At 39, Joseph Choge is arguably one of the youngest CEOs running a regional brand with a presence in eight African countries. He is the chief executive officer of Premier Foods Limited, a constituent of IPS and the company behind brand names such as Peptang, PEP and Orchid Valley. Choge started his career as an accounts assistant at Barclays Bank (now Absa) before moving to Real Insurance, then Unilever and Airtel before his current posting. He shares some of the principles that have kept the Premier brands relevant in a competitive market that sees many new players joining every day.
How does a hawker transition to a CEO?
Easy. Similar rules apply. I began by selling a few litres of milk from my mother’s cows in Kitale. But I thought I could do more. I started buying milk from one village and selling it in the urban centres. I would buy a cup of milk for Sh5 and sell it for Sh10. That is a 100 per cent profit! The volumes began to grow to the point that I didn’t see the need to go to the university. But my father insisted, and I obeyed. I also believe that my wife’s words to me in those earlier days have pushed me to succeed. She told me that I was destined for greatness and that only I can limit how far I go. I try to live up to her words
What rules from then do you apply now?
The experience of selling milk opened my mind to possibilities and opportunities that are always before us but don’t see. I learnt to value the customer and that with a quality product, the right pricing and great customer service, one can succeed. Hawk- ing milk taught me about value addition. I made the traditional sour milk ‘mursik’ and sold it at a higher price thus giving me higher returns. The experience taught me about financial independence at an early age. I relive those days in my workplace, and with my wife. I think we should all hawk some milk at some point in our lives. The milk business prepared me for life in the corporate world. I know the value of every coin that comes in. Today, my team and I try to see how best we can satisfy our customers and how to value our suppliers. That is key to how we have managed to still be alive in a crowded market.
HOW WE HAVE REMAINED KING IN A COMPETITIVE MARKET
1. We have mastered the cash-flow dilemma
Block the cash flow and you will get stuck. Whoever said turnover is vanity, profit is sanity, but cash is king was right! Lack of cash flow can lead to working capital challenges and could actually grind a business to a halt. Just think of unpaid suppliers of critical ingredients. If they decide to cut their supply, the impact could slow down your business. This then gives room for competitors to eat into your market share. If you master how to manage cash flow in a business, you are halfway to the top.
2. We know the three keys to remaining competitive
First, you must act on customer feedback. As they say, the customer is King and client feedback and insights are key to ensuring a competitive edge. Next, you must ensure that your products are consistent. For example, to be a well-known household brand for over 80 years is a testament to the quality of our products. Don’t compromise on the quality. Third, changing consumer trends require convenience. Online shopping enables customers to access products comfortably from home. At Pep- tang, for example, customers can conveniently shop on the website and receive their items from the comfort of their living rooms.
3. We know the right time to diversify
Market research, customer insights and feedback should be the main drivers of product diversification. Through market research, one is able to identify opportunity gaps and develop products to bridge them. For example, our new product, ReCharge Dawa Drink, became a hit during the Covid-19 pandemic. This is a good example of listening to the market and moving with the times. Also, the impact of low hotel occupancy, especially from international visitors, has been felt by most food companies like ours. However, innovation into other products including Peptang Peanut Butter has extended our portfolio and mitigated the effects of reduced consumption from the hospitality industry. While the pandemic has affected business worldwide, we have seen companies adopt changes to remain afl oat.
4. We don’t neglect innovation
Customers’ demands, preferences and expectations continue to evolve over the years. For example, due to increased knowledge in health and wellness over the last few years, there has been a rise in corresponding products. People are more concerned about nutrition, fitness, and their environment. Therefore, companies need to create products that can meet the needs of the emerging clientele.
5. We are vigilant about counterfeits
While we have not experienced any cases in the recent past, we are keen to ensure this does not happen to our products. Our unique formulations make it difficult for copycats to produce counterfeits. Fake products not only erode market share but also compromise the trust companies have built over the years with their customers.
6. We know the value of the employees
One of the best decisions I ever made was choosing the right people to work with. You are who you surround yourself with. I sur- round myself with smart people who challenge me and have my back. Also, in times of crisis, management should engage employees so they come up with solutions that work for everyone. Creating open channels of communication helps employees channel any ideas or fears they have to the management team. This promotes employee- ee well-being by eliminating or reducing any feelings of stress and anxiety. And productivity goes up.
7. Manage your debt
Always scout for the lowest rates you can get. Then renegotiate, refinance or consolidate bank loans. These measures keep your cost of debt down and help improve your cash flows through lower repayments
