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purveyors of exceptional quality specialty-grade coffees

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1 purveyors of exceptional quality specialty-grade coffees
BD Imports, Inc. 14 April 2017 DRAFT PRESENTATION (EDITING FOR CONTENT) 7/25/02 2:09 PM The word premium was incorrectly used on our first brochure. In the coffee industry, premium is a grade of coffee that falls below specialty grade. We can be described as a supplier of “exceptional quality” specialty grade coffee Company name should be written as BD Imports, Inc. not as an Inc. as stated on the color band on the bottom of each page. purveyors of exceptional quality specialty-grade coffees

2 agenda A Closer Look At Coffee
BD Imports, Inc. 14 April 2017 agenda A Closer Look At Coffee From the Crop to Your Cup: the Kenya Road Kenya, Coffee and the World Selecting the best for BD Imports Notes: A suggested draft show agenda, based on our understanding your outline and purpose. We’re thinking that going forward, this draft/show will become a standard “general capabilities” presentation for bd imports management’s use where-/whenever. The draft follows this agenda. Very good start: I would prefer to start the presentation out with A brief overview of Kenya. Information about the country: Kenya Located on Eastern African coast Independent country since 1963 Population: approximately 30 million Capital city: Nairobi Two main languages: Swahili and English Agricultural products: Tea, coffee Soil: Volcanic The slide “Where Coffee Grows” is nice and can be used in this section. However not the topic of the section, audience more sophisticated.

3 a closer look at coffee The Business of Coffee in the US
BD Imports, Inc. 14 April 2017 a closer look at coffee The Business of Coffee in the US Where Coffee Grows The World of Kenyan Coffee Botanical Species Grades Crops: Growing Seasons, Regions & Harvest Notes: A suggested draft show agenda, based on our understanding your outline and purpose. We’re thinking that going forward, this draft/show will become a standard “general capabilities” presentation for bd imports management’s use where-/whenever. The draft follows this agenda. Very good start: I would prefer to start the presentation out with A brief overview of Kenya. Information about the country: Kenya Located on Eastern African coast Independent country since 1963 Population: approximately 30 million Capital city: Nairobi Two main languages: Swahili and English Agricultural products: Tea, coffee Soil: Volcanic The slide “Where Coffee Grows” is nice and can be used in this section. However not the topic of the section, audience more sophisticated.

4 the business of coffee in the US
BD Imports, Inc. 14 April 2017 the business of coffee in the US Second largest US import, after petroleum Two types Robusta National brands, e.g. Folger’s, Maxwell House Arabica Specialty coffee houses, e.g. Starbucks, Peets Imported from more than 80 different origins Fewer than 100 US-based importers of specialty-grade coffees Notes: Are there additional facts/figures of relevant interest to highlight on this slide/section? Re bullet 4: here, we’re looking for facts to distinguish bd imports from its peers, again in terms of general capabilities; the sub-bullet is only a suggestion of the type of fact we have in mind. Suggest: Renaming the slide to “The Business of Coffee in America” Second largest US Import after oil, Not really an opportunity here for differentiation. General info slide that will be used with investors or lenders. Delete last bullet

5 where coffee grows  The Americas The Middle East East Africa
BD Imports, Inc. 14 April 2017 where coffee grows The Americas The Middle East East Africa Southeast Asia

6 kenya—botanical species
BD Imports, Inc. 14 April 2017 kenya—botanical species Five different botanical varieties K7- older plant SL28 – older plant SL34 – older plant Ruiru 11- newer more pest resistant, higher yield Blue Mountain NB: We can put this information in table form as well.

7 grades of kenyan coffee
BD Imports, Inc. 14 April 2017 grades of kenyan coffee Up to 8 different grades of coffees marketed Largest bean size (7.20 mm screen); highest prices Smaller bean size (6.20 mm screen); good prices Smaller than AB Light, ragged beans separated from other grades “Elephant”—two beans joined together Grows as one bean in a single cherry; 10% of crop Smallest, thinnest beans; chipped, broken, flawed Not wet-processed, fell from trees; 7% of crop AA AB C TT E PB T Buni

8 BD Imports, Inc. 14 April 2017 marketing confusion Brand names given to Kenya AA by exporters and/or importers AA Top AA+ AA FAQ AA Minus Private label name Added slide

9  growing seasons 60% of total crop 40% of total crop jan feb mar apr
may jun jul aug sep oct nov dec main crop to auction 60% of total crop harvest main crop fly crop to auction 40% of total crop harvest fly crop

10 growing regions  Nyeri, Kirinyaga, Embu, Muran’ga
Location: from Slopes of Mt. Kenya N & NE Altitude:1500m – 2100m Varieties: SL28, SL34, Ruiru (>1.5%) Rich volcanic soil Main-crop coffees 20% of produce is top category

11 growing regions  Meru Location: Slopes of Mt. Kenya
During 1987/88 coffee price recession, farmers abandoned crops

12 growing regions Kiambu, Ruiru, Thika  Location: N/NE of Nairobi
Altitude: m Rainfall: 1000m3 Climate: degrees C Varieties: SL28, SL34, Ruiru 11 Typically, average main-crop coffees Ruiru planted on a large scale will soon come to market

13 growing regions Machakos  Location: Eastern Region
Altitude: m Semi-arid climate Early Crop coffees

14 growing regions Makuyu, Donyo, Sabuk, Mitubiri 
Location: E/SE of Nairobi Semi-arid climate Early Crop coffees

15 from the crop to your cup— the kenya road
BD Imports, Inc. 14 April 2017 from the crop to your cup— the kenya road The Business of Coffee in the US Purveying Specialty-grade Kenyan Coffee The Market Today: Critical Times for Kenyan Coffee From Crop to Cup: the Kenyan Road Our AA From Kenya to Consumer Notes: A suggested draft show agenda, based on our understanding your outline and purpose. We’re thinking that going forward, this draft/show will become a standard “general capabilities” presentation for bd imports management’s use where-/whenever. The draft follows this agenda. Very good start: I would prefer to start the presentation out with A brief overview of Kenya. Information about the country: Kenya Located on Eastern African coast Independent country since 1963 Population: approximately 30 million Capital city: Nairobi Two main languages: Swahili and English Agricultural products: Tea, coffee Soil: Volcanic The slide “Where Coffee Grows” is nice and can be used in this section. However not the topic of the section, audience more sophisticated.

16 purveying kenyan coffee— the Kenyan Coffee Auction
BD Imports, Inc. 14 April 2017 purveying kenyan coffee— the Kenyan Coffee Auction All Kenyan coffee sold at auction on Tuesday mornings by authorized marketing agents ±100 licensed buyers/exporters Buyers get samples 10 days prior to auction Notes: Re slide title: Is there an insider name or nickname for the Coffee Auction? Here, relevant/compelling details of the auction process itself. Suggestion: How many exporters from how many countries are routinely present/buying? The title: Purveying Kenyan Coffee: “ The Kenya Coffee Auction” The auction is simply known as “The Kenya Coffee Auction System” All Kenya coffee is sold by Millers, in Nairobi, through an auction system; practically every Tuesday morning. There are approximately 100 licensed buyers/exporters Small samples are given to buyers 10 days prior to the auction. We cup the coffees to determine if these are coffees we would like to buy. Show pictures of auction room, kenya_coffeeboard.jpg And kenya_auctionroom01.jpg Add photo of Kenyans in cupping room, lots of bags and cups on table, sent in zip file. This was sent quite a while back, more recently than 7/20.

17 from the crop to your cup— the kenya road
BD Imports, Inc. 14 April 2017 from the crop to your cup— the kenya road 7 changes of hand within country of origin Farmer Cooperative Society Miller Exporter KENYA 3 – 9 months* Union of Cooperative Society Marketing Agent Auctioneer Notes: Plays as two slides Could you show pictures that would start with farming pictures, Processing, pictures, mills etc, harvesting, and end with the front door to the customer Intelligentsia, All of these photos were included in sent 7/20 Here’s the 2 that involved this one particular customer: Labeled as: DSC01344 DSC01365 * Relative to crop and conditions

18 from the crop to your cup— the kenya road
BD Imports, Inc. 14 April 2017 from the crop to your cup— the kenya road 7 changes of hand within country of origin KENYA Farmer Cooperative Society 3 – 9 months* Union of Cooperative Society Moves coffee from Nairobi to port of Mombasa via rail or truck Loads 44,000 lbs (300 x 132-lb bags) onto steamship container Prepares appropriate documentation for US Customs Certificate of Fumigation Bill of Laden Certificate of Origin Commercial Invoice Phytosanitation Certificate Miller Marketing Agent Auctioneer Exporter Exporter Notes: Plays as two slides Could you show pictures that would start with farming pictures, Processing, pictures, mills etc, harvesting, and end with the front door to the customer Intelligentsia, All of these photos were included in sent 7/20 Here’s the 2 that involved this one particular customer: Labeled as: DSC01344 DSC01365 * Relative to crop and conditions

19 from the crop to your cup— the kenya road
BD Imports, Inc. 14 April 2017 from the crop to your cup— the kenya road 7 changes of hand within country of origin KENYA Farmer Cooperative Society 3 – 9 months* Union of Cooperative Society Miller Marketing Agent Auctioneer Exporter Notes: Plays as two slides Could you show pictures that would start with farming pictures, Processing, pictures, mills etc, harvesting, and end with the front door to the customer Intelligentsia, All of these photos were included in sent 7/20 Here’s the 2 that involved this one particular customer: Labeled as: DSC01344 DSC01365 * Relative to crop and conditions

20 from the crop to your cup— the kenya road
BD Imports, Inc. 14 April 2017 from the crop to your cup— the kenya road 7 changes of hand within country of origin KENYA Farmer Cooperative Society 3 – 9 months* Union of Cooperative Society Miller Marketing Agent Auctioneer AND Up to 4 changes of hand before arrival in US Exporter CONSUMER 3-4 weeks Importer Distributor Roaster Coffee retailers and distribution channels (e.g. restaurants, grocery stores) * Relative to crop and conditions

21 our AA from kenya to consumer
After auction, 10 lbs of each purchased lot from Nairobi At departure, 10 lbs from port of Mombassa On arrival, 2 lbs from our warehouse (CA/NY) Our quality assurance process We make sure that the coffee we get is the coffee we bought.

22 kenya, coffee and the world
BD Imports, Inc. 14 April 2017 kenya, coffee and the world Kenya and Coffee The Market Today: Critical Times for Kenyan Coffee Prognosis: Positive Notes: A suggested draft show agenda, based on our understanding your outline and purpose. We’re thinking that going forward, this draft/show will become a standard “general capabilities” presentation for bd imports management’s use where-/whenever. The draft follows this agenda. Very good start: I would prefer to start the presentation out with A brief overview of Kenya. Information about the country: Kenya Located on Eastern African coast Independent country since 1963 Population: approximately 30 million Capital city: Nairobi Two main languages: Swahili and English Agricultural products: Tea, coffee Soil: Volcanic The slide “Where Coffee Grows” is nice and can be used in this section. However not the topic of the section, audience more sophisticated.

23 kenya and coffee Coffee represents 20% of Kenya’s exports
BD Imports, Inc. 14 April 2017 kenya and coffee Coffee represents 20% of Kenya’s exports 2000/1: 1.2MM 60K bags = ksh 10.2bb 2001/2: imports up marginally Coffee employs ±250,000 Kenyans 60% small scale growers 40% plantations Coffee production presently in decline

24 kenya—export trade matrix
BD Imports, Inc. 14 April 2017 kenya—export trade matrix Kenyan Coffee Exports (60-k bags) Germany 387, ,018 Netherlands 137, ,129 Belgium 98, ,990 Sweden 86, ,158 UK 66, ,305 US 63, ,713 Importer 2000 2001

25 the market today: critical times for kenyan coffee
BD Imports, Inc. 14 April 2017 the market today: critical times for kenyan coffee MY 1999/ 2000 MY 2000/1 MY 2001/2* MT produced MT produced 50% decline MT estimated marginal increase Source: GAIN Report, US, NB: MY = market year, MT = metric ton

26 the market today: critical times for kenyan coffee
BD Imports, Inc. 14 April 2017 the market today: critical times for kenyan coffee Low farmer morale Poor market prices Seedling prices rose from ksh 10 to ksh 201 —small farmers can’t afford new plants2 Reasons for production decline Ongoing national coffee reforms Kenya Coffee Act (April 2002) completes first phase of liberalization of coffee industry; seen as promising Exceptional-quality Kenya AA will be more prized and more rare in the future 1 USD 1 = ksh 78 2 Source: GAIN Report, US, 2002

27 2002/3—a positive prognosis
BD Imports, Inc. 14 April 2017 2002/3—a positive prognosis 2002/3: estimated production MT—up 20% Good weather, improvements in husbandry and higher market prices all support high expectations Prices USD/50K bag green: 1999/2000: USD /1: USD /2: USD 120 LAST WEEK >USD 200/50k bag Investment ops in coffee farm inputs and value-adding equipment (coffee roasters, milling) Stabex Funds have facilitated important strides at farmer level 10 April: EAFCA’s first internet auction fetched record price (Ueshima Coffee Co. of Japan; USD 453/50k bag)1,2 Very good slide, I wouldn’t change a thing on this one, information is right on. Co-op Bank of Kenya Limited considering wiping out coffee farmers’ old interest (12-13% interest rate) 1EAFCA = Eastern Africa Fine Coffees Association. 2 Source: GAIN Report, US, 2002

28 selecting the best for bd imports
BD Imports, Inc. 14 April 2017 selecting the best for bd imports Our Eyes and Ears At Auction Exceptional Kenya AA Socioeconomically Responsible Coffee The BD Imports selection process Notes: A suggested draft show agenda, based on our understanding your outline and purpose. We’re thinking that going forward, this draft/show will become a standard “general capabilities” presentation for bd imports management’s use where-/whenever. The draft follows this agenda. Very good start: I would prefer to start the presentation out with A brief overview of Kenya. Information about the country: Kenya Located on Eastern African coast Independent country since 1963 Population: approximately 30 million Capital city: Nairobi Two main languages: Swahili and English Agricultural products: Tea, coffee Soil: Volcanic The slide “Where Coffee Grows” is nice and can be used in this section. However not the topic of the section, audience more sophisticated.

29 our eyes and ears at auction
BD Imports, Inc. 14 April 2017 our eyes and ears at auction Native-born, world-travelled professional 50+ years in Kenyan coffee industry Represents BD Imports exclusively Is a primary part of our direct link to source Added slide You may delete the other slide that was titled, Selecting the Best for BD imports.

30 our strategy “Cost+profit” model vs “C-market” model
BD Imports, Inc. 14 April 2017 our strategy “Cost+profit” model vs “C-market” model Study auction reports to determine age of coffee Sample coffees throughout the process Purchase small auction lots from top growing regions Purchase 95% Main crop coffees Further sort lots at origin if necessary to remove broken/discolored beans, shells and chips Added slide You may delete the other slide that was titled, Selecting the Best for BD imports.

31 our standards The real thing—as fresh as can be
BD Imports, Inc. 14 April 2017 our standards The real thing—as fresh as can be Within 1 week after purchase coffee leaves Kenya No blending of lots No re-naming of lots We use Lot number and Cooperative Society name as per auction; eg, Lot 157/Mushagara-Kirinyaga Added slide You may delete the other slide that was titled, Selecting the Best for BD imports.

32 exceptional kenya AA Mushagara/Kirinyaga 
BD Imports, Inc. 14 April 2017 exceptional kenya AA Mushagara/Kirinyaga 132-bag lot fetched highest price at mid-March auction and was most sought-after by many aggressive buyers Mushagara grown by cooperative society in Kirinyaga region on the slopes of Mt. Kenya Altitude: m Climate/ Rainfall: m3 per annum Temperature: degrees C Varieties: SL28, SL34, Ruiru 11(>1.5%) Production: tons per annum

33 the bd imports selection process
BD Imports, Inc. 14 April 2017 the bd imports selection process Our buyer sends us a sample of each of the best exceptional AA crops We send cupping samples to each of our clients, and we cup the same ourselves We set purchase guidelines for buying fresh green beans based on the individual preferences and needs of our clients, and import them directly ourselves Each shipment is warehoused for distribution in our facilities in CA and NY Consistently and honestly purveying the best Kenya AA makes the BD difference. The very best roast always starts with the very best beans. Experiencing the best Kenya AA should always be like a safari in a cup. bd imports believes

34 BD Imports and you— a winning partnership
BD Imports, Inc. 14 April 2017 BD Imports and you— a winning partnership Sole US importer of many distinctive crops of Kenyan AA Larger importers shun smaller producers who can afford to devote time and attention to superior crops Niche created for dedicated specialty importers while cornering specialty crops among few competitors Competitive pricing model permits profit while not outpricing product Quality is our object, not quantity Purveyors of “socioeconomically responsible” specialty green coffees

35 BD Imports, Inc. 14 April 2017 changing the world one cup at a time— socioeconomically responsible coffee We view growers as an extension of our business, therefore also of yours Specialty coffee imports provide vital means for sustenance and progress for small- to mid-size growers Importing specialty produce means “giving back” to coffeegrowers directly, since much of the profit from export does not reach growers Supporting specialty growers promotes clean agriculture and “quality over quantity” in export coffee While bringing specialty Kenyan coffee to the world, we also bring the world to Kenyan coffeegrowers Information is power

36 summary  more individualized services
BD Imports, Inc. 14 April 2017 summary More and larger roasters are discovering the quality difference BD offers Direct link to origin Solid relationships with buyers and growers of our product assures supply and integrity Socioeconomically responsible product and practices Specialty coffee attracts exceptional clients, like ours and yours more individualized services expanded focus of target imports bd imports’ forecast

37 BD Imports, Inc. THANKS YOU!!
14 April 2017 THANKS YOU!!

38 BD Imports, Inc. 14 April 2017

39 kenya coffee act Implemented April of this year
BD Imports, Inc. 14 April 2017 kenya coffee act Implemented April of this year Coffee Board of Kenya relinquished marketing to private agents (subsidiaries formed by millers, Mt Kenya farmers) Kenya Coffee Producers and Traders Association to manage central auction system MinAg has de-registered Nairobi Coffee Exchange and dissolved Coffee Farmers Bank Careful implementation of reforms can reverse downward trend in production and marketing (industry image) Great slide, information accurate .


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