Leaving your job to concentrate on your new business is always a difficult decision to make. But when a Danish organisation Ms Linnet Akol had been working for ceased its operations in Uganda, she decided to fully manage Krystal Ice Limited. It had been processing and selling ice flakes to fish factories and ice cubes to businesses that sell cold drinks at the time.
When the company had just started operations in 2009, electricity costs were subsidised, allowing the company to incur low costs. Then, problems struck. The subsidy was removed and this created new challenges for the budding ice producing company. It found the power tariffs high.
In the face of the new challenge, the company brought in a consultant who advised it to purchase machines that consume lesser power. Once they did as advised, their power bill dropped. Their ice production followed.
“Production was cut down by a half,” Ms Akol says. With the new trials came the fear of closing down the ice company so she decided
This “something” dated back to 2009 when the social scientist turned entrepreneur attended a business conference in the United States of America. Part of the lessons was that she needed to diversify her business with related products.
What also stuck in her mind was that she needed to do a business that she is not only passionate about but also one that has a great impact on society in terms of employment.
She was exposed to factories doing similar ice business such as shredded ice. That inspired her. But her thinking at the time was that she would not manage, at least not with her little resources.
Following the new setback, she acted. “I came up with the idea of making ice cubes which are edible. But I wanted to add value. When we would get study visits at the ice plant, you would see children trying to eat the ice but it was not healthy. I developed a product that is healthy and of good quality, a product my children, customers and I can eat,” Ms Akol explains the start of a new journey.
There were few options for healthy snacks on the shelves from what she had discovered in her market research. She decided to use fresh frozen fruit pulp to produce what she later called ice pops. In 2015, she had learnt that Uganda Industrial Research Institute (UIRI) could be a stepping stone for bringing her idea to life. Once she approached UIRI, she was mentored and given hands-on experience on developing a final product.
Fruit farmers were her source of raw materials from day one, given that the company produces six fruit flavours including mango, apple, orange, pineapple and watermelon. Once her idea of the frozen fruit pulp was ready, she put the fruity ice on sticks and sent it to the market. Within the first year of production, she sold more than 40,000 ice pops.
Two years later, Ms Akol says her business is on its way to success. She considers certification from Uganda National Bureau of Standards (UNBS) as a big achievement for the company. She attributes part of her success to constant search for mentorship and networking programmes around the world.
“The best advice I have got from these programmes is to push my boundaries, look for opportunities and learn to make myself better,” she says.
The ice pops have been welcomed without a lot of marketing. Her budget has not allowed her to advertise on television or radio. So word of mouth, family/kids events, social media and fliers are her channels of marketing.
The company’s machines have capacity to produce 1,000 ice pops every day but they are still under underutilised.
“We are still trying to create awareness so sometimes we do not have to produce that much, only that which we are able to sell off,” she says.
Every day, the budding company spends Shs100,000 on every fruit. In a good month, the company sells 10,000 ice pops.
Ms Akol recently participated in the ‘Rising Woman’ initiative held by Daily Monitor, dfcu Bank and Uganda Investment Authority and emerged first. She also walked away with Shs15m as the woman with the best business proposal.
Her plan now is to grow her business. “I want our production to increase. We are still below capacity. I want to see us buying more machines. In five years, I want a fully automated big plant. For the next two years, we would like to get 3 million customers,” Ms Akol says.
Rising above challenges
Despite the few strides made, that does not mean there have not been some challenges. The ice pops are yet to be fully accepted on the market partly because they are Ugandan products, she says.
But also, no proper marketing has been done. The company has capital constraints and needs to do proper marketing, rebrand products, hire the right team and give it the training it requires to take the business to a greater level.
She admits she has not been to banks for a loan and instead uses loans from investment clubs because the interest rates are lower than those in commercial banks.
She still has challenges with determining her exact target market. “Children are our biggest customers but it is their parents who pay. They are just influencers but I can tell you 70 per cent of our pops are bought by children between the age of six and thirteen,” she says.
In addition, there is competition but also the cost of doing business, electricity tariffs in particular, is high. There is more to that; Ugandans do not want to pay a good price for the ice pops.
“This is a product worth Shs2,000. But because we are just starting, we put it at Shs1,500. Those out there from Kenya cost more than Shs2,500 but because it is a Ugandan product, people do not appreciate. We want the product to be known and as people appreciate, we see how to work on pricing,” she says.