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Agripreneur 101: Sweet success for jam producer

After over a decade of working in the fruit value chain, Nigel and Christynn Jacobs decided that they wanted to build their own legacy for themselves and for their son. In 2018, they established Jacobs Jam Company, and have not looked back since.

Nigel, a marketer by trade, says both he and his wife worked within different spaces in the fruit value chain for years before they decided to realise their dreams of working for themselves.

“Both of us worked for the big food manufacturing companies in South Africa. I worked on the marketing side and started my career as a brand manager, worked my way up to marketing manager, and [my last position] was equivalent to marketing director.”

His wife, Christynn, is a qualified food technologist who initially worked in food testing, then moved over to product development, research and development, and ended up working in food compliance.

“We always knew that we are entrepreneurs at heart, and we want to work for ourselves, so we registered the company on the 21st of May 2018. And we basically knew, two years before that, that we were going to start the company or business.”

Nigel explains that, at the point when they decided to start a business, they were still undecided about what the product would be.

“In 2018, we realised that it has to be jam. We registered the company, and now four years later, there’s a jam factory and a jam company established.”

A fruitful venture is born

The choice to manufacture jam was pretty simple, says Nigel. The town of Ceres in the Western Cape where they are based, is famed for the abundance of fruit it produces. Both the Jacobs’ have worked for big agricultural businesses in the town, which was beneficial to their business hopes.

“I worked on the processing of fruit side and Kristen worked on the fresh food side. So we have very strong relationships and networks with regard to the fruit value chain, and that’s how we started on jam. We’ve got access to raw material.”

After registering Jacobs Jam Company, both of them continued working until January 2019. They used their time in 2018 to write up their business plan and set up as many aspects of their company that they could. They also started applying for finance, something that was particularly difficult.

“By September, the business plan was completed and then we started our funding application approach. We applied for funding, loans, grants, and finance to start the business. And we were only successful with achieving finance two years later. We got our loan approved in December 2019.”

The Jacobs’ had already established a good network in the fruit industry, the only thing they needed to do in their kitchen was develop their product.

“We worked for the big factories, we launched products for those companies, and [those products] went into retail and it went into the export market. So we decided that when we start our business, we’re going to start from factory level and go directly into retail, and not start off by selling to friends and family.”

Persevering through difficult times

One of the primary challenges they face with Jacobs Jam, is getting access to the retail market. Nigel explains that their operation was built to accommodate the country’s biggest retailers, but that they have not yet managed to crack that part of the market.

“Our factory and our product are designed to be sold in top-end retail outlets like PnP, Shoprite and Spar. Up until now, four years later, we are still not listed with PnP and Shoprite, and we’re selling to 30 individual Spars. We’re not listed with the head office of Spar.”

The reason for their difficulty is that the market is consolidated and conservative, Nigel says, and there is an unwillingness to take a chance on new products. Despite this, Jacobs Jam continues to grow – even beyond Mzansi’s borders.

We are selling to many small independent retailers, wholesale, cash and carries, and owner-run stores, so we’re selling to about 300 individual customers in the Western Cape. And then we are also exporting to Zambia. We are currently negotiating a deal with Ghana, and we’ve got a few food services customers as well that buy bulk products from us.”

Nigel says working for themselves has been a far better experience than when they were working for others.

“Although it’s very difficult and challenging, and we struggle every day, both myself and my wife have never been happier. When you work in corporate, you feel like you are enslaved. You are earning a salary, but you still feel like you are a prisoner. And now that we’re working for ourselves and we are entrepreneurs, we are not earning salaries, but we feel free. [That feeling] is much better than the salary that we used to earn with the corporates. So, although it’s challenging, we encourage people to go out and do it and become entrepreneurs, because there’s no better feeling.”

Nigel has the following advice for aspiring agripreneurs:

Be willing to sacrifice

Before you leave your job and before you embark on an entrepreneurial journey, make sure that you can survive, that you’re willing to sacrifice and give everything up, you are willing to lose everything in order to gain everything.

It can take five years before you start generating a regular income and when I say regular income, it’s nowhere close to what you were earning when you were employed by the corporates. So, be sure that you have the tenacity and the willpower to endure this difficult journey because it’s not easy. 

Prepare yourself financially

Make sure that you can financially carry yourself. In our experience, we saved up enough to carry ourselves for six months. You don’t get a salary, but you still have to service your responsibilities. When we embarked on the journey, we only saw the loan being disbursed and paid out to us two years later. So, we were significantly underfunded from the start. Six months were not enough.

Apply, apply, apply

Just apply for everything and anything that’s out there. If you see that there’s a grant or loan or finance facility, apply for it. You may not be successful, but if your name is in the hat, and it gets drawn, then it can be to your advantage. What we do for all of our funding now is we apply with the forecast that the application is paying out 12 months later. 

So, a normal person would think that when you do an application, three months later, the money is in your account. That’s not how it works for emerging entrepreneurs without self-funding or without their own working capital. If you are going the government route, then you can be guaranteed that it’s going to take 12 to 18 months before you see any money. 

Build a network

Most of our success stories have come from people just talking about us or us talking to people, and then somewhere, someone hears about us and it’s a decision-maker that can help us go further in our journey. So, networking is very important.

Use social media effectively

We also use social media a lot [where] we don’t just write out everything that happens in our business on the same day that it happens. If good news happens today, we bank it, and we use whatever content we have on our social media platforms right now. Then at a later stage, when the time is right, then we come out with whatever the content is that’s also good news. It’s not just about putting content out and there’s no strategy. Use social media, and use it wisely. 

Know your numbers!

The entrepreneur must know the numbers by heart. Know your costings, know your overheads, and know your turnover and income by heart. You should know it, at any time of the month, at any hour of the day. I was never into the accounting numbers, but I had to force myself to really understand the numbers and be in touch with it. The last thing that you want is an entrepreneur that doesn’t know how much it costs to make his own product, and whether he’s even selling it at a profit or at the loss. So, if you’re not a numbers person, force yourself to become a numbers person. 

Source article: Food for Mzanzi