Guaranteed markets
To reduce fragmentation in the produce market, a mobile-based platform is supplying vendors in Kenya with fresh fruit and vegetables and providing a steady market for smallholders.
In Kenya, over 17,000 farmers are being provided with access to guaranteed markets and increased farm gate prices, whilst costs for fruit and vegetable wholesalers are being reduced. Established by an agri-tech start up, a business-to-business system is matching more than 6,000 urban retailers with smallholder produce to improve the supply chain from farms to markets, and reduce agricultural losses.
Twiga Foods developed the food supply platform in 2014, at a time when middlemen, oversupply and significant post-harvest losses were taking a toll on farmers’ earnings, while increasing food prices for consumers. To overcome these issues, Twiga initially worked on connecting banana farmers directly with local vendors, “We realised that there was a very disjointed chain regarding how produce moved from farms to markets,” says Grant Brooke, Twiga Foods CEO. “Our initial proposition was that, if we could get a critical mass of retailers ordering on a daily basis, this would stabilise demand and allow us to offer producers guaranteed markets,” Brooke adds.
Through its platform, Twiga cuts out the middlemen and can therefore offer higher prices to farmers, whilst providing lower prices and a reliable, high quality supply to vendors. Farmers deliver their produce to the nearest Twiga Foods collection centre, which are spread across 20 counties, and receive an SMS receipt of the goods and payment within 24 hours through the mobile money service, M-PESA. “They pay well, I’m assured of my payment and they don’t have many conditions,” says Alvan Muriithi, a farmer from Embu County, who, since working with Twiga, has nearly doubled the profits he makes from the sale of his pawpaw fruits.
Produce is processed and packaged at a central warehouse in Nakuru, Kenya, before being distributed to 6,000 street vendors around the city. To uphold food safety standards, the company works with international experts in setting up post-harvest regulations that mirror international practices, including cleaning produce at the time of harvest to reduce the development of fungi, and the use of cold rooms to manage temperature and humidity. Twiga also works with Kenya Plant Health Inspectorate Service officials to ensure that produce coming from collection centres conforms to the required standards.
Buoyed by an increase in platform members and by the evident benefits for both farmers and vendors, Twiga Foods is now looking at rolling out operations across East Africa. The company has also expanded its product portfolio to include 17 different products, including other fruits, vegetables, maize flour, cooking oil and sugar. In 2018, the company raised over €8 million from investors, led by the International Finance Corporation (IFC), to add processed food and fast-moving consumer goods to its product line-up. “The IFC investment will enable us to reach more farmers, improve efficiency in service delivery and increase access to high quality produce and foodstuffs for vendors,” says Brooke.
