Two Six Zero Brands is a leading grains and snacks processor based in Zambia. The award winning enterprise has invested recently to meet rising demand for affordable, nutritious food and beverage products for local, regional and international markets. Food Business Africa had a discussion with Gaurav Vijayvargiya on the company’s plans and ambitions
For Lusaka, Zambia based Two Six Zero Brands, the last five years or so have been critical to their future. A future that the company’s Chairman Ram Ray Vijayvargiya (or VJ as he is commonly known) has been working on for the last 24 years, as the company looks forward to celebrating its silver anniversary of 25 years.
The companies, originally started with the names of Vijay Limited and its sister company Seba Foods, has been undergoing a transformation, as the Founder & Chairman takes a back seat, culminating in a new company name that will drive the future of the producer of nutritious food and beverage products in Zambia and beyond: Two Six Zero Brands.
Spearheaded by Gaurav Vijayvargiya, a young and driven executive who was appointed Chief Executive Officer for the enterprise in 2019 to step up to support his father, Two Six Zero Brands is on a journey of growth and transformation, as Gaurav seeks new opportunities for the company within Zambia, regional markets and internationally.
Gaurav says that he is thankful for the vision of the firm’s founders, the contribution and resilience of the team members (many, who have been with the company for over 20 years), support from business partners who have believed in them over the years, and the love for their brands from consumers across Zambia and beyond, as the producer of foods and snacks celebrated the 24-year milestone in early 2021.
“In 2019, we rebranded the company with a new identity Two Six Zero Brands, consolidating all the products from sister companies with a mission for innovation to launch further quality consumer products. What many people don’t know is that the name 260 in Two Six Zero Brands comes from Zambia’s telephone domain which is +260,” Gaurav informs Food Business Africa. Gaurav reveals that the new name and logo celebrates Zambia, where they have made a mark and where they truly appreciate the hardwork and resilience of its people, which is portrayed in the phrase from the country’s national anthem: ‘Like our noble eagle in its flight, Zambia praise to thee.’
“The reason why this excerpt from our national anthem is crucial to Two Six Zero Brands is because our vision and mission are bigger than us. We are extremely grateful to have this opportunity to work in a country where people have the ability to rise above the nation’s problems. The eagle is a revered symbol in Zambia and is depicted on both the national flag and in our logo. The eagle represents our resourcefulness and forward thinking nature. We are ambitious, we have a vision and mission that is bigger than us, and we are doing the work to make it happen.”
The firm’s production facility, which consists of storage, processing and packaging facilities plus offices by use by its staff is located within the Chinika Industrial Area in Lusaka, Zambia. The company processes over 25,000 metric tonnes of various consumable food products per year.
Gaurav informs us that the firm has had a busy but impactful few years, as they have focused on restructuring the business by investing in new facilities and the team, to take advantage of new opportunities. “We have worked with over 6,500 small holder farmers in the last 5 years. We have also consolidated our companies and operations and moved into a new manufacturing site, which has enabled us to counter some challenges, especially that of storage since we now have larger storage capacity. We have also been able to optimize costs by integrated value addition in the backend of our supply chain, which has diversified our operations further by including a maize mill.” The company continues to fill critical roles in the quest to have a knowledgeable and agile team that will be key to their next growth phase.
“On the products that constitute of maize, our maize milling operation feeds into our maize based beverages (both powdered and ready to drink) and snacks. We produce grits for our own requirements to produce our Emilios brand of snacks, which is our original, 20 year-old brand. In 2020, we launched ready to drink beverages, Monkoyo and Chibwantu. These are traditional Zambian beverages sold in general trade and some supermarkets. We have also recently debuted a soya milk beverage in Zambia, the first of it’s kind in which milk is extracted from Zambian soybean, and sold in a fresh milk format
Two Six Zero Brands is one of the key companies in the grains value chain in Zambia and is proud of its work with thousands of small holder farmers to procure soya beans and maize across the country. “For example, we have worked with over 1,000 small holder farmers in the last one year in the production of pro-vitamin A maize, which is bio-fortified and non-GMO. We support these farmers by providing them with training on good agricultural practices, and sign take off agreements with them and also try to understand their challenges and see how we can help them improve their production and post-harvest practices to increase the yield of the crop. We aggregate the commodities by procuring them from farmers and get them delivered to our warehouses located across the main production areas in the country. We then transport the produce to our storage facility in Lusaka that can handle over 16,000 metric tonnes of commodities.”
Agriculture employs the most people in Zambia. Gaurav believes that with evidence showing that broad-based poverty reduction occurs when there is productivity increase in the highest employer in the economy, Two Six Zero Brands has a major role to play in alleviating poverty and improving nutrition in the country, to support the government, which has also identified agriculture as the engine for economic diversification, transformation and accelerated poverty reduction.
The company’s impact in the agriculture sector has been noted, receiving two awards from the The Indaba Agricultural Policy Research Institute (IAPRI) and Musika Development Initiatives Zambia Limited (Musika) in the 2019 Champions of Agriculture Awards, where it bagged the Highest Number of Rural Farmers Reached in Agricultural Marketing and the Highest Investment in Rural Agricultural Marketing awards.
The year 2020 was tough for Two Six Zero Brands. “the entire world has been affected and we were not spared either. With schools being closed, we had challenges for demand on our Emilios snacks line as well as the Instant Thobwa. We saw a huge reduction in sales, which was very tough. We decided that we won’t lay anybody off and so we had to tighten our belts. We used creative schemes in the market to ensure that we still stood to be counted in the middle of the pandemic. We backed up efficiencies by reducing certain direct overheads such as diesel generator costs and carried out a couple of Kaizen activities. The lesson we learnt in 2020 is that we need more Kaizen initiatives for the improvement of the company. It is a big drive to make sure that we can optimize internal efficiencies.”
Exports to the US begin
Gaurav is positive that the future will be brighter, even as the Covid-19 continues to impact Zambia and other countries around the world. He, however, is elated that despite the pandemic, the company managed to open a new growth opportunity: exporting the first container of its Golden Goodness Textured Vegetable Protein to the US market.
“Extremely proud of our entire team to have worked throughout the pandemic to achieve our FDA certification, and through a disrupted global supply chain, ship our products from Zambia to the US,” says Gaurav. Already available to the US consumers through the world’s leading online retailer Amazon as we went to press, Gaurav says that nutritious, non-GMO textured vegetable proteins are availed in a resealable bag, and a premium pack.
The huge milestone comes after Two Six Zero Brands were registered with the US Food and Drug Administration (FDA) to start exporting Zambian products to the country. “All products regulated by the FDA must meet the same requirements, whether imported from abroad or produced domestically, therefore demonstrating our commitment to adhering to the highest quality standards in the industry. The ability to export to the US has a direct positive impact on the economy of Zambia, by earning foreign exchange revenue, which is crucial during this pandemic period. The impact on the smallholder farmer supply chain is immeasurable, bringing overall pride of exporting proudly Zambian made textured vegetable protein products to the US,” Gaurav explains. Furthermore, Two Six Zero Brands recently bagged an award for the most collabortive exporter, by the USAID and Zambian Association of Manufacturers, in light of this achievement, and to leverage the African Growth and Opportunity Act, which now has Golden Goodness listed on Amazon.com!
He added that the deal was made possible due to the linkages from the Southern African Trade and Investment Hub and the team within the company, who offered valuable advice and put in the effort to achieve the milestone, one year since it was floated. “Am hopeful for this to open up various opportunities in the future, because we need to take Two Six Zero Brands to the US. The products went straight to Amazon and we believe that with Covid-19, this is the way to start off entry into the US – the e-commerce way!”
Rising protein demand
Gaurav lends his voice to the lack of affordable protein in Africa, especially in Zambia and surrounding countries, where he sees the need for nutritious, safe and affordable food rising as more consumers move into urban areas.
“We have expanded our capacity significantly to make sure that our products are of quality and affordable compared to meat, fish or beef. The demand is there, not just for protein, also for various micronutrients. We see a lot of stunting across children under the age of 5; in Zambia it’s between 30-40 percent, as per latest reports. We need to combat malnutrition across the continent. Our mission also includes work towards the United Nation’s Sustainable Development Goals especially SDG 2 Zero Hunger and SDG 3 Good Health and Well-being. There are also other sorts of proteins like fish, and we are seeing that here in Zambia they are working aggressively towards building the aquaculture value chain to avail more fish to the population.”
However, achieving the goal for more affordable protein in Zambia faces the challenge of a weakening and unstable currency. “The biggest challenge is the strength of our currency. The Kwacha depreciated by 10-42% every year between 2015 and 2020, only appreciating slightly in 2017. We are selling in a very price sensitive market in Zambian Kwacha, whereas our packaging materials and the price of soya are all dollar based; it creates a lot of pressure to avoid the foreign exchange loss. In this market, if our cost is inflated by a certain percentage, we cannot pass this to the consumer, so we take the hits and absorb a lot of the costs.”
He adds that power instability and availability is another problem they have to contend with, with the use of the generator becoming the new normal.
Gaurav reveals that the company constantly seeks to identify new consumer needs in a market that is sensitive to pricing. “We make sure we have products that are in single serve packs, which have the fastest sort of movement because of the purchasing power element which many Zambians face. We also ensure that we focus more on Zambia’s agricultural produce and that is basically the route going forward.”
Growing regional markets
With Zambia’s location, which is in the middle of key regional markets in the SADC region, the company is looking at establishing and growing sales for its products in the region.
“We recently started exporting to Congo and have been exporting to Namibia. However, we do have plans of expanding in this region, but now with travel restrictions it becomes a little harder. Initially the challenge was that we did not have enough capacity to cater for the region; now that we have expanded the capacity, the only challenge left is Covid-19.”
He contends that the other challenge to their plans to expand into other countries in the region
is the cost of logistics. “Our infrastructure is not developed well enough to enable us to tap into other markets. Also diversity would be another problem; I mean, we have 54 countries and that means different cultures, economies, languages and currencies. The cost of trading thus becomes high mostly due to the lack of a common currency. If negotiations aimed at breaking some of these barriers in this region are successful, like with the East African Community, then trading will be much easier.”
As the company strives to boost access to nutritious, affordable food to its consumers across Zambia and the region, Gaurav notes that the company is pleased that Zambia has managed to produce adequate quantities of maize and soya beans for local consumption and utilisation, while largely becoming self reliant over the last decade.
He reveals that as a firm focused on sustainable practices, Two Six Zero Brands was able to reduce its diesel consumption by about 15% in 2020 by optimizing the boiler requirements and steam generation for its plant. They have also explored solar aggressively, looking as 1 MW solar plant but now its biggest problem has been storage, due to the high cost of putting up a power storage facility, and the current grid system which doesn’t allow for buyback. On the water side, they have taken measures to re-circulate the steam from the boilers, saving on water on their quest to become environmentally friendly.
“The future of our business is to strengthen Two Six Zero Brands by manufacturing high quality products. We are looking into being the leading manufacturers of high quality, affordable products that enhance for a good life in Africa. We are looking into plant-based protein in the form of food and beverage, as they are gaining momentum in Africa. There are a few products we are planning on investing in to allow us increase our processing capacity from the existing over 25,000 metric tonnes to 35,000 metric tonnes in the next 24-36 months.”
He further informs Food Business Africa that the company is in the process of a capital raise to fund its new projects. “While it is a family owned business, we operate in a very professional manner and have a great senior leadership team, with professionals in their respective fields. My father has definitely laid a very good foundation for us to build upon. We are open to the idea of funding and partnerships, but look for strategic partnerships to support our growth strategyWith the vision that we have for the business, and the space we currently operate in, I believe good opportunity exists for growth.
Gaurav adds that many food manufacturers in Zambia lack the appropriate information, knowhow and ability to prove that a business has strong governance, so that they can receive external funding. “Most Zambian businesses do not come out with confidence of having strong systems, policies and governance in place. Am happy to see that there are initiatives taking place to help take Zambian SMEs into the capital raising rounds, with initiatives driven from Prospero Zambia.”
He closes by saying that the success of Two Six Zero Brands over the last 24 years has been having the right people and teamwork. We can have the right processes but without a good team we will go nowhere. The strategy we are taking to grow in the next 5 years is building a good team, processes and partners We look forward to celebrating our 25th anniversary in 2022 and to many more investments in the food industry in Zambia.”