Christopher Muema is founder of Fity Foods, a Kenya-based company that manufactures yogurt for sale to schools, offices and homes in Nairobi. He started making yogurt five years ago while studying for a degree in food science. Initially he sold to students at his university, but formalised the business last year. Muema tells How we made it in Africa about the difficulties of running a small business in Kenya’s competitive dairy industry – and his most exciting moment in entrepreneurship. Below are edited excerpts.
1. Tell us more about your start-up.
Fity Foods is a food manufacturing business currently focused on producing yogurt. Our product is branded Mista Yoghurt and our main customers are schoolchildren. We don’t stock in retail shops because that market is already too competitive. Instead we do deliveries to our customers at their homes. We have also signed contracts with schools to deliver yogurt several days a week for students. And some employers also buy our products as snacks for their staff. Also in some offices we have arrangements with staff who just don’t want to leave their desk to go buy a snack, so we deliver to them. We offer our clients an affordable quality product, and also convenience.
2. How did you finance your start-up?
I used my own money and I’ve been bootstrapping since we started.
3. If you were given US$1m to invest in your company now, where would it go?
I’d buy equipment to expand our production capacity. We would like to deliver to more schools and to sustain such a high amount of deliveries we need machinery that is expensive.
4. What risks does your business face?
The dairy industry in Kenya is highly competitive. It is also dominated by really big players which makes it hard for smaller entrants to compete. To be sustainable in the future we have a lot of work to do in carving out our own niche and establishing our brand. We will have to ensure good quality and consistency to remain relevant to our customers.
One of our target customer segments, which is families, is not sustainable. Not many families can afford to purchase five litres of yogurt every week. So we need to deal more with institutions such as schools and companies that purchase yogurt for their students and employees.
We are also facing challenges with pricing. Most people want us to reduce our prices and we cannot do that because of our size. That would make it hard for us to operate sustainably.
5. Tell us about your biggest mistake, and what you have learnt from it.
I started making yogurt while I was in university and I did not really see it as a business then. After I graduated I lost focus and rushed into other opportunities without thinking things through. At some point I got involved in setting up a dairy [milk] business and spent months on a farm trying to get things off the ground. I then came back to Nairobi and started a fast food business with rent money my uncle gave me and Ksh.6,000 ($56) capital from my mom. In the first month I made Ksh.60,000 ($568) and thought it was amazing – but three months down the line we could hardly pay the bills so we shut down. I then co-founded a cheese production business, which I thought was a very good opportunity, but it also did not work out. All these ‘opportunities’ took my attention away from the yogurt business, yet it is the only business that has always done well. I have learnt the importance of believing in your idea, being committed to it and not letting yourself get distracted.
6. Describe your most exciting entrepreneurial moment.
Formalising the business was a big step for me. Last year we registered the trademark, got all the certifications required and designed our brand. It was an exciting moment because after years of doing this as some sort of a hobby, Fity Foods finally became a real business.