Kazi Yetu: Doughnut Design Case Study

01 | Brief Summary and Key Facts

Kazi Yetu (“our work” in Swahili) is a social enterprise producing high value, organically certified orthodox tea and marketing it internationally. It aims to redistribute economic gain to benefit tea, herb and spice farmers and cooperatives, especially targeting women.

• Location: Tanzania 
• Founded: 1 July 2018, by Tahira Nizari and Hendrik Buermann
• Size: 35 employees globally (purchasing from up to 2,500 farmers)
• Sector: Tea and herbal infusions
• Legal form: Private limited company operating as a B-Corp certified social enterprise and trading with smallholder farmers’ cooperatives
• Website: www.kazi-yetu.com

Highlights of their unique approach

Kazi Yetu was founded to change the way products are made and traded between Africa and the rest of the world. Commodities that are exported from Africa are mostly processed and packaged abroad, minimizing economic gain in the country of origin. Kazi Yetu’s high quality, traceable tea and its herbal and spice tea blends are all grown, processed and packaged using organic products and regenerative principles within Tanzania. The work is performed by an all-women factory in Dar es Salaam. Kazi Yetu’s purpose is to promote job creation for women and more equitable pay for the farmers and workers in its own supply chain and operations. It also aims to provide a blueprint for others to learn from and to emulate. 

Highlights of their unique design

Kazi Yetu’s unique design is in its focus on enhancing the livelihoods of its farmers and workers while also protecting the environment – and on its holistic approach of applying this principle at multiple stages of the value chain from production through processing to packaging.

Its primary purpose is to improve the livelihoods of smallholder farmers and create decent jobs for women. At the same time, it recognizes that its purpose can only be achieved if the company is commercially successful. Capitalizing on the growing demand for ethically and organically sourced goods, Kazi Yetu has found a local and international conscientious customer base that is willing to pay a premium price for tea. This premium helps to cover the cost of sustainable production, even as ordinary tea prices often struggle to cover the basic cost of production. Kazi Yetu usually pays farmers 20% more than the market price, which they discuss with the farmers in advance. Additional costs, such as training and support for farmers, are also reflected in the consumer price. Customers are rewarded with a high quality, organic product and the satisfaction of knowing that it is produced on fair and ethical principles.

02 | Founding Story

Kazi Yetu’s co-founders, Tahira Nizari and Hendrik Buermann, are development workers by profession. Nizari – whose family is originally from Tanzania (via Canada) – had worked for the Aga Khan Foundation in Central Asia and East Africa supporting farmers groups to improve their livelihoods. She also led Tanzania’s economic inclusion portfolio. Buermann continues to work for the German Agency for International Cooperation (GIZ) on organic agriculture projects in Tanzania and beyond.

Working in these contexts, the financial and social inequity in international trade with African producers became very evident to them. They witnessed farmers losing out since the value that was added by processing their products was usually gained abroad, and they witnessed women being excluded from many jobs due to social norms and gender discrimination. 

In response, they set up Kazi Yetu, buying tea, herbs and spices from Tanzanian farmers and their cooperatives, employing women (who would otherwise struggle to find employment) in their urban processing and packaging unit, and selling the finished product internationally. 

They provide farmers with training and equipment to help them optimise organic and regenerative farming techniques. 

In 2023, they established Sakare Speciality Tea Company, a factory producing high quality speciality tea. The factory was set up with financial and other support from Bloomberg Philanthropies, Care International and the Tea Board of Tanzania – but ownership has been transferred to the local smallholder tea farmers’ cooperative, the Agricultural Marketing Cooperative Society (AMCOS). This means that AMCOS (which has 1,165 members across 23 villages) can process its own tea rather than sell it to the local plantation. The control of processing combined with improved leaf quality is giving farmers a roughly  500% increase in revenue. (More on this model in the Distributive section below).

The success of the model has led the Tea Board to plan the launch of six more such factories. Kazi Yetu’s role is now as the main buyer from the factory, but also offers advice and guidance where needed.

Their development background influences every decision Nizari and Buermann make, but they are also clear that “Being a social entrepreneur is different from being a commercial entrepreneur and one does not negate the other…  a financial bottom line is absolutely critical for the success of the business.”

03 | Regenerative & Distributive Strategies and Actions 

Regenerative

Kazi Yetu has a clear criteria for all farmers and suppliers to follow organic and regenerative practices in the production of ingredients. Not only will this improve soil health and biodiversity, but it will also reduce farmers’ costs of production (artificial fertilizer and pesticides are expensive) and enable products to be organic certified, reaching a bigger market. Nizari explains:

“We want them to be able to grow for years and years to come. And the way to do that is to have a very nourishing, enabling soil in the ground.” 

This regenerative philosophy is applied across the value chain, from farm, to factory, to the consumer.

Farms: They train farmers on climate-smart and regenerative agriculture to build their resilience against climate change. Kazi Yetu provides farmers with seeds and equipment such as drip irrigation kits and solar dryers. Crop diversification – and therefore biodiversity – is inherent in the cultivation of teas, herbs, and spices. In addition, farmers are taught that some herbs – such as lemon grass, neem, garlic and chillies – can also be used as natural pesticides. They are also taught how to make organic compost from household scraps and agricultural waste. Kazi Yetu continues to research how regenerative farming practices can benefit farmers, such as using biochar which can strengthen the soil and multiply yield dramatically.

Factory: Kazi Yetu’s packing factory in Dar Es Salaam is partially solar powered and organic certified, which also creates a healthy working environment for its majority-female workforce. They try to keep water and waste management as efficient as possible. They are also exploring clean energy sources for the new Sakare tea factory, including solar and briquettes made from rice husks.

Consumers: The tea is packaged in paper tubes which are recyclable or reusable and the cornstarch tea bags are biodegradable, which is important for the environment as well as reassuring health-conscious consumers.  

Distributive

Kazi Yetu was conceptualised to address the way in which Tanzanian tea, herb and spice producers benefit economically from the value chain beyond the farm level. It also seeks to address employment issues for women in both rural and urban areas.

Smallholder farmers:  Despite regulations and stakeholder engagement, Tanzania’s 30-40,000 smallholder tea farmers, many of whom are women, and who are often selling green leaf to large multinationals, are not in a position to negotiate a fair share of the profits. Kazi Yetu is demonstrating through the Sakare factory that it is possible to set up a small, affordable factory that is cooperatively owned and which adds value at the source. The company is 99% owned by Sakare AMCOS and 1% owned by Kazi Yetu, who are the major buyer of the factory’s output and are also directly managing the facility. 

Although not a cooperative member, and not entitled to any profits of the company, Kazi Yetu has an equal say in all decision making, and there is a shareholders’ agreement indicating that they are core directors of the business. All smallholder tea farmers in Tanzania are required to be a member of their local cooperative society, so the factory effectively serves all local tea farmers. 

Although they could have established and operated  the factory themselves, the company chose to involve the Tea Board and development agencies and to work with the local tea smallholder cooperative to ensure that the benefits are widely distributed and the lessons are widely shared.

They are clear that donor funding is not essential to establish such a factory, and have produced a financial blueprint to demonstrate to Tanzania’s large smallholder tea cooperatives that they have the capacity to raise loans to set up their own factories and still be completely commercially viable.  

Farmers were receiving 366 shillings (approximately 0.14 USD) per kilo  (the regulation price set by the Tea Board of Tanzania) by selling green leaf to a processing factory for CTC (crush, tear, curl) tea. For tea processed in their own factory, they now earn at least 5.00 USD per kilo of basic orthodox tea, and up to 15.00 USD per kilo for specialty teas. It takes five kilos of green leaf to make 1 kilo of made orthodox tea – so by selling processed tea they are able to increase the income from green leaf from 0.14 USD to between 1.00 and 3.00 USD per kilo (minus processing costs). 

The company has also helped herb farmers add value at source by providing them with solar dryers. Kazi Yetu is their main buyer and pays a premium price, but they can sell any surplus to others. 

Women:   Kazi Yetu seeks to transform the way women are involved in the trade of teas, herbs and spices. The majority of tea pluckers are women and plucking orthodox tea requires a high level of attention to detail and a high sense of judgment. However these skills are largely unrecognised and undervalued. 

Girls often miss out on education due to poverty, leaving them at a disadvantage in the employment market as women. Women are excluded from skilled jobs in tea factories, such as transporting, marketing, and trading. They may not even control the finances that they earn from plucking green leaves. In urban settings, women are often not employed in jobs perceived as heavy duty or that require mechanical skills.  

Kazi Yetu has one all-women tea packaging factory in Dar Salaam that was established  to address this problem and to demonstrate that women can have much greater participation in the tea value chain. Many of the employees were unemployed single mothers. With decent pay, working conditions and training, they are now running and fixing the machines and handling all of the tea, herbs, and spices in the factory. They have also self-mobilized into a savings group.

The factory has twelve full-time workers, and during peak times up to 35 casual workers. They are all trained with the same skills on production, packaging, personal hygiene and cleanliness of the factory.  They are supervised by five team leaders who are responsible for the production room, the ingredients room, machine operation, the finished packaging and food safety and hygiene standards across the factory. These team leaders work under a production supervisor. All the workers, team leaders and the production supervisor are women.

Although trade union representatives have presented to the women the benefits of membership and about their rights as employees, none have so far chosen to join a union. Instead they come together and present their concerns and challenges to the management. The current management feels that it is responsive to workers’ needs, making numerous improvements to the working environment and providing health insurance for them and their dependents. At the same time, they do recognise the importance of establishing formal systems to ensure workers are properly represented should the management ever change.

04 | How the Deep Design Enables Strategy and Action

As a company founded with the primary purpose of improving the income of smallholder farmers and jobs for urban and rural women, Kazi Yetu’s profit motive is secondary. In other words, profits are pursued in order to provide livelihoods, rather than people being employed/traded with in order to make profits. This ensures a much healthier balance between capital and labour and a fairer distribution of value along the value chain. Similarly, regenerative farming practices are employed primarily to protect the health and longevity of the farm’s productivity, and in so doing protects the environment.

As a socially driven business, the founders have forgone any dividends since the start of the business, and all profits are reinvested in the company growth. Activities such as training and support for farmers are also financed through other grant funding such as from Transform Trade UK. Financial viability and profitability are equally important to Kazi Yetu to ensure that the business is feasible, growing, and able to increase market opportunities for farmers and women. As such, they work hard to increase gross profit margins year on year, and are profitable in Tanzania. They have one impact investor from the Netherlands (HRSV) and they are accountable to report on their financial success as well as impact. Their long term goal is “to build a valuable business that would exit one day to a larger corporation or private equity firm that can scale up what we have started to a whole new level of farmer engagement and women’s empowerment.”

This philosophy is realised through the company’s focus on the longer term gains for the suppliers, workers and their communities rather than on quarterly returns to shareholders, and its reinvestment of profits into strengthening the productivity, negotiating power and sustainability of those workers and farmers

This design is likely to be more sustainable than a conventional business model since greater equity means greater equilibrium; farmers and workers are more likely to be motivated to remain in the industry, while farmers and workers in conventional tea production are increasingly leaving to find more lucrative employment or to enjoy more freedom and respect.

Until recently, Nizari and Buermann were the sole shareholders (although no dividends have been taken out), but held strategy meetings with the whole management team making decisions together as if they were a board. In 2024 they took on their first investor and are creating a formal board. The founders are mindful of the importance of choosing new investors and shareholders carefully, ensuring that they share the values on which the company is based, ie; “not prioritizing profit or their financial bottom line but also thinking about the growth of the workers, growth of the supply chain and the growth of the company.” (Nizari)

05 |  Reflections and Lessons for Other Businesses

Conventional tea producers are often skeptical of small, specialty tea companies with a smallholder supplier base. This type of business definitely requires patient capital – and patience – but Kazi Yetu is demonstrating the commercial and social feasibility of this approach. It is demonstrating that it is possible to: 

• Produce high quality tea from smallholder farms. 
• Set up a small, low cost processing factory close to where tea is produced so that farmers can greatly enhance their income. 
• Be commercially viable producing organic tea and sharing value equitably along the whole value chain.

According to Nizari:
“Investors are impressed with our gross profit margin and our products/operations are competitive amidst international standards.”

According to Nizari, despite global economic uncertainty, “Conscious consumerism is on the rise by 8% in just Europe and the US.” The new generation is spending more on value based products and is also conscious of what they are putting into their bodies, and how the people and the environment are being affected by what they're consuming. This creates a healthy opportunity for purpose-driven companies like Kazi Yetu.

Private ownership, purpose-driven enterprise, patient capital and maintaining a long-term vision while tackling short and medium term business and social issues have been foundational to Kazi Yetu’s success.

Nizari says “We're all about collaboration. So if there are companies or people out there that want to replicate or think about how we did it, I would absolutely be open to talking to them. We need to surround ourselves with like-minded individuals.”

This case study was researched and written by THIRST in collaboration with DEAL.