ImpactFocus: Why Mushrooms Matter
For most of us in the United States, fresh mushrooms are a normal part of shopping in the produce section of our local grocery store. White button mushrooms are relatively inexpensive and used in many recipes (463 on Epicurious.com alone: yes, I checked). For avid cooks, we usually don't think twice about the availability of other types such as cremini, portabella, shitake, or oyster mushrooms. For die-hard foodies, discovering the delicacies and luxurious flavors of mushrooms like morel or truffle are culinary life-changers (a fellow wine-lover Loraine Brown at Vino Veritas can attest to the time I teared at the delight of pairing black truffled pizza with a Rioja Gran Reserva). So beyond their role as a delicious ingredient in many cuisines, why on earth would I be writing about mushrooms in a blog about Social Impact?
This week I am on a work assignment in Rwanda. My colleague and I are analyzing the key challenges and opportunities to unlock investment in the agricultural sector of this land-locked nation the size of Maryland. In a country where 57% of the population lives in poverty, and 37% in extreme poverty, it seems incongruous to be talking about the potential role for luxurious mushrooms in fighting malnutrition.
I was privileged this week to be invited to visit a for-profit social enterprise in Rwanda called Kigali Farms. The work they are doing to build a market (both on the supply and demand side) for mushrooms in Rwanda inspired ImpactMarkets to choose them as our first social enterprise profiled in our new blog series ImpactFocus.
So Why do Mushrooms Matter?
It turns out that mushrooms have an extremely high nutritional value (read more on the Mushroom Council's website):
"Mushrooms are good sources of proteins, carbohydrates, vitamins and minerals, often exceeding levels registered in most widely consumed cereal staples. They have been widely advocated for inclusion in human nutrition in the tropical rural areas and especially where cereals or pulses are staples and meat may be rare or too expensive for a greater portion of the population. For example, UNICEF in 1990 recommended a wide inclusion of mushrooms in the diets as a strategy for fighting child malnutrition in some parts of Tanzania.
In terms of the amount of crude protein, mushrooms rank below meat, but well above most other foods, including milk, which is a staple of the Rwandan diet. More importantly, mushroom protein contains all the nine essential amino acids that are required by man but cannot be synthesized by the human body. In addition, mushrooms are a relatively good source of phosphorus, iron and vitamins including thiamine, riboflavin and niacin. They are low in calories, carbohydrates and calcium. Mushrooms also contain a high proportion of unsaturated fat.”
So now we have established that mushrooms are both nutritious and delicious. Oyster mushrooms, as it turns out, are also one of the cheapest and easiest sources of home-grown protein. In an environment where 90% of the population makes it's living (mostly subsistence) from working the land, mushroom farming is starting to gain a lot of attention.
At ImpactMarkets, we are always on the lookout for for-profit social enterprises who successfully align their business goals with their capacity to make a measurable social impact. Kigali Farms in Rwanda is a great example of this type of market+impact alignment. Their Vision and Mission statement provide a great framework to understanding how growing and distributing mushrooms and substrate (the stuff that mushrooms grown on) are aligned with the fight against malnutrition in East Africa:
"Mission: Kigali Farms works to help fight chronic malnutrition by providing the foundation of a sound mushroom industry, allowing mushrooms to become a meaningful part of the Rwandan diet.”
"Vision: We think of mushrooms as the forgotten, high-impact crop. Mushrooms require minimal land, lots of fresh weather, high humidity, and grow best with the kind of attention and care women best provide. Most importantly, their nutritional value make them a perfect fit for the traditional Rwandan diet. With these very qualities, mushrooms can equip Rwandans with a crop that is easily grown and consumed.
Today however, they are produced inefficiently and with high costs. Kigali Farms strives to improve mushroom productivity and bring mushrooms within reach of most Rwandan household budgets. We hope to witness mushrooms in Rwanda to be as plentiful as tomatoes, carrots, or bananas.
We envision mushrooms as the most cost-effective source of protein for anyone in Rwanda, one that will provide many Rwandans with opportunities of livelihood earn a new income and a healthier diet, simultaneously tackling food insecurity and malnutrition.”
Kigali Farms has taken their mission of enabling the production of mushrooms in Rwanda in order to simultaneously tackle food insecurity and malnutrition, and constructed a business model to support these goals. A few examples:
* Substrate. In less than 2 years, Kigali Farms has become the leading provider of substrate to the emerging mushroom farming industry. Substrate, as I learned, is really any organic material on which mushrooms grow. In the case of Rwanda, they had been using imported cotton husks from Uganda. However, Kigali Farms is currently working on pelletizing locally-sourced wheat straw to both support local farmers and also substantially lower the cost of the substrate. They estimate they may be able to reduce the cost to the farmer by as much as 50% with pelletizing and scale.
* Spawn. Currently spawn must be imported from China. Plans are underway to develop a spawn laboratory in Rwanda, enabling lower cost production as well as potential export markets for Rwanda to serve the East African market.
* Commitment to purchase supply. Kigali Farms, like other agribusiness social enterprises, has made the critical decision to buy 100% of the production from farmers who purchase their substrate. This is not a small commitment as it requires that they work tirelessly to develop the demand side of the market. In a country where oyster mushrooms are not part of the staple diet, this means substantial market surveys, working with local chefs, engaging all aspects of the value chain (wholesale, restaurants, hotels) and even developing additional product lines like dried and powdered mushrooms.
* Farmer education. Kigali Farms has in-house agronomists that work with their farmers to show them proper mushroom growing techniques, including design of small mushroom growing huts made from local materials. They provide their farmers with technology-enabled supply chain tools, including requiring that they SMS estimates of the next day's oyster mushroom harvest (in Kg) to help anticipate supply.
* Focus on market price reduction. In the absence of significant local competitors, it may seem at first counter-productive for Kigali Farms to measure its own success based on how much they can reduce the overall price of mushrooms in Rwanda. After speaking with them and better understanding the focus on both market-making and fighting malnutrition, it is clear that the two goals are fundamentally linked. The average Rwandan household simply cannot afford the nutritious mushroom at current prices; for the market to substantially grow Kigali Farms needs to convince the average Rwandan household of the health and wealth benefits of the oyster mushroom.
So the next time you are in the grocery store produce aisle, stop in front of the mushroom section and think about the world of social and economic possibilities that are attributed to the mushroom industry in developing markets.
Mushrooms, as it turns out, matter a great deal in the global fight against poverty and malnutrition.