Nigeria: Entrepreneur explains how she built healthy fast food brand Nuli

Ada Osakwe, founder and managing director of Nuli.

Ada Osakwe, founder and managing director of Nuli.

Ada Osakwe started Nuli as a juice delivery company operating out of her kitchen and delivering to customers via motorbikes. She has since expanded to selling a range of food and drink products in the biggest supermarkets in the country, as well as six cafés between Lagos and Abuja. Osakwe tells James Torvaney about growing the company, the challenges she encountered and the opportunities in the healthy food industry.

Give us a snapshot of your business.

Nuli Juice is a healthy fast-casual dining brand. Our mission is to galvanise healthier lifestyles through fresh, locally grown food.

Our food and drinks are prepared with produce sourced locally from indigenous farmers. For example, fonio stir-fry, cassava waffles, and fruit juices.

We currently have six physical stores in Lagos and Abuja. These are a mix of larger stores – with ample seating space where people can eat, have meetings, and relax – and smaller outlets more focused towards ‘grab and go’ customers. We also provide branded Nuli products to supermarkets and hotels, and manufacture drinks and snacks for other retailers.

What motivated you to start Nuli?

Starting Nuli Juice was an accident – I never set out to be an entrepreneur. After working in finance, I became the senior investment advisor to Nigeria’s Minister of Agriculture, working on bringing agriculture investment into Nigeria. In this role, I observed how Nigeria was sending over $10 billion every year importing basic items like rice and fish.

The country doesn’t have strong domestic processing such as cold storage, power and logistics, making it difficult to industrialise and create true wealth. In addition, approximately 60% of the fruit and vegetables harvested go to waste. I thought, “Why are we spending all this money on importation, when we could be producing it ourselves? Why are we wasting so much nutritious food?” I was motivated to provide the answers to these questions, and founding Nuli was the first step to this.

How did you get started? What was your first product?

I started making natural juices in 2015 from my kitchen at home. I saw data showing that although Nigeria is a large producer of fruits like pineapples, barely any of this local produce was processed into fruit juice.

We set up a simple online presence and offered delivery only, via motorcycles. After that, we started going to food fairs, gyms, cafés, hotels, and supermarkets to sell the juices. We were eventually able to get into the large chains like Shoprite and Spar which helped get our name out.

We saw strong demand from customers for fresh and healthy food alternatives. So after a year of offering delivery only, we opened our first Nuli Lounge café with an offering of meals to add to our branded drinks. We broke even in 2016. In 2018, once we had proven we could make a sustainable profit from the business, we raised $850,000, mostly from angel investors, which we invested in scaling up and building new stores. By the beginning of 2020, we had 10 stores in total, including some inside offices at companies like KPMG and the Nigeria stock exchange.

Nuli produces a range of food and drink products.

Nuli produces a range of food and drink products.

Where do you see the biggest potential for Nuli – in packaged goods or in the restaurant chain?

Both are fast-growing revenue lines. My ambition with Nuli is to build an international African brand that goes global, that will fit in as much in Nairobi and London as it does in Lagos. Our juices help us with this but scaling out the restaurants is core to our medium-term strategy.

Internationally, there are so many similar food and drinks brands you are competing for shelf space with. But with physical stores, we retain much more control over the whole customer experience and therefore we can build a much stronger brand.

You mentioned some of the infrastructure challenges faced by the agriculture sector in Nigeria. How do you manage these supply chain challenges?

To fulfil our promise of fresh food, we need to keep our supply chain as tight as possible. We source all our items locally – even things like strawberries and blackcurrants, which are grown in Plateau State. Around half of our products we source directly from farmers, and the rest from intermediaries.

Then we have cold storage in our factory in Lagos. That helps keep produce fresh, but it still has to be processed and sold within a couple of days. One of the things we do is ensure there is direct communication between store and inventory. Each store has ‘Nuli champions’, who spend all day talking to customers and watching which products are selling. They feedback information to the factory every day, on what is selling and what people are asking for.

A few years ago, I looked very seriously at investing in a HPP (high pressure pascalisation) cold press production line, which would have enabled us to extend the shelf-life of our juice without using any additives. In the end, I decided against it, because it was still a risk. We could cold press our juices, but what if the truck breaks down in transit, or the retailer’s fridge isn’t working? There are still parts of the supply chain that we have no control over.

We keep as much of the supply chain in house – we barely outsource any of our last-mile logistics. We have tried in the past but we have faced issues because often third parties don’t offer the level of service that people expect from the Nuli brand. So now we are investing in our own refrigerated trucks and motorbikes.

What are some of the biggest operational challenges you have faced?

Compared to countries like Ghana, operating in Nigeria is extremely difficult, particularly for small businesses. I am very fortunate in that I have built up a strong network of people I can call upon from my previous career in private equity and with the Ministry of Agriculture. But even so, there are a lot of roadblocks. Getting a simple NAFDAC (National Agency for Food and Drug Administration and Control) approval for our juice took about a year. Rent is another difficulty – landlords ask for at least two years upfront, sometimes up to five. This makes it really difficult to scale and expand.

We opened our second store, in Ikoyi, in July 2016. The first few weeks went well and we had a good customer base. But less than two months after opening, the Lagos government came in and demolished our store, due to a dispute they had with the landowner. One day it was business as usual – the next day the store was gone. There was no consultation.

After that it was difficult to be resilient. I had put so much time and money into the store, and it left me in a very dark place. We went from making juice in a nice modern space to a small dark kitchen. I was so embarrassed, but I wanted continuity – I didn’t want to pause operations. It took almost a year before we were able to move back into a proper store.

Ada Osakwe with pineapple farmers in Nigeria.

Ada Osakwe with pineapple farmers in Nigeria.

How has the coronavirus pandemic affected your business over the last year?

Before coronavirus struck, we were operating 10 Nuli outlets, including the office concessions. With the move towards home working, we are currently down to six.

The pandemic forced us to think about diversification across other revenue lines such as manufacturing for other outlets. We started working with a large chain with outlets across the country. They wanted grab-and-go sandwiches and other food products to sell under their brand. It’s a small part of our overall business but still a useful revenue line.

With people spending more time at home and less time in the office, we had to think about how we can remain close to our customers. One of the new things I’m excited about rolling out is Nuli-in-a-box. These are converted shipping containers that are smaller than our regular stores but are much more flexible and make it easy to establish a presence in the higher-density residential areas.

What are some of the food industry trends you are seeing?

We continue to see trends towards more health-conscious lifestyles, particularly in plant-based eating with the younger generations. Having said that, plant-based diets are still not mainstream in Nigeria, even if a lot of our cuisine actually lends itself to plant-based, whole food diets.

In Nigeria, looking at our business, we notice some interesting trends in customer behaviours; for example, we found that in our Surulere store people prefer to sit down and spend longer in the restaurant, whereas other areas lean more towards take-out items. Also, we found that Nigerians are less into cold foods, so we have tried to focus our grab-and-go offering on hot food, like our toasted naaninis and stir-fries.

What about technology? Do you see opportunities there, for example with food delivery apps?

There is a lot of focus on tech but unique food delivery apps haven’t really taken off in a big way. Even when people know we are online, they still order through Whatsapp or via phone. This trend is evolving though. Online orders accounted for 1% of our sales in January, but as at June, it now accounts for 5%, with no marketing spend.

We also see a lot of tech opportunities behind the scenes. For example, we’re using technology to become more customer centric – to anticipate and project demand, understanding behaviour, remembering people’s favourite orders, and so forth. We see a lot of machine learning applications for our business. I also think there are opportunities to use technology to improve traceability of produce from farmers to consumers.

James Torvaney is a business consultant and financial advisor specialising in West Africa. He has worked with clients across a number of sectors, including technology, manufacturing, consumer goods and hospitality.