Ethiopian entrepreneur provides a snapshot of his peanut butter business

Wow Peanut Butter is an organic peanut butter brand based in Addis Ababa, Ethiopia. Founder Henok Abera answers our questions. 

1. How did you come up with the idea for Wow Peanut Butter?

After graduating from Hawassa University, I was faced with a lack of work opportunities. I was unable to find a job in my field of study, so I started doing marketing for various companies at exhibitions and expos. While I was travelling across Ethiopia for these expos, I searched for business ideas and discovered a gap in the market for peanut butter.

I rented a place and bought a grinding machine that could process 30kg of peanuts per day. I had one employee and sold our product to small shops, mini-markets, supermarkets, wholesalers and cafés in Addis Ababa.

Our output has since grown from 30kg to 600kg per day. We have increased our workforce and added new machinery.

We are currently producing only peanut butter; however, we do have plans to start peanut snacks, peanut oil and peanut powder.

2. From where do you source your peanuts?

We currently source our raw peanuts from farmers and farmers’ unions in an area situated 500km north of the capital city of Addis Ababa. The peanuts are unique to the area thanks to the weather and the quality of the soil.

3. What are your retail channels?

Our stockists are small shops, mini-markets, supermarkets, cafés and wholesalers. Our most successful channel has been working with the distributors. We work with two distributors: one is based at Merkato market in Addis Ababa and distributes to various outlets in the city; the second distributor takes the product to regional parts of Ethiopia. They assist us in making our product visible in many places we cannot reach.

Wow Peanut Butter stock ready for distribution.

4. How competitive is the industry?

The market is very competitive. Besides peanut butter producers, there are stakeholders like honey and jam producers as well as importers of these items. Our peanut butter competitors include Yami, Harga, Harer and Tesfaye, as well as imported products from India and the USA.

Our peanut butter doesn’t contain any additives whereas many other companies add sugar, salt or acetic acid to their products.

5. What has been the most successful form of marketing?

Distributors are one of our biggest marketers; however, we want to focus on our digital marketing. Distributors aid visibility in the market because they have a wide network to reach the local and village routes. Our marketing team advertises our product on digital channels so that we and our distributors can reach higher sales and new customers.

6. Tell us about your biggest challenges.

One of our main challenges is sourcing modern machinery. Our current machine is a local model and outdated. Another hurdle is access to working capital. We face financial constraints as we buy the raw materials in cash but many of our customers buy our finished product on credit.

7. What mistakes have you made along the way?

One of the mistakes I made is not working with the right people. We hired unskilled labour and lost a lot. We countered this by building a team with complementary skills and perspective.