Letting go of a golden dream
Mbongeni Mguni | Friday March 13, 2015 15:48
There is a saying in the 100 percent juice business: it’s magic lies in the fact that is “juice is food, juice is better than fizzy drinks and juice is better than alcohol”. Juice’s popularity also piggybacked on the growth of the global health movement, which began in the 1980s.
Globally, the industry is worth approximately US$30 billion (P285 billion) per annum, which is easily twice the projected size of the local economy for the 2014-2015 financial year. The potential for the business in Botswana was recognised early by South African juice giants, who quickly established firm supply networks through retail networks dominated by players from that country.
In the mid-1990s, Ephraim Setshwaelo, a local entrepreneur had also noted potential in the market and in 1996, established Golden Fruit Pty, the country’s first 100 percent juice manufacturer.
Using a P2 million capital injection, Setshwaelo set up on a piece of land not far from the Boatle junction in a sprawling mini-industrial district along the eastern stretch of the A1. “The potential was abundant because the market was huge, including SADC and the millions of people there,” Setshwaelo said this week, recalling the venture’s earliest days.“Manufactured products were dominated by one country and my knowledge of the country and Batswana was that when they get to know how to do something and want to do it, they reach excellence very quickly.
“The rate at which they reach excellence is quick and they are not difficult to train.
“I believed if you could go into any sector of manufacturing and if you are well established and have the passion, you could be better than South Africa.”
Buoyed by the existence of support institutions such as the Botswana Development Corporation (BDC), National Development Bank and the Citizen Entrepreneurial Development Agency, Setshwaelo took a leap of faith in the country and Golden Fruit began operating.
In his words, “once the opportunity arose, I saw it could not be missed. We went ahead and invested in the best plant and produced the best juice.”
In as much as Setshwaelo and his partners believed in the quality of their product, the early years quickly taught them the difficulty of breaking into an established market.
Two South African brands, Liquifruit and Fruitree, dominated the market and towered over the fledgling Golden Fruit brand, shaking the initial confidence with which the venture had been founded.
“I found that Batswana are a people of brand loyalty and are not easy to take away from their preferred brands,” he said. “You bring something new and they say ‘what’s this? It’s full of sugar or it’s just water,’ or whatever other excuse simply because they want to stay with their own brand.
“The two existing brands had been thoroughly and professionally marketed in every corner of the country. They had local representatives who guarded the market jealously and supplied the retail chains.
“It was like swimming upstream.”
Setshwaelo found local support difficult to come by as well, and he says government officials in particular were reluctant to support the fledgling brand.
“We knew a lot of juice was being consumed in schools, hospitals, offices at government events and others, but our people preferred the South African brands.
“There was a time when we were giving it away for free just for them to taste! With Air Botswana, we spent two years trying to convince them to take our juice on their flights and at some point we had to sit down and say ‘just forget it’.”
“Those were serious problems and if you love your country that just leaves you heartbroken.” The entrepreneur recalls vainly trying to persuade government officials to invoke protection or preference programmes to boost the fledgling business. According to Setshwaelo, Golden Fruit was told that protection would only be granted if it could prove that it could totally supply the market.
“Overnight? That was impossible.”
As the initial years passed, however, the Boatle-based company began securing market traction and retail chain doors began opening for the new-kid-on-the-block.
The same loyalty Batswana had lavished on the South African brands, they redoubled and heaped on the homegrown product. Setshwaelo said the hype was justified by the product’s remarkable taste and soon takeover talk was coming in from market titan, Coca Cola.
“They have their own juice called Minute Maid and they carry it along to whichever market they enter. But where they find an equivalent juice, they partner with the local one.
“We were not comfortable with selling out at that point. I asked them how they had come to know about us and they said they constantly conduct global research on all products, looking for quality.
“Batswana became proud and possessive of the product. They saw that it was not a fly-by-night; it was pure. They were proud to see something of their own that looked good and tasted great.” In its heydays, Golden Fruit’s employment peaked at 73 and included juicemakers and bottlemakers, with the majority of workers picked from surrounding villages and predominantly youthful.
Young boys who dropped out school for consuming alcohol or fighting and girls, who were expelled for pregnancy, suddenly found themselves with hope.
Golden Fruit introduced the youngsters to machines and trained them. But much more than that, it gave them a skill and the belief that they too were qualified to do something other than roam the village.
“These people were very literate and teaching them to operate machines with measurements was very easy,” Setshwaelo recalled. “They themselves were amazed at their performance.” Beginning in the early 2000s, Golden Fruit would hit choppy waters that Setshwaelo attributes to boardroom wrangling. The end-game began when the company approached the BDC for funding to grow and as a result of an equity injection, the parastatal appointed its representatives to the board to protect its interests.
Squabbles over the direction of the company soon emerged with Setshwaelo now revealing that he increasingly felt isolated and unwanted in his brainchild. Greater funding meant Setshwaelo was faced with either matching the parastatal’s funding proposal or yielding equity.
“It’s like hardware and software. The person who comes with the idea into the business is the software and the BDC are the big guns who bring in the machinery and the funding or the hardware.
“How you mix these two is very important because the driver of the hardware has a lot of power but a lower idea of what the product is about.
“These are people who have never held a broom or a tool; they use fountain pens.
When they come, they are very educated in business plans, regulations and others but in terms of innovation and creativity, they are totally ignorant.”
Setshwaelo’s relationship with the BDC deteriorated and, left with a two percent holding in the business in the mid-2000s, he played his last card, sold out and left the business to the corporation.
“I felt very, very sad when I let it go. I knew it would not survive.
“It eventually closed in 2013. For many workers, that’s all they knew how to do and they just had to go back to the village. “That makes me very sad.”