Kenya: Entrepreneur shares experience of building a premium food company
Seeing potential in maize products
Jebby grew up on a farm in Kenya. Her parents became commercial maize farmers after the country gained independence in 1963. In the beginning, government and institutional support for farmers assured success but, over the years, import competition made finding markets for the harvested crops more difficult.
In the early 1990s, Jebby lived in Switzerland with her husband but nurtured a dream to start something back home that could provide a market for the maize production her family was part of.
Her inspiration for an agro-processing business came a decade prior, on a student exchange to the US, when she was exposed to Mexican cuisine with its maize-based products such as tacos and tortillas.
In 2010, Jebby’s employer asked her to relocate and open an office in Cape Town, South Africa. She settled her family in Kenya and Daniel oversaw the establishment of the production line for Bdelo in a rented factory outside Nairobi while she left for work in South Africa.
Getting production started was the easy part, she recalls. “We went to the US, where we found the right technology and equipment. Once we were up and running and had the product ready, that is when reality hit and we realised it’s not as simple to get it on the shelf.”
Bdelo managed to get its products listed at some of the bigger supermarkets but the distribution and logistics were very challenging and expensive.
“I believe this is why quite often only multinationals can survive because they have the business muscle and money to run their own distribution fleets,” she says.
The supermarkets also expect suppliers to handle the merchandising of their own products through display design and discount offers.
“Apart from these expenses, you have to deal with inefficiencies in terms of professional attitude. Sometimes shelf-stockers hide products because they want a bribe for better placement,” explains Jebby.
Despite all these hurdles, Bdelo was listed and stocked in some of the largest supermarkets within three years and had its products in various regional markets: Rwanda, Tanzania, Uganda and Sudan.
In 2015, however, two of these large retailers went bankrupt. Owing to the extended payment terms that are standard, Bdelo lost millions. “They had up to 120 days to pay us for the supply of stock. When they went under, we lost a lot of money and three years after starting production, we were back to zero. There were no rules and regulations for the protection of suppliers in Kenya. You are at the mercy of the retailers and they know you depend on them.”
To survive the severe financial hit and re-establish a line of working capital, Jebby took a job as a business consultant in Saudi Arabia, sending money back while her husband kept investigating new retail partners and business opportunities.
Product aimed at upper-income consumers
“Over time, we have innovated the tortilla. We have localised it and integrated local raw materials such as millet, sweet potato, arrowroot, chia seeds and even moringa,” says Jebby. The company has since moved out of the rented facility after finishing the construction of its factory in 2019.
Its products, mostly different iterations of tortilla chips, are aimed at the health-conscious consumer looking for gluten-free, all-natural snacks and foods. Jebby concedes this remains a relatively small market within the borders of Kenya and thus the high-end retail strategy is the only current solution.
“We cannot stock our product in smaller shops because the consumers there cannot afford a product such as ours.”
The company has started offering its product through e-commerce platforms such as Greenspoon and now has its own online shop as well. Other brick-and-mortar retail stockists include Carrefour and Chandarana Foodplus.
Courtesy of How We Made It In Africa – full article here.