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Entrepreneurs Turn Zambia’s Wild Fruit Into a Growing Juice Business

Forest Africa Zambia, an agro-processing company located in Chilanga, Zambia, produces juices and other products from wild fruits. In this interview with Jeanette Clark, co-founder Frazer Handondo discusses the company’s business model, the advantages of focusing on smaller retail outlets as a sales channel, and future diversification plans.

Zambia boasts a wealth of biodiversity; however, it has been identified by USAID as possessing one of the highest deforestation rates globally. Annually, an estimated 300,000 hectares of Zambian forests are lost. A key factor driving this deforestation is the scarcity of alternative livelihoods within rural communities.

“When farmers’ crops fail, whether due to drought or flooding, the first thing that often happens is that they go en masse to cut down trees to make charcoal to earn an alternative income,” says Frazer Handondo.

For Frazer and his wife, this challenge presented an opportunity to kill three birds with one stone: protect Zambia’s natural biodiversity, provide alternative livelihoods to rural communities, and build a business in the process. In 2017, the couple co-founded Forest Africa Zambia, an agro-processing company with a factory in Chilanga, Zambia. It produces juices and other products from wild fruits harvested by rural community members.

Zambia has an abundance of indigenous and unique fruits that are well-suited for value addition, including the baobab fruit, African medlar, monkey bread, wild loquat, governor’s plum, and several others.

Making and selling fruit juices

It took some time to get off the ground, but by 2019, Forest Africa was operational. The company secured a supply chain by forging relationships with rural communities that had access to the relevant fruit trees, excluding protected forest land.

“We announced, through the local leadership, that we were interested in certain fruits and then began to aggregate as each household or collector brought the fruits to us,” explains Frazer. The seasonal fruit was then transported to Chilanga, on the southern outskirts of Lusaka, for processing.

Using their own investments and savings, the Handondos first focused on getting the right machinery to process the baobab fruit into different products.

The company quickly added a second product, ngai juice made from the African medlar fruit.

Frazer was surprised by the swift acceptance of the company’s products and the eagerness of smaller retail shops, in particular, to stock the juice. “It was amazing how people embraced our products almost immediately.”

Today the company produces 15,000 litres a month and transports it to over 200 retail shops in the Lusaka, Southern and Copperbelt provinces. A case of six bottles of baobab fruit juice costs around US$3.30.

Targeting smaller retailers

The company has found targeting smaller retail shops to be lucrative. “They pay cash on delivery, which is cardinal to our business, especially as the fruits we use are seasonal,” says Frazer. “This keeps us afloat, and we can manage our overheads without worrying about the longer payment terms from larger companies.”

Nonetheless, Forest Africa recognises the marketing and branding advantages of being available and visible in larger supermarket chains and is working towards expanding its presence within the country.

It also actively uses Facebook to advertise its products and engage with its 2,800 followers, sometimes even to arrange home delivery.

A Forest Africa Zambia employee handling packaged fruit juices.

A Forest Africa Zambia employee handling packaged fruit juices.

Product diversification

Frazer envisions opportunities to process the wild fruits the company utilises into various additional products. For instance, with the baobab, Forest Africa already produces juice from the pulp, extracts a non-greasy oil from the seeds, and transforms the shells into eco-friendly briquettes.

Furthermore, the residual cake left after pressing the oil could be repurposed as fertiliser or livestock feed for cattle and poultry. Another possibility is utilising a portion of the fruit to produce a red tea, rich in antioxidants. Forest Africa has even developed vegan baobab milk derived from the seeds, although this product has not yet been commercialised.

The company is piloting a “nutritious and tasty jam” from the African medlar and will start with full-scale production once the equipment arrives from China. “We could also make an oil from the seeds,” says Frazer.

Growth opportunities

Forest Africa aims to eventually cultivate its own trees to guarantee sustainability. Although local competitors are beginning to emerge, Frazer is confident that there remains significant scope for domestic growth before considering regional expansion. In the meantime, the company is examining whether the Democratic Republic of Congo or Angola would be suitable for cross-border expansion when the time is appropriate.

Working capital remains the company’s most significant challenge. If the right partner can be found, Frazer believes that an investment or equity partner would propel Forest Africa to the next stage of growth.

“Borrowing is restrictive as the cost of finance in Zambia is between 20% and 30%. You can imagine the money you need to buy during that narrow window, when the fruit is in season, to last the whole year.”

For the moment, the company overcomes this hurdle by ploughing back as much of its profits as it can.

Source : Howwemadeitinafrica