URBAN BITES ENSURES THAT WE ALL GET TO APPRECIATE THE CRUNCH OF A POTATO CRISP.
June 28, 2017
KCB Venture Magazine
Potato crisps are an integral part of the snacking menu for school-going children the world over, and Kenya is no different – particularly in urban, middle-class households.
But the Urban Bites brand of potato crisps has managed to find crossover appeal among teenagers and young adults, by adopting a marketing strategy driven by bold colours and cool, funky packaging.
One would be mistaken to think Urban Bites was a nightclub or some cool spot in Nairobi.
Processed and packaged in Kenya by Norda Industries, so successful was the unconventional marketing strategy that several of Urban Bites’ competitors also had to jazz up their packaging in response, some incorporating popular cartoon characters like Superman, Tom & Jerry and Ben 10.
Despite that “last mile” success for a company that is less than 10 years old in the market, the major hurdles in the story of Urban Bites have been high up in the value chain, in sourcing potatoes, says Norda’s Managing Director, Faraz Ramji.
You wouldn’t immediately think potatoes would be a problem – after all, the potato is the second-most important food crop in Kenya after maize. It is also an important source of revenue, employing more than 2.5 million people across the entire production chain.
But Ramji says the main issue was getting the right variety for manufacturing potato crisps.
“When we started, we were dealing with a lot of middlemen,” Ramji told Venture Magazine. “Sometimes they would bring us potatoes that would produce crisps that were too soggy, or too sugary, or that would brown too much.” To circumvent this, the company had to try and find a stable, consistent supply of the right kind of potato for crisping.
“We found a group of 200 farmers in Bomet that had been trained in best farming practices in cultivating potatoes for crisps, but they had no market. “It was a perfect match – we agreed on a price and quantity with the farmers, giving them a price 60-70 percent higher than they were used to; on the other hand I was getting my potatoes about 30 percent cheaper than if I sourced them from middlemen.
Within no time, our orders went up from five tonnes a month to five tonnes a week. ”For two years, the arrangement worked well, but then the problems began. “We started having supply shortages that were outside the normal seasonal cycles; they would last one or two months, which forced us to scale back our production. I wasn’t willing to compromise on quality,” says 35-year-old Ramji.
When Norda’s team visited the field to find out what the problem was, it turned out that there was a shortage of certified seed of that specific variety of potato. The Kenya Agricultural Research Institute (KARI) and the Agricultural Development Corporation (ADC) are the main suppliers of certified potato seed in the country. The supply shortages were exacerbated by the fear that farmers had been recycling seed from the last harvest, which made their yields drop from 15-20 tonnes an acre to about seven tonnes.
“They were trying to save money, and I don’t blame them,” says Ramji. “But with less demand from farmers, the seed suppliers didn’t see the need to keep propagating the certified seed. It was a kind of vicious cycle. ”The Norda team considered importing seed from the Netherlands where it was abundant, but then realised they would run into a labyrinth of regulations from the Kenya Plant Health Inspectorate Service (KEPHIS) – seeds tend to carry disease, and there was the risk of introducing diseases into the country.
Importing potatoes was out of the question – there are numerous restrictions on importation of fruits and vegetables in Kenya, and with potatoes having a shelf life of just two weeks, you would need a whole cold storage chain from farm to factory. Finally, after numerous production slowdowns and meetings with seed companies and farmers’ groups, the Norda team was able to secure a supply arrangement with smallholder farmers in Bomet and Meru, who had been trained on best farming practices by Syngenta and the International Potato Centre, known by its French acronym CIP.
Ramji was excited about the first harvest, expected in March 2017. It would mark the end of more than two years of crisscrossing the country looking for the perfect potato, a hunt that had begun to feel like a search for the mythical unicorn. But then more heartbreak was in store for them – the potatoes harvested were far too small, because of the drought that hit the country late last year into the first quarter of 2017.
“Despite clean seed and best farming practices, the harvest was appalling,” Ramji says. “It has made us reflect on what would be the best way to avoid this in the future. Should we work with large farmers who have access to irrigation systems, or perhaps go into farming the potatoes ourselves? Was it just bad luck, and should we stick it out to see what happens next season?”
Ultimately, Ramji isn’t giving up, and Urban Bites remains on the shelves, and has ramped up its visibility for young adults in particular – the crisps are sold in partnership with Subway sandwiches, as a kind of quick meal combo for the young adult, urban consumer on the go. It’s a step toward broader trends in the West, where crisps are not just a snack for school-going children – industry executives have worked hard to make sure that potato crisps, for example, have become part of the regular restaurant menu—crisps with sandwiches, crisps with soup, crisps as a topping for salad, and so on.
And Norda is diversifying more into its maize-based snacks such as crunchy corn curls and puffed corn, for which there is more stable supply of raw material.