For the last week I’ve been in Techiman, a city of 80,000 people and the leading market town in Ghana. Because it is situated near the Tano River, it has historical significance as a major trade route and is now home to the second-largest market in West Africa. Trucks from Mali and Niger come down here to distribute products to the rest of Ghana and other countries in West Africa. I am up here to meet some maize aggregators (middlemen) and try to figure out their margins. Most farmers accuse the aggregators of cheating them on prices, but no one knows for sure because the aggregators aren’t exactly forthcoming with their pricing arrangements and, even if they were, they don’t keep records so they can only tell you with any certainly about the last few purchases they maize. Not to mention, maize is absolutely crazy – the price might fluctuate from 25 Ghana cedis (Ghc) to 100 Ghc in a year. So it is a tough task, but I’m slogging my way through (right now, I have calculated 20-30% gross margins, 5-10% net margins, but who knows).
For the last month I have been working with a group of small-scale pineapple juice processors. I met with the owner of I.E. Starke, the maker of “For You” brand pineapple juice. We went over his business and collaboratively developed a business plan (it is essential not to write the plan for the company you are working with, because they will just treat it as another document on the shelf and never look at it again). I took a look at his operations and listened to what the challenges are in terms of his business. Then I went on my merry way to head up to Techiman.
The other day, I was eating lunch in Sunyani, the regional capital of the Brong Ahafo region an hour from Techiman, with Bennet, the field financial facilitator, who was going around with me to meet all the aggregators and discuss with them options for obtaining credit from the different banks. We were sitting at Mandela’s, an outdoor restaurant that serves banku, fufu, and jollof rice – staples of the Ghanaian diet. He ordered a pineapple juice, and, lo and behold, the waiter brought out a “For You.” I ordered one also, and went to talk to the manager about where he bought it and how much he paid for it. He said he bought it from someone who brings cases every week to his place of business, and he didn’t know how much he paid for it. The person who sells it to him brings it from Accra.
So the path of the pineapple starts with a crown, which is the top of the pineapple (the green part that looks like a crown). It is planted in the ground on a farm outside Tema or Ho, and 18 months later, another pineapple is harvested. The pineapples are sold to an exporter, which inspects the pineapples for sugar content, bruising, color, and brix level. The rejects are put in a pile out back. The exporter charges small-scale processors 120 Ghc a week to come take 2.5 tons worth of export rejects. The processors then make it into juice, bottle it, and sell it to a wholesaler who brings it to Accra. That wholesaler then sells it to another trader, who brings it up to Sunyani and sells it directly to a restaurant. Then a guy walks into that restaurants and sits down to order rice with boiled plantains and tilapia, and wants a tasty beverage to wash this down, so he orders a pineapple juice. The waiter brings him a “For You,” and he says to himself, “Ain’t that some shit.”