Case: EthioChicken – Improving food security and quality of life in the midst of turmoil

EthioChicken: Improving food security and quality of life in the midst of turmoil

“I bought household goods and paid school fees for my children by selling the eggs.”

This is one of the comments by a 28-old female respondent received in a customer survey that EthioChicken, an Ethiopian poultry company, conducted to gauge their customer’s views and assess whether their lives have improved through partnering with EthioChicken’s. For a company operating in a midst of significant instability, this has been quite an achievement.

At the forefront of sustainable poultry production

Established in 2010, EthioChicken has become a forerunner and one of the largest poultry companies in East Africa. EthioChicken operates eight poultry farms and four hatcheries, which produce and supply young chickens for households in urban, peri-urban and rural areas. With its two feed mills, EthioChicken is also a significant feed producer. In 2016, Finnfund provided a USD 10 million loan to the company. In addition, in 2021 OP Finnfund Global Impact Fund I invested USD 5 million in the company.

“Their business idea is pretty remarkable. Thanks to their innovative business model, by producing young chicken, the company contributes not only to food security but also to improving livelihood of people,” says Pauliina Halonen, Investment Manager at Finnfund-

EthioChicken is committed to sustainable production and strives to continuously develop its processes and operations. By producing chicks that grow into healthy chickens that produce eggs as well as poultry meat, the company supports families to improve their nutrition and livelihoods.

Let’s ask them!

EthioChicken employs directly roughly 1,480 employees, of which 615 are women (42%). In addition, they indirectly employ 9,000 entrepreneurs (25% women) who nurture, grow, and sell EthioChicken chicks. The young chickens are sold onwards mostly to farmers and households. In 2022, the company reached about 4,8 million farmers or households (80% women) in Ethiopia, generating income and improving the nutrition of a sizable proportion of Ethiopians overall.

EthioChicken is one of the few poultry companies in Africa to receive GlobalGAP certification, a global standard for sustainable agricultural practices. Developing the sustainability of operations and achieving the certification has been a requirement for Finnfund’s financing. The company also received the Boldness in Business Award from the Financial Times in 2018.

In order to know what customers think and how they benefit from the high-quality chickens supplied by the company, a customer survey was conducted by 60 Decibels, an independent research company. Under the survey 256 EthioChicken clients were interviewed in July-August 2021. The interviewees were selected from a random sample of 1,000 EthioChicken customers. The interviews were conducted in two local languages: Amharic and Oromo.

EthioChicken operates eight poultry farms and four hatcheries, which produce and supply young chickens for households.

Chicken (and eggs!) can make a difference

Money for school fees and household expenditures as well as better nutrition; these are some of the main benefits people mentioned in the survey.

For instance, 87% of customers say their quality of life improved and the money they earn from chicken rearing increased because of the chickens supplied by EthioChicken. Many of the company’s customers consume the eggs and chicken to feed their family, but also to earn more income by selling eggs and poultry meat.

Another important finding of the survey was that 80% of respondents had no previous access to the type of high-quality chickens provided by the company. This finding was more pronounced in rural areas, where the availability of alternatives was also limited.

“It is encouraging to learn that EthioChicken is reaching an underserved client group, especially in rural areas, where similar high-quality chickens were previously not available. Supplying chickens in those areas has an even greater impact, supporting people to improve their quality of life”, says Marko Berglund, Senior Development Impact Adviser at Finnfund.

Improving food security is also particularly important in Ethiopia, which is among the world’s poorest countries. In recent years, the country has suffered drought and a desert locust invasion, which has affected particularly farmers and other people living in rural areas. At the same time, Ethiopia is one of the countries where the population is growing the fastest in the world; Ethiopia’s current population is about 117 million and is expected to surpass 200 million by the end of 2049.

“EthioChicken has extended its sincerest gratitude to Finnfund. Without their loyal support, this growth and impact would not have been possible,“ says Yonatan Fiseha, Human Resources Director at EthioChicken.

“It is encouraging to learn that EthioChicken is reaching an underserved client group, especially in rural areas, where similar high-quality chickens were previously not available. Supplying chickens in those areas has an even greater impact, supporting people to improve their quality of life”

Marko Berglund, Senior Development Impact Adviser at Finnfund

Feedback for improvement

The survey also provided valuable feedback for the company to improve its operations. For instance, some of the respondents highlighted that the availability of the chickens should be improved. Others raised issues with maintenance costs, mortality rates and poultry diseases, all of which are matters that need to be considered in the poultry industry in general.

“We have an aggressive plan to continue to grow at 20% per year, to reach more households and continue to improve nutrition and food security. Through this growth we are aiming to reach one chicken per person by 2032, achieving a five-fold per capita increase over the next decade,” says Fiseha.

“We have also implemented the most up to date vaccination programme at the hatcheries, ensuring that the chicks being dispatched has a wider and more robust protection against diseases.”.

In terms of the survey, the sample was more focused on people living in cities and towns rather than rural areas, with somewhat higher living standards and income level overall compared to the Ethiopian average. Although the sample provided for the survey was 46% female and 54% male, 69% of actual respondents were male. The primary reason for this was that female respondent’s husbands or fathers would take the call on their behalf. In most of these cases, the male respondents reported that they were involved with the family’s chicken-rearing and were thus well-placed to answer questions.

Supporting people in the midst of insecurity

At the time of the interviews, Ethiopia has experience widespread insecurity that affected the whole country. Despite the difficult situation, EthioChicken was able to maintain its activities on a high level, and actually grow its business.

“We are glad that the people of Ethiopia have grown to trust the poultry industry as a source of livelihood, and we are dedicated to continue to grow our impact,” says Yonatan Fiseha.

Some key findings from the survey

• 87% of chicken farmers report their quality of life has improved
• 87% reported increased income from chicken rearing
• 37% report affording household expenses
• 25% talk about improved lifestyle
• 13% of respondents live in poverty (below USD 1.90 / day)

Julkaistu 23.1.2024