Entrepreneurship Zone: 05 September 2023 :: From Eswatini to Europe: Chilli sauce company finds global traction

Tue Sep 5 09:29:43 CAT 2023

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Entrepreneurship Zone:  05 September 2023 ::  From Eswatini to Europe: Chilli sauce company finds global traction

>From its base in Eswatini (formerly known as Swaziland), Black Mamba, a chilli sauce company, is tapping into the growing global demand for spicy tastes and the increasing allure of African foods. To date, it has exported to 15 countries, with the UK, Norway, and Germany standing out as key markets.

Claudia Castellanos, co-founder and CEO of Black Mamba, notes that from its inception, the company aimed its products at the export market. Eswatini, a nation of just 1.2 million residents where over 50% live below the poverty line, offered a limited number of customers.

Originally from Colombia, Claudia first arrived in Eswatini in 2008 through MBAs Without Borders – an organisation that pairs MBA graduates with volunteer consulting roles in developing markets. Initially, she provided consulting for a Swazi homeware brand that collaborated with a network of rural women weavers. After her four-month volunteer role concluded, Claudia decided to stay. In June 2010, she, alongside her future husband Joe, launched Black Mamba.

“After my experience of working in rural areas, I realised I wanted to work with farmers to improve their quality of life through business,” Claudia told How we made it in Africa in an earlier interview. “I took my husband’s business idea of creating a chilli brand and my background in marketing, and we decided to create a for-profit social business that would potentially help me to work with communities.”

Black Mamba procures its chillies, herbs, and peppers from about 100 small-scale farmers trained in organic agricultural practices by a local NGO called Guba. Instead of directly engaging with the farmers, Black Mamba collaborates with Guba, which oversees the farmers and delivers their produce to the company’s factory.

“From the beginning, we knew that we wanted to work with small farmers who can help us produce organic ingredients for our products,” said Claudia. “So while Guba wanted to improve food security in Swaziland, Black Mamba came on board to fulfil its second objective – which is to create market access and income for the farmers. It’s a win-win situation.”

“We have agreed contracts and prices signed with Guba and the farmers every year. That way, farmers have a secured sustainable income, and they know how much they are going to earn – a price better than what they will get in the market,” she explained.

Black Mamba originally started in the kitchen of Claudia and Joe, funded by their personal savings. From those humble beginnings, the company has grown significantly. Today, it manufactures approximately 200,000 units annually from its dedicated factory in the town of Matsapha. The company employs a total of 21 staff.

In 2020, Black Mamba received a R9.2 million (about $482,600) investment from American venture capital firm Enygma Ventures.

Defining Black Mamba’s market niche

Black Mamba is marketed as a gourmet product, geared towards “ethical foodies” who value organic ingredients and the company’s commitment to benefiting the community where the products are produced. The use of glass packaging underscores its premium positioning. Claudia says the products are aimed at consumers who “don’t mind paying a premium price for something that they know is doing good to the planet and doing good to communities as well”.

The founders pivoted to this premium market positioning after encountering financial challenges early on due to the wrong pricing strategy. Initially, Black Mamba products were priced to drive volume growth. By 2014, the company’s financial situation was dire. However, the duo managed to restructure the business and introduced a new approach by mid-2015.

Black Mamba’s range of chilli sauces.

“By changing our pricing strategy through rebranding, we managed to make Black Mamba profitable again. We also realised that it’s not always about volume, sometimes it’s about charging the right price for the right market. So I will rather sell less at a price that it needs to be sold, than sell at a price that is not good for me,” Claudia noted.

Black Mamba’s chilli sauce has a gross profit margin of around 40%. However, the company aims to raise this to 50%, which, according to Claudia, is the industry average for their type of business. She hopes to achieve this by lowering costs through economies of scale.

South Africa: Expanding close to home

In addition to markets further afield, Black Mamba has secured its footprint in neighbouring South Africa, with its products shelved at retailers like Food Lover’s Market and Pick n Pay.

In South Africa, the company struck a deal with retail giant Spar to produce its private label hot sauce. This opportunity emerged when a friend of Claudia’s, who worked at another food company in Eswatini, added Black Mamba chilli sauce to a Christmas hamper for a client of hers at Spar. That client, taken by the sauce, sent an email to Claudia’s friend stating how much he liked it. This email was promptly forwarded to Claudia. Sensing an opportunity, the Black Mamba CEO reached out to provide more details about her company. The Spar representative, in turn, mentioned they were contemplating launching their own line of chilli sauces and inquired if Black Mamba would be interested in a partnership. This exchange laid the foundation for Black Mamba’s venture into producing chilli sauces for Spar.

The expanding chilli sauce market

Claudia points out that hot sauces are witnessing rapid growth. The global market currently stands at about $4.5 billion and is projected to grow by about 8% yearly through 2030. However, with market expansion comes increased competition. At this year’s Fancy Food Show in New York, she noticed a marked rise in the number of artisanal chilli sauce exhibitors. In the South African market, she has found that retailers are inundated with manufacturers offering them chilli sauces.

Internationally, Black Mamba has differentiated itself from the competition with its distinct name, the story behind the brand, and its African roots.

The company also aims to stay relevant through the development of new products. Last year, for example, Black Mamba tapped into the “swicy” (sweet and spicy) trend by introducing a hot honey product – honey infused with chillies. Claudia says while hot honey was already big in the US, it was not yet as popular in markets such as the UK, South Africa, and Taiwan. Furthermore, Black Mamba has launched a localised take on chilli crunch – a popular Asian condiment made of chilli oil with crunchy bits.

Claudia notes that by adding these fresh products to its line-up, Black Mamba has opened doors with retailers, particularly those weary from the overflow of chilli sauces in the market. –Howwemadeitinafrica

Employees at Black Mamba’s factory.

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