While attending ANUGA Fine Food Fair in Cologne, Germany in 2003, Margaret Komen learnt that India had been banned from exporting chillies to the European Union due to excessive use of carcinogenic dyes. The ban had created an acute shortage of chilli powder across Europe. At once, Margaret, a food technologist, saw a business opportunity and spent considerable time at the fair conducting market research.
Her efforts bore fruit after one potential customer requested a sample of Kenyan chilli powder.
“I was excited by this offer and as soon as I got back home, I travelled to Malaba to link up with chilli farmers. Unfortunately, I managed to get only a small bag of chillies because their harvest was already booked by a chilli sauce company in Nairobi.”
Dried spices, vegetables and herbs.
Photo credit: Pool
Margaret went home with the chillies and milled them from her kitchen counter using a blender. She packed the powder and sent the sample to Germany.
“The client was happy with the sample I sent and went ahead to ask for the cost of one container of chilli powder. Everything was moving really fast. I consulted the family that had hosted me when I attended the fair and they advised me on how to do the pricing. Next, I sent a quotation to the client and that was my first sale of chilli powder.”
Shortly after in 2004, Margaret founded Mace Foods Limited (MFL) a large-scale producer of dehydrated spices, vegetables, and herbs for export.
“I borrowed Sh20,000 from my father, which barely covered the registration fee, the lawyer’s bill and one small milling machine that could manage three kilograms per hour.”
To assist with the working capital, her host family in Germany, Dr Cesare N. Aspes became Mace Foods’ first investor, injecting Sh1 million into the newly established company.
“After some intensive baseline and research on the chilli product itself, it was clear that we could leverage on the availability of agricultural land in Kenya and the production knowledge of selected small-scale farmers.”
Margaret notes that her company specialises in two main segments in the Agribusiness industry: Spices and Ethnic Foods.
“In the spices segment, we are specialised producers, processors, and marketers of five varieties of dried hot chillies both for pharmaceutical and food industry, targeting domestic and export markets. In the indigenous food segment, we also produce, process and market African leafy vegetables and assorted indigenous foods.”
Working with over 3,800 contract small-scale farmers in Western Kenya, Nyanza and Rift Valley, MACE foods has 18 employees who include agronomist and food technologists and 75 factory workers in the peak harvest period.
The business has adopted Fair Trade practices which means utilising sustainable agricultural practices with restricted use of agrochemicals, and fair prices for farmers, while ensuring decent working and living conditions for workers.
Margaret Komen, the founder of Mace Foods, dries chillies on May 2022 in Eldoret.
Photo credit: Pool
There are several applications for chilli extracts in the food and pharmaceutical industries. Oleoresin (chilli oil) is used when fortifying food or supplementing products with additional minerals and vitamins. Capsaicin is an ingredient in treatments for pain relief, skin ailments and nervous system disorders. Chilli powder is also gaining popularity as a stable natural colorant in skin products.
The company struggled for the first six months, she recalls her decision to admit to the client she was not going to be able to fulfil the order. With only 3,000 kilos of processed chilli powder, there was no way she was going to reach the 14,000 kilos required for a full container. Luckily the customer who was based in Frankfurt, Germany agreed to accept a smaller consignment.
Margaret then sat down with her family as well as her host family to formalise the shareholding of the business; each family contributed Sh1 million and took ownership of 50 per cent of the shares. Thereafter, they approached a local bank for a loan to procure the required machinery and office equipment.
This challenge of supply has necessitated a strong sourcing strategy from Margaret and the team over the years.
Founder of Mace Foods Margaret Komen displays her products in Eldoret in May, 2022 .
Photo credit: Pool
“In the beginning, we thought the best way was to convince the farmers surrounding Eldoret where we rented our processing facility – to consider growing chilli. The approach was not successful as the maize farmers were reluctant, perhaps due to uncertainties of growing a new crop .”
Mace Foods turned to other regions and today has a three-tier sourcing strategy. It has approximately 25 medium- to large-scale farmers as its suppliers. These farms are all 10 hectares or larger, with high technology infrastructure and water-harvesting systems. This negates the impact of changing weather patterns.
The company also procures from 3,800 small-scale farmers who have one to five hectares of land under cultivation. In addition, it sources chillies from five different co-operatives within Kenya, Uganda and Tanzania.
‘’Mainly lack of adequate raw materials in chillies product line and finance to invest in the rapid growth of the business are the major challenges we are facing. We are continuously fundraising for growth capital from diverse financial institutions who are in the Agri-Business sector.”
Mace Foods is certified by World Fair Trade Organisation, Kenya Bureau of Standards, certified seed Merchant by Kenya Plant Health Inspectorate services and currently undergoing inspection, training, and audits for HACCP Food Safety certification.
After production and packaging, their products are then distributed locally to leading shops like Naivas, Quickmart and Chandarana stores all over Kenya as well as exported in containers to international markets. The local market mainly targets individual consumers of traditional vegetables while the export market targets institutional investors in consumer and pharmaceutical industries.
Over time, the company has become a major player with clients in Spain, Italy, the UK, Germany, Portugal, the Netherlands and South Korea. It currently exports five varieties of dried chilli in bulk to pharmaceutical and food industry clients in Europe and Southeast Asia, and leafy vegetables to the US.
Mace Foods is now looking for funding to establish nuclear farms to ensure a stable supply to expand into the extraction of the oleoresin and capsaicin within the next two years. “We would like to be the first company to add that value in Kenya,” says Margaret.
