Volume is Vanity, Profit is Sanity and Cash flow is

reality.

EAFCA February 2007

Quiz Time

Are you Vain or are you Sane?

Question 1 If you look forward to 2007, how are you setting your targets – are you looking to

grow, process, export or roast a particular volume? Or are you looking to make a

certain profit?

Question 2 If you look back at 2006, and gauge your performance. Do you look at where you

stand in the exporter league table? Do you look at how much your business has grown in terms of turnover, or kilos (or pounds for

the Americans) you have roasted?

Question 3

Is your aim to be the biggest or the best?

…………or both!

Global Trends

From affordable convenience to differentiated individuality

Trading the Tails

Global Coffee Trends

Global Coffee ProductionBrazil & Vietnam - Share of Global Supply

0%

20%

40%

60%

80%

100%

1980 1984 1988 1992 1996 2000 2004

OtherVietnamBrazil

The Blend Trend

How is Africa Doing?

Africa vs. World Production

0

5

10

15

20

25

30

35

1936 1946 1956/7 1966/7 1975 1984 1994 2004

%

Africa’s Coffee Productionin 000’s bags (est.)

• ARABICA

• Ethiopia 4,500 • Kenya 1,000• Tanzania 650• Burundi 600• Rwanda 430• Uganda 375• Cameroun 125• D R Congo 100• Zambia 150• Zimbabwe 40 • Malawi 40

• Total Arabica 8’010

• ROBUSTA

• Cote d’Ivoire 2,700• Uganda 2,200• Cameroun 700• Madagascar 640• D R Congo 200• Togo 180• Tanzania 250

• Total Robusta 6’870

African Coffee – A Smallholder Crop

• Rwanda 98% • Ethiopia 96% • Uganda 95%• Cameroun 95%• Burundi 95%• Tanzania 80%• Kenya 60%• Malawi 20%• Zambia 2%• Zimbabwe 0%

African Gourmet Production

% Arabica Production offered as 'Gourmet'

5050

4025

201010

52

1

0 10 20 30 40 50 60

KenyaZimbabZambiaTanzaniMalawiEthiopi

RwandaUgandaBurundi

DR

% African Gourmet Arabica Availability 2006/7

39%

28%

17%

5% 4% 4% 1%1%1% 0%

KenyaEthiopiaTanzaniaRwandaUgandaZambiaZimbabweBurundiMalawiDR Congo (Kivu)

African Gourmet Coffee Prodn in bags

Kenya 415’000Ethiopia 286’000Tanzania 172’500Rwanda 51’000Uganda 40’000Zambia 40’000Zimbabwe 15’000Burundi 10’000Malawi 8’000DRC 1’000

Total 1.038 million

Caveat: The Market

Who Buys Your Green Coffee?

1. Those who buy the volume

2. Those who compete on price

3. Those who compete on quality

Mind the Gap

« Relationship coffees »

Washedarabicas

Sun-driedarabicas

DifferentialAgainst NYK C

+ 25

+ 5

- 8

-12

-25

ARABICA QUALITIESAdding value

+30 - + 100...

Be Realistic

Know your market

Mind the Gap

Be Realistic

Know your market

Thank you!www.schluter.ch