Entrepreneurship Zone: 16 June 2023 :: Zimbabwe peanut butter boss: Getting into supermarkets was the biggest battle

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Entrepreneurship Zone: 16 June 2023 :: Zimbabwe peanut butter boss: Getting
into supermarkets was the biggest battle

 

	
 


·          


 <https://www.hyundai.co.zw/> 


Nobukhosi Ndlovu launched Nutrie Foods in July 2013 in Harare, Zimbabwe. At
the time, she was employed as an HR consultant and had a few small
businesses on the side, but she always had a dream of commercialising the
production of the peanut butter her mom had made at home in the rural
community of Zhombe. Today, the company manufactures peanut butter, mixed
fruit jam and marmalade. It also packages honey, sugar beans, soya chunks
and rice under its brand, which is sold in various supermarkets and smaller
local stores in the country. Jeanette Clark speaks to Ndlovu about the
challenge of getting consumer packaged goods on supermarket shelves and the
growing demand for healthier food.


No finance, no equipment


Ndlovu’s first hurdle was securing the finance needed for the equipment
required to produce peanut butter on a commercial scale. “I did the research
and determined I would need equipment to the tune of US$20,000,” she
explains.

And so, the knocking on doors began but traditional banks had no good news
for her; they required collateral that she did not have. Finally, a friend
referred her to a microfinance institution co-founded by two Zimbabwean
women and Ndlovu set off to secure an appointment. On day one, however, she
was blocked by the gatekeeping receptionist. Undeterred, she returned the
next day and her spirited and loud debate with the same receptionist got the
attention of the CEO who was in the building.

“She asked that the receptionist let me in and, armed with my business plan
that outlined the funding required for the equipment, which could then be
used as collateral for the payments, I got the loan,” says Ndlovu.

Nutrie Foods moved its operations into a small rented warehouse in
Willowvale, an industrial suburb in Harare, that had three-phase electricity
to run the equipment.

“In the beginning, I was everything in that business. I sold my car and
bought a small delivery van. In the morning, I would buy groundnuts at the
farmers’ market, then I would go to the warehouse to manufacture and bottle
the peanut butter and, around 5pm, I would visit the local tuck and spaza
shops to sell the product,” she recalls. “The next day, the revenue earned
from the sales would be used to repeat the routine.”

The microfinance company noticed her diligent repayments on the loan and
granted her another loan for working capital.


The headache of getting into retail stores


Ndlovu readily admits that getting her products listed was her biggest
battle. (She once posted on Facebook: “Producing a product is easy; getting
it to market is death.”)

To supply these stores, Nutrie Foods’ capacity needed to be ramped up, so
for the first year, Ndlovu did not even approach the bigger supermarkets,
making sure to establish the operation first. However, once she did approach
them, there were many requirements and demands.

She had to deal with requests to change her labelling and packaging and
overcome the hurdle of paying a listing fee of $2,500, capital she simply
did not have as a new start-up. “I tried to negotiate and offered to provide
the value of the listing fee in stock, but to no avail. When I look at it
now, it was hectic and I felt like I was running around to please them but
it was absolutely worth it. Supermarkets are where the money is made in a
business where your margins are small and you have to push volumes.”

It was only in 2018, a week before her birthday, that the first big
retailer gave her the news that Nutrie Foods would be listed. “I said to
myself, this is my present! I don’t need anything else!” she remembers.

Nutrie Foods products are now available in various major retail stores such
as Pick n Pay, Spar, OK and wholesalers such as N Richards.


Boosting factory output


Ndlovu highlights another breakthrough for business growth. In 2016, she
was selected to join the Mandela Washington Fellowship as part of the Young
African Leaders Initiative (YALI). She spent some time in the US and got the
opportunity to present her business plan in a competition. The announcement
that she was one of the winners came with the very welcome prize of a
$25,000 grant.

“That grant changed my life because I used it to empower the women who were
supplying me with groundnuts. I was able to obtain seed and fertiliser for
them to increase production. At the time, we were doing about one tonne
every 24 hours, and then we moved it up to three or four tonnes per shift.”

The fact that Nutrie Foods could show a successful processing facility with
this increased output meant that it was able to approach banks for further
loans from a stronger footing. “I had property, I had shown growth. I
managed to get a loan and buy a new production line in 2018 that does 10
tonnes per shift and is automated,” says Ndlovu. Currently, the plant can
produce about 12,000 bottles of peanut butter per day.


Expanding the range


Ndlovu added additional products to her line-up almost immediately after
starting the business.

“When at the market to get groundnuts, I would see some of the farmers had
honey to sell. The honey did not require much from me as I already had the
peanut butter containers that I could use.” In the second year, Nutrie Foods
simply added sugar beans when purchasing the honey and groundnuts from the
farmers.

Over the years, products like jam were added, which did require a bit more
value addition and processing, and in 2019, Nutrie Foods began importing
Kilombero rice from Malawi to package under its brand for sale as a premium
rice product.

While the brand is still best known for its volume-seller peanut butter, it
is not the company’s most profitable product. “It remains our fastest-moving
product but honey brings in a bigger profit. The rice, as a premium product,
also has better margins, but it is on the expensive side, whereas the peanut
butter is an affordable commodity.”

According to Ndlovu, Covid-19 undoubtedly had an impact on consumer
behaviour. Honey sales were driven up by an increase in health consciousness
and an awareness of the benefit of honey and ginger for certain symptoms of
the virus.

“Many people changed to healthier diets. They were buying peanut butter to
use as a cooking alternative for oil and drinking honey in their tea,” she
says.

The trend is so pronounced that Nutrie Foods is investigating healthier
grains for its product offering. “People have stopped consuming the heavy
maize meal dish of sadza. We are looking to add finger millet.”


Exports and growth plans


After the purchase of the new plant in 2018, Nutrie Foods investigated the
certifications required to export its products. The advent of the pandemic
in 2020 put these plans on hold for a while although Ndlovu believes it’s
high time to restart that process.

“With our natural products, I think we would have a market everywhere, but
the plan is to first look towards our neighbours in the African region,” she
says.



Nobukhosi Ndlovu

 

- howwemadeitinafrica

 

 

 


 


 


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