Entrepreneurship Zone: 27 August 2021 :: Exporting dried fruit from West Africa to Europe: How this businessman built a sizeable company

Fri Aug 27 10:49:26 CAT 2021

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Entrepreneurship Zone: 27 August  2021 ::  Exporting dried fruit from West Africa to Europe: How this businessman built a sizeable company

Hans Peter Werder established HPW in 1997, exporting fresh pineapples from Ghana to Europe. Today, HPW is one of the largest producers of naturally dried mango, pineapple and coconut in Africa, processing over 30,000 tonnes of fruit a year, and employing around 1,500 people in Ghana and Côte d’Ivoire. James Torvaney spoke to Werder about how he grew the business and what it takes to penetrate the European market.

How exactly did HPW get started?

I got into the agriculture business somewhat by chance. In 1996, I was working in marketing at a company producing jam and other processed food items in Switzerland when I got a call from a friend asking if I could help him sell air-freighted pineapples from Ghana to customers in Europe.

Initially, we weren’t very successful, as most of the big retailers already had suppliers of pineapples. But when I came to Ghana I tasted how delicious the pineapple was fresh from the farm. The idea came up to cut and package the fresh fruit in Ghana and export it on a daily basis. Cutting them in Ghana allowed us to work with fully ripe fruit fresh from harvesting, and offer the customers in Europe much fresher, sweeter pineapple.

We started working with Blue Skies, which at that time was a young fruit processing company in Ghana, and exported to the Coop supermarket in Switzerland. They liked the fresh-cut pineapple enough to trial it in 60 stores. It was a lot of hard work, visiting all the stores and making sure the cold chain was in place from the factory to the shelf, but it went very well and that was the start for HPW.

In 2004, one of the farms in our network became the first fair trade certified pineapple farm in the world, which brought a huge increase in demand in the UK. We sent our first agronomist, Maik Blaser, to Ghana that year. He did a tremendous job helping to grow the farms in our network, helping build infrastructure and helping more farms to reach fair trade certification.

By 2007 we were the largest pineapple exporter in Ghana, exporting about 20 containers (320 tonnes) of pineapple per week.

Describe your business model.

HPW doesn’t own any farms. We have a network of farms which we offer services to and buy fruit from. We then process the fruit and export to Europe.

In total we work with around 1,400 individual farmers and employ about 20 agronomists. The support we provide includes supplying farmers with seeds and other inputs, pre-financing, trial plots and other research and technical know-how.

HPW’s factory in Ghana.

Most fruit in Europe goes through a small number of big players. Small farmers can’t sell directly to the big retailers because, individually, they don’t have the selling power or the operational infrastructure. So we realised early on that we could play an important role buying from a number of smaller farms and selling to customers in Europe, whilst taking care of operational matters like insurance, quality control, and key account management.

HPW now exports a number of different fruits products, including dried mangoes, coconuts, and bananas. What are the different products you offer, and how has that changed since the beginning?

After the financial crisis in 2008, sales of fresh-cut fruit dropped heavily; no one wanted to pay a fair trade premium. We needed to add more value to the product, and that’s when we decided to go into drying.

In 2011, we completed our first drying factory in Adeiso, Ghana. We started with around 250 employees, selling around 250 tonnes of dried pineapple and mangoes per year.

We later expanded our processed fruit offering to include other fruits such as dried coconuts, bananas, and fresh fruit snacks, both for private labels and under our own Tropicks brand. All our products are 100% fruit with no added sugar.

These days, processed fruit products make up the majority of our revenue – we export around one container a week of fresh fruit, whilst we export three to four containers (between 48 and 64 tonnes) of processed products, and that is still growing fast. The processing reduces the volume by a factor of around 10 to 15, so that is equivalent to over 500 tonnes a week of fresh fruit.

How does this shift from fresh fruit towards dried fruit tie in with your longer-term strategy?

Fruit such as pineapples have become a commodity, whereas we want to focus on specialty products, and move towards higher value products over time.

The Ghanaian industry tried to compete with South American pineapple growers, and failed. We learned that for us it is important to stick to small, niche markets where we can really dominate.

Processing pineapples in Ghana.

Where are your biggest export markets?

In general, our biggest markets are the biggest countries in Europe – UK, Germany and Italy. But the fruit world in Europe is a small, and most of the produce goes through the same few companies.

How have you managed to be so successful selling into these European markets?

The biggest problem for buyers in Europe is finding a reliable source of produce. They want to know exactly what they can expect and they want to know problems as soon as they arise. Key account management is a real issue – how many producers in Africa have offices in the markets where their customers are based? We have another company, HPW AG, with an office in Switzerland, with additional staff covering the United States and Eastern Europe. This means we remain physically very close to our most important customers.

In June 2020, HPW opened a subsidiary production facility in Côte d’Ivoire. What was the thinking behind this expansion?

The demand for dried mango was already far outstripping what we could produce, and was growing by around 20-30% per year, so we had to look at how we could expand our production.

We were already buying substantial volumes of mangoes from the north of Côte d’Ivoire and processing them in Ghana, so we thought it was a good opportunity to open up a factory in Côte d’Ivoire.

Also, we had seen a growing demand for organic produce, particularly in the United States. Due to its drier climate, Côte d’Ivoire is better suited to organic crops than Ghana, where the majority of our produce is grown conventionally. So we felt that this was the right time to move into Côte d’Ivoire.

The timing was a real challenge, as the construction period coincided exactly with the Covid-19 outbreak. We had technical people who should have flown to Côte d’Ivoire but instead had to send instruction videos via Whatsapp. We’re proud that we managed to complete it only a couple of months behind the initial schedule.

Hans Peter Werder

You also do business in Kenya…

Yes, we started a co-operation with a local company in Kenya last year. We helped them to start producing dried fruit – designing their factory, training their staff.

We want to operate a year-round business, and because of the different harvesting seasons in East and West Africa, this means we can now dry mangoes nine months of the year. Sourcing in different locations also helps mitigate against climate risks.

Where do you see the future for HPW?

Mango is still by far the biggest market for dried fruit. Other dried fruits, such as pineapple, are still quite new to European customers, though over the last five years we have started to see them move from specialty stores to supermarket shelves. The market is growing but we still need to push hard to move big volumes.

In terms of snacks, sugar still dominates – everything contains sugar. We believe that with health and wellness trends, it is time to have natural snacks that are made of pure fruit with no added sugar. Today maybe 10-15% of our turnover is fruit snacks but we expect that to grow in the future. We also want to add more value to dried fruit products, for example by adding cocoa or cashew into our snack bars.

HPW has its own fruit snacks brand called Tropicks.

Do you think you will focus on building your own Tropicks brand, or on manufacturing products for other brands?

Currently around 60% of our products are private label, 40% are made under the Tropicks brand. The future for us is definitely more on private label – we want to focus on being a production company and not a marketing company.

What are the key lessons you have learnt from building HPW to where it is today?

Everything we have learnt in this business has been from scratch, step-by-step. From a market point of view, we could have grown much faster but we haven’t always had the money or the management in place. So we had to learn how to build in a managed way, focusing on specific things. In general, every second year we have added something new, such as a new factory, or a new country.  –howwemadeitinafrica

Mango processing at HPW’s facility in Ghana.

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