“It is really providing an opportunity for people to get an income and it gets our brands to places it wouldn’t reach and at the right occasion. We want to reach more youth with this because for them there is no investment, just their commitment” as Nestlé provides free Nescafé kits.
Obruchkova says the company is also seeking to grow its presence in the breakfast cereals markets which is “growing very fast”. The production of its cereal brands has been challenging in Kenya because of difficulties in accessing high quality maize, a key raw material.
“It is our priority… [but] we want to ensure sustainable supply of raw materials. The struggle was for two or three months we could not produce because we couldn’t find [quality maize],” she says. “This category is growing very fast. I have seen this in my home country (Ukraine). It is a consumption habit with the growth of the population’s purchasing power, improved knowledge, access to information and also people being busy… people go for more convenient products.”
Addressing the challenges
Nestlé sources raw materials such as wheat, sugar, salt, spices and packaging locally. To solve quality shortfalls, Nestlé has a farmer development programme through which it trains and assists 26,000 coffee farmers and 6,000 dairy farmers in rural Kenya.
Other difficulties Nestlé faces in Kenya include frequent power outages and logistical challenges.
“We have a generator that we can run [when power goes off] but there is a certain process in cereal production when if there is a power outage the machine blocks and a lot of material is lost. We are discussing how to overcome that and [we may have] to even run that machine on a generator full time because we cannot face the fluctuations.”
Despite the challenges, Obruchkova says, Nestlé is optimistic that difficulties manufacturing companies currently face are likely to be overcome in coming years.
“The reason why we are here is because of our long-term commitment. We know the growth is coming and we know we have to be here when the growth hits in five years. We know it will be driven by oil and other natural resource discoveries. Look at Angola, the country is in total blossom and the buying power of the consumer has grown.”
Advice to other manufacturers
She advises other manufacturing companies expanding in Africa to learn the market and its unique culture.
“You need to see how you can master excellence here, adapt to the culture, to the [power] outages and everything and then grow.”
She reckons that technological innovation is likely to revolutionise modern trade in Africa and galvanise economic growth.
Companies, she says, will need to adopt a new way of thinking.
“The way we think and look into the future should be different,” she says, adding that companies ought to conduct research that will advise product development and marketing strategies that appeal to the evolving tastes and preferences of the youth.