Entrepreneurship Zone: 21 October 2022 :: Fruit juice: West African businessman eyes European market

Fri Oct 21 09:03:26 CAT 2022

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Entrepreneurship Zone: 21 October 2022 ::  Fruit juice: West African businessman eyes European market

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Benin-based Othentiks produces a range of natural fruit juices.

After working as an IT consultant in Europe for over a decade, Eric Medji took advantage of a business opportunity in his home country Benin. Medji talks to Jaco Maritz about his fruit juice venture Othentiks.

Opportunity back home

Since 2001, Eric Medji worked as an IT consultant in Europe for firms such as PwC and BearingPoint, and more recently his own company, returning to his home country of Benin each year for a visit. Around 2010, he began to notice positive economic developments in the West African nation. Eager to be a first-mover, he investigated various business opportuniies.

His research revealed only a limited number of juice manufacturers in Benin, despite the abundance of fruit. The existing players also had sub-standard products with poor packaging.

Together with a few family members, Medji decided to start the fruit juice company Othentiks in 2013. He still undertakes IT consulting work, splitting his time between Paris and Benin, although Othentiks is currently his main focus.

Starting out

Following thorough research into the market, in 2016, the company introduced a selection of eight juices including pineapple, hibiscus, mango-pineapple and papaya-pineapple. These pasteurised drinks are free of preservatives, colouring agents and added sugar.

During this pilot phase, the company deliberately kept its operations small to iron out any issues. Time was also spent perfecting its processes and getting the necessary food safety certifications in place. Medji did not want to be in a position where the company invested in marketing but was unable to cater for the increased demand.

An early challenge was sourcing adequate packaging – glass bottles, caps and labels – in Benin. Othentiks has since found a local bottle supplier but the caps and labels are still imported from Europe.

In Benin, the company’s main clients are supermarkets, specialised shops, hotels, restaurants and wholesalers. About 25% of sales are direct-to-consumer, which helps with cash flow as business-to-business clients have payment terms of up to 90 days. In addition, it exports to other West African countries such as Togo, Burkina Faso and Senegal.

Eric Medji, founding partner of Othentiks

Ramping up production

After completing the pilot phase and sitting out the challenging Covid-19 period, Othentiks started its next growth chapter, which will see it relocating to a bigger factory next year. From its current facility in Cotonou, Othentiks can produce about 1,500 to 2,000 of the 250ml bottles per day. The new plant in Calavi will have two production lines, each capable of churning out 2,000 bottles per hour.

In 2023, Medji plans to roll out non-pasteurised fresh juices. However, these will be sold only in the local market because of their short shelf life. He is also considering related products such as dried fruit and alcoholic fruit drinks.

Expanding to Europe

Medji has ambitious plans to export to Europe. To test the market, it has already started selling in France and Belgium. As part of its market research, Medji studied all the competing juices on the shelves in Europe. “If you want to sell in the same market, you should have the same level of quality, or better,” he believes.

Sourcing fruit

Othentiks sources its fruit from local farmers in Benin. Pineapple is abundant locally and blended into most of its juices to replace water and sugar. Other fruits, such as passion fruit, are often tougher to find in adequate quantities. From next year, the company plans to grow some of these scarce fruits on its own land to ensure consistent supply.

Market positioning

The company’s pure juices, retailing for between US$1 and $1.50, are targeted at Benin’s upper middle class. Medji explains there are several players catering for the mass market with lower quality products priced below $0.50. Another reason for Othentiks’ premium positioning is to compete with brands in Europe. Once the new manufacturing plant is up and running, it should be able to reduce prices somewhat but it will remain a premium product.

-      Howwemadeitinafrica

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DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

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