Nairobi entrepreneur rises from zero to 60% profits in months in peanut butter

But with each round of profit he has bought more equipment to cut his costs and boost his sales, increasing his sales fourfold since last year, and doubling his profits.

This year, he bought an oven and commercial blender, after customers said his peanut butter sometimes had a bitter taste.

“I personally sort my peanuts by hand, removing unsuitable ones, so I remain with the good ones only. However, I realised that the processor who roasted and crushed my nuts was mixing my sorted produce with produce from other customers, which were not sorted properly. That would cause my peanut butter to have a bitter taste sometimes,” he told FarmBizAfrica.

“I have bought my own oven for roasting the peanuts and a commercial blender. Now I can make peanut butter myself and get that creamy texture. Before, I relied on someone else and the end product would sometimes not come out as I wanted, not as my customers wanted.”

The processor was mixing peanuts from many customers to cut its electricity costs, he said, but he realised that roasting and grinding his own nuts did not increase his power bill by very much, and he saved his processing costs.

“For 10kg of nuts, the processor would charge me Sh700 for both grinding and roasting. I would then buy the tins and package.”

“I was surprised by my electricity bill…When I looked at my total electricity bill, it had only increased by Sh200, so it’s not even that much. At first I was actually worried that the equipment would consume a lot of electricity, but when I checked, only Sh200 in a month.”

Another addition he bought with early profits was a bicycle.

Last year, he was making a profit of around Sh1,500 to Sh2,000 from each 10kg batch of processed nuts, which he was processing once a month, but losing profits to transport costs.

Now, he is processing at least 10kg a week and using his bike for collections and deliveries.

The result is profit of between Sh3,000 and Sh 4,500 a week, selling each 250g jar at Sh150, 500g for Sh300, and 1kg at Sh600, and using medium-sized red groundnuts, which he said are “recommended for making peanut butter”.

“Red nuts are tasty, even those sold in supermarkets are red. We don’t do the white ones, they are not as tasty,” he said.

On the cost of raw materials, Austine said on good days, a kilogramme of nuts can cost Sh200 per kg and when supply is low, the price can rise to Sh300 per kg, with vendors selling produce from other countries, such as Uganda.

Austine is now scaling up further and looking to supply peanut butter to local supermarkets.

“Peanut butter is profitable. That is why I am sticking with it,” he said.