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Starting A Yogurt Company in Kenya (Part 1)

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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.

13 comments for “Starting A Yogurt Company in Kenya (Part 1)

  1. Khares
    October 31, 2012 at 5:55 am

    Kiragu you can try Finken holdings limited for cultures (google it)

    Kiragu you can try Finken holdings limited for cultures (google it)

    Contact us for the flavours, and cultures and other ingredients. we are always there to help at very competitive prices.

  2. Anonymous
    March 5, 2012 at 9:23 am

    what are the machinaries required for making yourgut coz i have ben touched with the stories i have heard from you guys God bless you for thinking about others as well

  3. WACHERO ABRAHAM
    May 4, 2011 at 6:36 am

    you have inspired me since i have the same idea and its my current employer who delayed me.for two months we havent been payed.i can make yogurt and something else coz i prefer variety.i am waiting for ma pay to get the packaging machine.by the way,i just knew how to make yogurt in april 2011

  4. Njenga
    March 2, 2011 at 2:02 am

    Kiragu you can try Finken holdings limited for cultures (google it)

  5. Kiragu
    February 28, 2011 at 3:09 pm

    I have started business of making yogurt but my problem is where to get the culture

  6. sudeep
    December 17, 2010 at 8:18 pm

    very inspiring as i also always wanted to start a yogurt industry back home in nepal

  7. David Mugo
    November 6, 2010 at 9:08 am

    I also have a passion For starting and runnning a yoghurt making company.

  8. wachira Wilson
    August 17, 2010 at 3:31 am

    Am grateful for the information and the questionaire too. Am too in the same line of operation and i feel encouraged that other citizens are trying to create jobs for our other Kenyans as well.

    I have a problem with financiers so if you would be kind enough to introduce me to some willing ones. the reason is that i intend to venture in the supermarkets but these dont pay on delivery and for mine because of its infancy level right now needs to have some backup inorder to supply without instant payments.

    I wish we could have a dialogue with you and discuss this at length. have a nice day too.

  9. AKINYI
    July 27, 2010 at 7:27 am

    Producing and selling this http://en.wikipedia.org/wiki/Leberkaese to Nbo commuters.

    GUDDOS, I’D LIKE TO START ONE TOO; HOW ABOUT THE CHALLENGE OF FINDING THE INGREDIANTS’ YORGURT

  10. kenyanentrepreneur
    January 14, 2010 at 5:27 pm

    Jke:

    I looked at the ingredients: “It consists of corned beef, pork, bacon and onions” …eek…I don’t know if I’d want to eat that :cry:

    But why do you think it would be a success? The farmers choice sausages are pretty popular. Would this supplant those?

  11. robert
    January 13, 2010 at 5:12 am

    thats great idea but u need to go out first an see the typeof market that is available so to work with the amount of consumers so as to capitalize on the market and u will realize how strong ua business will diversfy to be guys thanks alot am robert aka roba

  12. jke
    January 12, 2010 at 6:39 pm

    Here’s another idea for takers:

    Producing and selling this http://en.wikipedia.org/wiki/Leberkaese to Nbo commuters.

    I bet it wd be a success.

  13. Its wonderful.
    January 12, 2010 at 2:53 pm

    Its wonderful

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