Serial entrepreneur carves a niche with potato processorThursday March 30 2023
The potato value chain has been the main pain point for Kenyan farmers for decades now. After a bumper harvest, thousands of tonnes go to waste. And this is where Wedgehut Foods carved a niche.
The Ruiru-based company supplies processed and chilled potatoes to hotels, hospitals, food caterers, schools, and people’s homes.
At the height of the Covid-19 pandemic, 37-year-old Wanjiru Mambo established Wedgehut Foods, a potato value addition, which cuts the time taken to source, prepare, cook, and serve Kenya’s second most staple food.
“I’m a seasoned entrepreneur, been in business for the last 10 years, in logistics, hospitality, and now agro-processing,” she says.
The certified accountant founded Wedgehut Foods by default.
“My partner and I had a restaurant in Upper Hill, Nairobi and when the pandemic containment measures were announced, we had to do something with the stock we had – meat, vegetables, potatoes, and other perishables,” she says.
Ms Mambo decided to take the potatoes home and sell them in her neighbourhood and since there was panic buying at that time, the stock cleared fast.
That's when she first sniffed a business opportunity and ordered more potatoes from her hometown in Limuru.
There was ready demand for potatoes, but she faced a challenge- potatoes do not have a long shelf life.
“I started doing research on what can be done to potatoes. I reached out to a friend I had met four years earlier supplying fresh potatoes to eateries and supermarkets in Nairobi but unfortunately, they had closed down the business,” she points outs.
While that revelation would have discouraged others, Ms Mambo's curiosity was only further aroused.
Eventually, she spotted a gap in the value chain. Potato peeling is one of the most tedious jobs. For companies such as fast food restaurants, this translates to labour costs that eat into already thin margins.
Ms Mambo reckoned that she can make some good money by easing this burden and her research backed the business viability.
“I engaged a professional to help me put my projections together and in 2021, formed the company which is currently located at Cape Business Park in Ruiru,” she says.
The business model
Wedgehut Foods buys potatoes from farmers, brings them to the Ruiru factory, sorts and processes them into several products - French fries, potato wedges, lyonnaise, potato cubes, and whole potatoes that are peeled, cut, and cleaned to remove starch, then vacuum-packed to reduce oxidation, then chilled.
Their clientele cuts across from supermarkets (Naivas, Quickmart), hotels and fast food chains, (Safari Park Hotel, Ole Sereni, Java, Galito’s), institutions (Strathmore University), caterers, and domestic consumers and with a capacity of five metric tonnes per day.
Ms Mambo says they are barely scratching the surface.
The mother of three started small.
“The machines we have now are not what we began with, at the beginning, we had a 500 square feet facility with a five kilogramme (Kg) per minute peeling machine which I bought using my savings. Right now, we have an 80kg per minute machine with a factory space of 4,000 square feet,” she says.
Ms Mambo adds that she was lucky to find a company that was closing down and which sold her a few equipment that she paid for in instalments and also took chama loan and as the company grew, her bank came in handy.
She advises that if one wants to start a business, begin with what you have, however small and where you are, and let the growth of the business push you to the next level.
Being a food processing company, Wedgehut Foods had to establish standard operating procedures, and food safety audits, and compliance with these has propelled its growth.
Lessons from previous businesses
This not being her first business venture, Ms Mambo says that as an entrepreneur, never ignore any stage you are in because it is preparing you for the future.
Having been in the logistics and hospitality businesses, one of the lessons she picked from the onset is to invest in the right people.
“I was clear on the people I needed to walk this journey with because it shortens the learning curve from an early stage,” she says.
The other thing she points out is planning ahead and doing a bit of research on the business you are doing and cautions that you should not go into it because others are doing it. Have a clear plan, including how to raise money.
And once in business, Ms Mambo says that working capital is a disease that most companies struggle with because some use it for capex leading to cash flow issues.
“Money is key in a business so think of how you manage it. I have been deliberate that because ours is a capital-intensive business so I’m always working on cash flow to stay afloat. We buy our potatoes in cash but our clients pay after 60 to 90 days,” she says.
At Wedgehut Foods, Ms Mambo says that the biggest nightmare she has ever faced was having six tonnes of a consignment of potatoes ‘turning black’ on the shelves which was basically a post-harvest issue.
“It was a crisis. It was firefighting, I got calls after calls from my clients’ CEOs and from that onwards, we mastered potato quality from sourcing, and processing. It was a loss that almost made us close our business,” she recalls.
Market access is the biggest challenge to most businesses but for Wedgehut Foods, the issue is sourcing and aggregation of potatoes, and with the current drought ravaging the country, scarcity and consistency of potato supplies are her pain points.
“We’ve done marketing, and new clients are coming in but the scarcity of potatoes gives me sleepless nights.”
Two, being a capital-intensive venture, you need money to pay farmers in cash yet her clients have up to 60 days credit period.
To deal with that, they are negotiating with clients to have a shorter credit period. “We tell them if it’s not working for us then we can’t be able to serve them. It’s a thin line and a struggle but just know how to manage it,” she says.
On the quality of potato supplies, the entrepreneur points out that there is an information gap on the quality of potato processors want.
“Just because you have farmed potatoes for years doesn’t make you an expert, technology, and innovations change. A processor needs good size potatoes of certain varieties,” she says.
On competition, Ms Mambo says the market is huge for all.
Despite the confidence, she says that theirs is still in a journey. Currently, she has a team of 40 workers.
With her current product line secured, she says she is getting obsessed with food and potato value addition and intends to diversify into potato flour-making alongside other vegetables as she continues to run her Express Courier and Mambo Logistics companies.
“The business is now outgrowing me so I’m hoping to bring other investors on board,” she says.
Her advice to entrepreneurs? “Stop having ‘a bedroom affair’ with your business by clinging on to it. Let it run on its own and allow other people to come and move it to the next level, be brave enough to seek help,” she says.