The businessman who sold Ethiopian teff pasta to Italians
Interview with Yonas Alemu
MANAGING DIRECTOR AND FOUNDER, LOVEGRASS ETHIOPIA
Teff, a tiny grass seed native to Ethiopia, ranks among the world’s most ancient cultivated crops, having been domesticated between 6,000 and 4,000 BC. For thousands of years, Ethiopians have used teff flour to make ‘injera’, a flat, spongy sourdough bread that is a staple in their diets. Celebrated as a superfood, teff is gluten-free and rich in nutrients such as iron, magnesium, manganese, calcium, zinc, and vitamins B and C. Ethiopian elite runner Haile Gebrselassie has even credited teff as a factor in his athletic success.
Investment-banker-turned-entrepreneur Yonas Alemu is the founder and managing director of Lovegrass Ethiopia, a health food company making a variety of items from teff and other Ethiopian grains. Its products include pasta, breakfast cereal, pancake mixes, powdered beverages and snacks. Lovegrass has a factory on the outskirts of Addis Ababa and sells both internationally and within Ethiopia.
Jaco Maritz spoke with Yonas about his business journey.
Highlights from the interview include:
- From farm to finance: Alemu’s remarkable journey from rural Ethiopia to an investment banker in London.
- The big leap: Why he walked away from a lucrative banking career in the UK to launch a food company in his homeland.
- Defying the odds: Returning to Ethiopia despite scepticism from his friends
- Going international: How Lovegrass secured deals with major retailers like Ocado, Selfridges, and Whole Foods.
- Manufacturing in Ethiopia: The advantages and challenges of producing locally.
- Cracking the Ethiopian market: Strategies for tapping into Ethiopia’s 120 million-strong consumer base.
- Lessons learned: What Yonas would do differently if given a chance to start his business again.
Watch the full in-depth interview below:
From rural Ethiopia to global finance, and back to Ethiopia
Yonas was born and raised in a farming community in Ethiopia, where some of his earliest memories involve waking up before dawn to help in the teff fields. In his area, schooling was only available up to grade eight, after which many children returned to household chores and farming. However, Yonas’s parents were adamant that all their children receive a proper education. To continue his studies, Yonas had to walk 12 kilometres each day to a nearby town. After about a year of this, his brother, who established a business in Addis Ababa, took him to the capital, where Yonas completed his high school education.
Upon finishing school, Yonas earned a scholarship to study in Bulgaria, a socialist country like Ethiopia at the time. He then received another scholarship to study in the UK. It was here where he eventually began his career in investment banking, working for 17 years at institutions including BNP Paribas, J.P. Morgan, and Credit Suisse.
In 2014, he came across teff in some health food stores in London but was perplexed after discovering the teff on shelves came not from its native Ethiopia, but from the US where it was commercially cultivated. Recalling his childhood and how hard the farmers toiled, Yonas decided to start a business selling Ethiopian food products in the global market.
Yonas began experimenting with teff-based products in his family’s kitchen and later refined these ideas in a lab. He decided to launch his company, Lovegrass, with teff-based pasta as the first product.
In 2016, Yonas left his position at Credit Suisse and relocated to Ethiopia to establish Lovegrass. Quitting his banking career wasn’t a difficult decision, as it was a move he had been contemplating for years. “I’ve been planning it and I’ve been wanting to do this for pretty much decades,” he says.
Setting up operations
“All my friends, they thought I lost it,” Yonas recalls. “How can you go back to Ethiopia now when everyone is trying to escape the country,” he remembers them saying. “But I didn’t see it that way,” he adds.
In Ethiopia, securing land for his factory was a lengthy process, taking over a year and a half. However, it was just the land – Yonas was responsible for building the road, getting electricity to the premises, and ensuring access to water and other infrastructure. He also constructed a warehouse, which only needed the machinery to be fully operational.
The money he made during his banking career helped finance these expenses.
However, just as construction neared completion, political unrest in the country made Yonas move back to the UK, where his wife and children were still based.
Determined to maintain momentum, he opted to import teff from Ethiopia to the UK, milling it at a warehouse on the outskirts of London. He then sent the milled flour to a manufacturer in Germany to be turned into pasta.
Exporting pasta to Italy and beyond
In 2018, with no established clients yet, Yonas took his products to a specialty food trade show in London. The shipment from Germany arrived just two days before the exhibition. Despite the tight timeline, Lovegrass won the award for the most innovative product at that year’s show, and later secured another award at a food show in France.
These accolades led to significant interest from major European retailers, with outlets like Ocado, Selfridges, Whole Foods, and Planet Organic beginning to stock Lovegrass products. The company has gone on to export across Europe. “The day we first exported pasta to Italy was probably one of my happiest,” Yonas said in an earlier interview.
However, convincing consumers to pay a premium for pasta was challenging, as they typically viewed pasta as a low-cost item. Additionally, teff was still relatively unknown to most people, adding to the difficulty of establishing a market for the product.
Lovegrass has since also added several other products to its line-up, including breakfast cereal, pancake mix, snacks and powdered beverages.
Launching production in Ethiopia
In the meantime, the political situation in Ethiopia stabilised, allowing Yonas to move back and resume his plans. He ordered the necessary machinery, but production was further delayed due to the Covid-19 pandemic. Despite the setbacks, manufacturing officially began in August 2021.
Lovegrass sources its raw materials directly from farmers, with whom it has long-term supply agreements.
Yonas highlights that manufacturing in Ethiopia is much cheaper than in Europe, particularly in terms of power and labour costs. However, the decision to produce in Ethiopia is not purely driven by business considerations; it is also part of the company’s broader vision to contribute to the industrialisation of the country.
Although there have been challenges related to manufacturing in Ethiopia, Yonas has been pleasantly surprised by how easy it was to train the factory staff, who are entirely Ethiopian. “The dedication of the people is extraordinary,” he adds.
Navigating Ethiopia’s consumer landscape
In addition to exporting its products, Lovegrass is also targeting the Ethiopian market itself. Currently, sales are nearly evenly split between domestic and international customers.
But reaching consumers in Ethiopia presents unique challenges. Yonas notes that consumer culture in Ethiopia is very different from the rest of the world, partly due to the country’s history of never being colonised, which has limited its exposure to outside influences. He notes that the majority of the population has never even heard of the product categories Lovegrass is selling.
Another significant hurdle is the lack of large supermarket chains to facilitate distribution. “You have to be very, very innovative with logistics and distribution. You have to deal with small mom-and-pop shops all around Addis, for example,” Yonas explains.
He also highlights a lingering perception among some Ethiopians that locally produced goods are of inferior quality. However, Yonas emphasises that Lovegrass sells the exact same products in Ethiopia as it does in Europe. “Whatever we sell in Addis – in Merkato, which is the biggest market – is 100% the product that we sell in Selfridges in London. So the quality is top-notch. But you have to communicate all this. You have to tell the consumer.”
Reflecting on his journey, Yonas acknowledges that while he has learned a great deal from selling to the European market, if he could start again, he would have concentrated more on the Ethiopia and the broader Africa from the outset. “The biggest market is really in Ethiopia and Africa … and that’s where our biggest focus is at the moment,” he notes.
Lovegrass managing director Yonas Alemu’s contact information
Contact details are only visible to our Monthly/Annual subscribers. Subscribe here.