Premier Food Industries: A Leading Food Processing Company in Kenya Since 1935

Interview with Joseph Choge, CEO of Premier Food Industries Limited

What is your assessment of the food sector? What are the latest trends? Is the sector competitive?

We are in a very competitive sector. The food sector is quite crowded at the moment. We try to distinguish ourselves from a quality perspective to be able to survive the stiff competition that is in the market. It is a sector where new investors come in from outside the country as well as the local competitors. In fact, our biggest competitor is actually a local brand. Premier Food Industries has been around since 1935, so that is a heritage of over 83 years. We have tried to learn a few tricks of the game within the sector. Competition is growing every day. Most of it is coming from low quality food products that are coming into the market and eating into our market share. The more the consumer thinks about pricing as a determinant of purchase rather than quality, it becomes challenging for those of us who only focus on quality as well as giving consumers a competitive price. We will always find a way to innovate, such as coming out with new products that are healthy for the consumer. The Kenyan consumer is now moving into a healthy kind of mindset. The question is how we can satisfy that kind of market. We have come out strongly both in juices and offering sugar free products. Soon, we will also be rolling out vegetable juices. Currently, no one else is doing those in the market. It is no longer about what companies are churning out from their factories. The current consumer is very sophisticated. You need to understand them and give them exactly what they want, but never compromise on quality as you do that. Each day is geared towards giving the best, quality food products to the consumer, as we have always done since 1935.

Where do you stand out in the market?

We want to be the sole provider of food from breakfast to snacking to lunch to dinner. If there is a big brand that is out there that wants to come into the market and have a local partner that can take their product to the market, we are definitely open to exploring that opportunity.

Our biggest point is that we have distinguished ourselves as a house of quality food products. I want each and every consumer to look at the ingredients on the packaging to see what is being offered by every company. That way, they are able to select products that will not harm their health. In this day and age, people are talking about cancer, etc., so you need to be careful about what you consume. Quality is at the heart of what we do and we want to give the customer the very best. For example, our squash is the only one that actually contains fruit. It is a bit expensive to put it on the shelves, but a knowledgeable consumer and a consumer who knows what they want would definitely know which one to buy. Another thing for us is the fact that we try as much as possible to get our fruits from Kenyan local farmers. Today, if you look at the Orchid Valley Juice for example, we get our mangoes from Hola in the coastal region and the eastern part of the country. It always gives me satisfaction to see that when you buy that truckload of mangoes it actually benefits a local farmer. We are the biggest tomato consumer in the country because we are the leading sauce company in Kenya. We can easily go out and buy huge tracts of land and grow tomatoes, but there is a mantra that we have. If a small-scale farmer can do it, why go and mess with his bread and butter? We try to promote them as much as possible. The only thing we can do better now is to figure out how to help them to reduce the impact of the middleman. Most of the time, we find that the profit is swallowed up by the middlemen bringing the produce to the factories. We want to go to the farms and partner with them to start aggregation centers where they bring the produce and we select the ones with the right quality for our production. We try to partner for mangoes, tomatoes, Mexican beans, and other key inputs we use in our production. Personally, I am a product of a peasant farmer. My parents used to have a very small garden where they would grow whatever staple food to feed ourselves and a bit extra to take to the market. Every tomato we buy from that small farmer equals school fees for a child in that village.

What is your international reach?

Our biggest market is Kenya. This is our home ground. We are across every county in the country. We also export into Uganda and Tanzania. Those are our two biggest markets in the East African region. They are just a few kilometers away. We export to Congo, Rwanda, Burundi, Gabon, Cameroon, Central African Republic. We have exported as far as Qatar, Australia, and the UK. They are very good markets for us. We are exploring moving into the US. We are trying to tap into the AGOA (African Growth Opportunities Act) market. We are still studying if it is something that is an opportune area for us. Our chilis and African honey would do well there. Peptang honey is rich African honey from the acacia trees in the bushes, sisal, and different kinds of flowers in the country. The honey market is massive and we have not even scratched the surface. If we can break into the US market with honey, it would be huge for us.

Who are your clients?

Outside Kenya, we use a distribution model so that we can have only one point of contact at any time. For example, in Uganda we have one distributor who buys all the products from us and distributes them to different supermarket chains. However, we maintain the relationships directly with the different chains.

What are the main projects you are working on?

We try to bring a lot of product innovation such as looking at the healthy angle of where the consumer is today. There are a lot of things in the pipeline. The latest project we have just introduced is quality peanut butter. When all the local brands were banned from the supermarket by the Kenya Bureau of Standards, Peptang remained because we have no aflatoxin. It was a big success for us. We have introduced tomato paste in SKUs (Stock Keeping Units) that can be able to reach the smaller consumer as we try to give a substitute for someone who may not be able to afford a tomato when the prices are a bit high in the market. In terms of companywide projects, we will be moving into a new, state of the art facility by 2020 or 2021. This is necessitated by the growth that we have experienced over the last two to three years to accommodate the kind of volumes that we want to do and the new innovations and products. We have to move more into automation and go into newer machines that are more sophisticated and will be able to give more efficiency. We can then pass that efficiency on to the consumer through the price point.

Are you looking for partnerships?

We want to be the sole provider of food from breakfast to snacking to lunch to dinner. If there is a big brand that is out there that wants to come into the market and have a local partner that can take their product to the market, we are definitely open to exploring that opportunity either through their brand or the Peptang brand. As part of our growth strategy, we want to grow five times in five years. It is crazy, but it is doable. One of the areas that we look at as a growth avenue is acquisition. We will need a lot of funding to go through with that. We are already partnered with our funding partner Proparco. Development partners who would want to come in and fund this kind of expansion would be highly welcome.

What CSR activities do you do?

We are heavily invested in CSR as a company. We look to be responsible citizens. We have adopted schools where we try to furnish the schools with desks and give food. We have also adopted children’s homes, some of which you can see on our Facebook page. We have recently partnered with one of our brand ambassadors to go to Turkana. Turkana has a special place in my heart because I went to school there. It is semi-arid and there is a lot of hunger. Even when I was in school, I could see it. When this opportunity presented itself to take food to the people of Turkana, it warmed my heart to be a part of that. It is something we will continue into the future. Whatever we can do to alleviate hunger problems in that region as a company we would be more than willing to help. We always post online for additional help when we go there for extra things like flour or sugar, etc. It is a very worthy cause. The biggest thing for us is the partnership with the farmers. Mostly, it is the women who do this kind of small-scale farming. If you empower women, you empower the nation. In our own workforce in the plant, almost 70% are women. That is empowerment of the community. Once you empower the woman, you can bet that that coin she takes home will buy something for her children and send them to school. We also have scholarship programs within the company for our own workers. For the children of our employees who have done well in final primary education going into high school, we sponsor their high school education. For those on the lower wages, we try to support them throughout their educational life 100%. This year alone, we are supporting at least four students.

Project yourself to the medium term, two to three years’ time. What is your vision for the company?

This is what wakes me up every day. We want to grow five times in five years. I pinch myself and think it is a crazy idea, but it is feasible. I want to look back five years from now and see a company playing in the big leagues of manufacturers within the country. Not to say that we are not there, but how much more can we impact the communities that we serve today? The more I grow the company, the more inputs I require from farmers. I look at Peptang as an employer of choice in this Kenyan market. I am a good example to the market that Peptang is also for the young leaders. I was nominated as one of the Top 40 Under 40 in Kenya last year. We focus on growing young talent to be able to be the leadership within the organization. Today, we have a crop of young individuals running the show and they are very excited to take this company to the next level. I want to buy extra tomatoes and extra mangoes from the farmer. The only way to do that is to grow the market, grow export, grow local. I want to give as much employment as possible within the country and give farmers an avenue to be able to sell their products from their farms all the way to our tables in our homes.

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