Page last updated at 07:46 GMT, Friday, 13 March 2009

Ghana's juicy economic lesson

By Will Ross
BBC News, Ghana

Worker packing bottles of Blue Skies fruit juice, Ghana
After sales to Europe slumped, Blue Skies found new customers at home

What do you do when your buyers in Europe start cutting their orders?

Target the local market.

That is the strategy being used by Blue Skies - which exports pre-packed fruit salads and juices to Europe but has now realised their products can also tickle the taste buds of Ghana's more affluent customers.

Most businesses in Ghana have been relatively unscathed by the global economic downturn. Despite the warnings that the storm is approaching, there are few visible signs yet.

Poverty is still rife but that cannot be pinned on the recent global crisis.

Tight squeeze

But Blue Skies is definitely an operation which has taken a hit.

Our target is the middle class and they are more sedentary - they sit in the office with fat bellies
Eunice Yeboah Afeti

Blue Skies

The company employs close to 1,000 staff at its factory near Nsawam, north of Accra.

They work in shifts to produce the small tubs of fresh fruit salad made up of pineapple, mango, papaya, coconut and passion fruit.

With the emphasis on keeping the fruit fresh, the factory feels like mid-winter in a supermarket car-park in Scotland. This is surely the only place in steamy Ghana where a thick ski jacket is a necessity.

Last year sales brought in almost $20m (15m) but the financial crisis in Europe has blown some dark clouds over the Blue Skies factory.

"Customers now view our product as a luxury," says Kennedy Afful the finance manager.

"Sales are down by more than 10% and our cash flow has been stretched to a limit.

Eunice Yeboah Afeti (left) and Elizabeth Adu
The juice has been surprisingly popular, says Eunice Yeboah Afeti (L)

"We recently put in applications to foreign and local banks but the money isn't there to borrow."

Some will question the sustainability of flying fruits and juices around the world but in a country where jobs are scarce, the workers are desperate to keep their jobs.

There is depressing news in the personnel department.

"Last year during the peak season we had more than 2,000 workers here but casual and contract staff were laid off and now we have 936 workers," says Eric Oduro Amparbeng, Blue Skies' senior personnel officer.

"We have made 83 permanent staff redundant this year and if the situation does not improve there is a likelihood that more will follow."

I learn that some of the farmers who have been supplying the pineapples are also in trouble and that means less work for the hired farm labourers.

When the British store Marks & Spencer cancelled its entire order of fresh pineapple juice the company had to look elsewhere for markets.

Low-hanging fruit

With the help of the staff it soon realised there was no need for a lengthy search - a market was right here in Ghana.

Blue Skies fruit juice, Ghana
The fruit juice is aimed at Ghana's health conscious middle class

"It was our staff who were buying the juice and selling it in town and in so doing they created the market for us," says Eunice Yeboah Afeti, in charge of product development and innovation.

"Our target is the middle class and they are more sedentary - they sit in the office with fat bellies.

"But at least if they have a health conscious drink, it will help them reduce on the diseases that could come to bear as a result of taking other drinks," she adds.

The local sales will probably not compete with the overseas orders but at least the workers on the juice line have kept their jobs, the machinery has not been mothballed and it should be a useful cushion against fluctuating sales in Europe.

"The local market has grabbed our juice in such a fantastic manner," said Kennedy Afful, who looks a little more cheery than when he was discussing the falling exports

"In March last year we were taking in just 200 cedis ($145; 105) a week from the juice sold in Ghana.

"But last week we took $7 000 from local sales and we anticipate by end of year we will reach $14,000 a week."

Price gamble

At a recommended price of 1.5 cedis ($1) for a half-litre bottle, the pineapple and mixed fruit juices are at least three times the price of a bottle of Coke or a Fanta but Blue Skies knows there is a market out there.

Workers packing bottles of Blue Skies fruit juice, Ghana
The sales of fruit juice have helped to stem a tide of redundancies

"At first I couldn't believe there was no added sugar because it tasted so sweet," says Anne Sekyi, owner of Melting Moments, a restaurant in Accra's upmarket Labone neighbourhood.

"They are popular here and Ghanaians love fruit so I think they should have been selling these juices locally a long time ago."

The Blue Skies juices compete for space in her fridge with fruit-based drinks from the Caribbean.

The colours are so bright they ought to come with a free pair of sunglasses.

They may contain water, fruit juice from concentrate and natural coconut flavour but further down the ingredients list come sugar, citric acid, stabiliser and ascorbic acid.

The Ghanaian juices are being pushed as a healthier alternative.

The financial crisis means belts are being tightened in Europe but as a result, the Blue Skies company may have found a lesson for other exporters across Africa: when sales abroad plummet, take a look closer to home at the local market.

You just might be surprised.

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