After abandoning a business in garments over 23 years ago to venture into ice cream production, Glacier Products Ltd has grown in leaps and bounds, on the way delighting, enchanting and tantalizing their customers with world class products while achieving formidable milestones. Food Business Africa team recently paid the leading ice cream and chocolate maker a visit to hear the journey it has made in cooling palates and enthralling moods from the company’s Managing Director, Dipam Shah.
Glacier Products Ltd is a well-known ice cream and chocolate confectionery manufacturer operating from Nairobi, Kenya and serving the entire East African region.
The company has a rich history spanning nearly 40 years. There are about 10 other ice cream makers spread across Nairobi and Mombasa that are heeding the scream for ice cream in a market that looks very promising.
The cool and sweet story of Glacier Products begun in 1979 with a small ice cream company along Pemba Street, Nairobi at a time when technology, storage facilities and space were limited.
Limitations in packaging options also meant that differentiating brands was difficult, coupled with restricted market access to both in Nairobi and upcountry.
“When I came back from the United Kingdom, the original business was up for sale,” begins Dipam. “The family decided to venture out of our traditional business which was in garments. We bought this company as a going concern in 1995 and we have been running it since then.”
From a small firm with a small office, two distribution vans and a staff of just 20 people, the company has grown phenomenally, moving to an ultra-modern ice cream factory, setting up a new chocolate factory among a myriad of milestones that has seen the firm punch above its weight in the market.
“We embarked on a journey from a turn-over of KSH 10 million (US$100,000) at the takeover per year to the current figures above KSH 1 billion (US$10 million). It wasn’t easy at the onset; it was a struggle selling ice cream as we did through vendors using push-carts. It was quite challenging at a time when the cold chain was not as big. We have now grown to 250 employees, with a fleet of over 30 refrigerated vehicles serving the whole of East Africa region,” Dipam reflects.
Backed by the growth and a demand for premium products the company has continuously upgraded and improved its processes to position itself with the dynamics of the industry.
In the last five years they have introduced extruded ice cream products, rebranded their Dairyland brand, got into brand licensing to work with the Warner Bros. characters for a new children’s product line and integrated Amore to Dairyland Premium.
Other notable developments have been modernization of the milk delivery process, ice-lolly machine upgrade, CIP automation and chocolate plant equipment upgrade that encompassed a new chocolate molding line.
Success on the back of hard work
So, what has enabled this firm which is behind the Dairyland brand to be ahead in a game and market that others who have tried have fallen by the way and those still around are playing catch up?
Dipam alludes the firm’s success to shrewd decisions, the culture of excellence and the strive to provide quality, which he is particularly passionate about, above anything else.
“As a manager you must keep in mind that you don’t have all answers; you can’t solve all problems,” states Dipam, the passion he has for the company radiating out unforgivingly.
“Therefore, you need a strong support team that you believe in and show them that you believe in them. The management is accessible to all. We help, guide and solve emerging issues. Regular brainstorming resolves most of our problems. I don’t interfere so much with what the employees are doing because they are specialists in their various areas.”
The company has a very able and empowered Human Resource department to drive the work force requirements. Finance is a big department where Dipam’s co-directors are in-charge.
The Production segment is headed by a Group Production Manager who runs both the ice-cream and the chocolate factories. A fully-fledged Quality department was created when the company moved to its new factory and headquarters on Road A off Enterprise Road in Nairobi’s Industrial area. The department is critical in the operations and it is adequately financed and supported.
“It was a bit of a struggle when it was hived from the larger production function; the production team found it difficult to accept the ‘interference’, but we had to instill the understanding and the importance for everyone to embrace quality,” stresses Dipam. “For no one can achieve their production goals without quality in mind.”
The other departments are Supply Chain and Sales and Marketing. The Marketing department is strong, robust, driven and independent with an elaborate financial backup. To remain focused, Dipam tells our team that the manufacturing function and the marketing function must be handled and treated distinctly.
He says, a manufacturing firm is solely a manufacturing firm and a marketing one just that. Dipam is more focused on operations (manufacturing and logistics), a function he believes to be very intricate and need a lot of his input.
The company underpins the culture of excellence in people throughout the organization. The firm is out to build its identity along excellence that is driven by customer satisfaction and not profits solely.
In the small world we operate in, Dipam emphasizes the values of procedure for every action undertaken. “Procedure entails the DNA of our company. Procedure precedes all actions. This culture enables us to inculcate quality and value from which we chart our way of standardizing events in an ever-changing work and market environment,” he affirms uncompromisingly.
Long journey to success
When Glacier Products set out, they didn’t get much into export market although they had a good market in Tanzania. Traders picked goods from Nairobi.
This was however to change when in 2005 the Bakhresa Group opened a big factory in Tanzania, consequently gobbling up the market that Glacier had enjoyed for a long time. “It is a market we had enjoyed without making much effort. We had to go back to the drawing board and re-strategize,” says Dipam.
The re-strategy saw them do a survey by visiting several outlets, which led to a revelation that demand for Dairyland products still existed, but the product was not available in the market.
With this sound verdict, they decided to go back to Tanzania and distribute their ice cream. They put up a depot in Dar es Salaam with an office, cold room, some vans and freezers for the outlets in 2006, marking the company’s first big breakthrough. The depot served Dar es Salaam and the Kilimanjaro region of Arusha and Moshi. Gradually the firm penetrated other regions in Tanzania.
With the company experiencing extraordinary growth, the initial facility that was essentially a go-down could no longer meet or match the unexpected growth. Space was a major constraint, let alone the fact that the facility had not been specifically purposed for food processing.
Awareness on quality and safety were stark too; it was inevitable to relocate to align with the growth and industry and market dictates. The firm moved to the factory fit for its operations in 2008.
The astonishing fast development saw the firm open a depot in Kampala, Uganda in 2009.
In the same year Glacier Products, through their ice cream range of Dairyland Mia and Amore, received Superbrands status award, becoming the first and only ice cream brand to do so. Before the dust had settled, the fast-growing firm was nominated in the Top 100 mid-sized companies in Kenya in 2009/2010.
“With these recognitions and the attention that comes with it, we got an opportunity and a justification to even focus more on quality systems that culminated in our company acquiring ISO 22000:2005 certification in 2012,” registers Dipam delightedly.
The firm had demonstrated its ability to control food safety hazards in the food chain and hence adequately protected the consumer. It is in the same year, buoyed by the quality achievements and fueled by the quest to offer high quality and innovative products, that the company started using natural colors in most of its ice creams.
“This was a costly decision, for natural colors are expensive. However, in line with our vision to deliver quality we had to stick on this path which has nonetheless gotten us desired mileage despite the cost,” Dipam reiterates confidently.
2013 welcomed the launch of novelty ice cream bars by the upward moving firm. The confounding growth had spiraled and as Dipam confides, they hadn’t foreseen it.
“We had not envisaged the very fast growth in the business. This led to new challenges of cold storage and space,” he says.
To shape up, the firm put up, nearby, a massive cold storage facility to which all the production was dispatched and stored for onward distribution in 2013. This became their distribution hub.
Food safety and operations excellence
Good times were still on the horizon for the firm that had surmounted many peaks and momentous events unfolded.
In 2015, Glacier Products upgraded their ISO 22000:2005 to FSSC 22000 certification. Having scored a first by being the only ice cream company in Kenya to acquire the ISO 22000:2005 certification, the firm was now way ahead of its competitors by demonstrating that the company had a robust Food Safety Management System in place that meets the requirements of its customers.
The latter certification is recognized by the Global Food Safety Initiative (GFSI); this injects confidence on the highest hygiene standards and stringent procedures put in place by the firm.
The journey to the company’s food safety excellence journey began when the company received the ISO 22000:2005 certification, according to Lilian Adhiambo, the company’s Quality Assurance Manager and Food Safety Team Leader.
Lilian declares that the company has achieved great progress in terms of plant hygiene, personnel safety and operational excellence since the operationalization of the food safety systems, and that the company found it easier to update the system to the FSSC 22000 once the ISO 22000:2015 was in place, since the requisite documentation and procedures were already in place.
“One of the main contributing factors to the failure of a food safety management system is brought about by the company assigning one individual to be the only one with the full knowledge about the system. In our case, we do not have this problem owing to the fact that we have in place departmental food safety leaders who have been trained in the process and handle effectively any food safety system issues, including audits and management review meetings,” reveals Lilian.
Lilian is full of praise for the top management led by the CEO for setting the pace for setting the pace and tone of excellence in food safety management in the company.
“The management has placed the right priority on food safety excellence in our organization, providing the requisite support in terms of resources, time and training, both internal and external. The support we have received has enabled everyone in the company to place food safety at the top of their mind and actions,” she adds.
However, Lilian says that the duplicity of roles between local authorities, ministry of health and the Kenya Bureau of Standards (KEBS) makes it extremely difficult for the company to comply with regulatory requirements, with each of them having conflicting requirements.
She urges that the government should harmonise the roles played by each of these regulators and critically, also look into ways the regulators can also become change agents by working closely with food companies to improve regulatory compliance.
Quantum leap to chocolate making
To put the icing on the ice cream, the firm pulled one of its other major milestones by opening a chocolate manufacturing plant in Kikuyu in the same year, 2015, becoming the first East African firm to venture into chocolate manufacturing.
Dipam reveals that the move into the chocolate segment was relatively easy, as the Dairyland brand already had a lot of brand equity in the market.
“We wanted to ride on this strength of the brand and introduce other products. We settled on chocolate because we sniffed a niche in the growing market,” says Dipam of the decision.
The company saw an opportunity to take advantage of the loyalty to the strong Dairyland brand and so decided to come up with another product that would resonate with their customers.
The ice cream plant did not have enough space to incorporate chocolate manufacturing, so the company established a new plant in a different site at Magana, Kikuyu in Kiambu county near Nairobi.
Why Kikuyu, a location way out of the main industrial hub in Nairobi? By 2015, the company had concluded that it was becoming less and less ideal to manufacture in Nairobi; it was increasingly becoming an expensive place. The firm decided to move outside Nairobi.
“Initially we were apprehensive about the ease of accessing expertise in the form of technical support promptly because of the distance from the manufacturing hub. We were also not certain about the reliability of electricity because we were setting out away from the Nairobi industrial area, where KPLC promptly mitigates power outages,” Dipam talks of their part worries.
Interestingly it turned out to be a sound decision and all their worries were just that, worries. Since the commissioning of the plant, they have had reliable power supply and the technical support has been readily available.
The only notable challenge is the non-existent sewerage system, though that also has not affected their operations much because chocolate processing does not require an elaborate sewerage infrastructure as ice cream would.
The facility was set out as a pilot plant with caution in mind because it was a new area for them and therefore the need to test the waters. “When things started shaping up as planned, we embarked on expansion. We have been constantly upgrading the plant,” says Dipam.
In 2016/17 the company automated some processes including the molding line and in 2018 some new equipment that tripled the capacity from inception in 2015. It has nonetheless been a stiff learning curve for the chocolate maker. To roll out acceptable products took time.
Having started with the chocolate compound, it took up to one year to get it right for the chocolate bars. Issues circulated around material sourcing and refining the R&D process.
“We had to bring in a consultant on board though he was an expert in ice cream with some ideas in chocolate. The equipment supplier worked closely with us but by and large most of the development and processes have been in-house,” prides Dipam.
Chocolate making expertise
Talking with Kevin Ochieng, the production manager at the chocolate plant we get to feel the strides the company has made since 2015 at the new plant that was supplied and commissioned by a renowned Italian supplier.
“Here we make chocolate compounds, chocolate bars, spray chocolate and coating chocolate,” Kevin informs our team. “The equipment was obtained from Italy from a renowned chocolate making equipment manufacturer, who also installed and commissioned the facility.”
Currently, the plant has a capacity of producing 150 kgs of chocolates per hour based on the market demand. It is evident as you move around, the premises design and layout took into consideration the requirement for ensuring production of safe products by provision of enough hand wash stations, changing rooms, washrooms designed not to open directly into the processing floor, floor layout that allows for effective cleaning and sanitation, waste management receptacles and pest control.
“There is a vibrant team in place managing personnel safety through the OSHA requirement and the appointed OSHA Coordinator. There are fully trained first aiders and provision of personal protective equipment,” Kevin talks about personnel safety hearteningly.
The new plant has already bagged a significant accolade, after coming in second at the prestigious Africa Food Industry Excellence Awards 2018 in the Sugar and Confectionery sub-category at the New Plant of the year category at the event which was held in Nairobi, Kenya.
The judges were impressed with the plant’s focus on hygiene, food safety and processing excellence.
Rising demand in Kenya and region
Dipam says that consumption of ice cream is on the rise in Kenya and the East Africa region, as can be evidenced in an increase in retail sales.
Much of this growth can be attributed to proliferation of ice-cream parlours within the growing number of shopping centres in the country, rising disposable income levels among middle-income groups and the positioning of ice-cream as a dessert in the majority of hotels and restaurants throughout the country.
Africa’s hot weather and growing youth population are firmly behind the trend, as consumption is highest among children, teenagers and young adults.
“The market for ice cream and chocolate is growing steadily in the East African countries due to burgeoning middle-class and increasing product familiarity,” agrees Dipam.
Despite the evident progress and growth by Glacier there are several hinderances in the market and regulations.
“Ice cream is not developed as it could have been desired regionally due to accessibility and affordability. The sector depends on a sound cold chain, which requires substantive investment,” Dipam explains.
Delayed payments from customers affects cash flow and impacts operations negatively. There is also the burden of obtaining distribution permits for every county in Kenya, thereby increasing the cost of delivery. Most of the manufacturer’s raw materials are imported and at times delays in import clearance ends up stagnating onward activities which affect the general output at the firm.
Most recently, in 2018, Uganda and Tanzania imposed taxes on Kenyan-made packaged food products containing added sugar, including chocolate confectionery, ice cream, sweet biscuits and sugar confectionery. The stated justification for this was the use of imported industrial sugar in the manufacture of these goods. These stringent tariffs are stifling export trade and eroding the expansion into the East African region.
The company distributes its ice cream in Kenya, Uganda, Tanzania, Rwanda, Southern Sudan, Sudan and in UN missions as far as DRC and Somalia. Their chocolate market is concentrated in Kenya and Uganda with plans to go wider and further.
This story appeared in the January/February 2019 issue of Food Business Africa magazine. You can read the entire magazine HERE
