Margaret Nyamumbo didn’t have her first cup of coffee until she left for college.
On the coffee farm she grew up on in Kenya, she says, the traditional morning drink is chai. The reasons are both cultural and economic. Kenya’s tea culture has its roots in colonization, with the British bringing leaves to the country from India. What’s more, coffee is more expensive than tea, making the decision easy for money-conscious farmers.
“Growing up, we’d send off the coffee for export, and then we would drink the tea,” Nyamumbo, 36, tells CNBC Make It.
When flying to the U.S. to begin her undergraduate studies at Smith College, Nyamumbo says she asked her sister what to order when the flight attendant offered coffee or tea. “She said, ‘Don’t order coffee — it’s too bitter,'” Nyamumbo says. “But I still ordered it. I was going to America. I felt like I had to fit in.”
Her sister was right: It was bitter. But as Nyamumbo grew into life in the U.S., she acquired more than just a taste for, but a fascination with coffee and the culture surrounding it.
“It was an acquired taste that I started to love,” she says. “And as I went deeper into the culture of coffee, I became really interested in it. Tracing the supply chain was one of the reasons I got very fascinated by [the idea of starting] a coffee company.”
That company is Kahawa 1893, which Nyamumbo launched in 2018. The brand name combines the Swahili word for coffee and the year coffee was first commercially grown in Kenya.
Margaret Nyamumbo, 36, is the founder of Kahawa 1893, a coffee company that imports its beans from Africa.
CNBC Make It
“With Kahawa 1893, we celebrate the rich origins of coffee in Africa,” Nyamumbo says. “Even though coffee’s originally from East Africa, it traveled around the world to Europe, Latin America and eventually came back to Africa in 1893.”
It’s a trajectory that shouldn’t feel unfamiliar to Nyamumbo herself. Despite being a child of coffee farmers, it took a trip to America, an MBA at Harvard and a short stint in investment banking to realize she could build a coffee business while giving back to the sort of farms that raised her.
Kahawa sources its beans from growers in Kenya, Rwanda and Tanzania and the Democratic Republic of the Congo. Each bag contains a QR code that allows customers to tip women farmers, who Nyamumbo estimates perform 90% of the labor in the coffee industry, but own none of the land. Kahawa matches customer tips, which so far have totaled $45,000. All told, the company has delivered $90,000 to some 500 African farmers.
It’s a mission that has resonated with customers. In 2023, Kahawa sold more than $3 million worth of coffee.
“It is a dream job,” Nyamumbo says. “I wouldn’t have predicted it, but it’s something that I love doing. I don’t know what else I would be doing if I wasn’t doing this.”
Changing careers: ‘I wanted to build something from the ground up’
After graduating with her MBA in 2016, Nyamumbo took a job in investment banking — a gig that was not only lucrative, but intellectually stimulating.
“I really enjoyed the work. I really enjoyed being able to perform at that level. It was very, very exciting, very competitive and cutthroat. It was a great skill set to be able to build on,” she says.
Nyamumbo had every intention of staying in banking and climbing the corporate ladder, but the work she was doing — analyzing consumer goods companies — seemed to be pulling her in another direction.
“I learned how different brands had been started, and I realized that brands, even Fortune 500 companies that that are household names, at one point, had very small, humble beginnings,” she says. “As I learned more about the industry, I [realized I] wanted to build something from the ground up.”
Given her upbringing, coffee was a natural fit. She started to explore what it would take to start her own coffee brand — slowly, at first.
Kahawa customers can ‘tip’ African farmers online. Since 2018, customer contributions, which Kahawa matches, have totaled $45,000.
CNBC Make It
“It started off as a side hustle. But it was really hard to balance out because my job was very demanding,” Nyamumbo says. “I really couldn’t do anything on the side except weekends. Even weekends was kind of pushing it.”
In 2018, Nyamumbo requested a sabbatical to give the fledgling Kahawa 1893 her full attention. She figured she would leave for about a year. If things didn’t work out, she reasoned, she could go back to investment banking, albeit a little poorer. For the then-31-year-old Nyamumbo, it was a risk well worth taking.
“It was something I wanted to do. I didn’t want to be 60 years old and regret not ever having tried it.”
Building the business: ‘It was around the clock’
Nyamumbo says the startup was financially sustainable from the beginning, and she invested anything she earned back into the growth of the business.
That isn’t to say, however, that Kahawa didn’t hit its share of roadblocks. Nyamumbo says she worked long hours thinking about everything from the big-picture problems, like how to market her brand and manage the supply chain from farmers in Africa, all the way down to the nitty gritty.
Nyamumbo and her brand went viral after a 2023 appearance on ABC’s ‘Shark Tank.’
CNBC Make It
“I wake up, I’m thinking about it. I’m physically dropping off packages at the post office. I was roasting. I was doing tastings at night. I’m sending emails. I’m posting on social. It was around the clock.”
By 2019, she had moved her business from New York to San Francisco and was earning the majority of her revenue by selling her coffee to Bay Area tech companies, such as Facebook, Airbnb and Twitter, for consumption in their offices.
“Then the pandemic hit, and that business went away overnight,” Nyamumbo said.
Until then, Kahawa hadn’t received any outside investment or taken on any debt — but Nyamumbo had. She’d funded startup costs from her ample savings and hadn’t paid herself a salary while the business got off the ground. By 2021, she’d racked up $50,000 in credit card debt and was considering picking up a part-time gig to supplement the business.
A stroke of good fortune: ‘We have something here’
But that year, the company received a stroke of good fortune. Trader Joe’s expressed interest in bringing Kahawa into its stores — a rare departure for a store that had traditionally stocked its own house brands. “That was a big break. But the scale of it was so big,” says Nyamumbo. “That was the first time I felt, like, ‘Oh my god. We have something here.'”
Nyamumbo tapped her personal networks to find investors, who bought in for $285,000. It was enough to get the coffee paid for, roasted, packaged and shipped off to Trader Joe’s shelves.
Kahawa became the first Black- and woman-owned coffee brand on the grocer’s shelves, launching Kahawa into the public eye. Soon, other major stores began picking up the brand, which these days derives the bulk of its revenue from wholesaling.
In 2022, Nyamumbo sought further investment, this time from the team of famous investors on ABC’s “Shark Tank.” In the episode, which aired in 2023, Nyamumbo accepted an offer from guest shark and Good American CEO Emma Grede, for $350,000 in exchange for 8% equity in the company.
“It’s been an amazing relationship, and it’s been life-changing for the business,” Nyamumbo says. “I think the amount of exposure that we were able to get from the show — it went actually went viral in Kenya — so that was that was kind of a surreal moment to have.”
Nyamumbo began paying herself a salary in 2021 and soon paid off her debt. She currently lives in New York City, and says her work has cooled — some. She’s still putting in roughly 50 hours a week. Nyamumbo says Kahawa has been profitable since it launched, but declined to share documentation for its profits or margins.
Looking ahead: ‘We want to bring more of that value’ to women farmers
Nyamumbo has big plans for getting Kahawa into more mugs around the globe. The brand recently struck a deal with Keurig, making Kahawa available to the more than 40 million households who use K-cups.
“Being able to bring the brand in a more convenient way to more households is really cool for us to grow the distribution,” Nyamumbo says. “Because when I started the brand, one of the things I realized was that specialty coffee was not approachable to a lot of people. And so I feel like our brand has been bridging that gap between specialty coffee and approachability.”
Nyamumbo grew up on a coffee farm in Kenya. As her business expands, she hopes to continue to share the profits of the coffee trade with African farmers.
CNBC Make It
And the more coffee Kahawa sells, the more the company can make good on Nyamumbo’s goal to bring more of the crop’s profitability to the farmers who grow it. Kahawa pays well over the minimum fair trade price of $1.80 per pound for their beans, paying farms in the range of $3.50 to $5.50 to source specialty coffee.
“Right now, the statistic is that less than 5% of coffee’s value stays in farming communities. So we want to be able to bring more of that value.”
The goal, she says, is to continue to empower women farmers and to give them the means to invest in their local communities. Farmers on the receiving end of Kahawa customer tips have founded a scholarship to keep Kenyan girls in school. They’ve also reportedly invested in a mill for local maize, as well as income-producing livestock and tailoring businesses.
So far, she’s taken heart not only in Kahawa’s financial impact on the communities it operates in, but in the social one as well.
“One of my favorite things was just to see these women have the satisfaction of being seen,” she says. “They were very excited, I think, to see me, to see another woman who’s representing them on the global stage.”
“That’s some of the intangible benefits of being able to build this brand is that, beyond money, beyond physical satisfaction, it’s that emotional connection that we’ve built with the women.”
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”
Are you stressed about money? Sign up for CNBC’s new online course. We’ll teach you how to be more successful and confident with your money, and practical strategies to boost savings, get out of debt and invest for the future. Start today and use code EARLYBIRD for an introductory discount of 30% off through September 2, 2024.
Plus, sign up for CNBC Make It’s newsletter to get tips and tricks for success at work, with money and in life.
