May 2, 2014
When his Rwanda-based grandfather fronted the idea of setting up a snack manufacturing plant in Nairobi in 2008, Faraz Ramji was not convinced about it.
“My background was in development studies. Immediately I finished my studies, I went to Rwanda to set up a street children’s project, which I was running quite well for three years.”
The fact that it has been six years since he took up the challenge is a testament that his bet paid off. If it hadn’t, Urban Bites Potato Crisps, Footballz and Bitez Corn Snacks, which his company c manufactures, would not be sitting in supermarket shelves.
Swerving from gentle-handed charity to hard-nosed business in 2008, the 32-year-old director and his team started by manufacturing corn chips, something no one else was doing at the time. This endeavour was buoyed by the fact that almost all of the raw material needed was available locally. “The maize, the oil, the packaging and everything else was local. It was only flavours that we needed to import.”
After four years of making corn chips, Ramji’s team sought out new horizons, launching into potato crisps.
“My first question was, how do we find potatoes?” The British-born entrepreneur traversed local markets and small farms in search of the tuber, but was often disappointed by the inconsistent results. “Sometimes the crisps would come out brown, sometimes green, sometimes sugary, and sometimes soggy. For good quality crisps, you need a specialised potato with the right level of maturity, size, and level of moisture.”
Feeling the need to get good quality potatoes prodded him on to seek for more information on the internet. “I came across a project based in Bomet that had trained about 200 farmers on how to plant the perfect potatoes for crisps, ran by Kenya Agricultural Research Centre and the International Potato Centre.”
A further stroke of luck was in the offing as despite the group’s successful training, they had no market in mind for the potatoes. “They were very glad when I got in touch with them and the team leader from the potato centre brought us samples from 12 groups the very next day.”
Fuelled on a high of having found what appeared to be the perfect tubers after months of searching, the manufacturers did not anticipate the new batch of crisps would become popular so fast.
The demand for the snacks was made even more apparent by the fact that they had embarked on manufacturing them with potatoes from the newly-discovered farmer’s group, not long before the Christmas season.
“The potatoes they gave us were good but not enough. Christmas came and ended being a big disaster because we didn’t have any potatoes.
I was fuming at the fact that we didn’t have any product on the shelf that December. But that’s the reality of business, people will not say ‘We will not have crisps this month because there’s no Urban Bites’, they’ll just buy from the competition.”
Ramji prefers not to talk figures in terms of how much profits his company has made since, but says they have grown tremendously.
“When we started with Urban Bites, we were buying one tonne of potatoes a week; now we buy 10 tonnes.”
Some of the challenges Ramji’s team has faced along the way have been problems with machines, shortage of produce, difficulty with distribution and high cost of power. He is also antsy about the fact that their suppliers are all situated in one place, saying there’s a need for more farmers to cultivate the specialised potato. “We are dependent on Bomet because no one else in the country is farming this kind of potato. I’ve been shopping around to get an alternative source because if anything happens in Bomet, we need back up. These type of potatoes can also be grown in Naivasha and Meru.”
The company’s approach to pricing, packaging and marketing may have given it additional leverage in the snack industry. The corn snacks priced at Sh10 a packet are affordable for the mass market. Urban Bites with its glitzy upbeat packaging featuring Nairobi’s skyline in psychedelic colours. It targets the middle-class and is about the same price as many other potato crisps in the market.
Ramji laughs as he says that the packaging that the design team chose to go with was risky. “Someone told me it looked like a nightclub poster, but I was just having fun. I think one of the successes of Urban Bites is the packaging. We don’t want to just be a commodity; we want to create local products with an international standard.”
Marketing is the other area that the company has taken a unique approach in, getting its corn products in supermarkets as well as placing them in kiosks, open air markets and bus stops to reach the mass market. “Snacks are an impulse buy. If you want people to buy them, let them be available everywhere. Success lies in the volumes; the base of the pyramid is where the fortune is.”
Ramji’s company currently employs over 180 people and receives potatoes from about 100 farmers.
Sitting in his Mombasa Road office, the smell of oil and crisps wafting in the air, he looks up, fascinated by the fact that he’s come full circle.
“One of the by-products of it and any other business enterprise really, is that you are making a difference. It’s exciting to see the farmers grow. Since we started, they’ve been able to buy a truck and they tell us that they can now take their children through university education.
Before, they used to be ripped off by middlemen. We pay them a higher amount than the average price, which is why they remain loyal to us.”
What advice does he have for someone setting out in food manufacturing?
“Do your homework. Understand your supply chain and availability of the product before investing. Once you have done that, just jump in. That is what separates the entrepreneurs from the rest.” Even as he counts this business a success, his street children project in Rwanda still stands, sheltering and educating 120 children.