On an anxious afternoon in 2000, Athanas Matheka, then a food technologist with Unilever, decided to leave employment and chart the risky waters of entrepreneurship.
He admits that the decision was a leap of faith since his children had not yet started school and their only source of livelihood was a small supermarket run by his wife.
With a Capital of Sh15,000 and an idea borne during fieldwork in Eastern Kenya, Makueni and Kitui districts, in the late 1990s, he set up his company. In the course of this particular fieldwork, he realised that there was a lot of honey in these two areas, at time when most of it was sourced from Australia, and only because most processors were poor at the honey-refining stage. He was confident of making a successful business out of honey, and begun the ground work in 2002.
“People had been coming to our supermarket and asking for quality honey, a product we didn’t have, and when I discovered there was plenty in Eastern Kenya, I knew I had to fully explore the gap in demand and supply,” he says.
He bought two buckets of honey for the first trial, refined it, put it in jars and with a handwritten label, and stocked it in his shop. When the customer response was encouraging, he didn’t waste any time.
“I designed a logo and labels owing to my knowledge in production with the help of a designer. I then proceeded to process three cartons of honey, took it to one of the leading supermarkets, and after a week, I was called for my money — Sh3,840,” he says.
Four years later, in 2006, there was a big drought in the country. By March of that year, he had made only Sh3,000 in profit, money that was depended on by four employees and his family.
“I was unable to source honey then, which was our main and only product. It took a three-week travel around Tanzania to get the precious commodity. This was reality kicking in that we had to diversify,” he notes.
The resolve to diversify would finally come to fore in 2010 when they had accrued enough money to buy equipment and start dealing in another product; peanut butter processed from groundnuts.
Almost two decades later, Matheka has withstood the turbulence that accompanies business and is now the CEO of Greenforest Foods, a fully-fledged and accredited leading food processing and manufacturing SME whose core is offering nutritional foods.
“It’s not easy navigating as a SME in the food industry, however, the biggest currency an entrepreneur can have is a brilliant idea that fuels their vision. Looking back, it is hard to convince someone that I began with a paltry Sh15, 000 that I kept on ploughing to sustain the business,” he says.
Greenforest Foods currently has 90 employees with 80 percent of the workers being youth and women. It specialises in five varieties of products: honey, peanuts, peanut butter, cashew nuts and beeswax. The business occupies a 15,000 square meters’ warehouse, and as at last year, it had processed 15,000 tonnes in volume.
The food manufacturing SME has a transcending impact since it works with 7, 000 smallholder groundnuts farmers in Kenya and Malawi, and with 5, 000 Bee keepers’ in Kenya and Tanzania as well.
Irene Kendi, the Quality Assurance Manager at Greenforest Foods, showcases their products.
Photo credit: Pool
On the issue of importing the raw materials and the idea to develop value chains amongst Kenyan farmers, Matheka says, “Covid-19 taught people a lot of things, we were forced to look to Malawi as a source, which is a stop gap measure, we are developing a value chain among the local farmers, and soon, maybe we will get 90 percent locally and the remaining 10 percent from outside.”
According to Irene Kendi, the quality assurance manager at the company, sourcing from the Comesa region ensures that they do rigorous analysis that conforms with The Kenya Bureau of Standard, (Kebs) certification on the raw materials.
“The major issue as an SME in food quality assurance is that we import a very big consignment, to ensure that the whole is free from aflatoxin is what we strive to do. You can find two bags have aflatoxin or an indifferent moisture content or oil content, three don’t, we thus take a homogenous sample just to ensure the whole product matches the sample. This is all in an effort to be a provider of safe, nutritious products,” she says.
While it is a common trend for most food processing and manufacturing entities to struggle with fluctuation in demand and production capacity, it is not any different for Greenforest Foods.
Matheka explains that they handle that with a balancing effect not just in demand and market, but also with the availability of cash. Another compounding factor for them is forex.
“Forex is a big headache to almost everyone importing. The shilling has lost value by almost 30 percent in the last two years, it’s a very big challenge because you can’t keep on increasing prices of your products. It forces you to devise ways of reducing the cost of production without compromising the welfare of the employees,” he says.
Other challenges that affect the company just like many SMEs include the inaccessibility to credit, making working capital a problem, and vendor driven financial products, which are usually stumbling blocks.
There is also the pertinent issue of multiple taxes, whereby the business gets levied on seven different taxes on raw materials, making the final product expensive and uncompetitive in export markets.
Also, acting as an impasse is the non-recognition of respective county securities-based lending regulatory bodies such as THE Directorate of Occupational Safety & Health Services and respective county governments charge for food handlers’ certificate for the same employee. There is also the monthly Standards such as Levy and S-mark from KEBS.
The businessman notes that they capitalise on efficiency to handle production capacity and have invested in equipment such as a colour sorter from initially sorting by hand and a big oven. They are also planning to leverage technology to increase their market visibility.
“Being small makes us very agile, we are quite responsive to customer needs and wants, we are quite dynamic because the majority of the workers are young. We are keen on consumer preference because people are our assets and we try as much to invest in them,” he says.
The business is looking to venture into new products soon, and since innovation is key in the food manufacturing business, Matheka tries to keep up with trends – he recently travelled to Malaysia where cassava is used to make 20 different meals. He observes, for instance, there is a lot of sorghum in Kenya, which is a climate-tolerant crop in the face of global warming, and it only makes sense to see how it can be value-added to make a palatable, nutritious food.
