Entrepreneurship Zone: 14 January 2022 :: Kenya: Entrepreneur shares experience of building a premium food company

Fri Jan 14 10:08:45 CAT 2022

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Entrepreneurship Zone: 14 January 2022 :: Kenya: Entrepreneur shares experience of building a premium food company

 <http://www.zitf.co.zw/> 

Elizabeth Jebby Bischof started Bdelo – a food production company that manufactures maize-based products such as tortillas and tacos in Kenya – with her husband Daniel in 2010. It has not been an easy road, with challenges forcing the company to refocus and restart over the years. Today, Bdelo has its own factory and is looking at market opportunities in the Middle East and the UK. How we made it in Africa spoke to her about market conditions, challenges and lessons learnt.

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.”

Retail distribution

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  <https://www.howwemadeitinafrica.com/category/sectors/agriculture-sectors-2/> 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.

Working in Saudi Arabia for six and a half years has helped Bischof find possible entry points into the Middle Eastern market for Bdelo’s products. “Last year, we found a potential partner in Saudi Arabia and sent a container of our tortilla chips on a trial basis. As we don’t use any stabilisers or preservatives, the shelf life of 10 months could be a problem if you consider the shipping time,” she says. “Now we have a new plan and, with a partner in the Kingdom of Bahrain: we will be shipping the pre-processed tortilla sheets and processing them into the final product there.”

Bdelo will also look at localising some of the flavours for the taste preferences of that market.

“The future is still in the African market for us but for now we are hoping to gain some business in the Middle East and elsewhere while we wait for the high-end consumer market for healthy snacks to grow locally.”

Finding the right partners for distribution

After the company almost went under following the bankruptcy of the two supermarket chains, Bdelo reconsidered its distribution strategy. It found a local distributor that focuses on healthy food products. This partner now handles all the logistics and customer acquisition.

“They provide a full service so we only have to load at the gate,” adds Bischof. “It does take away from our margin as they deduct 20%, but for a smaller company like us, the trade-off is worth it.”

Product positioning

Bdelo is actively positioning its product not just as a chip snack, but as an element or key ingredient for an entire meal.

When Jebby first encountered Mexican food on that student exchange trip in the 1990s, she discovered the tortilla closely resembled a snack from her childhood days back home.

Growing up, children in Kenya would fight over the crust after a meal of ugali – a stiff porridge made from maize – has been cooked.

“The crust was amazing! And because we would mix our ugali with millet or sweet potato, the flavour was delicious,” she says. Today, Bdelo has built on that childhood memory that Jebby had and has a fusion range which include maize and millet tortilla chips; maize and chia; and even maize, sukuma (a mix of collard greens) and moringa.

“Our website features recipes that showcase our product in meals, making it clear that it is not just a chip snack for kids. It also makes an enjoyable and nourishing meal.”

New markets beckon

With its innovative products, including the fusion of maize and other African raw materials such as millet and moringa, Bdelo has been attracting some attention from various export markets. A company in the UK is discussing producing the tortilla chips; there is also a possibility to export to the UK from its facility in Kenya but Bdelo would first require ISO standards.

“We also have been in discussions with a company from in the US. It is interested as our product is a unique ingredient that could be used in nacho dishes,” says Jebby. And, while there have been enquiries from West Africa, the logistics to get the product from Kenya to, say, Nigeria, are proving difficult and expensive.

The interest is there, according to Jebby. She believes with an increase in health consciousness among global consumers, the company will gain access to new markets and lift production volumes, which remain relatively modest. “We hope to increase our current monthly turnover in the next couple of years, boosted by new markets such as the Middle East and the UK.”

Bdelo just signed a Ksh. 20 million (about $177,000) financing agreement with ADAPTA to support growth into the Middle East, Eastern Africa and other established markets.-Howwemadeitinafrica

Elizabeth Jebby Bischof (left); an example of one of Bdelo’s products (right)

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