Nikhil Arora, 25, and Alejandro Velez, 24, didn't plan on being mushroom farmers. In 2009, during their last semester at the University of California, Berkeley, Arora lined up a corporate consulting job and Velez nabbed one in investment banking.
But a lecture on sustainability in a business ethics class changed all that. Their professor mentioned that he had heard it was possible to grow edible mushrooms in recycled coffee grounds.
"No one had ever taken that idea and done anything with it commercially," Arora says. Intrigued by the idea, the students took to Velez's fraternity kitchen, where they set up 10 paint buckets of used coffee grounds fertilized with oyster mushroom spawn. Ten days later, they had sprouted their first crop.
They conceived a business, fueled by a $5,000 prize from a campus innovation competition that allowed them to buy a van and rent a 200-square-foot warehouse. "At that point, that was like giving a million dollars to us," Arora recalls.
Two weeks shy of graduation, Arora and Velez nixed their plans to join corporate America. They spent the summer couch surfing and giving themselves a crash course in urban farming, tweaking variables like humidity, air flow and temperature. The investment paid off. That October, they sold their first mushrooms to Whole Foods Market in Berkeley. "We still have that invoice on our wall," Arora says.
Soon they branched out into manufacturing and distributing indoor grow-at-home gourmet mushroom kits using recycled coffee grounds as "soil"; this became the basis for their company, Back to the Roots. "We started off doing the fresh mushrooms, then both the mushrooms and kits, and now just the kits," Arora says. "We were almost out of business doing both ... realizing they are very different operations--consumer-branded product vs. fresh produce--and we had to pick one to really execute."
Today, Back to the Roots operates out of a 10,000-square-foot warehouse in Oakland, Calif., selling its DIY mushroom kits to 2,500 retailers internationally, including Whole Foods, Safeway, Home Depot, Loblaws in Canada and Three-Sixty in Hong Kong, as well as directly to consumers online. Revenue reached $1.3 million in 2011 and is projected at $5 million this year. Consumer purchases of the $19.95 mushroom kits through the company's website account for 20 percent of all revenue.
To produce the at-home kits, Back to the Roots collects at least 40,000 pounds of used coffee grounds each week from 30 Peet's Coffee & Tea locations. This spared landfills 1 million pounds of coffee grounds in 2011; this year, Back to the Roots is on track to recycle 3.6 million pounds.
Arora and Velez take pride in having grown their sustainable food business organically, without VC or equity funding. To date, their most substantial cash infusion has been $125,000 in prizes from business-plan competitions, including two worth $50,000. To help ensure their employees share their enthusiasm, the owners divide half the company's profits among the 31-person team at year's end. "It's a fun way to align everyone to the same goal," Arora says. "We're all growing together. We really want to build a lifetime, generational brand."
Bulelani Goniwe (24) was born in Cofimvaba, Eastern Cape. His family moved to the Free State when his father got a job in the mines. Today, Goniwe and four other people own and manage a farm called Youth Navigators in Agribusiness which deals with vegetable and crop production. “Agriculture has always been part of my life, my father owned cattle and grew crops and our neighbours did the same. As a young boy I had aspirations of owning my own farm and land” said Goniwe. After matric Goniwe wanted to learn more about farming so he spent a year acquiring training in crop production from a farm owner. In 2008 Goniwe heard about the Agri-Business Entrepreneurial Programme, an initiative between Umsobomvu Youth Fund and the National Emergent Red Meat Producers Organisation (NERPO), and together with one of his partners they enrolled for this programme. The programme was established in 2003 and was designed to equip unemployed young agricultural graduates to enter the agri-business sector, develop tacit entrepreneurial skills of youth in agri-business, assist participating youth to build up the required skills for entry into the formal job market and assist participating youth to set up and develop their own agri-business enterprises. The NERPO programme was very informative and developed my entrepreneurial skills. I can now compile a business plan,” said Goniwe. Youth Navigators in Agribusiness’ clientele includes grocery chains such as Spar, Shoprite, Boxer’s Super Store and hawkers. According to Goniwe before they start ploughing, they first negotiate with potential clients to ensure that there is a demand for the product. The company employs seven part-time employees every month. “We want to buy new land, get more customers and employ permanent employees. For you to succeed in this industry you need to have patience and work hard,” he concluded.
The Agripreneur: A new breed of Young entrepreneurs combining their love of Farming and Agriculture with an acquired professional Business Approach
“Seventy percent of employment in Africa comes from agriculture, so you can argue that, in Africa, agriculture and economy are synonymous. In effect, you cannot modernize the economy in Africa without starting with agriculture.”
This quote, from Prof. Calestous Juma’s The New Harvest, is yet another reminder of the crucial role that agriculture will play in propelling Africa out of poverty (Shields, Elist. 2013. Africa Policy Magazine, John F Kennedy School of Government: The Key to unlocking Africa’s Multi-Billion Dollar Agriculture Opportunity: Great Managers).
I believe that in the next 5-10 years the youth are going to have a strong role to play if Agricultural development is to be realized. For this to happen, the youth have to continue pursing employment and business avenues in the agricultural industry, which as cited above has always been a big employer for Africans. For example here in Uganda, many university graduates are now joining the Farming and Agribusiness movement as a way to earn a living but they are also adopting and using knowledge gained from their various courses to form innovative and different ways of adding value to their crops.
I have personally been involved in agriculture for some time mostly in the field of horticulture and in 2010- 2012 grew some bird eye chili and Jalapenos that I was selling to an export company here in Uganda. But weather changed over first planting season with long dry spells and the current monopoly of irrigation system companies here in Uganda. I took the initiative to research on effective low cost models of irrigation and later picked up some models that were fabricated locally at almost half the cost. I later passed on these models to my colleagues who were interested in low cost irrigation systems and market knowledge of what to grow.
It’s from this that BITEPH Strategic Consulting was started and currently operating in Uganda. We have created an ecosystem were we provide a one-stop shop for start ups and SME companies in the field of agribusiness and agro-processing through the provision of Funding opportunities, Business Mentoring, Financial literacy, Legal and Creative/Design support.
Amagara Skin Care is example of one of the successful incubatee’s to have graduated from BITEPH Agri-solutions incubator. “Amagara Skincare Ltd is a natural cosmetic company based in Uganda. The dream was to bring 5-year product idea into reality and on to the shelf. Our team had the privilege to work alongside an enthusiastic client who had a social driven motive to promote farmer out-grower schemes and value addition. The result: a stunning natural well branded skincare product that has received tremendous positive response in the market and media.”
Donald Byamugisha from Uganda
Donald Byamugisha obtained his BSc in Biochemistry with Management Studies from University of Sussex in 2009, and then pursed his Masters in Biotechnology from Georgetown University in 2010. Interned in the Agricultural Division at the Biotechnology Industry Organization in DC and later returned to his home country Uganda where he did some consulting work with Association of Strengthening Agricultural Research in East and Central Africa (ASARECA) in partnership with Agrogenetic Technologies (AGT) under a World Bank Food Security Project. He is now partner at BITEPH Strategic Consulting pushing for more youth involvement in agri-business. Email: donald.byamugisha@biteph.com ; donaldbyamugisha@hotmail.com