Meet the Entrepreneur: Fahad Awadh, YYTZ
At FINCA Ventures, we look for entrepreneurs leveraging market-based solutions to create large-scale, lasting social impact. In this series, “Meet the Entrepreneur,” we’ll be taking you into the minds of the intrepid leaders at our portfolio companies who boldly venture into markets in need of positive disruption.
Tanzania is the fourth largest cashew producer in the world with 85 percent of cashews grown by smallholder farmers. Yet, Tanzanian farmers capture less than 10 percent of the final cashew price due to underinvestment in processing capacity and market connections. In this interview, we spoke with Fahad Awadh, Founder of YYTZ Agro-Processing, to uncover how the company is stepping up to meet the growing demand for cashews while increasing farmers’ incomes through community-level processing. YYTZ is a Zanzibar-based cashew processor that is engaged across the entire value chain to bring more value back to the farmer through launching a transparent consumer brand that resonates both regionally and internationally due to the quality and traceability of their products.
You’ve lived abroad, in the Middle East and Canada. What brought you back to Tanzania?
Fahad: Moving back to Tanzania was always a dream of mine. While I was born in Tanzania, my dad was a pilot and got a job opportunity abroad, so we moved to Bahrain when I was two years old. Every year since then, we would come back to Tanzania to spend the summer holiday and as I grew older, I was able to establish a deep connection to Tanzania. Through these trips, I was able to maintain a level of proficiency in Swahili which made it easier for the country to feel like home. Growing up I always knew that I wanted to make an impact here, especially as I became more engaged in different entrepreneurial endeavors. I felt like I could create value in Tanzania somehow. I didn’t know the “how” or the “when”, but it was always a possibility.
You’ve always been entrepreneurial, having started businesses in university, and even earlier than that. Can you tell us about what motivated you in the past, what you learned from these early experiences, and what’s been your biggest ‘a-ha’ moment?
Fahad: When I was 10 years old, my family moved from Bahrain to Canada. While there, I was accepted into an International Business and Technology program where I was able to learn the values of entrepreneurship at a very young age. We were taught marketing and accounting skills and by grade eight, we were required to apply what we’d learned by developing a product. The culmination of this project was to take the product and sell it at the district school board. Since then, I’ve been inspired to look for new opportunities to be an entrepreneur.
In university, my friends and I launched a clothing business organically, as we weren’t looking to get into business at first. The clothing brand was called Malyka Clothing, which means Angel in Swahili, and was focused on creating positive messages and telling powerful stories through clothing. Our product resonated with our university peers and in no time, the demand for our clothing brand grew tremendously. That experience was my first exposure to the concepts of direct sales and communication with the consumer. We participated in several festivals, trade and fashion shows and traveled to different universities to sell our products. As the brand continued to expand, we began distributing in Canada, the Bahamas and Gambia. It was a foundational and creative experience that allowed me to eventually travel to Bangladesh to meet with factories that produced for corporations like the GAP and Abercrombie & Fitch. This experience taught me how to source and about international trade, which allowed the brand’s line to grow further. When I decided to return to Tanzania in 2013, I was eager to find an opportunity to somehow add value. My biggest ‘aha’ moment was discovering that not only was Tanzania the 4th largest cashew producer in the world, but very little value addition was being done in the country. The nuts would be plucked from the tree, then shipped out to have the shells removed in another country, which I thought was insane! This business venture has been the largest part of my entrepreneurial journey because the stakes are higher, and we’ve carried out more investments. We provide farmers with an opportunity to generate income in my home country and witnessing the opportunities this company has brought to the people and communities we represent in Tanzania has been incredibly satisfying.
How did you come up with your company name, YYTZ?
Fahad: YYTZ is a combination of two concepts. YYZ is the airport code for Toronto, Canada and TZ is the abbreviation for Tanzania. Born in Tanzania and raised in Toronto, both places played a significant role in defining who I am today, and I am fortunate to be able to combine the two to represent my brand and to pay homage to the two places that I call home.
How has working alongside your father contributed to the mission and success of YYTZ?
Fahad: Working with my father has had a tremendous impact on me. Growing up, my father was my role model, and the person who always believed in me and supported my goals. When the opportunity presented itself to work alongside him, I was thrilled. I enjoy working with my dad and it’s great to have someone to lean and depend on as a sounding board, not just for advice. As for our skill sets, we complement each other. Being a retired pilot, my father has extensive technical skills. He is very hands-on and has been instrumental in installing equipment around the factory and helping with renovations. We’re also united in our corporate vision, which I think is essential to a good business relationship.
What entrepreneurial best practices have you discovered that help keep your everyday life centered and efficient?
Fahad: I often think of ways to be as successful as possible and try to find different ways of doing so, like meditation, which helps to keep my mind clear and sets the tone for the day. I search for ways to remain productive and effective on the job, and I make it a priority to surround myself with good people and a strong team that can help drive progress. I also like to read and learn from prominent business leaders and thinkers. An essential tool that I stumbled upon over the years was ‘stoicism’. The book, The Obstacle Is the Way, by Ryan Holiday introduced me to stoicism and I think it’s an effective modus operandi for entrepreneurs, as it teaches you to not only embrace challenges, but also to realize that they are unavoidable. You will always face obstacles, and this book teaches you how you can prepare for these roadblocks and eventually concentrate on finding ways to overcome them. The trick is to recognize that the challenges you face will make you a stronger person, and when you overcome these difficulties, you will learn valuable lessons.
What obstacles have you faced in your business journey so far and what have you learned from them?
Fahad: The challenges we’ve faced on this business journey have been quite numerous [looking back]. The financial sector in Tanzania is very risk adverse. In other words, start-up businesses aren’t always seen as viable borrowers. Accessing working capital [to purchase cashews from farmers] became a challenge in the early stages of developing the business because several banks did not believe that cashews could be processed in the country efficiently. One thing I learned was to concentrate on the solution during this journey and not get discouraged. Thankfully, we found several champions who believed in our vision, understood what we wanted to establish and who provided support in the early stages to keep us going.
COVID-19 has undoubtedly impacted many businesses around the globe. In the difficult moments, how do you stay focused on moving forward and driving business growth?
Fahad: Certainly COVID-19 affected business growth. However, our team directed its attention to the tasks that we could move forward, despite not being able to ship products to customers at that time, such as building our website, creating new flavor varieties and renovating our factory. I believe that keeping a positive outlook and concentrating on moving things forward regardless of the current climate is crucial.
You are launching the More Than Cashews brand globally. How do you envision this brand resonating with consumers?
Fahad: Our intention with this brand is to introduce a different way of conducting business in the cashew value chain. We want to build a brand that is sustainable and purpose-driven; resonating with conscious-minded consumers. We want to connect consumers to product origin in a way that hasn’t been done before. We’re one of the few companies that works directly with small village farmers and have established a consumer-oriented brand that also links these farmers directly to consumers. Essentially, we want customers to know where their food comes from, how it is processed, and that financial care is taken of the workers who manage the cashew trees. Through this method, we hope to create value that we will pass on to the farmers in the communities where we work.
What does the recruitment process look like for farmers?
Fahad: YYTZ works with different types of farmers. We have farmers located in Southern Tanzania who have been cashew producers for years and add value to their own cashews. There, we set up a community buying center and appoint community leaders to represent our company as liaisons and to register farmers. We then provide these farmers with food safety training and storage bags to properly ship their goods to us. The other type of farmers we work with are in Central Tanzania, in a region called Singida. Here we partner with new cashew farmers through a cashew nursey program where we organize meetings inside the villages to introduce farmers to the crop and provide them with training on how to prepare and plant the field, and how to care for the cashew trees. We’ve found that farmers were eager to start growing cashews in a way that would maximize their profits and provide them with an additional source of income.
YYTZ sources cashews from 4,700 smallholder farmers and women’s groups in the largest cashew-producing regions in Tanzania. What kind of impact do you want to have on these farmers’ productivity and incomes?
Fahad: In starting this business, uplifting farmers was one of our top priorities. To achieve this dream, we had no choice but to make sure that our business was consumer-focused [in order to provide farmers with stable, above market prices] and stood apart from our competitors. Through YYTZ support, we offer financial literacy and farm level training to motivate farmers in our communities, as well as provide access to automated machines that help increase production, all while providing a stable market for farmers to sell their cashew nuts into. Additionally, we pay our farmers about 50 to 70 percent above market prices and we found that the response to this was incredible. We strive to ensure that our farmers are much better off in five years than where they started.
Imagine it’s five years from now and YYTZ is making international headlines. What would that headline be and why is this important to you?
Fahad: The headline I would want to read is, “YYTZ Is Changing the Way Cashews Are Processed in Tanzania.” Basically, we want to achieve being able to take a commodity that people love — people love cashews — and make the best cashews accessible. I may be biased but Tanzania is considered to have some of the world’s best cashews. We want to take this product that people enjoy and make sure it places value on the people who make it. We want to ensure that more of the value of cashews remains in the country and the communities where they grow. When it comes to having an impact on marginalized and rural communities, we believe that this is a vital strategy to push things forward.
Why were you excited to have FINCA Ventures come on-board as an investor?
Fahad: We feel the financial synergy we can build with FINCA Ventures will help bring value to the communities and farmers with whom we work. FINCA believes in our dream of bringing financial security and prosperity to rural areas and supports our goal of using cashews as a tool to tell a story that might not have been heard by others. We’re looking forward to this relationship with FINCA and are happy to have the team on board.
Read more about YYTZ and why FINCA Ventures chose to invest in this social enterprise in the article Why We Invested: YYTZ.