The Journey of Quality
SMAGS HOLDINGS LTD plays a crucial role at multiple stages of the coffee value chain, ensuring quality, transparency, and fair returns for producers. Our involvement spans from production support to final marketing.
Understanding each step helps appreciate the effort behind every cup and highlights our commitment to excellence.
This diagram illustrates the typical flow within the Kenyan coffee value chain as of early 2025. Arrows indicate the movement of coffee (black), money (red), and invoices (green), showing the interactions between producers, cooperatives, mills, warehouses, marketing channels (agents, brokers, nairobi coffee exchange), exporters, and importers. Note that direct sales pathways may bypass certain actors like the nairobi coffee exchange or brokers.
Key Stages & Actors
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Producers: Coffee cultivation starts here.
- Large Scale Producers (Estates): Usually manage the entire process from growing to milling.
- Small Scale Producers: Typically deliver coffee cherries to a Cooperative Society Factories.
- Cooperative Society: Collects coffee from small scale producers, usually managing initial processing (pulping, fermentation, washing/grading, drying) and marketing collectively.
- Dry Coffee Mill: Processes coffee cherries (wet processing) or dried cherries (dry processing/Mbuni) into green coffee beans ready for grading and storage.
- Warehouse: A crucial logistics hub where milled green coffee is stored, graded based on quality (size, density, defects), and cataloged before sale.
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Marketing Channels: Various avenues exist for selling the warehoused coffee:
- Coffee Agent (like SMAGS): Acts as a marketing representative for large scale producers/cooperatives. They facilitate linkages with buyers, manage logistics, support quality control and often negotiate direct sales.
- Nairobi Coffee Exchange (NCE): A central auction market where licensed Coffee Brokers trade cataloged coffee lots on behalf of sellers (large scale producers/cooperative society) to licensed Dealers/Exporters.
- Direct Sales: Large Scale Producers/Cooperative Society, usually via an Agent, sell directly to international buyers, bypassing the auction. This often involves pre-negotiated contracts.
- Direct Settlement System (DSS): An electronic system designed to facilitate faster and more direct payments from buyers/brokers to the producers' accounts, enhancing transparency, when using the Nairobi Coffee Exchange.
- Coffee Broker: Licensed entity operating at the Nairobi Coffee Exchange, representing sellers to auction coffee to buyers.
- Dealer / Exporter: Licensed buyers who purchase green coffee through the Nairobi Coffee Exchange or direct sales. They handle final quality checks, bagging, documentation, and export logistics.
- Importer: International buyers (roasters, traders) in destination countries who purchase the green coffee from Kenyan Exporters.
Transparency and Traceability
Throughout this chain, SMAGS HOLDINGS LTD prioritizes traceability and transparent communication, ensuring that the story and value of the coffee are maintained from farmer to buyer.