New Face of Markets

Ready Made Foods Thrive in Niche Markets

As life style is changing in most urban areas of Ethiopia, and there is less time to prepare staple foods from scratch at home. Ready-to-eat food items are becoming popular, and an emerging group of entrepreneurs is seeing an opportunity in the sector and putting money into it. But the journey they take is far from smooth. FORTUNE STAFF WRITER, SOLIANA ALEMAYEHU explores the operations of the emerging businesses, the competitive sphere they work in and the challenges they face.

When Hailu first started making commercial injera 13 years ago, it was practically taboo. In fact, four months later when Mamma Fresh Injera was unable to cope with demand, they were too afraid to ask for a bank loan.

“We thought they would laugh us out of the bank,” he said.

The practice of buying readymade injera was not as common as it is today. As Tigist Alemu, a mother of three in her forties relates, the packaged injera would never have ended up in her shopping cart a decade back. She explained how things have changed as she browsed the shelves of her neighbourhood supermarket.

Years back, she would always have had help in the kitchen so not being able to make injera at home was a rarity. Now, help is becoming harder to find. Consequentially, not having home-made injera occurs more often.

“If I couldn’t have it made at home, I’d do it myself,” she said “if I couldn’t then my mother, or one of my sisters, or neighbours would have sent me some.”

She explains that both she and her extended family are too busy now; and not having help in the kitchen is a phenomenon that occurs too often to keep troubling other people. While she muses that her daughter could go through life without ever having known how to make injera, her mother would still not do it.

“She would probably have rather died!” she exclaimed.

The supermarket she shops at, a place called Safeway on CMC road, sells 300-400 pieces of injera a day. But its supervisor Yonatan Minda explains that when there’s no electricity in the neighbourhood, that figure doubles.

This change in culture is not singular to injera. Other Ethiopian products in ready-to-eat or almost-ready-to-eat form occupy a section. Spices and essential food ingredients like berberre and shiro line the shelves. This evolution is slowly giving rise to businesses that would not have been possible years back. Manufacturing brands are emerging alongside small businesses dedicated to making cooking easier by the day.

In addition to products that have simplified the older, labour intensive methods of cooking, non-traditional kinds of food but with a traditional touch have started to appear on the shelves. Locally made cornflakes, barley-based Muesli and Cruesli, and teff based pancake mixes line the shelves along with their imported counterparts.

When Mihret went to the US two years ago, she heard more about the benefits of teff than in the thirty plus years she had eaten it in its country of origin. In the supermarket she saw people fighting over the little injera that was on sale and thought she saw a business opportunity.

Within a year she had hired a food expert and started developing her product. She wanted to make a teff product that would fare well in western supermarket shelves, so she decided on food types that were practically the primary staple of the American diet – pancakes and waffles.

The next step was to get her star ingredient, teff, to have pancake like properties. She researched recipes that were already successful and started work before coming against her biggest obstacle at the time, the teff itself.

“It has no strength, no elasticity,” she said recollecting her frustration.

So she hired a food expert and started working on the grain’s properties. The product, 455 grams of pancake/waffle mix in a powdered almost ready to eat form was created a few months later. She presented her product to various people along the way, and changed her product, from package to taste, accordingly. By May, she had rented a venue for a cafe with the aim of creating a test kitchen.

Situated in Bole, close to the airport, Merxy’s Teff Testing Kitchen has a menu with teff as the base ingredient for all the items, from pizza, to lasagna, to her most popular creation to date, the teff wrap. Her hush-hush teff formula is produced and packaged in the back, while her office is situated on the upper floor. An open style kitchen dominates the café, showing how the food is prepared. Mihret hopes this will encourage customers to take the mix home and cook with it.

“The café was ready four months before the product,” Mihiret said, “but I didn’t open it until I had the product ready. It would have missed the point – the product is the reason behind the café.”

Product development took nine months of her time. She had to import lab equipment for testing, a small sized mill, the additives that transformed her teff to a pancake-ready mix, a mixer, packaging machine, and the two storey house on the road that goes from the roundabout by Edna mall directly to Moenco. She described the process it took at Customs to get her equipment once it had arrived. It was the hardest challenge at the time she said.

Once the product was finalised, it became time to license it. That process entailed getting the go ahead from the Food, Medicine & Health Care Administration & Control Authority (FMHACA), the Ethiopian Public Health Institute (EPHI), and the Ethiopian Conformity Assessment Enterprise (ECAE). The first checked the capacity and hygiene of the place of production. The second took samples and carried out toxicity and chemical testing which gave her the nutritional facts printed on the box. The last one checks physical and chemical parameters once production starts, and is able to carry out four instances of surprise testing each year.

While some food types are strictly controlled and cannot be sold before all licensing procedures have been passed, others are done on a voluntary basis. Tekae Birhane, marketing & corporate communications director at the Enterprise, admits that while some international standards are applied, the same cannot be said about the local ones.

“Everyone has a different recipe for making berrberre, so it’s hard to standardise it and test it accordingly,” he said. “So far, we can only test pure berrberre, if it doesn’t have additives.”

He added that they do not carry out just the toxicity tests because not being harmless does not translate to being sound. If bananas are added to traditionally spiced butter, another local food that has numerous recipes, that butter may not cause health issues. But the Enterprise should not give it a stamp of approval, he said, because it defeats the purpose it was made for.

Merxy’s gluten free baking mix, after a year in production, has made its presence known on 59 supermarket shelves from 105 Br to 125 Br a box. A staff of seven can whip up 455 cartons of the mix, from two quintals of teff each day. That is, if their biggest operational challenge – breaks in electricity – lets them. Three temporary sales staff promote the product at different points of sale and an additional 14 help run the café. The venture cost 3.5 million Br, sourced from her new business partner.

Things were not always so expensive. Another food manufacturer, one of the few who have been in the market long enough to have become a household name, started much smaller.

Selam Baltina started production of spices and grain-based ingredients that make up the basis for many items on a traditional Ethiopian menu with 500 Br. First, they sold the grains. Two years later, in 1996, they started to process and sell the powdered version. Like all grains, it was put in burlap bags and scooped according to the weight that a customer asked for.

“We saw that more and more people started to work, and had less time to do what is traditionally processed in individual homes,” Mekonnen Nigussie, vice manager said.

But that was not without its challenges. He explained that selling a finished form of berberre was especially hard because people had a hard time trusting that the product was safe.

“But food should be handled in a much cleaner manner,” Mekonnen added. “So we thought of packaging it.”

Starting to do so at the same time when others in the business were accused of adding clay into the food was quite tough. But now, the company has acquired 10,000sqm of land around Ayertenna where a staff of 100, mostly female, go through the traditional process of preparation.

Finding the inputs is very difficult, Mekonnen explained. As a country dependent on rains for harvest, production date and capacity are subject to the whims of nature. Nevertheless, the export business alone, ships 600-700 quintals of just berrberre. And half of that amount of mittin shiro.

In addition to the challenge presented by the introduction of a new product, packaging was, and still is, problematic.

“It shouldn’t be the type that collects moisture, because that ruins the food,” he said, “it should be protected from sunlight because that depletes colour and taste – both essentials in berrberre.”

They have found packaging that fits the first criterion, but have not yet been able to meet the second. A third, unforeseen criterion crept upon them from a corner they had not expected.

“We used print the labels in-house, and insert them in the packaging ourselves,” Mekonnen said. “Then people started faking our products.”

Labelling needed a solution. The ideal packaging has an aluminium underside to protect from heat and light. And, the exterior has the company and product details printed upon it.

The aluminium was a no-go. But after searching, they were finally able to print on transparent packaging.

Packaging is an obstacle to many other food manufacturers in the industry. Seifedin Sergaga, an up and coming food manufacturer, identified it as the biggest hurdle to his product development.

“I had to research myself what is safe,” he said, explaining the many grades of packaging there are, and that some are even reused.

Seifedin needed the packages to house the oats-based cereal he has started to manufacture. Inspired by a ‘healthy’ theme, Seifedin started a health-conscious café in front of the Vatican Embassy beneath his furniture store that specializes in restoring old furniture.

Breakfast items were lacking, he thought, so the café started experimenting with grains. Granola, perceived to be a healthy nutritional choice, slowly became a hit.

They mixed baked oats, honey, raisins and some spices, presented it in the form of a breakfast cereal dipped in yoghurt and served it.

“People started liking it so much,” Seifedin said, “that they started to ask if they could take some home.”

He saw a business opportunity in the cereal that was also well-loved by expatriates that frequented his café. He then invested a quarter of a million Birr in that opportunity.

Taza Granola, a brown paper bag containing 350g of flavoured granola, cinnamon raisins or banana cake, was born a few months later. His investment largely went into packages, rent and ingredients.

After going through a licensing process similar to what Mihret went through, he is both encouraged and concerned. On the one hand, he found that the offices he had to deal with were not only efficient but also encouraging.

“It’s not the kind of treatment you get when you pay your taxes,” he mused.

On the other, he saw that the determination of shelf life and expiry dates are up to the manufacturer. It is left to their discretion, and while they are responsible for any bad occurrences, they will not be held accountable until something untoward occurs and they are implicated.

Credit constraints mean that until Seifedin buys the machine, he will have to outsource the roasting of his oats. Until such time, he has bought a factory grade spaghetti roller and is having it modified so it can bake and roll oats.

With a two-woman team, and the oven as the fanciest equipment in its kitchen, Taza can currently produce 200 packages a day. Each is sold at 70 Br to 85 Br apiece from his end. So far, Taza Granola has only been presented at bazaars and events in addition to the café around the Vatican Embassy. Seifedin is talking to a supermarket chain about launching the sale of the breakfast cereal.

Taza may be starting out, but others have already hit the shelves. Mihret has already put in a 50 million Br loan request to the Development Bank to expand the Merxy line and start exporting. She expressed her intention to start a partially-baked line where all customers are required to do before consumption is heat it up.

Selam Baltina plans to introduce a liquid form of the spice berrberre, Mekonnen revealed.

Mamma Fresh has taken it one step further. In addition the injera and spices it produces, it has now started a ready-to-eat line of dorro wet, a traditional form of chicken stew, approved by the US’ Food & Drug Administration (FDA).

“We haven’t even put a dent in the demand,” Mekonnen and Hailu proclaimed. Far from fearing market saturation due to the plethora of emerging companies, they think more should be done and eagerly await competition.


Published on Apr 12,2016 [ Vol 16 ,No 832]



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