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Marcopolis presents the Ghana Report focused on investments, doing business, economy and other topics featuring interviews with key executives and government officials. The sectors under review are agriculture, banking, energy, industry, telecom, IT, real estate and more.
InterviewsJune 07, 2022
Snack Food Industry in West Africa: Discussing Latest Trends with Geoffrey Fadoul of Daily Food
Geoffrey Fadoul, Co-Founder and CEO of Daily Food Ltd
- Written by Sandra Francisco
- Published: June 07, 2022
Interview with Geoffrey Fadoul, Co-Founder and CEO of Daily Food Ltd
What is the history of the business?
Daily Food was founded by me and Jean-Paul Nassar in 2018. We got the idea from a product sold in Nigeria in very high quantities called Beef Roll, or Gala. Basically, it is bread with sausage meat inside and we thought this product could work in Ghana, so we started Daily Food as an industrial bakery to produce this product. Unfortunately, or fortunately for us, it did not peak to our expectations. We learned that the Ghanaian consumer was different from the Nigerian consumer, and we needed to pivot. We found ourselves with a set of industrial machinery built for a bakery and with a top team in the bakery business. In order to pivot, we thought about what kind of product we could offer the Ghanaian consumer, and this is where we started with a cupcake, which today is our bestselling item – the Boss Baker cake original. Two months after we launched it on the market, we found ourselves with a lack of capacity and we invested in a second line, then a third line and today we are positioned as a leader in Ghana in cupcake snacks. There are many types of snacks. One of them is biscuits, another is cupcakes, which are mainly consumed by kids at school. From there we expanded our range, and we are currently exporting to 8 countries in West Africa. When we increased capacity, we were approached by fast-food chains like Burger King, KFC, and Domino’s because we are the only industrial bakery in Ghana which is ISO (International Organization for Standardization) 22000 certified and FSSC 22000 certified. That is the highest food safety standard certification in the world. They asked us is we could produce dessert items and burger buns for them. That was the start of our B2B journey, and we now offer dessert ranges such as brownies, chocolate chip muffins and cookies. We are registered with them at the international level, and we are now trying to supply Burger King and KFC franchises in other countries.
What is your competitive advantage and what makes you stand out?
High standards, quality, taste and affordability. We have a competitive advantage over our competition in exporting to francophone countries because I lived in the neighboring countries for ten years before coming to Ghana. It is my territory as well, and I know them well. We are originally francophone. I am French, as is Jean-Paul, my partner, so it is easier for us to communicate with neighboring countries and our competitors, even if they have been in the business for more than 20 years, are not able to export to those countries. In our second year, we were already in three countries, in the third year in six countries and we are still expanding.
How do you feel about competition?
We like competition, we embrace competition. It makes the market grow, makes it more visible and will improve every player in the market. I am happy to have competition. I was begging for competition. Unfortunately, in the last four years we had junior competition. They would enter the market, lose money and get out. So, let us see now what the new competition can do.
What is your impression of the snack food industry?
Since we entered the industry in 2018, there has been continued, steady growth. During the pandemic, the category slowed in growth because snack food in Ghana is an out-of-home consumption. During Covid, kids were not at school and many people were at home, so there was a slowdown in growth in the packaged food industry, and snacks in particular. We have recovered in part in post-Covid, but we have been affected heavily since the fourth quarter of last year and we are facing a de-growth of the industry in Ghana and West Africa, and this is due to the inflated cost of raw materials. When the cost of all of our ingredients went up, including packaging materials, plus the devaluation of the currency in Ghana, we were able to move from a magic price point to another magic price point. What we call a magic price point is 1.5 Ghana cedi. When we move out of a magic price point, we have a choice of going to a non-price point of 60, 70 or 80 pesewas. At Daily Food, we increased the size of the product and we moved to 1 Ghana cedi to make it sustainable for us while absorbing the increased cost of all the raw materials. That was the first factor. The second factor we see with our consumers is the price of their main necessities like bread, vegetable oil, tomato paste, sugar and flour, all went up and transportation costs went up too. Salaries did not follow accordingly, so what is happening is that a consumer will spend more now on necessity items rather than on snacks, and less in general in the market. This has made the market slow down, meaning while people enjoy cupcakes, they are not a necessity. In certain categories of snacks, especially the ones that are not belly-filling, we have seen a de-growth. However, we expect a recovery, probably next year.
What other African countries do you export to?
Our first market was Togo, but it is a small market. Our most important and interesting market is Ivory Coast. We started exporting there in 2019 and we treat it as importantly as Ghana in the sense of marketing integration. We are close to the whole value chain of wholesalers, distributors and retailers. We also design the product according to the market to which we export. In terms of size and in order to meet the price point in those countries, for example 50 CFA or 100 CFA, the packaging is designed specifically for them. The packaging is in French, and all the marketing campaigns are in French. Currently we are exporting to Togo, Benin, Burkina Faso, Ivory Coast, Niger, Mali, Guinea, Liberia and Sierra Leone. We have one factory serving the region.
Do you have any plans to build factories in other countries?
Not at the moment. In the next three months, we will be present in Nigeria, and we have been registered in Dubai. In a month’s time our products should be on the shelves in Carrefour Dubai. We are still expanding in Ghana and exporting internationally. We believe that manufacturing in Nigeria has a lot of challenges and is not an easy journey, so we would rather be more competitive manufacturing in Ghana and serving the Nigerian market from here.
Do you plan to bring in investors, or will you remain a co-owned company?
We will open it up to other investors at the right time. As long as those investors bring value and not only money, we would be happy to have them on board.
What is your medium-term vision for the business in the next three years?
Our main expansion and goals are on three different axes. The first one is the institutional axis. We would like to add more multi-national fast-food franchises to supply to. We are working on Domino’s now, and Pizza Hut and Chicken Inn on a national level and on a regional, and why not, international level. In the biscuit category, this month we are launching three types of biscuits for Ghana and for the region and I would see this range expanding. And as for the cupcakes, I would like to see more innovation. We have been very innovative. For example, we have launched a digestive cake. We have launched a sugar free cake in Ghana that seems to be more appreciated on an international level than on a regional level. I would see us as well exporting to Europe and the US in the next three years. Right now, we produce and sell 500,000 cupcakes per day in the region, and I think we will be above a million in three years.
Aside from that, what is important to highlight is the social impact we believe we have at Daily Food. I am the chair of Food For All Africa, which is an NGO founded by chef Elijah (Amoo Addo) involved in trying to eliminate hunger in Ghana and West Africa. Daily Food is a very active member. On another note, my biggest moment of pride in Daily Food is when I realized that our Boss Baker cupcake goes into the bag of a child who goes to a school where the tuition fee is $25,000, and at the same time, is consumed by a child who is on the street and not able to go to school. We are proud that our product cuts across social classes and is available to each and every one, no matter what life he or she is living. We are also committed to using less plastic. In Ghana, all the products are put in rubber bags, and we decided a year ago to eliminate that by introducing string packaging and we have eliminated thousands of tons of plastics.
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