Entrepreneurship Zone: 10 October 2022 :: Selling ice cream in Tanzania: Entrepreneur shares her experiences

Mon Oct 10 09:10:26 CAT 2022

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Entrepreneurship Zone: 10 October 2022 ::  Selling ice cream in Tanzania: Entrepreneur shares her experiences

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Mercy Kitomari

Tanzanian Mercy Kitomari quit her banking job in 2013 to start an ice cream business. Almost a decade after launching Nelwa’s Gelato in Dar es Salaam, she is now setting her sights on finding a model to export to the broader East African region. How we made it in Africa catches up with her after our last interview in 2016, to talk about sales channels and her expansion plans.

There have been ups and downs in Mercy Kitomari’s journey as an entrepreneur and CEO of the organic ice cream brand, Nelwa’s Gelato. Back in 2016, she was operating a Nelwa’s retail outlet in Dar es Salaam and the company was supplying bakeries and other stores in the city. Nelwa’s has since closed down its branded store, focusing on distribution to larger retailers, related industry stores such as bakeries, and home deliveries instead.

“I closed our outlet just before the end of 2016. I had to figure out which direction I wanted to go and have since decided to focus on production, rather than trying to enter the retail business,” she explains. “The dream is to expand to more regions, which is a lot easier when you work business-to-business, supplying to retailers.”

However, for Kitomari, direct-to-consumer orders are preferable as it offers better payment terms than sales to larger retailers. The company’s products are currently stocked in various Dar es Salaam supermarkets, such as Shrijee Supermarket, Viva Supermarket and Smart Buy Hypermarket.

At the moment, Nelwa’s can produce between 1,000 and 2,000 litres of ice cream per month in four flavours: Vanilla from Zanzibar, Chocolate from Mbeya, Strawberry from Iringa, and Oreo: Cookies and Cream (the first three are named after the origin region of the flavour ingredient). It packages the ice cream in one-litre tubs and aims to increase capacity to between 6,000 and 8,000 litres a month.

The world might be facing elevated energy prices, a looming economic downturn and geo-political volatility, but Kitomari still believes there are many opportunities for entrepreneurs in Tanzania. “Even with the global challenges, there are various smaller enterprises that are emerging and growing.”

In her own business, she has branched out into a new revenue stream: offering an online ice-cream-making course for beginners for 55,000 Tanzanian shillings (US$23). “It is both a brand-building exercise and a revenue stream,” says Kitomari.

A growing market

Kitomari believes there is still significant growth potential on the African continent for frozen desserts and ice cream. For her, it is a no-brainer. Africa is humid and hot, and ice cream should be popular. It took some time, but nine years after starting the business, she is seeing trends locally that support the ice cream industry, such as the growing number of bakeries popping up. “People are opting for artisanal bread, pastries and cakes and in these outlets, you often find ice cream as well.”

Nelwa’s has built up good relationships with bakery clients, originally even placing its staff in the bakeries to scoop ice cream and educate patrons on the product. “It was a slightly intrusive business model, selling ice cream directly to customers in those outlets. We have since moved back to providing tubs of ice cream in a branded freezer, which works better for us,” says Kitomari.

Instagram and WhatsApp driving direct-to-consumer sales

When Kitomari started the business in 2013, advertising on social media was less of a conscious business decision and more a matter of cost as it was free. “In those days I made the ice cream at night for delivery the next day. In between, I would post on social media,” she recalls. Today, Nelwa’s has more than 12,000 followers on Facebook and 42,600 on Instagram.

Nelwa’s Gelato ice cream is stocked in several supermarkets.

The company spends some money on paid-for digital advertising on Facebook and Instagram, but only about 20% of its growth in followers is from advertising. The rest is all organic.

No matter where orders come from, Kitomari and her small team of five employees will commit to fulfilling them. Most of Nelwa’s direct-to-customer orders are via WhatsApp and Instagram. Direct sales have picked up, in part thanks to Covid-19.

Raw material availability

Kitomari is not worried about sufficient raw materials for the planned expansion as Nelwa’s partners with one of the largest dairy distributors in Tanzania. Machinery is also readily available from China.

However, the availability of fresh ingredients sometimes poses a challenge. “We work with one farmer group that provides strawberries. Until recently, we did face shortages out of season but our suppliers are now freezing the pulp so that we have it available the whole year,” she says.

Cold chain management a hurdle for export growth

Nelwa’s already has interest from a potential customer in the Democratic Republic of Congo and Kitomari is also exploring the option of taking the product to Nairobi, Kenya, and Kampala, Uganda. “The dream is to have an African brand of ice cream for Africa; one city at a time,” she says.

Cold chain management remains a challenge to the planned expansion. Kitomari is looking into finding a logistics partner that can be trusted to take the frozen product to its intended destination, keeping the temperature at the appropriate levels.

“I am still hopeful we can start with some exports in 2024. We are looking to find the right partner; Nelwa’s is looking to invest in a refrigerated truck. We’ll see,” she says.

-      Howwemadeitinafrica

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