Snacks, Spices and Seasonings Industry in Kenya by Sawan Shah of Tropical Heat

Interview with Sawan Shah, Executive Director of Tropical Heat

What is your assessment of the sector in Kenya? What are the latest trends?

There is a lot of heat in the FMCG space, several new players, and quite a lot of movement in the industry including some consolidation. The reasons for that are that the average age of Kenyans is 19 years old. It is a growing population and more and more people are reaching that aspirational bracket where they can afford a larger basket value of goods. So, a lot of industries and manufacturers are looking to tap into that and make sure that they have services that they can provide to that demographic. Out of all the different sectors in Kenya, manufacturing is one of the pillars that the government is trying to promote and push. There is a lot of interest and there are a lot of players. Some are successful, some are not. It is very difficult to be successful in this industry. There are several challenges.

Is the sector competitive in Kenya?

In spices, we are the leading manufacturers and distributors of spices, herbs, seasonings, and an item indigenous to Kenya called Masalas; blends of different spices that add a kick to your dish, such as tea or rice.

There are new entrants into the market every month. In the last two or three years we have seen 10 to 20 new brands emerge. There are several new, emerging supermarket chains that have come into the country. So, there have been big changes in terms of the industry, the retailers and the distribution channels. That always opens up new doors. For example, Carrefour and Shoprite have entered the market. With that, they are also importing a lot more brands from their own home countries, compared to in the past where the larger retail chains would focus more on Kenyan brands. Having said that, traditionally Kenyan people have grown to trust and enjoy some specific brands and continue to do so. It is an exciting space and it means that nobody can rest on their laurels and nobody can take what they used to have as market share for granted. We see competition as positive, and it keeps us on our toes. We prefer to focus on our own strengths.

What range of products do you offer?

We are an FMCG company and our primary focus is in two broad areas which is snacks and spices / seasonings. On the snacks side, our core products are potato crisps, extruded snacks, peanuts, ethnic snacks such as the Kenyan Chevda range, and more recent innovations in a healthier range of snacks such as rice cakes, baked snack. In spices, we are the leading manufacturers and distributors of spices, herbs, seasonings, and an item indigenous to Kenya called Masalas; blends of different spices that add a kick to your dish, such as tea or rice. We have plans to diversify into other areas soon.

What makes your products stand out?

There are a number of factors which differentiate us. First is our relentless passion for quality. We have extremely high quality control processes in place. Second is that we source all of our raw materials in the area in which they are best grown. We make sure that we always import or procure locally the best quality ingredients regardless of cost or location. We currently import raw materials from over 10 countries including Turkey, Vietnam, Singapore, Egypt, South Africa. For spices, for example, we do not use any bulking agents. So, we are slightly more expensive on the shelves to our consumers, but our philosophy is that nobody should compromise on the quality of their food. Through that, we have established Tropical Heat as a very strong brand. Building on that brand and raising the awareness, educating our consumers about the benefits of our products, is the third channel through which we differentiate ourselves. We have an innovative approach to marketing and brand building. The final pillar through which we differentiate ourselves is to ensure that from a service perspective we are always world-class, across our entire supply chain and to all our stakeholders, and of course via distribution channels to ensure consumers have easy access to all our products.

Is this plan in Kenya or internationally?

The plan is both within Kenya, and internationally. Our vision is to have a truly global presence in the long term, and to be a brand that is a source of pride for Kenya, across the world. Having said that, Kenya is our primary market and we must ensure we are always strong ‘at home’. Our buzzword around the factory is “passion” and our purpose for the staff is not how we can be the leaders in manufacturing snacks, but how we can inspire passion, how we can make sure everybody from our farmers to our suppliers to our customers to our consumers have a good experience when they interact with the Tropical Heat brand. Traditionally, we were focused in the modern trade sector. Only the top 5% of the population could afford one of our products. Going forward, the plan is to ensure that every Kenyan can get their hands on a high-quality Tropical Heat product, and we have an internal vision which is to have our product available within 500 meters of you wherever you are in Kenya. We want to increase our availability and penetration across Kenya, as well as globally.

Where are you available internationally?

We are currently in 17 countries. Our plan is to be in 20 countries by 2020 and to build on from there. We constantly have people emailing us asking where they can find our products in their country and we want to make them available. Our primary market is Africa but we also have a decent presence in the UK, the US, and other European countries, such as Germany. Wherever you are in the UK or the US, you can buy our products online and have that product shipped to your door. It is almost the same price as if you were in Kenya. Our products are a very popular gift item for people to take to their families in the UK and the US. We used to have people taking one suitcase of their two-suitcase allowance on British Airways or Kenya Airways full of our snacks. Now they can save that space for clothes and other Kenyan goods because you can get these products in the UK.

Are you looking for technological partnerships?

We are always looking for ways to leverage emerging technology and improve our service offering. Traditionally, we have actually built most of own technology in house. For example, we have built our own ERP system across our organization, and have recently built our own CRM sales platform whereby our whole sales team is communicating with us online and we can see how interactive they are with their customers through our platform. There are an increasing number of technology partners in the Logistics Supply Chain, which is a very positive sign – as handling transport and logistics is often one of the biggest challenges for us as a business.

There is a global trend that eating anything which is greasy, such as potato crisps, is not good for your health. What is your response to this health trend?

Our friends always laugh at us because our family and my partners in the business are the most health-conscious individuals around. Ironically, I probably eat two or three packs of snacks a day. I taste a product from every single batch made in this factory every day. The fact that I eat it means that I find our products are actually okay. We are noticing this health-conscious trend and as a result, we have invested and are looking to pioneer that space within Kenya and build a healthy snacks range. We know that people are going to snack. Children are going to want something tasty to take in their lunch boxes. But, how can we make that healthier? So, we have launched a range of products that are a healthier range of snacking. For example, we have rice cakes made from pressed rice. We have a range called Safari Puffs which are baked instead of fried snacks. We have some new ranges that will launch soon along these lines as well. We, and myself included, all believe in a balanced diet. If people exercise and have a healthy lifestyle, having one snack a day is not going to be excessively harmful. The reality is our fastest moving and most popular range of products is still the fried range. That is what the market wants. So, our strategy as a company is to have that available because that is what is popular, but also to have the healthier alternative for the individuals and the niche market which is growing in Kenya so that they can access it as well.

What is your CSR policy?

CSR is one of our biggest passions in terms of the Board of Directors for this company. One of our key goals is to add impact to our society, to our own people and staff, as well as to the community around us. We have a CSR initiative of four key pillars which we want to promote. Number one and the area in which we invest the heaviest is to give back to the needy in Kenya. There is a high degree of poverty here. We do this through physical investment, through sponsoring schools, we have sponsored several children to help them get a better education, and through food and nutrition. Almost every weekend, we have a team which goes out and donates product to communities around us including schools, churches, and some charities. There are three other areas in which we are looking to focus as well. One is in the community around us. We recently moved to a new location and we want to make sure that we are making a positive impact on the local community. We want to set up a medical camp here where people can get free access during the weekend to doctors, dentists, etc. We will have a Passion Day where once every three months the whole team gets together and does a street cleaning activity or paints a school or goes and promotes a school or a church locally. That is still a work in progress. The third pillar is through sport. We sponsor several Sporting events, we have a Tropical Heat football team; we have sponsored the Kenyan and Ugandan Cycling teams through equipment, bicycles, uniforms, to help them leverage on their raw talent. A lot of them have the raw talent but not the finances to succeed in their sport with regard to training facilities. Cycling, football, running are all sports which we are promoting in different ways. We also take part as a team in a lot of charity runs in the country, such as the Mater Heart Run. There is one almost every month. We take a big team of 30 to 40 individuals and go for it. The fourth pillar is something new which is a project which will be launched soon which is promoting wildlife in Kenya and how we can help our environment. We are about to run a campaign called Waves for Wildlife where the actual consumers of our products are going to be able to contribute to promoting wildlife, which is something very close to the heart for myself and many Kenyans.

What is your vision for the company in the next two to three years, the medium term? What would you like to achieve?

The dream and the ultimate vision for us is to ‘Touch 1% of the World, with Passion, every day’. We want to build on our existing strengths of focusing on superior quality but add three pillars to that. Number one is to provide world-class service. We want to become world-class at every single level of the value chain. Secondly, to have very solid systems built in within our company, so that we can leverage these, and diversify across different product ranges. Finally, the third is to make an impact on society through our initiatives, such as Waves for Wildlife. We want to focus on how we can really build up the community and environment around us and improve it.

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