Unga Group: Scaling new food-tech paths for growth and outstanding customer experience
Unga Group has been Kenya’s home of human and animal nutrition solutions for over a century. On April 5th of this year, the company celebrated 116 years since the first bag of wheat flour rolled out of its inaugural mill located on Sadler Street (now Koinange Street).
The company has had a checkered history but has remained steadfast in its mission to provide superior human nutrition, animal nutrition, and animal health products and services to East Africans. The company once had operational mills in Kenya, Uganda, and Tanzania. The mill in Tanzania was nationalized in 1967, while the business in Uganda met a similar fate in the same year.
Kenyan operations have, however, remained steadfast, and today they account for 95% of the company’s total revenues. Jogoo Sifted Maize Meal and Exe All Purpose Wheat Flour are popular brands nationwide, often evoking nostalgic memories of childhood when the late President Moi was in power.
Current Group CEO, Joseph Choge, is among a generation of new leaders who enjoyed meals prepared by these brands while growing up. It may have motivated him to respond positively when the recruiters came calling.
In an exclusive interview with Milling Middle East & Africa Magazine, Choge admits that he did not apply to become the Group Managing Director of Unga. “Somebody called me and asked if I would consider working for the Group,” he says. “Having grown up with Exe chapati, Jogoo as my Maizemeal, and Fugo for animal feeds, this was an opportunity I was not willing to let slip away.”
The chance to work in a listed company with such a rich heritage was, however, what sealed the deal for him. Unga Group has been listed on the Nairobi Stock Exchange (NSE) since 1956. Seaboard remains a significant shareholder, controlling a 35% stake in Unga Holdings Limited, which serves as the Holding company for the Nairobi Commercial Street-based company.
Unga Group shareholders own the remaining 65%. As one of the largest food companies listed on the NSE, the manufacturer of the Hostess premium maize meal brand reported annual sales of over KES18 billion (US$130 million) and controls assets valued at more than KES10 billion (US$71 million), as per the latest audited full-year results (FY2022).
Choge, who previously served as the CEO of Premier Foods, the manufacturer of popular Peptang sauces and jams, was well aware of the intense competition in the industry when he accepted the new job offer. By his admission, competition in the milling industry has gotten stiffer by the day, with over 50 new millers joining the fray in the period he has been in charge at Ngano House.
To secure its future, Unga has a new strategy. “We are responding to shifts in consumer purchasing habits by repositioning ourselves as a holistic food company through strategic joint ventures and partnerships,” the company says. All of this rests squarely on the easygoing executive who exudes confidence in his ability to lead Unga into a new and potentially more glorious future.
A Legacy of Trust and Excellence
Unga, having been around for more than a century, has been able to build a legacy of trust among its loyal consumers. Jogoo, which has been a part of Unga Group since 1963, nourishes many families daily as maize meal is a staple in Kenya. Choge tells us that the secret behind its success, as well as that of other brands in the Group, is Unga’s zero tolerance for any deviation from quality.
“We’ve anchored ourselves around quality and safety leadership, which assures every consumer that if they partake in Unga products, they are partaking something of exceptional quality and whose safety is at its peak.”
Assurances are not made by word of mouth, though. Unga has a fully-fledged lab where quality tests are carried out to guarantee safety. “We use the top-of-the-range equipment to check our raw material, work in progress, and finished product so that whatever goes to the consumer has been quality assured,” Choge reveals, adding that the lab recently won an award as the best in all of Seaboard’s facilities globally.
In addition, Unga’s operations are all ISO 22000:2018 certified, and the company employs a HACCP-based Food Safety Management System to ensure products and safe and exceed customer expectations. Quality checks do not start at the lab. “It starts at the point of picking the raw material from the farmer,” Choge explains. “We would never want to fall short or negatively impact Kenyans by causing diseases.”
Unga also complies with all relevant statutory standards to further assure consumers of product safety, and all its products hold the appropriate Kenya Bureau of Standards (KEBS) certification. In its 2022 report, the company introduced on-site aflatoxin analysis to ensure compliance with KEBS specifications. “Furthermore, we have implemented new methods in our ISO-accredited laboratory, resulting in a reduction of turnaround time from 24 hours to just 5 hours,” the report states. “This also helped improve our laboratory accuracy level from 0.8 to 0.58.”
Entering a new phase as a holistic food company
Although Unga’s primary focus is on the milling sector, the company has always aspired to be a holistic nutrition partner for its consumers. A casual look at its long history reveals efforts to diversify into other food products.
The household brands that have been part of Unga throughout history include Proctor & Allan, a breakfast cereal maker (1953-1999), Elianto, an edible oil brand (1973-1998), Elliots bakery (1961-1994), Ufuta, a vegetable cooking oil brand (1986-1999), and Ennsvalley Bakery (2015-2021).
Faced with new competition in the milling sector, the company is once again expanding its product range beyond traditional maize meal and wheat flour. “Every day, we strive to be a proper food company,” Choge explains. “Now we have rice and pulses under the brand name Amana, which we have recently relaunched.” Amana was initially introduced in 2014, offering Basmati and Pishori rice varieties.
Its expansion into pulses has introduced green grams (ndengu) and various bean varieties, including black beans (njahi), yellow and rose-coco beans. Just before we went to print, Unga expanded the Amana range to include premium packaged white sugar. Although a new player in this segment, Choge assures that every batch is produced with the same strict quality standards for which other Unga Group brands are known. After a successful launch, the plan is to have Amana achieve the same national status as either Exe or Jogoo. “We want to ensure that it reaches every home within the country,” he says.
Innovation has also been rife in the core maize meal and wheat flour business segment. Unga’s maize meal portfolio comprised grade 1 sifted meal Jogoo and its premium counterpart Hostess for an extended period. “We now have a maize meal brand called Hodari and have recently introduced Pendo for our wheat flour.” It does not end there. “We’ve recently launched an easy cake mix for the people who love baking.”
Caring for animals and pets
Just like in Human Nutrition, Unga Group has a long history in Animal nutrition and health, dating back to the 1940s when the company first manufactured animal feeds. This portfolio includes livestock feeds, cattle minerals, feed premixes, customer-specific formulations, feed concentrates, acaricides, dewormers, vaccines, antibiotics, and analytical services.
Operating as Unga Farm Care East Africa Limited, this division of the Group’s business has become the leading manufacturer and marketer of a wide range of high-quality Animal Nutrition and Health products in the region.
Regarding animal nutrition, Choge says that quality is determined at the farm. “We don’t judge our quality; the performance and productivity of the animal at the farm determines whether we are offering quality or not.”
Having grown on a farm and once sold milk from cows fed by Fugo, Unga’s flagship brand, Choge is happy that even under his watch, the company continues to deliver quality feeds that farmers have come to associate it with for decades. “We’ve proven to our farmers that we are the center of quality in the country, and that’s why we’re the market leaders.”
As the CEO, Choge provides the overall strategy for the business, the responsibility for achieving these goals rests with Dr. Wilfred Kamau and other highly qualified staff at Unga Farm Care. Wilfred, a veterinarian by training, currently serves as the Business Development Manager at Unga Farm Care. Part of his daily duties includes formulating recipes that would deliver the utmost nutrition to animals.
“At Unga, we don’t simply mix feeds; we think carefully about the animal we need to feed, its nutrient requirements, and what the farmer wants to achieve with the animal,” Kamau explains. Once the recipe has been formulated, Kamau explains that the company “goes the extra length of analyzing them in our labs to make sure they are wholesome for the animal.”
While touring the animal feed facility, we noticed an exceptional level of hygiene; one could easily mistake it for a facility that handles human food. “We have to live up to the standard of our marketing tagline: Alama ya Ubora (mark of excellence),” Kamau explains. The high hygiene standards also apply to the type of raw material received at the factory.
“We have a whole quality control and quality assurance department that ensures we only receive raw materials that conform to the high internal standards that we have put in place.” Kamau adds that this team of professionals also monitors the entire process to ensure that every stage along the production process contributes to safe and quality feed at the end of the line.”
Dr. Kamau boasts about Unga’s ability to produce feed for any farm animal. From poultry to ruminants to fish and even to crickets, Unga has a formulation that is specifically tailored to each of these animals’ nutritional needs. “We are also feeding lab animals at the request of some of our customers.”
With pet ownership in the country rising, especially during the Covid-19 period, Kamau confesses that they received numerous requests from customers who have known the company for its safety and quality track record for a product that caters to the nutrition needs of pets. “In response to this demand, we have our own pet food brand,” Dr. Kamau explains. Sold under the K9 brand, Unga pet food is available in 3 varieties, K9 Puppy, K9 Adult, and K9 Senior, and is tailored to meet unique nutritional needs at different development stages of dogs.
We have partnered with Kenya railways to transport our human nutrition products from our facility in Eldoret to Nairobi as well
as animal nutrition products from Nakuru.
Joseph Choge – CEO, Unga Group
A sustainability-minded business
As a responsible corporate citizen, Unga Group aims to contribute more to the environment than it consumes in its operations. In 2022, the company commissioned One Carbon World, through the Kenya Association of Manufacturers (KAM), to review its data and recommend best practices for achieving carbon neutrality. Even as it awaits recommendations, the company has been taking internal measures to minimize its carbon footprint.
“I’ll start with the electricity,” Choge says. “As we speak, we are in the process of installing solar panels across our various plants. By September of this year, we anticipate having enough solar panels installed to reduce our energy consumption by 30%.” Additionally, the company is implementing changes to its energy usage, such as using energy-efficient bulbs and lights equipped with motion sensors. This will ensure that lights are only activated when necessary.
Beyond electricity, the company is considering minimizing its transport carbon footprint. “We make an effort to minimize the number of trucks on the road through consolidation, which, in my opinion, is an effective method to reduce emissions released into the atmosphere,” Choge reveals.
“We have also partnered with Kenya Railways to transport our human nutrition products from our facility in Eldoret to Nairobi, as well as animal nutrition products from Nakuru.” This partnership has resulted in a significant reduction in emissions and a cost reduction of up to 70%, which is beneficial for the company’s financial performance.
Working with farmers, especially in light of climate change and disruptions in the global supply chain, is also a key component of Unga’s sustainability agenda. Choge reveals that the journey started in 2022 when Unga did an aggregation program with the farmers and attempted to stock a significant amount of grain to mitigate shortages. Beyond aggregation, Unga has been contracting farmers and providing them with support to ensure they achieve higher yields.
“We have contracted agronomists who visit farms to assist our farmers adopt better farm practices that result in higher yields,” Choge explains. Support goes beyond agronomy and includes partnerships with suppliers of the necessary seeds and fertilizers. Choge also reveals that the Group connects farmers with banks, allowing them to access funding for their farming activities. For farmers growing soybeans and other pulses, Unga is also collaborating with partners to develop irrigation systems to ensure optimal production, even in the event of insufficient rainfall.
Having experienced significant wheat shortages, with the limited supply being sold at record-high prices due to the war in Ukraine, the Unga group is also exploring the possibility of cultivating hard wheat locally. “We are conducting experiments with farmers in Uasin Gishu to determine if this particular variety of wheat can be successfully cultivated locally and yield desirable results,” Choge reveals.
With local production, Unga can reduce its dependence on expensive imports, as the resurgent dollar continues to strengthen against the shilling. “The forex losses that we are incurring are massive, so the more we can source locally, the better for us,” Choge reveals.
Employees are also a fundamental pillar of Unga’s success in maintaining a sustainable business. Choge, the team leader, is aware of this reality. “I firmly believe that if you take care of your employees, they’ll take care of your business,” Choge says. Unga excels exceptionally in this area. In 2022, the company paid nearly 1000 employees a remarkable KES 884 million (US$6.26 million) in employee benefits and remuneration.
The benefits of being an employee of Unga Group extend beyond salary packages. “We try to invest as much as possible in improving the skills of our employees,” Choge reveals. “We also strive to provide a better environment for them and keep them challenged, so that they can enjoy their time with us to the fullest.”
Unga is also working to ensure greater representation of women. “Our middle management is 46% female, and those reporting to middle management is about 40% female as well,” Choge reveals. Overall, the percentage remains low at just 26%, and there is a valid explanation for this. “Most of our work involves carrying heavy bags, so it may not be suitable for female employees,” Choge explains. Despite this, Unga remains committed to raising this number to at least 30% by 2025.
A forward-thinking business
For over 116 years, Unga has been providing our families with high-quality food. It has survived so long by constantly innovating to keep up with changing market needs while remaining true to its core values of quality and safety. As the milling industry becomes increasingly competitive and consumer needs continue to evolve, Unga finds itself at another pivotal moment that could potentially alter the trajectory of its history.
The company has made several investments to ensure its future, including modernizing its wheat mills in Nairobi and Eldoret, and revamping its maize meal equipment. The company has also commissioned a new soybean mill and extruded fish feed plant to meet the rising demand for these products.
In 2022, Unga entered into a 50/50 joint venture with a Dutch producer of animal nutrition, fish feed and processed meat products, Nutreco. Under the joint venture, Unga Group is expected to enhance its fish feed business in Kenya, and its previously idle mill in Uganda will be utilized as part of Tunga Nutrition Uganda Limited.
In June, the Kenyan subsidiary of the joint venture opened and launched a state-of-the-art fish feed extruder with an increased capacity of tons per hour. This facility will further cement Unga Group’s presence in Kenya’s fast-growing fish feed market.
Unga is also investing in technology to enhance efficiency at its facilities and foster greater interaction with customers. “We have automated most of our plants,” Choge reveals. He adds that the plant in Eldoret is technologically advanced, with milling operations being conducted primarily from a programmable logic controller. It is considered the best site on the continent in terms of technology and efficiency.
Choge has nothing but praise for advancements in food-tech in the milling sector. “With technology comes efficiency, and the more efficient you are, the more you can pass on the affordable cost to the consumer,” Choge says. He adds that he sees technology playing a more significant role in Unga Group’s future. “The mill here in Nairobi is a bit older, so the first plan is to maximize its utilization. Afterward, we can consider investing in new state-of-the-art machinery.”
As e-commerce slowly gains traction in Africa’s retail market, Unga has expanded its presence in this sector through partnerships with platforms such as Jumia, Twiga, and Kapu. With e-commerce, Choge reveals that the company is not only able to reach customers more efficiently but also gains access to crucial data that can inform its future innovation.
“I was looking at some statistics and noticed that the pasta business is growing,” he reveals. “That is a shift you would never have noticed if technology were not available,” he continues. “You might find yourself one day unprepared, stuck with your all-purpose wheat flour while the market has moved on to pasta.”
Even as the company transforms, Choge stresses that their customer will always remain king. “We have managed to secure our market share by meeting our customer’s needs, and we will continue to strive for excellence to ensure that we continue keeping our customers happy,” he promises.
This feature appeared in the June 2023 issue of Healthcare Middle East & Africa. You can read this and the entire magazine HERE