Defying odds to build a thriving, healthy tea brand
By Fredrick Obura | November 22nd 2020
She had no prior experience in running a business. She had no capital and no savings to talk of. And her parents were skeptical and unwilling to advance her any money for her venture as they believed that “girls get married, not set up businesses.” That was in 1995 when Flora Mutahi decided to venture into tea blending and packaging with the setting up of Melvin’s Tea where she’s the founder and CEO.
Over the years, she has had to weather many storms (most of which have not been the proverbial storms in a tea cup but real challenges), learned her lessons along the way, and moved on to the next phase of building Melvin’s Teas brand.
Now, with her Melvin’s Teas brand marking its Silver Jubilee anniversary – and the company directly employing over 120 staff – Flora Mutahi shares her experiences from the time when she set the company up until now, the milestones achieved, as well as her industry insights as relates to tea blending and packaging. Read on…
QUESTION: Start by giving us a background about yourself – family and career.
Flora Mutahi: We are 2 boys and 2 girls in our family and during our upbringing, there was equality from cooking, cleaning, driving, and all household chores. My father was a banker and my mother was a seasoned entrepreneur having run a secretarial bureau, and a soap manufacturing company among others. Businesses were a common subject at our dinner table.
Growing up, I always wanted to be an air hostess, because of frequent travel. Of course, my parents would hear none of it. Being good in accounting, I pursued it to a degree level and also enrolled in professional courses. However, I found myself skipping classes and James Mcfee, the director of Accountancy at Strathmore University encouraged me to introspect and be true to myself.
I quit my first ever job as an auditor after only 9 months where I had audited large manufacturers. I was so excited I would spend my lunch breaks on the shop floor listening to the machines and asking questions.
Q: Why did you diversify from free-flowing salt production to tea blending and packaging?
FM: I moved from free-flowing salt to tea in a few months as I noticed that a ton of salt was $100, and thus knew this was never going to make me money in the market as the returns were so low.
Q: When starting or venturing into tea blending and packaging, what were some of the main challenges you would deal with? How did you surmount these challenges in the end?
FM: I had no experience in manufacturing, let alone the tea and salt industry. I had no capital, I had no savings and my parents were unwilling to give me the money as their thought process was that girls get married, not set up businesses. Borrowing from banks meant we had to have collateral, which we didn’t. And like I said at the beginning, I lacked management experience while the market was also not ready for innovative products.
So how did I surmount these challenges?
First, I sought business advice from people who had been in the industry before, I also went to Kabete Campus of Food Technology to learn about food technology and processing. Then I got financial support from family, my Sacco, and a few friends. I also found a fund for women which helped with additional capital.
My mother being a seasoned entrepreneur supported us right through. And we invested heavily in marketing with the team always trying to get into prospective customers’ homes.
Q: Have you managed to sign or develop arrangements with eateries to stock your various tea brands and offer (or suggest) them as options (or choices) to customers coming in to take tea?
FM: Our product has a health proposition and yes, all the eateries that support this have reached out one way or the other. We are currently selling our products in the majority of the HORECAS – that is Hilton, Karen Golf Club, Simbisa, and Artcaffe, to name a few.
Q: In your perception, and from customer feedback, how has the Kenyan market and consumers responded or received the Melvin’s Teas brand? Are we receptive to the brand and its taste and appreciative of your efforts?
FM: Being 100 per cent naturally flavored products, our brands have been well received in the Kenyan market and my business has grown over the last 25 years. Especially during this time when the consumer is very careful what they consume we have found more and more people looking for Melvin’s teas.
Q: The Kenyan tea industry is developed while the market has many brands competing for customers. Have you managed to take your Melvin’s Tea brands beyond our borders into the African and global market? If yes, how has this been?
FM: Yes we have been able to list our product regionally in some countries in Africa and a few globally. However, our vision going forward is to see single-origin tea packaged in Kenya in supermarkets globally.
Q: What next is on the horizon, a supermarket perhaps or another product line, say pastries to go with the tea(s)?
FM: As I stated before, the global market is our next challenge and target.
Q: Having been in the tea blending industry for over two decades now, what are some of the issues that industry players have to urgently address in your opinion for Kenya’s tea industry to record further growth?
FM: A major problem facing the tea value-chain is a dysfunctional and inefficient tea auction system characterised by lack of transparency, accountability, and competition; and prone to manipulation, capture, insider trading, and cartelization by value-chain players leading to ineffective price discovery, low prices and poor earnings to tea farmers. The structural character of the tea auction in Mombasa in terms of management, governance, and decision-making processes is that it is a club where all value chain players with a direct commercial interest in the outcome of the auction process run the auction. This is a serious conflict of interest that predisposes the auction process to capture by vested interests, insider trading, price-fixing, and other malpractices.
Moreover, the tea sector is undermined by the manipulation and predatory behaviour of the Kenya Tea Development Authority (KTDA) and its subsidiaries on the value-chain. KTDA which supplies over 60 per cent of the tea traded at the auction has consistently used its market power, dominance, and influence to undermine the auction, curtail price discovery and exploit the vulnerabilities of small holder tea growers.
Thirdly, tea farmers have been also plagued by the twin problems of low prices and price volatility. While the low prices have eroded direct earnings by tea growers, tea price volatility has led to unstable cash flow for tea farmers.
Q: As an entrepreneur, and a lady for that matter, are you receiving sufficient government support in your efforts around manufacturing and employment creation?
FM: Ease and cost of doing business in Kenya is the largest challenge any entrepreneur faces. We would want the government to help us reduce the cost of doing business, drive more predictability, and continue to negotiate more trade agreements, thereby making Kenya an export-led country and economy.
Of course, I would like to see more opportunities granted to women around access to finance especially less collateral-based finance, market access, and capacity building as you are aware there are very few large women-led manufacturing businesses.
However, I do not believe the government is the only body that can grant that opportunity to our businesses, the private sector can too.
By joining and lobbying for better support in the sector through bodies like the Kenya Association of manufacturers, KEPSA, and the like, we can put our requests forward, and hopefully, we shall deal with them.
Q: As you mark the brand’s 25th anniversary this year, what can you look back on with pride? What have been your major milestones since 1995?
FM: Several. We have built a company with a firm foundation, a firm team and the sky is the limit. You know tea is Kenya’s largest foreign exchange earner but over 95 per cent of our commodity is exported in bulk with no value addition. We must begin to create more value in our country, give our youth jobs and the government the much needed foreign exchange.
Q: Any final thoughts?
FM: Every woman is an entrepreneur what is missing are Enablers and Opportunities to help them achieve this. If we develop Agility, Grit Resilience, and a flexible mindset, we can do it. Inequality is not a natural condition, it is something we create, meaning we can un-create it. Dare to dream.
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