At one end of the global coffee supply chain are the diners who gather for brunch at the sidewalk tables outside Chloe’s Cafe in San Francisco’s Noe Valley neighborhood. Regulars there order the fluffy banana-walnut pancakes and steaming hot cups of Kahawa 1893 coffee. At the other end of the supply chain are the unseen farm laborers—most of them women—who tend the coffee trees each day on the hillsides of rural Kenya.

Margaret Nyamumbo (MBA 2016) founded Kahawa 1893 in 2017 to shorten the distance between these Kenyan farmers and American coffee drinkers and to invest in the women who make the industry run.

Each brightly colored bag of Kahawa 1893 features a prominent QR code that allows purchasers to give to the women behind the beans. “People have been very receptive to the idea,” says Nyamumbo. “Customers tip at restaurants, and they tip their Uber drivers. It is a model customers are familiar with.” And it’s a model she believes could also transform the coffee industry and other commodity supply chains.

“The economics of coffee are some of the most challenging out there,” explains Nyamumbo, who herself grew up on a Kenyan coffee farm. The price of coffee beans on the global market is under $1 a pound, while the actual cost to produce that pound is between $1.62 and $2. The coffee farms are profitable only when they rely on free labor, typically from the women in the farming family. During harvest season in November and December, these women typically awake before dawn to pick the coffee cherries in the cooler morning air. Then they spend days tending to the drying beans, meticulously sorting them for sale.

To ensure that more of the value produced in the supply chain is returned to the farm laborers themselves, Kahawa 1893 cuts out some of the traditional middlemen in the industry. The company works directly with Kenyan coffee cooperatives to source coffee beans that Kahawa roasts in San Francisco. Kahawa originally sold its beans to Bay Area offices, but when most of the region’s office employees were forced to work from home in the pandemic, it pivoted from B2B sales to a consumer-focused business plan. The shift allowed Nyamumbo to more fully realize her initial goal of connecting producer and consumer.

According to Nyamumbo, payments through Kahawa’s QR code average $5—about a third of the purchase price—with about 3 percent of consumers choosing to tip. She believes consumer education and trust, as well as frictionless tipping options, will drive those numbers higher. When Kahawa launched tipping capability for customers who purchase directly from the company website, in the summer of 2021, the percentage of those who contributed skyrocketed to 25 percent. The company also matches the gratuities; the total has been rising steadily since Trader Joe’s began stocking the product in its 200 California stores in 2021, and Nyamumbo expects it to grow significantly following the brand’s debut in Target and Fresh Market stores.

Kahawa 1893 is experimenting with using blockchain for transparency in the tipping process. It also is exploring whether cryptocurrency might allow for more efficient tipping in a café setting. The cost of transferring money between currencies makes small tips impractical, explains Nyamumbo, but cryptocurrencies don’t have the same transaction fees, which could allow someone buying a cup of coffee to leave a tip for the coffee farmers at the same time they leave one for the barista.

Approximately 80 percent of American diners tip restaurant servers, according to a 2020 TD Ameritrade survey. Nyamumbo says that if 10 percent of Kahawa’s customers are willing to pay more to support fair labor practices, it could be life-changing for the women of the Kenyan coffee industry. Already, Nyamumbo has seen women who have benefited from Kahawa’s tips, distributed through the coffee cooperatives, building more permanent homes to replace mud houses and investing in their daughters’ educations. “They can start planning for the future,” Nyamumbo says.

She hopes to expand Kahawa’s approach within the coffee industry, working with coffee farmers in other countries like Rwanda, and she also sees an opportunity to move into other sectors with similar economic and gender dynamics, such as tea, chocolate, and shea butter. Tipping your farmer may feel unusual to American consumers today, Nyamumbo acknolwledges, “but I see this as being pretty standard in the future.”

This article was originally published on Alumni Stories.