Starting from scratch and funding his business every step of the way, Mustafa Koita, founder of Koita dairy products shares ingredients of taking a start-up to dizzying heights of success
Mustafa Koita, the founder of Dubai-based dairy manufacturer Koita is not willing to sell his company despite receiving “major offers on a weekly basis”.
In an exclusive interview with Arabian Business the self-financed businessman outlined that his business is “too close to his heart” to consider accepting any offer.
“I want to keep hold of the company at least for the foreseeable future. We get offers every week for substantial amounts of money, which is not something I need at this stage,” said Koita who has enjoyed a 370% growth in online sales over the last few months.
Koita’s popularity in the UAE alone – one of 10 countries it operates in – has soared ever since it began trading seven years ago. The company imports anywhere between 250,000 to 500,000 litres of milk on a monthly basis. In comparison, Koita recalls importing a container with 10,000 litres of milk when he first started. “We would do 5,000 litres a month then.”
Navigating Covid-19 challenges
Koita was speaking to Arabian Business regarding the company’s recent success, growth, and plans for the future. He revealed how the company was able to navigate a shaky economy during the height of the pandemic.
“I was scared at the outset” said Koita whose product is manufactured exclusively by suppliers in Italy, one of the countries severely impacted by Covid-19.
Logistics costs went up by 20% but the fact that food suppliers and grocery stores remained open was a “blessing in disguise” for the plant-based dairy manufacturer.
The supplier base in Italy continued operating as normal given the authorities in Italy were not willing to shut down the staple industry of its citizens.
“We weren’t on a golden run and did face challenges in the Philippines where food stores were closed,” Koita says.
Koita came up with a plan in conjunction with its distributors in the Phillipines getting a direct to consumer (DTC) delivery model up and running within four days. “We helped them set it up and gave them some funding as well because it was critical to get things back up as soon as possible.”
Such has been the success of the DTC model that it continues to be a major sales driver long after stores opened. “We would have applied that model in any other country we faced similar challenges.”
Lessons for entrepreneurs
Koita says the company was able to adapt quickly despite hurdles cropping up at different times. Koita explains: “We are also able to stay agile with our business. But most importantly it’s important to have a good sense of humour, which is something no business school teaches aspiring entrepreneurs. You need to be able to laugh some of the things off, or you will not be able to make it.
“During the Covid-19 situation there have been elements of positivism in our business, in a sense business has been great during this period. But if we go back in time, the first three years were extremely challenging, there were times I felt we were going under.”
For Mustafa, failure wasn’t an option and he believes that early childhood plays a huge part in an entrepreneur’s business style. “I have always wanted to be a successful entrepreneur. The tougher you’re personal life and the more insecurities you have as a kid those can either bury you, or be your assets to succeed.”
The company’s seven year journey can be broken up in two halves, the first three years Koita incurred small loses and or broke even on certain occasions. “For the next four years we have been in the green, and it is a really good feeling,” says an elated Koita.
The business has also grown exponentially, despite not receiving any outside funding, with the company now on the doorstep of the “strategic” US market. Funding is not necessary to grow, according to Koita and he explains how. “There’s a huge fallacy in the business world that you need cash to scale, there’s nothing further than the truth. No matter what industry you are in, you can scale your business and grow via self-financing.”
A slower growth flattens the trajectory of risk and also ensures sustainable growth of the business. Koita launched two products which were available in as many stores at the outset.
“Growing slow is quite palatable but you have to ensure key elements are bolted in place. Firstly, on the supply side you don’t have to launch with a diverse portfolio of products. Secondly, when it comes to presence, you don’t need to be in the entire UAE at launch, or in all GCC countries within six months.”
Building an empire
Koita wants the business to pass from one generation to the next, he believes he has the right ingredients to pull it off. “I want my three children to work in the family business, and their children to get involved as well. It’s my dream for the family to manage the company in any way, shape or form.”
“Five years into owning the company we were approached by a large European dairy company who wanted to buy us out. I had the opportunity to take up the offer that would open up a multi-million dollars coming opportunity. I decided to hold on to the business instead.”
While money is a luxury that Koita can do without for the long term, he doesn’t rule out the possibility of joining hands with a company that can help with know-how.
“If we did [hypothetically] sell a piece of the business it wouldn’t be for monetary gains, rather for the know-how of a major dairy tycoon that can help us grow our operations,” he reveals.
