Lukas Grosfeld co-founder at Wakuli.
Once our business was automated, we got the courage to scale up even more.
As an agricultural consultant in East Africa, Yorick Bruins saw that coffee farmer cooperatives were barely making ends meet. There has to be a better way, he thought. Together with his college friend Lukas Grosfeld, Yorick founded Wakuli: the coffee brand that keeps the chain as short as possible. The mission? To deliver freshly roasted coffee to the homes of one million European subscribers, thus providing 100,000 farmers with a fair and livable income. “When we were ready for serious growth thanks to new investors, we both quit our jobs.”
A better price for farmers
“It’s pretty crazy: coffee brands often have Italian names, while the beans actually come from places near the equator,” co-founder Lukas explains. “Wakuli means ‘farmers’ in Swahili. It’s a happy word that pays tribute to the source.” And that’s what Wakuli is all about. The coffee beans are purchased directly from the farmers, shipped to the Netherlands and roasted locally. Then the coffee is mailed out to some 7,500 subscriptions. This business model allows the startup to maintain an honest supply chain and provide specialty-quality coffee.
“Many farmers can only sell their coffee locally. The local merchant sells it to an exporter, who in turn sells it to a trader, and so on. All those links are unnecessary. Our plan was to eliminate the intermediaries so that farmers can receive a better price.”
No interest from supermarkets
The initial idea was to create a B2B marketplace that would connect small roasters and coffee farmers. “Thanks to Yorick’s connections, we were able to purchase our coffee directly from the farmers. We therefore decided to offer our product at supermarkets in the Netherlands. Their response? ‘We already have enough coffee on our shelves.’ We were then forced to start selling it ourselves. We knew that if we told the story of our fair trade coffee well, people would be interested. If you deliver better quality on top of that, then you can even beat out the supermarket coffee brands.”
Lukas Grosfeld co-founder of Wakuli
We were forced to start selling the coffee ourselves.
“We don’t just want to say that your coffee comes from South America. We would much rather tell the whole story: that your coffee beans were grown by a farmer named Sara, who earned so many euros with your purchase. We think this positive storytelling is important. People often tell us: your coffee is high quality, that’s why we keep buying it. But the background is exciting and makes us want to share it with others.”
A subscription format seemed worth a try. “Coffee is something you always want to have at home, so why not? Customers choose how much they want to receive based on their needs. That’s all there is to it. At the same time, we don’t need a retailer. We can make much more accurate purchases as well, since our sales are more predictable. It seems like a logical setup, but this didn’t exist for coffee – at least not successfully in Europe.”
To explore whether subscriptions would work, Yorick and Lukas launched a pilot. Lukas: “Within a short period of time we had acquired 300 customers. We thought: evidently we’re doing something right. When we were ready for serious growth thanks to new investors, we both quit our jobs. Right away we were faced with a new problem: how are we going to scale up this system?”
Need for automation
“The back-end of our website was linked to Google Sheets,” Lukas says. “If you aren’t familiar with or can’t afford the right software, that’s a great solution. You can use it to do things like keep track of sales and compile order lists accordingly. But what if a customer suddenly wants to receive their coffee every two weeks instead of four? Or wants to put their subscription on hold and then reactivate it? Our developer would have to enter these changes manually. That took a lot of hours.”
Not only was the subscription management time-consuming, Wakuli’s payment system wasn’t scalable at that point either. “We used Mollie for iDEAL and credit cards, but we had a hard time managing our recurring payments that way. We made one attempt at building a platform ourselves, but we soon discovered that it takes ten developers and two years to do this, not one developer and two months. Now I know that all the necessary tools already exist, you just have to find them. eCurring came at exactly the right time, especially since iDEAL and SEPA make up 93% of the transactions.”
“Now we can manage our subscriptions better, and we rarely spend time on failed transactions. Previously there were customers who didn’t pay, but still received coffee, simply because there were no checks in place. Sometimes the customers themselves weren’t even aware of this. Since we started working with eCurring, our developer can focus on developing again. And if someone wants to change their delivery frequency, we quickly update it and the rest happens automatically, without the customer having to approve anything. It’s really perfect.”
Lukas Grosfeld co-founder of Wakuli
We rarely spend time on failed transactions.
According to Lukas, customers didn’t notice the switch to eCurring at all. “But our work got much easier instantly. The great thing is: once your business is automated, you also get the courage to scale up even more. That was the starting point for us. We don’t know anything about payments, so we don’t want to worry about that part. I want to work with a partner who says: no problem, we’ll take care of it for you.”
Aiming for one million
How much longer until Wakuli reaches its target of one million households? Lucas: “That’s still a long way off, but at the rate we’re growing now, it’s definitely attainable. We know how to get there. Internationalization is an important step. We’re fortunate to be surrounded by coffee-loving countries like Belgium, France, Germany and Denmark. We’d also like to expand our product range. Our model can be a solution to everything that farmers are systematically underpaid for, including products like chocolate, spices and nuts. We’re already working on tea, and the response has been quite enthusiastic. Coffee will always be our main product, though. And if something doesn’t fit through the mail slot, that already makes it more difficult.”
“The only thing we never want to cut back on is the purchasing of our coffee. The farmers have to receive fair pay. So we’ll just do things like try to buy cheaper bags and make new agreements with PostNL. If we stick to that, we can continue selling 100% pure and fair coffee.”
— Geert-Jan, Flinders