Urbwise got a chance to sit down with Martin Ruga, founder of Desserts Anyone and talk about his entrepreneurship journey so far and what his plans for the future entailed. For those who may not be familiar with Martin, here is what you need to know.
He studied IBA (international business administration) with two concentrations in entrepreneurship and IT at the United States International University (USIU) which partly explains his passion for entrepreneurship.
So why did he opt to pursue the opportunity in chocolate? He explained to us that it wasn’t an intentional move but rather the need arose from wanting to impress his girlfriend during valentine’s day. To do this he decided to make chocolate coated strawberries.
As some of his friends and family continued to give him positive feedback on the treats, he began giving serious thought about turning it into a business. In addition to this, he already had food production knowledge gained from running a restaurant in his campus days.
According to Ruga, the main reason for the encouraging feedback was that the chocolate covered strawberries gave people the illusion of a healthy dessert since the majority of the composition was fruit.
As luck would have it, while he was still thinking on the way forward, a friend introduced him to the Tony Elumelu entrepreneurship program and asked him to consider applying which he did after carefully crafting a business plan.
How we started
In March 2015, he was notified that he had been accepted to the program which came with a grant of $10,000. Using this money, he bought equipment and began actively looking for places to sell his product which he had started packaging.
His first sales were made at Rupu, Big Square and a couple of other malls. After seeing an encouraging number of repeat sales, he concluded that the venture was something that held potential and worth pursuing.
Thanks to the growing number of entrepreneurship programs, Ruga saw a way to grow his business and applied to Centum entrepreneurship program by Centum Foundation. The highlight of the program involved being given 48 hours to create a completely new product with Ksh. 20,000 seed capital.
The deal was to return the seed capital back to Centum and anything above that was the entrepreneurs to keep. Armed with the new equipment and knowledge of what his customers wanted, he decided to create fruit chocolate ‘mshikakis’ but instead of packaging them, decided to create a more unique consumer experience.
In the allocated 48 hours he managed to generate Ksh. 42,0000 in sales and emerged the winner of the challenge among four finalists. As a result, the Centum foundation was impressed with his startup idea and decided to give him resources in terms of funding, helping him structure the business and gain valuable industry contacts.
Rise, fall and rise
By 2016, Desserts Anyone had gained significant traction and was keenly focused on scaling the products which it initially tested. Sales jumped from about Ksh. 42,000 to around Ksh. 250,000 and everything seemed to be going according to plan until the second quarter of the year.
In April, news broke that Chase bank had collapsed and though Ruga wasn’t one of their clients, his company had a huge customer concentration risk being a business-to-business (B2B) operation and lot of his clientele were members of the bank.
The bank’s collapse meant that Ruga’s business had no cash flow and receivables of more than Ksh. 100,000 which had no prospects of getting settled anytime soon. Add this to the fact that funding from the investors hadn’t yet kicked in, he cautions entrepreneurs against putting all their hopes on investors, stating, “Entrepreneurs should always remember that the best way to fund your business is through scaling your (sales) cash flows even with the allure of external investment” Ruga says.
Considering that sales fell from about Ksh. 250,000 to almost zero, he notes that his major fear was that the business would be viewed as a seasonal one and no one would take it seriously. This meant he had to revamp the business model as he had two products which he knew worked but had problems in distribution.
He therefore started thinking about how to reach clients in the retail space and did a few tests with private membership clubs with Parklands Sports Club being the most notable as well as activations at events.
Although the company posted an uptick in sales, it was nowhere close to the levels it had been doing in the past. The biggest challenge of targeting private clubs was the realization that foot traffic was limited since it’s mainly a niche space. However, it still validated his idea since people were still buying the products.
By August, the business had got its footing back with business customers returning after solving their bank issues and paying back what they could. Things picked up again and the business started getting more customers serving about 30,000g of chocolate monthly.
Following this experience, Ruga decided to change the game up a bit by reaching out to more malls such as Two Rivers and sales exploded. At the same time, he had to create a new product for the malls because they wanted something different and more personalized in terms of the experience.
He explains that while this level of personalization could also be done by other competitors, there’s a big difference in what they charge and what Desserts Anyone charges as they focus on volumes. He believes there’s a bigger market here as opposed to selling just a few. According to Ruga, “Year on year businesses for such small items will rarely change suppliers from my past experience unless a competitor with same or better terms comes along.”
As more and more people in business got to know of Desserts Anyone, they began getting referrals. Companies like Knight Frank came on board as one of the clients and with their networks it became easier to penetrate more locations.
So far Ruga explains that another significant challenge has been marketing. To date, he has relied on word of mouth to get more customers and tells us he has never used a shilling on marketing clearly indicating the massive opportunity that exists in the space. Once the company starts investing in marketing which he says will have to wait for a couple of quarters, it will undoubtedly further accelerate growth.
Other programs that Ruga says have been instrumental in turning Desserts Anyone to what it currently is include Mbugua Rosemary Foundation’s Young Entrepreneurs Program which they just completed.
“It’s such a thorough program in terms of operationalizing your business, marketing, whether the paperwork is in check, knowing who your customer is (i.e. not anyone who eats chocolate as they previously used to say),” he says.
Ruga says the program has helped him identify where he can target more customers. One of the interesting things he has learned so far is that once you identify one customer and they actually buy, by the time you go to the next one it becomes easier because you have clarity of who you’re selling to.
He tells us that he also happens to have participated in a German government funded startup mentoring program run by Enpact. This is a fully funded entrepreneurship program which provided mentorship, resources, networks and a chance to fly out to Germany to introduce you to similar industries for knowledge transfer. He credits the Enpact program with broadening his vision after coming back from the trip.
Compared to Africa’s, Europe’s chocolate market is way developed, Ruga further explains to us. The market there is more centred around the experience and chocolate is not just a product on the shelf.
Taking into account the fact that cocoa beans the world over come from either South America or Africa (majorly from Ivory Coast or Ghana), he wonders why Africa’s market is lagging behind. His motivation is now fuelled by the belief that not only Kenya but the continent as a whole has the potential to create an even better chocolate industry that is cost effective and can tell our African stories.
Full speed ahead
In October 2017, Ruga got a chance to pitch Desserts Anyone on KCB’s Lions Den where he was able to raise Ksh. 2 million from Darshan Chandaria and Wandia Gichuru. He explains that what attracted him to the two investors was the fact that Darshan is in the FMCG business, has valuable industry experience and contacts while Wandia understands the women’s market which are some of his biggest targets.
Apart from successfully raising capital, Ruga tells us that appearing on the show gave Desserts Anyone a lot of exposure to the point of helping them secure a client in Uganda. Furthermore, it generated interest among people and they started getting more inquiries on whether they had retail locations for people who wanted smaller quantities.
Since Ruga’s main focus has always been on B2B, one of his challenges going forward will be how to successfully shift focus to business-to-client (B2C) while scaling up B2B which is already working.
However, since he has been able to generate some retail sales from trial runs, Ruga believes there could be potential here and has just the right model to execute it. Rather than being on supermarket shelves, Desserts Anyone aims to offer an experience when eating their chocolate.
That is why they decided to use a pop-up kiosk model which will not only allow people the license to indulge in a guilt free experience but will also hit all their five senses. Essentially, one will see an attractive display, hear the distinct snap of high quality chocolate, touch, taste and smell chocolate.
Ruga continues to tell us that his inspiration for the model is Starbuck’s executive chairman Howard Shultz whose book ‘Onward’ really describes the Starbucks experience of how you will always smell fresh coffee when passing it. Ultimately, one of his major goals is to change how we consume and distribute chocolate.
The company currently has eight chocolate flavors, 30 dippings and 10 toppings. The pop-up shops are designed in such a way that even if you were to come in everyday, it would take more than a year to get back to your first creation by which you’d have already forgotten the taste of.
Desserts Anyone’s near term goals include expanding to online distribution which Ruga says will boil down to how fast they can deliver once a craving hits and an order is made. When asked if Desserts Anyone would be open to franchising deals, Ruga says that they can accommodate the Kenyan market but would have no problem if it were another country.
Why Desserts Anyone
Lastly, our final question to Ruga was why he chose the name Deserts Anyone. He explains that a lot of people use chocolate and sugary foods as comfort food when they are stressed so they liked asking anyone stressed? Taking a pen and paper, he shows us that when the phrase ‘anyone stressed’ is reversed it becomes ‘desserts anyone’ which he says should be the solution to their problems!