Java House will export around 10 to 15 tonnes a month of coffee and tea to China in a deal that is part of the coffee chain’s expansion plans.
The company’s chief executive officer Paul Smith announced the deal on Wednesday August 15 saying the exportation of Java House’s gram bags of Kenya AA Arabic Coffee and Gold Label Tea to China would be via Chinese online retail firm Green Chain.
Green Chain is a subsidiary company of China’s freight transportation firm Qingdao CJ Smart Cargo International.
“Some of our biggest sales of bagged coffee at our restaurants in Kenya are actually to Chinese customers, so why not take it directly to them?” said Mr. Smith.
Java House already exports macadamia nuts from Kenya to China.
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China is traditionally a tea-drinking nation. In recent years however, American owned Starbucks and British based Costa Coffee have spread into the Chinese market. The infusion of these giant global coffee makers has enhanced the coffee drinking culture to consumers in the Asian economic powerhouse.
“Starbucks and Costa really initiated a developing trend of people (in China) drinking espresso-based coffee”, Smith said.
How much do you know about your Java House?? 😀
‘What year was Java House established and which was the first branch??’
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.#javahouse #javalove #javayourhome pic.twitter.com/YKDbsEYIeW— Java House ☕ (@javahouseafrica) June 12, 2018
Java House opened as a single Nairobi coffee shop in 1999. Founded by Kevin Ashley and Jon (John Cordon) Wagner, the coffee chain that started off as Nairobi Java House grew from one outlet at Adam’s Arcade along Ngong Road to 59 stores in East Africa (51 in Kenya*, 6 in Uganda and 1 in Rwanda).
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Its exponential growth saw Washington-based Emerging Capital Partners buy 90% of the company with the remainign 10% stake remaining with Mr. Ashley. but has since expanded to around 59 stores in three East African countries.
In 2016, Dubai-based Abraaj Group won out in an auction of the coffee chain. The bidding war is reported to have also attracted US companies Carlyle Group and TPG (Texas Pacific Group).
The Abraaj Group takeover of Java House is said to have reportedly cost Ksh13 billion meaning the coffee chain’s founder Mr. Ashley could have walked away with around Ksh1.3 billion from the deal.
In May of this year, Java House told Reuters it plans to expand beyond East Africa with plans to open 25 new restaurants in Uganda and a dozen in Rwanda over the next five years. Mr. Smith also said the coffee chain is looking at options that could see it enter Nigeria and South Africa.
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Abraaj’s East Africa managing director Ashish Patel said at the time, “For us Java House is not an East African story. It is an international story. I’m pretty certain we’ll get there in the next couple of years.”
*Java House outlets in Nairobi do not include the Kileleshwa branch that was recently demolished.
All quotes from Reuters
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