Taking the Bitterness Out of Coffee: A Case Study of Value Chain Transformation in Ugandan Coffee Companies

Abstract: The international trade in coffee is widely acknowledged to perpetuate unequal structures between producing and consuming countries. While coffee is largely grown in and provides a large proportion of income for developing countries, most of the value-added activities are performed in developed countries. This paradox is exemplified in the case of Uganda where coffee is exported almost exclusively as green beans. However, two companies have been identified as deviating from this norm. Through a mixed methods approach, this thesis investigates these companies through a Global Value Chain framework. This framework provides an important point of departure to analyse how, where, and to whom value is added along a global network of production. To establish a baseline for the characteristics of these firms, this thesis first maps their range of activities along the value chain. Next, the analysis of these cases observes three ways in which they have transformed the traditional value chain of coffee. By performing three forms of upgrading in Uganda, the firms are able to vertically integrate within the value chain. The embeddedness of the firms in Uganda is also shown to shape the structure and approaches of these firms. Lastly, by analysing the governance structure the number of actors within these chains is recognised to have been reduced with value being agglomerated in three areas. This redistribution is also shown to bring more value back to Uganda when compared with traditional chains. The thesis concludes by reflecting on the possibilities for future investigation into the mechanisms of how these firms function from other disciplines.