Starting A Yogurt Company in Kenya (Part 1)

So, I was hanging around Twitter one day when I noticed one of my followers (a guy called Kahenya) talking about this yogurt company that he and a friend were starting.  Initially, I wasn’t that intrigued until he started mentioning the yogurt flavors they were coming up with.  e.g. ” Today, we just developed our passion fruit flavor; Then it was on to mango…then…I became intrigued and decided to ask him what exactly he was doing with this yogurt company of his.

My process of intrigue usually begins with me bombarding people with a whole host of questions about their entrepreneurial ventures and luckily, no one has ever refused to answer my questions.  So, I sent Kahenya a list of questions and he was kind enough to answer each one of them and I’ve posted that entire exchange here for you to read and perhaps even, offer your points of view.

Tell me a little bit about yourself and your other business partner (I believe her name is Cara?). What are your backgrounds? Educational, work, etc, etc…

We are just partners me and Clara, both have overseas work experience.Clara prefers to keep undercover on the publicity side of things, she is shy. She has previously worked in a senior position in a couple of airlines overseas. I have worked in South Africa and Europe.

Why did you decide to start a yogurt company in Kenya?

I have always wanted to have yoghurt I enjoyed and the only yoghurt I enjoyed is in London. I am not. So I decided to find a way of getting the two things together. I did not figure that it would end up being a yoghurt company.

What kind of obstacles did you face when you first started? Was it expensive to set-up? Did you have to raise money or get a loan?

It is very expensive. We are still setting up. This is all ViRN Instruments funded.

What kind of bureaucratic obstacles did you face? especially when dealing with government officials?

Ummm, its tough. KEBS is being a bit of a pain, but again, we are not really manufacturing so less hussles. We deal with packaging and final blending, not really from scratch. The blending is done by a company called Patricia and Simon, and they have qualified to handle daily products.

Now, on to the main heart of all businesses: How and who do you sell this yogurt to? What do you do for sales and marketing? i,.e. How will people find out about your yogurt?

Right now we are doing referrals and I did a radio interview recently. Heavy duty stuff starts next year, but we shouldn’t have to do much, cause it seems to be finding its way into the market quite easily.

Are you targeting individual buyers or grocery stores like Uchumi & Nakumatt?

We are considering options, but right now are dealing on a more bulk basis. Some supermarkets have requested stock, but thats all for early next year. We have a long way to go before we get there.

When most people think about yogurt, they think health. i.e. yogurt is a healthier alternative to other deserts like ice cream.  Is this the thinking in Kenya in terms of those people who would buy your yogurt? Are they people who are looking for a healthier alternative to ice cream, are they weight conscious?

Actually, we are  hoping to bring a fairly high end product to low income families. I have been spending a lot of time in low income areas and have come to discover that they just need something affordable to enjoy. We are simple and are making a simple product that anyone can afford.

A commentator on my blog recently talked about a restaurant he owns in the CBD and he kept saying that to succeed in the food business in Kenya, you have to understand the unique food culture of the people.  So, when I think about what he said and try to relate it to your yogurt company, my assumption would be that your target market would be middle to upper-middle class Kenyans and I’m making this assumption because I’m thinking that poorer Kenyans don’t have the luxury of worrying about health oriented foods like yogurt. i.e. they’ll eat when they can and they’ll eat what they can afford.  The health aspects would be secondary in their to this goal of simply eating.

Also, poorer Kenyans don’t have the weight issues and health problems that you see with richer Kenyans. So unless your yogurt is very cheap, would they be attracted to it?

Our yoghurt is 100% natural. The only preservatives we use are the container and the vacuum used to store it and a freezer. Thats it. 100% natural, cheap and healthy. You want to eat something sweet, we give you something sweet, we want to gain weight, we have something for that, you want to lose it, we have something. No complications.

As I was constructing these questions, I started thinking about Kuguru Foods, a company that made money by selling horrid drinks (full of sugar and other artificial flavorings) at a very cheap price to the majority of poor Kenyans.  So, for them, it was all about quantity over quality. Is this something you can do with yogurt? or are you going to try and achieve both mediums, i.e. selling both quality and quantity.  Do you think this is viable in Kenya?

That’s a tough question cause I could easily lie. The truth is, its one quality, to some it may appear low, to others high. Its something i would consume and due to health issues i have, as well as Clara, the quality is high enough to be consumed by us. It would be nice for us to sell a lot but if we break even, we are happy. Outside of paychecks, this is one business i don’t anticipate huge profits from. More of an ethical business.

Finally, what advise would you give to other aspiring Kenyan entrepreneurs who might be thinking about setting up a business there?

They are welcome. I’ts tough, bureaucracy and all. There are a ton of opportunities. And we need a whole lot of people to help create jobs and show the government that they are not needed.

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