Entrepreneurship Zone: 21 July 2020: Founder of Uganda’s Cheers beverages brand now has sights set on fresh juice market

Wed Jul 22 13:14:57 CAT 2020

 <https://www.renaultzimbabwe.com/cars/Koleos-HZG/koleos-hzg.html?utm_source=newsletter&utm_medium=email&utm_term=&utm_content=pip&utm_campaign=newsletter-faithcapitalcorp-jul20> When Ugandan entrepreneur Julian Omalla was 31, she registered her business, Delight Uganda Ltd, as well as the trademark for her Cheers beverages brand.

By this time, Omalla was already a seasoned businesswoman with seven years’ experience under her belt, including having to start from scratch after a business partner absconded with a substantial amount of capital which she entrusted to him to buy stock in neighbouring Kenya.

“Of all the trial moments I’ve gone through in life, I have never given up,” she says from Delight Uganda’s office in the capital Kampala. “After losing the money, that is when I started thinking big.”

At the peak of production when Cheers had about 60% of the market share, the processing line produced 12,000 litres of fruit-flavoured drinks per day, using concentrate imported from destinations like Israel and South Africa. Separately, on order, Omalla would produce fresh juices using seasonal fruits from the region. However, her dream was always for a line of 100% pure and fresh juice, native to Uganda.

The realisation of this dream is finally on the horizon, according to Omalla. Today, at the age of 55, she runs a farming operation comprising of 686 ha in the northern region of Uganda. Delight Uganda Farm grows 405 ha of mangoes, 20 ha of guavas and 60.7 ha of citrus. Construction is set to start this financial year on a plant which will process this fruit into fresh juice.

The factory will be constructed by the Government of Uganda in partnership with Delight Uganda. It will add value to the fruits grown in the northern district of Nwoya by approximately 5,000 farmers who form part of the Nwoya Fruit Growers Cooperative. The planned capacity of the plant will be 12 metric tonnes per hour.

According to Omalla, Delight Uganda will own 58% of the shares in the processing plant and the government the remaining 42%. The agreement is that Delight Uganda needs to buy back the equity from the government, which will exit after 10 years.

While the existing Cheers drinks are sold in Uganda, Congo, Rwanda, Burundi, Tanzania and Kenya, Omalla has her sights set on markets further abroad for the new line of products.

“We are not only going to produce juice. We will provide dried mangoes and dried guavas. Some of our fruit we will be turning into powders. There will be concentrate, pulp and the ready-to-drink juice. We are looking at the European and Arab markets, and even China. This is the big business we are anticipating and we are sure it is coming because we have been preparing for it for the last eight years.”

Early years

Omalla started her career working for one of her brothers on a tobacco farm in 1990 and then for another brother in a small shop in Kampala two years later. She always kept her eyes open for ways to improve the business and increase profits. After a year of working on the tobacco farm, she was offered a position as manager.

“I worked there for one year and we had excellent results. But I wanted to live in the city and moved to work for my other brother,” she explains. In the beginning, she could not speak the local dialect, having moved from western Uganda, but she learnt quickly. “I worked well and I exceeded my brother’s expectations.”

She soon improved the profit margins by building relationships with farmers, advising them they could sell on credit (to her and other traders) and then receive payment once the goods were sold. “They entrusted me with their produce and I could sell some of the product wholesale to other shops for a better profit. I really made a lot of money for my brother,” she adds.

Omalla branched out on her own in cross-border trade, using just a small amount of saved capital. She would get on the very first taxi to Kenya, buy produce and then travel back to sell it in Kampala. Slowly but surely, her business grew and eventually she was moving three trucks a week across the border.

A selection of Delight Uganda’s Cheers beverages

In 1992, disaster struck. Her Kenyan trade partner disappeared with funds she had provided for stock. Omalla travelled to the border to find him, but was held up at gunpoint at night. The criminals explained they were sent to take her life. They released her when she provided more funds she had been carrying. “I lost a lot of money, three-quarters of that money was not even mine. I then started again from humble, poor beginnings,” she says.

The setback taught her a few things. Firstly, to register her business as soon as possible as the lack of official registration limited her options for recourse following the theft. Secondly, not to place all her eggs in one basket; something she has put into practice over the course of her career. Thirdly, to always plan ahead.

She began processing juice from fresh fruit, the way her mother taught her, on the veranda of her two-bedroom cottage. She would buy the bottles from Kenya, prepare the juice overnight and take her produce to the market in a wheelbarrow.

“I would wear a red dress. I would wash and wear it every day because people would identify me and say: ‘Ah, it’s the girl in the red, she sells good juice.’ My customers would buy more when I wore that dress.”

Omalla walked on foot to the government chemist to get her juice tested for the registration process. She remembers thinking the amount paid to the lawyer to help with the registration was exorbitant (it was around US$135 at the current exchange rate). “When I started the company, I was everything,” she reveals. “I was the production manager, the accountant, the marketer.” Delight Uganda (at its factory in Kampala and on the farm in northern Uganda) now has 188 employees.

Omalla explains she chose the name Cheers because it portrays the positivity she believes one needs to have in life. “A good name can build somebody and a bad name puts somebody down. I was always cheerful in my work and the name Cheers really resonated with the public. Today, people call me Mama Cheers, remembering how they took the Cheers juice along to boarding school when growing up,” she says.

Growth and vertical integration

In the beginning, Omalla was still producing the juices at her home, making about 200 litres each day. Then, in 1999, she had enough capital to process the title on land that was left to her and set up her manufacturing line. She innovated and improvised along the way.

“I started small, I would buy equipment slowly. Then I fabricated a mixer and started using it to produce in bigger quantities from concentrate,” she says.

In 2000, the demand for her product outstripped supply and Omalla turned to the Uganda Investment Authority for funding to expand. Later, she also received financing from the Development Finance Company of Uganda. However, dealing with banks and finding funds have always been a struggle. For the most part, Omalla tried to reinvest her profits into the business. “Whatever I got, I was reinvesting. I am still investing today. You cannot sit back and just enjoy your money.”

The market liked the product and Cheers gained market share from Kenyan fruit-flavoured drink brand Quencher.

“I was the first local investor to produce and compete with the likes of Excel, which makes Quencher. They had all but captured the Ugandan market with their juice, but I slowly took 60% of the market share,” she says.

However, Delight Uganda’s market share with Cheers has dropped substantially over the last eight years, down to 20%. This, discloses Omalla, is because she decided in 2012 to pursue her dream of owning and running the complete juice production value chain. She purchased the land and set up the Delight Uganda Institute to help train local farmers to produce the best fruits for processing once the new plant is up and running.

While she was busy with this process, competitors have come in and taken market share. “But now our mangoes are ready, our guavas are ready. Within two years, I will go back to the number one position,” she vows.

She hopes the farm and institute in the Nwoya district can become a centre of excellence where people learn to grow the best produce and where investors will come to add value to the raw materials.

Omalla considers the decision she took in 2012 to sell and close some of her other businesses – a bakery in South Sudan, two poultry farms in Uganda and two hostels – and focus on the farm and the juice business as the right one. “It was a weakness which I had in my business. I was overstretched,” she notes. With the capital raised from the sale of the hostels, she could invest in the farming operations.

With product development done and dusted, Omalla cannot wait for the processing plant to be completed. “I am missing the 40%,” she says, referencing the lost market share. “When I have it back, I would be done.”--Howwemadeitinafrica 

Julian Omalla

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