Ikea signs Uganda coffee deal; targets cocoa and nut farmers

[STOCKHOLM] Ikea will start sourcing single-origin coffee from Uganda as it adds food-related businesses to its social entrepreneur partnerships.

The world's largest furniture retailer, which has so far focused on small-scale suppliers and artisans for such partnerships, signed a three to five-year partnership with Kawacom Ltd, a coffee processor and exporter in Uganda that works with local farmers in the White Nile region.

With the deal, Ikea has purchased enough Arabica beans to fill 500,000 250-gramme packages of coffee, which will be available in stores in 30 markets from this autumn, said Vaishali Misra, who leads the Ikea Social Entrepreneur Initiatives. It will buy an equivalent amount in its next fiscal year.

The move is part of Ikea's social business initiative, which aims to help marginalised members of society by offering them market access, training and income. The company is already involved in 19 entrepreneur partnerships with smaller-scale suppliers within handicraft and services businesses, each selling goods averaging about 2.5 million euros (S$4 million) to three million euros a year via Ikea. That translates on average into four to six months worth of production for the suppliers, Ms Misra said.

"The Ikea long-term partnerships with food-producing communities can help to enhance livelihoods, build sustainable crop production and support communities to become sustainable and self-reliant," Ms Misra said.

Ikea is also in talks on sourcing cocoa from smaller farmers in Africa or South America and nuts from those regions or Asia. Its social programme already has partnerships in countries such as Thailand, Jordan, India and the US and involves some 10,000 people.

BLOOMBERG