dream. Another feel good story."
Demanding a change in the kind of products pitched, a fan wrote, "Whatever happened to interesting products? Now everything is more about a social cause than anything else." Another person added, "It is more of a mission or a cause than a business."
'Shark Tank' Season 14 airs every Friday at 8/7c on ABC. Missed an episode? Been wanting to catch up? Episodes can also be viewed the next day on demand and on Hulu. Not just that, you can also watch old seasons and episodes on Amazon Prime Video and iTunes.
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