Entrepreneurship Zone: 30 July 2024: The journey of establishing a dried fruit business in Kenya

Tue Jul 30 09:41:42 CAT 2024

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Entrepreneurship Zone: 30 July 2024:  The journey of establishing a dried fruit business in Kenya

Burton & Bamber produces a variety of dried fruit products under the Sweetunda brand.

Burton & Bamber is a Kenyan food business with a focus on dried fruit products. Jaco Maritz spoke with co-founder, Jonathan Bamber, about the company’s journey into supermarket distribution; why it is focused on building a local brand as opposed to exports; and the challenging aspects of manufacturing within Kenya.

Burton & Bamber, the company behind the Kenyan dried fruit brand Sweetunda, was founded in 2015 by British-born Jonathan Bamber, his wife Sarah, and Ofelia Burton. Jonathan and Ofelia met while employed at a company that produced off-grid solar products targeting rural households in Kenya. However, a pivotal conversation with local farmers in Embu, a region in central Kenya, led to a change in their business direction. The farmers urged them to pivot from selling products they believed the community needed, to buying and promoting what the region already produced: mangoes. At that time, the country had an excess of mangoes, and farmers were struggling to secure buyers for their produce.

In response to this market inefficiency, Jonathan and Ofelia turned their attention to the mango value chain, deciding to start a fruit drying business.

Burton & Bamber began its mango-drying venture at a small rented facility in Thika, situated 45km from Nairobi, a town Jonathan refers to as the ‘Birmingham of Kenya’ due to its large number of factories and good access to target markets. A local business supported them, offering space at an existing factory and investing in processing equipment.

The company initially broke into the market by supplying bulk dried mangoes to some of Kenya’s prominent retailers. However, the founders soon recognised the potential for their own dried fruit brand. According to Jonathan, there was a noticeable dearth of dried fruit products in Kenya at the time, and the few existing companies were hampered by a lack of attention to their brands, packaging and product quality.

The founders gave their brand the name ‘Sweetunda’; tunda is ‘fruit’ in Swahili. As Jonathan recounts, “We sent our driver into Thika town with maybe half a dozen [name] ideas. He interviewed about 100 people and came back saying Sweetunda was the most popular name.”

The company initially produced dried mango, and later added other fruits like pineapple, banana, raspberries, and strawberries for dried fruit and fruit rolls. It also introduced granola to its product portfolio. Currently, it processes around six tonnes of food each day.

Navigating the retail landscape

While creating a product is a journey in itself, getting it into the hands of consumers is an entirely different challenge.

Jonathan recalls the early days when Sweetunda, with its simple packaging, found its first retail space in a modest vegetable shop in Nairobi. Around the same time as the launch of the Sweetunda, French supermarket chain Carrefour made its debut in Kenya. Gaining a spot on the shelves of Carrefour proved to be a pivotal moment in the brand’s growth. Following this the company also secured listings in smaller chains such as Chandarana Foodplus and Zucchini Greengrocers.

“My background is as a British diplomat and in international development. I had no retail experience. But what I do know is how to talk to people, and that’s what I did,” Jonathan explains. “And I literally went to meet everyone involved in the process: [from the] listings guys to store owners. And we learned how to get our products on the shelves.”

He adds that they took the products to farmers’ markets in Nairobi and elsewhere to raise awareness

When the business began to grow, Burton & Bamber partnered with third-party distributors to deliver products from the factory to  <https://www.howwemadeitinafrica.com/category/sectors/retail-sectors/> retail outlets. However, Jonathan says this approach had its drawbacks. Because the company was no longer responsible for its own merchandising at retail stores, it lost touch with its customers. Sweetunda products were just one of the many products that these distributors distributed and they didn’t make much of an effort to ensure the brand looked good on the shelves. “One of the most important things in retail is to make sure that your product commands attention on the shelf, looks great and is consistently available. And no one is as invested in that as the producer,” Jonathan says.

Targeting the mass market

Although the market for dried fruit is growing, Jonathan acknowledges that it is a premium product and not affordable to the majority of Kenyan consumers. He explains, “It’s not for everybody, not everyone can afford 200 grams of [dried] mango at $5.” Further, he notes that a large segment of Kenyans are unfamiliar with dried fruit. Despite this, he says there is sizeable customer base in the capital Nairobi. The city is home to many residents who’ve had international exposure, including returnee Kenyans and a substantial expatriate community from the US, Europe, and China, many of whom are accustomed to dried fruit.

To penetrate the wider market, Burton & Bamber recently introduced a new product named Crackies. This extruded sweet potato snack retails at about 20 Kenyan shillings (around $0.15) per 20-gram packet. In its pursuit of reaching the mass market, the company aims to distribute through Kenya’s thousands of small retail shops, known as dukas. “Crackies has a much greater potential to tap into the mass market compared to dried mango,” Jonathan states.

Recently, the company launched Crackies, a product aimed towards the mass market.

To get Crackies into the multitude of small shops, Jonathan underlines the necessity of partnering with distributors already servicing these outlets with products like soap, toothpaste and biscuits. Despite the company’s shift away from using third-party distributors when it comes to formal retail stores, he maintains that their role is essential in accessing the informal duka market.

Jonathan asserts that success in the mass market hinges on three key elements: a tasty product offered at a compelling price, effective distribution, and well-executed product awareness. As for raising awareness, he advocates for proactive, on-the-street marketing tactics. “We need to create an appetite for Crackies through activations which draw consumer attention to the product, create a buzz, giveaways – product sampling is most important,” he explains.

Adding value to sweet potatoes

Besides using orange-flesh sweet potatoes for Crackies, Burton & Bamber recently started capitalising on demand for the crop’s high nutritional value by producing a puree for sale to bakers, who then substitute a percentage of wheat in their bread with sweet potato puree. With a grant from the International Potato Centre, the company procured half-a-million-dollar equipment from the US capable of transforming sweet potato and other fruits and vegetables into an aseptic puree. Stored in a sealed metallised bag, the puree doesn’t require refrigeration and has a shelf life of over 18 months. Additionally, the company can produce pasteurised mango and other fruit purees for supply to restaurants to use in juices and smoothies.

Export market

Jonathan reveals that over the years, the company has exported both bulk and white-label products to countries like Italy, Sweden, and the Czech Republic. While Burton & Bamber continues to export, the company’s sales strategy is focused on serving the local market.

Jonathan expresses disappointment over the conduct of several international buyers, accusing some of poaching Burton & Bamber’s staff. He laments the pressure these entities exert on prices, effectively squeezing profits to minimal levels. With private labels demanding their 30-40% and retailers expecting their 40-50%, the manufacturer is left with almost nothing. Moreover, he highlights the steep costs that manufacturers like Burton & Bamber bear, which include upfront payments to farmers and comprehensive food safety certifications. “We currently have one export partner who is genuinely interested to work with us and walk with us. We’re excited about this model and will grow the relationship, hopefully replicating with new partners in the future,” he notes.

Manufacturing challenges eating into the bottom line

The business has been largely funded from the owners’ own pockets and grants from non-profit organisations. These grants, though, often necessitated a 50% matching contribution from the company. Jonathan acknowledges that such funding has been instrumental in establishing the company, enabling support in key areas including training for small-scale farmers, acquiring factory equipment, marketing initiatives, and securing essential food safety certifications.

The company’s revenue doubled each year for the first three years although growth stalled somewhat during the Covid period. Despite this, the business is yet to reach profitability.

Kenya’s challenging manufacturing environment has had a negative impact on the company’s bottom line. Jonathan cites sporadic power supply as a major issue. Unexpected power surges can result in damage to their machinery. Additionally, recent water scarcity due to the drought, also presented a significant problem for the factory. “We find that any profit we make go straight into either replacing a circuit board that has been blown up or buying water from a bowser … Doing manufacturing has been a huge challenge … It has surprised us at how difficult it is.”

Leveraging solar power to counterbalance the unstable electricity supply, Jonathan reports that the company has mitigated some of these difficulties. Despite the challenges, he remains positive about the business’ growth outlook.

—Howwemadeitinafrica

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