Entrepreneurship Zone: 15 May 2023 :: Entrepreneurs turn Zambia’s wild fruit into a growing juice business

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Entrepreneurship Zone: 15 May 2023 ::  Entrepreneurs turn Zambia’s wild
fruit into a growing juice business

 




 


·          

 

Forest Africa Zambia, an agro-processing company located in Chilanga,
Zambia, produces juices and other products from wild fruits. In this
interview with Jeanette Clark, co-founder Frazer Handondo discusses the
company’s business model, the advantages of focusing on smaller retail
outlets as a sales channel, and future diversification plans.

Zambia boasts a wealth of biodiversity; however, it has been identified by
USAID as possessing one of the highest deforestation rates globally.
Annually, an estimated 300,000 hectares of Zambian forests are lost. A key
factor driving this deforestation is the scarcity of alternative livelihoods
within rural communities.

“When farmers’ crops fail, whether due to drought or flooding, the first
thing that often happens is that they go en masse to cut down trees to make
charcoal to earn an alternative income,” says Frazer Handondo.

For Frazer and his wife, this challenge presented an opportunity to kill
three birds with one stone: protect Zambia’s natural biodiversity, provide
alternative livelihoods to rural communities, and build a business in the
process. In 2017, the couple co-founded Forest Africa Zambia, an
agro-processing company with a factory in Chilanga, Zambia. It produces
juices and other products from wild fruits harvested by rural community
members.

Zambia has an abundance of indigenous and unique fruits that are
well-suited for value addition, including the baobab fruit, African medlar,
monkey bread, wild loquat, governor’s plum, and several others.


Making and selling fruit juices


It took some time to get off the ground, but by 2019, Forest Africa was
operational. The company secured a supply chain by forging relationships
with rural communities that had access to the relevant fruit trees,
excluding protected forest land.

“We announced, through the local leadership, that we were interested in
certain fruits and then began to aggregate as each household or collector
brought the fruits to us,” explains Frazer. The seasonal fruit was then
transported to Chilanga, on the southern outskirts of Lusaka, for
processing.

Using their own investments and savings, the Handondos first focused on
getting the right machinery to process the baobab fruit into different
products.

The company quickly added a second product, ngai juice made from the
African medlar fruit.



Forest Africa Zambia’s factory is situated south of the capital Lusaka.

 

Frazer was surprised by the swift acceptance of the company’s products and
the eagerness of smaller retail shops, in particular, to stock the juice.
“It was amazing how people embraced our products almost immediately.”

Today the company produces 15,000 litres a month and transports it to over
200 retail shops in the Lusaka, Southern and Copperbelt provinces. A case of
six bottles of baobab fruit juice costs around US$3.30.


Targeting smaller retailers


The company has found targeting smaller retail shops to be lucrative. “They
pay cash on delivery, which is cardinal to our business, especially as the
fruits we use are seasonal,” says Frazer. “This keeps us afloat, and we can
manage our overheads without worrying about the longer payment terms from
larger companies.”

Nonetheless, Forest Africa recognises the marketing and branding advantages
of being available and visible in larger supermarket chains and is working
towards expanding its presence within the country.

It also actively uses Facebook to advertise its products and engage with
its 2,800 followers, sometimes even to arrange home delivery.



A Forest Africa Zambia employee handling packaged fruit juices.


Product diversification


Frazer envisions opportunities to process the wild fruits the company
utilises into various additional products. For instance, with the baobab,
Forest Africa already produces juice from the pulp, extracts a non-greasy
oil from the seeds, and transforms the shells into eco-friendly briquettes.

Furthermore, the residual cake left after pressing the oil could be
repurposed as fertiliser or livestock feed for cattle and poultry. Another
possibility is utilising a portion of the fruit to produce a red tea, rich
in antioxidants. Forest Africa has even developed vegan baobab milk derived
from the seeds, although this product has not yet been commercialised.

The company is piloting a “nutritious and tasty jam” from the African
medlar and will start with full-scale production once the equipment arrives
from China. “We could also make an oil from the seeds,” says Frazer.


Growth opportunities


Forest Africa aims to eventually cultivate its own trees to guarantee
sustainability. Although local competitors are beginning to emerge, Frazer
is confident that there remains significant scope for domestic growth before
considering regional expansion. In the meantime, the company is examining
whether the Democratic Republic of Congo or Angola would be suitable for
cross-border expansion when the time is appropriate.

Working capital remains the company’s most significant challenge. If the
right partner can be found, Frazer believes that an investment or equity
partner would propel Forest Africa to the next stage of growth.

“Borrowing is restrictive as the cost of finance in Zambia is between 20%
and 30%. You can imagine the money you need to buy during that narrow
window, when the fruit is in season, to last the whole year.”



Frazer Handondo, co-founder of Forest Africa Zambia

 

- Howwemadeitinafrica

 

 


 


 


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