Supply Chain Conversations: Mike Mamo of Addis Exporter

In addition to the most obvious actors in the coffee supply chain (coffee farmers, roasters, baristas, etc.), there are many other individuals in the industry whose equally significant roles are not always as well known. This interview with Mike Mamo, a friend and partner who has been instrumental to much of Passenger’s Ethiopian sourcing over the past few years, is the first in a series of conversations that we will be sharing in the interest of recognizing some of the lesser known, but hugely important, people in our supply chains.

Among Passenger’s current menu offerings, our Agaro Foundational lot and Bookkisa Reserve lot are coffees that Mike and his team at Addis Exporter were directly involved in facilitating. Additionally, the featured Ethiopian offering and a component of the Blend on the menu of our sister company, Necessary Coffee as sourced and milled with Mike’s support.

My interview with Mike was recorded on Wednesday, September 30th. At the time of writing, I feel that it is important to acknowledge the tragic conflict between Federal troops and the Tigray People’s Liberation Front (TPLF) that has escalated since this conversation was recorded. Our thoughts are with all of our Ethiopian friends and contacts during this incredibly difficult and uncertain time and we hope a peaceful end to this conflict will be found very soon.

Thanks so much for your willingness to make time for this conversation Mike! Can you tell me a little bit about the history of Addis Exporter?

So my Dad, Mamo Telila, is the one who established Addis Exporter, but he worked in the Ethiopian coffee industry for some time before that as an employee of a company called Besse. Besse was an old school multinational company that traded many different commodities (sugar, salt, petrol) in Ethiopia and I believe they were the first company to export coffee produced in the Yirgacheffe region under the name “Yirgacheffe". This was notable because, at the beginning, Ethiopian coffee was simply designated as “Ethiopian” no matter where in the country it was produced. Gradually, it began to be designated by processing, as “washed” or “natural”, but it was never traceable to regions until Besse began exporting coffee with regional designations, which was quite impressive at the time. When the Derg regime came to power in Ethiopia in the 1970’s, Besse was one of the first companies to be seized by the regime.

Shortly before the Derg came to power, my Dad, who was the head of export for Coffee and Leather at Besse, had established Addis Exporter with one other partner. By law, any company in Ethiopia has to be owned by an Ethiopian, so my father was the 51% owner and his partner, who was from India, was 49%. At the beginning, Addis Exporter didn’t have a dry mill, so the fact that my Dad and his partner both still worked for Besse, and had access to one of the most technologically advanced mills in Addis Ababa, was a great advantage. Since my Dad was well-liked at Besse, he was allowed to structure his workday so that he could continue working for Besse while starting Addis Exporter. He would start at 6 a.m. and work his Besse job until 5 p.m., and then work with his partner on Addis Exporter stuff from 5 p.m. to 11 p.m.!

Throughout his long career my Dad was truly a pioneer of the Ethiopian coffee industry and was a founding member of the Ethiopian Exporters Association.

How did you come to be involved in the business?

Well I, of course, got involved because of my Dad! I had been living and studying in the United States but my father increasingly needed help with the business as he got older and all my siblings were married. Since I was the only one who was not married, it pretty much fell to me by default to move to Ethiopia and get involved. I did this 15 years ago and have observed a lot of change in the industry since I first began learning the business.

What are examples of significant changes in the Ethiopian coffee industry that you’ve navigated since you became involved?

The founding of the ECX (Ethiopian Commodity Exchange) changed everything. Specifically it removed the type of traceability that we had come to rely on to build lots with specific regional profiles that our clients were accustomed to buying every year. Even if “traceability” under the previous auction system was not as specific as what we might mean by that term today, we had been able to select coffees that were truly traceable to particular communities that we knew, and build highly consistent regional blends for our customers year after year. With the shift to the ECX it became impossible to build lots in this way, and impossible to guarantee quality consistency the way we had been able to do before. We had worked years to develop particular profiles based on particular coffees. When we could no longer consistently deliver those profiles, we lost a huge chunk of our business. In a short period of time Addis Exporter went from exporting around 200 containers of coffee a year to exporting around 20 containers of coffee a year!

From my perspective, while there may have been some genuinely good intentions behind the creation of the ECX, the impact on the specialty business was a big loss of traceability and the introduction of a lot more uncertainty in terms of quality. Coffees in Ethiopia are traditionally given a quality grade with “1” being the highest quality, but when the ECX took over, the grade 2 coffees would sometimes score higher than the grade 1’s which really didn’t inspire confidence for buyers.

While the initial impact of the creation of the ECX was incredibly challenging for our business, there have been additional changes in more recent times that have been much more positive. For example, it has recently become possible for exporters to vertically integrate with individual washing stations, and for exporters to set up their own washing stations and source specific coffees directly from individual farmers or groups of farmers. So there’s so much more opportunity for traceability and transparency then there was even a few years ago. Last year, we bought our own washing station in Gera, located between two well-known cooperatives that some of your customers may have heard of before: Yukro and Nano Challa. Owning this site allows us to purchase and process coffee cherry produced anywhere in the Gera region.

Has owning and operating your own washing station in Gera opened your eyes at all in terms of the challenges of producing specialty coffee in the region?

When I spent my first few days at the site during harvest it really blew my mind in terms of how difficult it is to run a washing station and how hard it can be to try to buy coffee cherry that is consistently ripe and well sorted. We worked really hard to try to be picky and turned a lot of coffee cherry away - I think we were probably among the most selective sites in the region but we still probably averaged out at around 20% underripe cherry. I would guess that many of the other washing stations in the region, even famous names, were averaging closer to 40% (meaning only 60% of their coffees are actually at ideal ripeness). What’s amazing is that these coffees, even with inconsistent cherry selection, are cupping out at 86 to 87 points! It’s pretty wild to think how good the coffees could be with better sorting. Of course it’s also a pretty risky thing, when you want your washing station to be a successful business, to be too demanding in terms of selection: if you’re too demanding you simply won’t be able to buy coffee.

One thing we have started right from the beginning, that I think will enable us to improve our buying focus and hopefully our overall quality over time, is a purchase log, recording every producer that we buy cherry from, along with the volume and the community where they live. This is of course valuable from a transparency standpoint: while I can’t tell you that a particular bag from a larger lot is from a specific producer’s farm, I can tell you all the producers who contributed to a specific lot. And of course, knowing which producers we bought from and identifying links between particular communities/regions and our cupping and physical analysis data for the relevant lots helps us to refine our buying strategy for the next harvest.

How are things feeling in Ethiopia right now with respect to the Coronavirus pandemic?

The risks are obviously incredibly serious. Early on, we distributed masks and thermometers to the communities in the West where we work most closely to try to ensure that people are able to stay as safe as possible. But having a mask and wearing a mask is not the same thing, and no one is wearing masks around Jimma, which is pretty concerning. The national numbers for the country are not as bad as many other places but of course there are concerns that this mainly reflects low testing numbers. It seems to be the case that a high percentage of people who do test positive for the virus are recovering fairly quickly, potentially reflecting the fact that Ethiopia has a very young population overall. There’s a lot of uncertainty here, like everywhere, but we’re working hard to do whatever we can to protect our staff and be cautious when we’re traveling from Addis to more remote areas around the country.

Of course, we’re just at the start of the 2020-2021 harvest season here in Ethiopia, so there’s a lot of thought being put into how we can best serve our clients who are less likely to visit this season. At the very least, we are expecting that we’ll have to approach screening and sampling in some very different ways this year.

I believe I’m correct in saying that one recent change in Ethiopia has been that it’s now possible for individual coffee producers to become licensed to export their own coffee directly to a buyer. Can you help me contextualize how difficult it is for a producer to actually get licensed in this way if this is something they want to pursue?

I don’t think it’s actually terribly difficult to get licensed. But they need to produce enough coffee to justify the extra effort and expense of milling and drying their own coffee. The bigger obstacle for many of these producers is access to buyers who are willing to take on some risk. Let’s say a farmer produces 20 bags of coffee (and many farmers would not be able to produce that much), unless there’s a long-standing partnership and trust in place with a buyer, it’s a really risky proposition for that farmer to choose to export those 20 bags independently. Also, exporters and importers are generally looking to finance full container business, which the big private estates and cooperative unions are well positioned to supply, so that’s an obstacle for smaller farmers as well.

So many coffee farmers in Ethiopia are “small-holders” in a very real sense, meaning that they generally farm a small amount of land, and tend a small number of coffee trees, with the consequence that the total volume of coffee cherry that they can sell in a good harvest year is quite limited. Even if they receive an excellent price for their coffee, the total income they potentially receive will always be limited due to low total production volume. Do you think producing coffee is a genuinely viable and sustainable prospect for most small Ethiopian coffee farmers?

It really depends on the area. So, for example, in parts of Guji (in the South) many of the farms are fairly good size and the trees are quite young, so yields are better. In Agaro (in the West), it feels different to me. Most of the small producers are just not making much money and you can sense that lack of incentive. The quick answer to your question is that no, I don’t think producing coffee is sustainable for many of these small farmers, unless they have ways to diversify and earn money from other crops or other sources in addition to coffee. When total production volumes are really low, even paying extremely high cherry prices would not be a route to financial security. And of course paying unreasonably high prices for small amounts of coffee would not be sustainable for exporters or roasters either. Neither of us are making a bonanza in this business! Margins are thin right through the supply chain and expenses are high.

But while I don’t think coffee will ultimately be enough for some small producers, I do still think the specialty coffee community has a role to play in continuing to support coffee farmers in achieving better yields and receiving better prices that are consistent and driven by transparently communicated quality standards.

I know you wear a wide variety of hats and occupy a wide variety of roles in your work. Can you tell me more about what that entails?

On display at the Addis Exporter offices

In many cases I’m a “service provider” for individual producers or groups of producers which basically means I connect them with buyers like you and, depending on the situation, provide a variety of services. So depending on the situation, being a service provider includes filling many roles. Some of the common things me and my team help with include: QC and sample management, transport to the dry mill, dry milling, communications/arrangements with transit agents and shipping lines, obtaining letters of credit with the bank, working with the local Ethiopian Coffee and Liquor unit to obtain necessary government certifications, obtaining additional certifications or paperwork as requested by the buyer, obtaining shipping containers, the list goes on. It might surprise readers how some of the simplest things on paper end up being the biggest challenges. For example, sometimes just acquiring enough jute bags or hermetic liners for a particular shipment can be really difficult! Honestly, I’m incredibly glad that Addis Exporter has a logistics department so I can avoid a few of the inevitable challenges that come up when you’re trying to get coffee out of Ethiopia in an efficient manner.

You have a unique vantage point in that you are American as well as Ethiopian and have a clear understanding of the American coffee market as well as the Ethiopian coffee industry. Are there particular realities of the Ethiopian coffee trade that you wish more American coffee professionals understood? Are there aspects of the American coffee market that you wish more Ethiopians who work in coffee understood more clearly?

I think some Ethiopians assume that small American specialty roasters are making a fortune selling their coffee because they don’t understand the costs involved in importing the coffee and running a specialty roasting company in the States. I also think that, due to the fact that it’s only in the relatively recent past that buyers from small specialty roasters started coming to Ethiopia, the distinction between buyers for roasting companies like Passenger and buying agents for gigantic, multinational trading houses operating on a commodity model is just not always apparent to everyone here.

I think it’s helpful for small specialty buyers to keep in mind that the vast majority of Ethiopian coffee is still bought by a small group of largely commodity-focused trading houses, so even if these specialty buyers are ethically minded - and I believe that the majority of people working in specialty are ethically minded - it’s important to evaluate progress within this broader context.

But while some specialty buyers perhaps overestimate impact in some ways, the impact for individual Ethiopians, who have the opportunity to know that their coffee is cherished and enjoyed, is truly significant. Producers take genuine pride in seeing their coffee, or coffee from their coop or their region, recognized by companies like Passenger. I think it’s really important for American roasters to know that transparency shouldn’t just go in one direction. In the same way that specialty coffee lovers like to know where their coffee comes from, Ethiopian coffee producers like to know where their coffee goes to.

You mentioned that you’ve worked with a number of ethically-minded folks in the specialty coffee sector. Given the problematic nature of coffee’s colonial history, what advice do you have for actors in the supply chain who want to positively impact coffee producing communities without perpetuating colonial dynamics?

I come across lots of well-intentioned folks who seek opportunities to pay more for coffee or donate money for special projects, etc. And I think in many cases that motivation is coming from a good place. Asking is important. Meaning, if you want to avoid problematic missteps, it’s really important to know who you are buying from and ask them what their goals are. Ask, don’t make assumptions! You don’t want to donate a car to someone who doesn’t know how to drive a car or has no interest in owning one! Even for me, doing my work here, and being probably more from Baltimore than from anywhere else, I try to not make assumptions either. In Gera, we have a person who works for us that lives there, knows the culture, speaks the language, and is respected by the community there. Even though I have come to feel very much at home in that region, I don’t have the same cultural understanding or the same community ties. And, if you shift to a different part of Ethiopia, like Guji for example, there are different cultures, different languages, different faiths. So, as an American I’m always reminding myself to stay open-minded and respectful.

As you shared earlier, you moved to Ethiopia and got involved with Addis Exporter because it was a family business and you wanted to support your father. Now that you have continued for a number of years, what is the most rewarding part of this work for you personally? I know you don’t have to do this and I know the work can be very challenging.

Yes it certainly can be, especially with all of my family far away in the United States. And honestly, if I was primarily concerned with making money, it would probably be more profitable to focus on real estate management here in Addis rather than coffee. I keep working in coffee because I continue to see so much opportunity to positively impact coffee producing communities. I want approach working in coffee in a way that improves farmers’ quality of life. There are obviously a lot of different industries where you can do this work, but working with coffee for me has been really rewarding because I’ve seen coffee change Ethiopian communities in a really positive way.

Thank you so much for sharing your time and your perspective Mike

It’s been a pleasure, thank you!