Mavuno Harvest plants seeds of small-business expansion in sub-Saharan Africa

From The Philadelphia Inquirer: August 28,2017

http://www.philly.com/philly/business/mavuno-harvest-plants-seeds-of-small-business-expansion-in-sub-saharan-africa-20170828.html?photo_2

Mavuno Harvest imports dried mangoes, papayas, and other organic fruits from sub-Saharan Africa for sale at Whole Foods and many other retailers. But for founder Phil Hughes, the fruit is not the point.

Hughes, who served in Kenya in the Peace Corps from 2003 to 2005, wanted to work in African economic development, but through business rather than foreign aid or charity.

He found his way to that business, thanks to an enduring image he brought home from Kenya: the piles of fresh mangoes that went to waste because farmers lacked adequate access to external markets. His idea: Why not dry the fruit, extending its shelf life from one week to 18 months, and sell it in the United States?

“I had this theory of how this was going to benefit farmers in Africa and increase economic activity in their small villages. I didn’t mean to start a food company. I just thought that was the avenue that I could take,” Hughes said during an interview this month at Mavuno’s packaging and distribution center, in space leased from the Share Food Program in Nicetown.

The key was that farmers could keep doing what they were doing, which was growing fruit. “We’re not trying to tell farmers what to do,” a problem with many economic-development projects, Hughes said. It was simple: By selling some of their fruit for drying, “they can get paid for more of their harvest.”

Mavuno Harvest, which sells its products in about 4,000 stores nationwide and is on track to have $2 million in revenue this year, won the Food/Restaurant category of the 2017 Stellar StartUps competition, sponsored by Philadelphia Media Network, parent of the Inquirer, Daily News, and Philly.com, after being the only entrant to score enough points to make it to the finals.

A mechanical engineer by training who grew up in East Falls and now lives nearby in the city’s Wissahickon neighborhood, Hughes started Mavuno Harvest in 2012 with $50,000 in savings. He paid himself for the first time last year, when Mavuno had its first profit.

Hughes, 38, launched the business in Uganda, where the German government had donated fruit-drying equipment about a decade before Hughes had his idea, though it did not follow through by helping to connect the operators of those dryers to markets. “It was a typical development project,” he said.

The dryers Hughes buys from are locally owned small businesses. Their suppliers are farmers’ cooperatives in Uganda, Burkino Faso, and Ghana. That’s what Hughes likes most about Mavuno Harvest’s model.

“It’s growth of small businesses in Africa. The dryers themselves are able to grow their businesses. They are buying more fresh fruit, which means that all that fruit is not getting wasted. They are also able to employ more labor, and it’s encouraging economic activity.”

Economic-development experts said Hughes’ private-enterprise approach is crucial.

’In taking those mangoes and bananas and drying them and then connecting them with Whole Foods and other retailers in the U.S., he’s connecting those producers to the global supply chain,” s a i d W i t n e y W . Schneidman, a senior international adviser for Africa at Covington & Burling LLP, aWashington law firm, and a nonresident fellow at the Brookings Institution.

“It’s narrow. It goes from the growers to the dryers through Phil to Whole Foods. But that’s a really important start. The real challenge is for these producers to deliver X amount on time every month at a consistent quality level. Aid will never develop those skills,” said Schneidman, a Radnor native and Temple University graduate.

Hughes’ decision to set up his business without owning any assets in Africa was a good one for purposes of economic development, another expert said. “Ownership is critical, in terms of bringing longterm assets to families,” said Morgan Simon, author of the forthcoming book Real Impact: The New Economics of Social Change.

But getting the economic-development side right does not guarantee commercial success.

Hughes said he got lucky. “People know what a banana is. They know what a dried banana is. All we want to do is be the dried banana that’s on the dried-banana space. Then we’re OK,” he said.

Patrick FitzGerald, who teaches entrepreneurship at the Wharton School and knows Hughes through a family connection, said there is more to Mavuno Harvest’s success than that.

Many food companies with a social-impact or economic-development bent take shortcuts. “Phil would actually go there for three months and find the right product. You just don’t see that,” FitzGerald said.

Hughes is also skilled at selling the story to retailers. “He would meet with the people, explain the story, show pictures of the villages; he had a personal connection. It wasn’t just some guy trying to sell you dried fruit,” FitzGerald said.

Hughes wants to add products. Maybe cashews. “Nuts are a bigger-selling category than dried fruit. It’s much more appealing to a wider range of consumers,” he said.

For now, Mavuno Harvest’s roughly 10 employees in Philadelphia, who start at $9 an hour, spend their days engaged in a labor-intensive packaging operation.

Wearing plastic gloves, a few workers drop handfuls of dried coconut, for example, into small clear plastic tubs on electronic scales. From there, coworkers shovel the coconut into colorfully printed plastic pouches and zip them closed. The pouches then go through a machine that heat-seals them and prints an expiration date on the bag.

Etty Wahjuni, of South Philadelphia, has worked there for five months. “The owner is very kind to us,” she said.

Asked which products she likes best, she said mango and jackfruit. Pineapple, too. “I like them all.”