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FEATURE STORY November 1, 2018

Spawning a Market for Mushrooms in Ethiopia

This feature story is an outcome of infoDev, a multi-donor program administered by the World Bank Group, with a focus on entrepreneurs in developing economies. This story was originally published on December 6, 2017. 

Samrawit Amare picks up a small clear bag of tightly packed white, cottony balls. “It’s so pure and white,” she says of the contents. What she is holding is a bag of mushroom spawn, ready to sprout juicy, white oyster mushrooms after incubation in a dark room.

Amare depends on a steady supply of quality spawn to run her mushroom farm. It’s rare for her to find such top-notch spawn in Ethiopia—most good spawn is imported from China.

But this spawn is special. It’s produced a few minutes away from Amare’s farm in northern Addis Ababa. In fact, Amare was trained in mushroom farming by the owner of the spawn company, a woman named Kalkidan Sileshi.

In 2015, Sileshi founded Silew Mushroom and Spawn Production, Ethiopia’s first and only high-tech privately owned spawn producer. Since then, she has trained more than 200 mushroom farmers, many of whom have become her spawn customers.

Mushroom farming is a fast-growing sector in Ethiopia, which is broadening the country’s crop diversity and strengthening its climate resilience. Backed by a grant from the infoDev-supported Ethiopia Climate Innovation Center (ECIC), Sileshi is taking the mushroom market to the next level.

The growing demand for mushrooms in Ethiopia

The mushroom market in Ethiopia has grown significantly over the past 10 years. Traditionally, the Ethiopian diet includes a relatively small number of vegetables and animal products (around 50 types compared to more than 3,000 in Asian countries, for example). However, as international cuisines began to take root, the popularity of mushrooms shot up. For instance, the growing popularity of Italian pizza and Chinese stir-fry has increased the demand for mushrooms from hotels, airports, and restaurants.

At the same time, climate change threatens Ethiopia’s limited crop diversity. Mushrooms, which require no sunlight, little water, and less acreage than grains, are a climate-resilient crop that can contribute to Ethiopia’s food security.

Despite the growing demand, the Ethiopian supply is generally poor and local companies import most mushrooms from China: While cottage farmers sprang up to fill demand, they lacked training and proper equipment, and contamination often ravaged their production — it was common to lose 30-40% of a crop to mold and bacteria.

A new high-tech solution

After graduating in natural resource management, Sileshi saw an opportunity in the rapidly expanding mushroom market. “I was so eager to establish my own seed laboratory,” she said in an interview at her lab. “But at that time, I [didn’t have] the money.”

Then, she found out about the ECIC grant competition and applied. She won a $33,000 grant that allowed her to purchase equipment and launch her company. “The ECIC competition was one of the main things that helped me to establish the laboratory,” Sileshi said.

Her high-tech equipment paid off. Silew’s rate of spoilage is only 10%. There are only two other spawn producers in Addis Ababa: a government-run lab and one at Addis Ababa University.

According to her customers, there is a wide gap in service: “I order from Silew, it takes one week. From the government, it’s one month, two months,” said Elias Negash, who received training from Silew to run his mushroom farm on the outskirts of Addis Ababa. Silew has trained more than 200 mushroom farmers, giving a new career to many young and old people alike.

Negash explained that the government and university labs have a high turnover of trained staff, and production grinds to a halt when key staff leave. Since there’s no financial pressure on the public labs to serve customers, they have no incentive to keep their production steady.

Silew, meanwhile, needs to maintain its customer base and grow fast. She has a subsidized lease on a government building, but in order to keep her favorable rent, she must demonstrate revenue growth to government officials. She surpassed the latest milestone of 1 million Ethiopian birr last year, so her lease was renewed. Now, she wants to grow and branch out from oyster mushrooms to other, more difficult types, like shiitake and button.

Making the world her oyster (mushroom)

Her customers are waiting, and they want to scale their production too. Ethiopia’s appetite for mushrooms is still not quenched by local production.

Wagnew Ayalneh, a retired scientist and Silew customer who runs Wasa Mushroom Farm, gave us a sense of the huge quantities demanded by hotels and restaurants: “I negotiated with Sheraton Hotel [in Addis Ababa], but they wanted 25 kilograms of mushrooms every day,” a quantity he couldn’t meet. “I couldn’t sign,” he said.

“We have connections with three hotels, and each of them needs 10 kg of oyster mushrooms per day,” Sileshi explained. She had to ruefully tell them no. “We couldn’t get that; the demand is very large; very, very large.”

She’s working on a solution by pooling together farmers’ harvests to satisfy large orders from hotels and restaurants. However, the best long-term strategy would be to scale up production.

Clearly, the Ethiopian mushroom market has much room to grow before it can achieve the scale of international markets and fully contribute to Ethiopia’s climate resilience.

Sileshi dreams of expanding her lab and ramping up production. In time, she hopes to help seed a new mature mushroom industry in Ethiopia.

The Ethiopia Climate Innovation Center is supported by infoDev's Climate Technology Program, a World Bank Group initiative sponsored by the government of the United Kingdom, Australia’s Department of Foreign Affairs and Trade (Australian Aid), Denmark’s Ministry of Foreign Affairs (DANIDA), Norway’s Ministry of Foreign Affairs, and the Netherlands’ Ministry of Foreign Affairs.