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COVID-19 and the Nigerian MSME – This is Soupah’s Story

27th June, 2020

SUN Business Network Nigeria member, Soupah Limited, a food processing company located in the heart of Oyo State in Nigeria, was founded by Ifeoluwa Olatayo as a student in 2016. Her business has since boomed into a thriving enterprise which caters for the nutritional needs of the socio-economic class at the bottom of the pyramid. Ifeoluwa works with local farmers to off take their fresh fruits and vegetables, which she then processes into soup spices that are further fortified with micro-nutrients.

Soupah Limited currently employs 12 full-time and 4 part-time workers. It has 4 retail outlets, 3 of which are situated near the University of Ibadan, catering mostly to the student population.

A normal working day at Soupah includes sorting the raw materials harvested by the farmers, mostly tomatoes and red peppers. After sorting, the produce goes through different stages of washing, drying, pasteurising, fortifying and packaging before being supplied to various supermarkets and its own retail stores, where they sell packaged soup ingredients along with other complementary nutritional foods.

Following its establishment in 2016, Soupah has received several awards for their social and environmental impact across the value chain, from farm to fork. Their awards include; EcoBank New Venture Fellowship, Indi-Africa Fellowship, 2018 Food Connection Challenge by Netherlands Government in Nigeria, 2018 SUN Pitch Competition Finalist, Overall Winner of the 2019 MSME Award by the Office of the Vice President of Nigeria, and the prestigious 2019 Bourlag-Adesina Fellowship for African Entrepreneurs.

Despite Soupah’s unrivaled success, nothing could prepare Ifeoluwa for the effect of the COVID-19 pandemic on her business.

 

 

Surviving the COVID-19 Pandemic

When the Federal Government declared a 14-day total lockdown in the states of Lagos, Ogun, and the Federal Capital Territory in March 2020, Oyo State was exempt and remained open for business. However, the state government imposed a state-wide curfew to reduce the spread of the virus. As soon as this was announced, many people started panic buying and storing up food items from markets. Since Soupah solely produces spices, they quickly noticed that their sales began to drop significantly as consumers concentrated more on purchasing staple food items. Supermarkets were investing more in fast-moving consumer goods, rather than those that were considered ‘non-essential’ and Soupah reported record low volumes of supermarket sales. At the same time, their other marketing channels (schools, hotels, restaurants) also suffered from low patronage. Due to their low sales, Soupah decided to stop processing altogether in April 2020, and were forced to place some staff on shift duties, reduced pay, and furlough. This disruption to regular operations has left Soupah in the red.

Sadly, Soupah’s story is not unique. In a recent survey of the impact of COVID-19 on SMEs in Nigeria, conducted by GAIN, WFP and the SUN Business Network, 98% of SMEs reported that the pandemic had an immediate impact on their businesses. The main impacts cited were decreased sales, decreased production, and operational challenges such as transport disruption making it difficult for staff to get to work.

Not giving up

Although the COVID-19 pandemic has had a negative impact on Soupah’s regular operations, Ifeoluwa recognises that this is an opportunity for her business. “The pandemic helped us see our shortfalls as a company, especially in the area of technology”, says Ifeoluwa. With her team, they have decided to take a step back and connect directly with their end consumers by accepting direct orders and offering doorstep delivery. The business will operate minimally until economic activities are able to resume. Still, will Soupah ever go back to normal? Ifeoluwa is preparing her team to see how they can deal with the ‘new normal’.

Soupah’s Post-Pandemic Plans

The number one post-COVID question for the Soupah team is how their business operations will recover from the effect of the pandemic. Ifeoluwa plans to restructure and reinvent how Soupah operates within the value chain to create alternative business channels and achieve growth. Soupah intends to come out of the pandemic as a ‘tech-enabled business’, by creating an online platform where customers can directly order their products and other complementary foods. In addition, Soupah is exploring how best to use logistics support such as cold vans for delivering fresh fruits, vegetables, and other food items to their customers, as well as studying other lean business models for the continued success of their business.

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