Over the past decade, exports have played a key role in Ethiopia’s economic development. The commercialization on international markets of Ethiopian products such as flowers, coffee beans, and oil seeds has significantly contributed to the country’s GDP growth and the creation of hundreds of thousand of local jobs.
The recent World Bank’s Third Economic Update on Ethiopia however highlights how a recent drop in export prices has severely impacted the profitability of many local industries, leading to the country’s worst export performance in years. To overcome this challenge, local companies have to improve their competitiveness through better integration in the value chain, product diversification, and investments in sustainable technologies.
Rahel Moges and her company Ethio-Green LLC, represents a great example of how smart investments coupled with a good diversification strategy can turn a traditionally home-made product like Injera into a booming international business. With the support of the Ethiopia Climate Innovation Center (ECIC), Rahel has invested in an innovative solar–powered drying system that allowed her company to export Injera all over the world without compromising its characteristic taste. Now, by tapping into the vibrant Ethiopian diaspora, the company is expanding its presence on several international markets, including the US. In our interview, Rahel talked about some of the main challenges she had to face to launch her company and her ambitious plans for the future, including a new line of traditional food products.
Q: Can you tell us a little bit about your business?
I co-founded Ethio-Green LLC back in 2008 in Washington DC with my business partner Woineshet Yirga-Keefe. We wanted to import fresh Injera - the traditional Ethiopian bread - to the Washington DC metropolitan area. Ethio-Green was one of the first companies to import fresh injera to the US.
Encouraged by the growing demand and the success achieved, we decided to establish a second company in Ethiopia to produce directly Injera for both the domestic and international markets, including the US, Canada, Europe and Middle Eastern countries. In 2011, I moved to Addis Ababa and in 2012 I established Ethio-Green Production and Industry PLC.
We have big plans now. The high demand for the products in the existing markets, coupled with the potential of a strong, vibrant Ethiopian diaspora in new countries like Canada, Sweden, the UAE, and Saudi Arabia, made me consider the development of a large-scale manufacturing plant. This would not only allow us to increase significantly our production volumes, but it would also give us the opportunity to diversify our offer by adding the production of different teff–based (the cereal used to make Injera) products.
Q: Why Injera?
Injera has been eaten by Ethiopians for centuries and it defines the local cuisine and cultural traditions. I started importing Injera because I believe that food is a great way to open people’s minds to other cultures. Ethiopia is often portrayed in the media only for its poverty and food crisis, while the country has so many unique traditions to offer. Besides, Injera is a very healthy food. Teff, the grain used to produce authentic Injera, has high nutritional values and it is 100% gluten-free.
Q: What's the market demand/potential for your product?
In 2008, when we started importing Injera to North America, the Ethiopian Diaspora was our primary market. All Ethiopians, no matter where they live, know it. The demand was already there; we just made Injera available to them. My company was one of the first to tap this market. Eventually other importers realized this huge business potential and today the market is booming. Besides, it created jobs for women and also supported exports. Currently, Injera is exported to several countries outside of Ethiopia, in particular to the United Arab Emirates and the United States. The demand keeps growing with the Ethiopian Diaspora. In addition, thanks to the availability of the product on local stores, there is a growing market of non-Ethiopian consumers who are learning about Injera and are including it into their recipes.
Q: How did you start out?
My business adventure started one night in a Mexican restaurant. I was dinning with family and, while eating corn chips, I started thinking - as much as corn is Mexican - of Ethiopian Injera. The next day, I discussed the idea of importing Injera with a close friend of mine and together we contacted a few producers in Ethiopia. Then, we checked the U.S. regulations on imports. Back then, Injera was not known and it was quite difficult to identify a product code for importing it. With customs personnel, we identified the food category that best describes Injera and we came up with the idea of providing the code “pancake without custard or cream filling.” After making sure that importing was possible, we immediately got our license and we created Ethio-Green LLC to get our first sample.
Q: Do you have any advice for people who want to start a new business?
What I would recommend to anyone who wants to start a company is that, even if knowing the business is essential, knowing yourself is even more important. You have to be ready to embrace both good and bad moments. Even if my company is doing very well now, I had to face many challenges that I did not expect. Throughout this process, I’ve learned that dedication is equally crucial regardless the situation; it’s the one thing that keeps you going and eventually makes you realize your dreams. Focus on your goal not on the stumbling blocks in front of you.
Q: What are the biggest challenges you had to face in scaling up your business?
Like in most businesses, access to finance is one of the most challenging areas. In addition, access to sustainable power is another challenge that we have to face if we want to expand our business; however, we strongly believe that this issue is temporary and we expect that it will be resolved soon. We would also like to introduce ‘good manufacturing practices (GMP)’ to enter new markets by meeting international standards. However, to do so, we need technical support to get the required accredited certifications.
Q: In your experience, what are the specific challenges that women in Ethiopia have to face in setting up a new business?
In general, I would say not getting the right information and not starting in the right way. In other words, starting without a solid understanding of the great challenges and opportunities of the market. Don’t focus only on the ‘glamorous’ aspect of doing business and remember that even if you work for yourself, you still have your clients to answer to; it’s like having hundreds of bosses!
Q: How the Ethiopia CIC is helping you overcome these challenges?
The Ethiopia CIC has given me training and has helped me analyze my business in detail. I was the first woman to win the Proof of Concept Competition organized by the center. Winning has validated my business concept and will help me get investments and credit from other lenders.
The Ethiopia CIC has also showed me how a successful business can benefit from measures and technologies developed to protect the environment. For example, the idea of a ‘solar dryer’ represented the perfect solution to our export problems. The ECIC supported us and encouraged me to consider clean technology solutions.
Q: What are the next steps for your company?
In the next two to three years, I want Ethio-Green to be a solar-based, energy-efficient company that can help protect the environment. In Ethiopia, in almost every household people bake Injera; the use of ovens for its preparation is very energy consuming and in the long run can have a serious impact on the environment. By producing Injera in our energy efficient facilities, I think we can help minimize the use of electric ovens and contribute to save energy.
Q: How do you think the Ethiopia CIC is making a difference in your country?
I believe it’s very important to create awareness around climate-related issues and promote solution that can mitigate them. Even if Ethiopia is not currently highly industrialized, its growth rate and transformation plan indicate that the country will soon see the development of many industries. Now is the time to understand how to establish and run sustainable businesses and the ECIC could play a key role in promoting the use of clean technologies and best practices.