Grant Brooke (left) and Peter Njonjo (right) who run Twiga Foods Ltd. In
the enterprise, mobile technology, food producers, pack houses and
vehicles converge to deliver farm produce to urban retailers. PHOTO |
JEFF ANGOTE | NMG
Clad in navy-blue aprons and white hair caps, dozens of women
work dexterously at the machines, weighing and grading bananas. Outside,
lorries hum and roar as men load bananas and other farm produce.
It
is a beehive of activity at the godowns located about 200 metres from
the Standard Gauge Railway’s Nairobi terminus from where bananas,
tomatoes, cabbages, mangoes, potatoes and onions are ferried to kiosks
and market stalls in Nairobi and its surrounding suburbs.
The
fruits and vegetables arrive here from more than 17,000 farms across 20
counties to be sorted and packaged for direct delivery to 2,500
vendors.
In all, about 500 people work here as drivers, clerks, data analysts and other cadre of jobs.
This
is Twiga Foods, a start-up where mobile technology, food producers,
pack houses and vehicles converge to deliver farm produce to urban
retailers free of charge.
The model, that has been
hailed for raising farmers’ yields while stabilising consumer prices and
ensuring safety, has recently added fast-moving goods such as cooking
oil to its deliveries.
The revolutionary business is the brainchild of Grant Brooke, a
researcher, and Peter Njonjo, the former Coca-Cola President for west
and central Africa.
The son of public officials from
Texas, USA, Brooke was educated at Princeton before first coming to
Kenya in 2008 seeking to understand how religion affects purchasing and
credit decisions of small business owners in Nairobi.
So
high was the potential he saw in Kenya that he returned even after
postgraduate studies at the University of Oxford, this time for the long
haul where he and Njonjo would begin laying the foundation for the
business that has shaken the industry to its roots and attracted
billions of shillings in investments in less than five years.
Two
weeks ago, Creadev, a France-based global firm, announced a Sh500
million investment, which followed an injection of Sh1 billion by the
World Bank’s private investment arm, International Finance Corporation
(IFC) in November last year.
IMPACT OF WHAT YOU DO EVERYDAY
Other Twiga investors include DOB Equity, Wamda Capital, 1776 VC, AHL Venture Partners and Alpha Mundi.
In launching the business in 2014, Brooke and Njonjo chose bananas because of their huge demand and perishability.
“Choosing
one produce allowed us to build the distribution network,” explains
Njonjo at the premises where amid the cacophony of weighing machines and
the banter of the busy workers, he and Brooke took us back on the
journey that brought them to today’s coveted position.
It
took a chance meeting at a mutual friend’s house in 2012 to get them to
plant the seed that would bear Twiga Foods two years later.
“After
academic life in the UK, I started looking for ways to stay. Peter and I
had become friends and we started wondering what we could do together,”
explains Brooke, now 33.
He
grew up in Texan ranches, regularly spending time in the summer camps,
but chose Kenya for business and not the US because “here you get to see
the impact of what you do every day”.
Born and raised in Nairobi, Njonjo and his parents (an engineer father and accountant mother) do not have any farming history.
“We
were trying to find purpose, not just a business whose objective is to
make money,” he says, but is quick to add that founding Twiga Foods is
not the fairy tale that it now looks as it took lots of resilience to
have it take off.
“One of the stories I haven’t shared in many circles is that my wife and I had to sell our house to get this going.”
Brooke, the founding CEO, ran the day-to-day affairs of the business, but Njonjo would call twice a day from his perch in Lagos where he oversaw Coca-Cola business in 33 countries. He had earlier served in East Africa.
Brooke, the founding CEO, ran the day-to-day affairs of the business, but Njonjo would call twice a day from his perch in Lagos where he oversaw Coca-Cola business in 33 countries. He had earlier served in East Africa.
It took them 18 months to take off and
combining competencies proved to be their greatest advantage and a
lesson to would be business partners.
“Brooke had spent
a lot of time on research with mama mbogas in Kangemi and I was in the
supply chain. We saw a distribution and production challenge and we
reckoned, this was a problem we could solve,” Njonjo recalls.
TAPPED INTO BLOCKCHAIN TECHNOLOGY
By
contracting farmers, the disruptive start-up has been credited for
cutting out middlemen and reducing postharvest losses on fresh produce.
“Our
state-of-the-art technology cold room digitally controls temperatures
to ensure the bananas can be sold for more than two days after they
leave our stores,” chipped in Njonjo, returning us to the operations of
the business as he pointed at bananas that were being graded according
to size.
The grading would determine the pricing. And
so efficient is the system that nothing goes to waste. Any damaged fruit
or vegetable is sold as manure.
“Farmers in this
country are earning a seventh of their potential because of low
production. For the past six months, for instance, 80 per cent of
potatoes in Nairobi have come from southern Tanzania and despite
travelling up to 1,700 kilometres, they end up here cheaper than the
variety produced here.”
And it is not just potatoes, he
notes. “Nearly all other basic commodities are imported. Most of our
garlic, for instance, is now from China.”
And contrary
to what many experts see as the cause of Kenyan farmers’ woes, Brooke
and Njonjo believe it is not so much the high cost of production but the
low yields that is the bigger problem.
“The biggest
problem is yield. We also need to bring more of our land into
cultivation and we need to get more competitive irrigation
infrastructure for the small and middle income farmers,” explains
Njonjo.
To build consistency and boost delivery, Twiga Foods has tapped the blockchain technology to deliver loans to their clients.
“A
lot of our customers buy twice a day because they don’t capital to
fully stock the shop. So we are solving a real need in the market.”
The
company recently rolled out the farmer finance facility of Sh1 billion
after a pilot with 220 market women taking an average loan of Sh3,000
for between four and eight days – at an interest of
one and two per cent, respectively – returned a high repayment rate and boosted traders’ profits.
one and two per cent, respectively – returned a high repayment rate and boosted traders’ profits.
“For the past 12 months we have been
creating the blockchain in which secure identity is tied to a client
which has enabled financial institutions to come on board.”
But agronomy talent is another big challenge which the Twiga two believe stand in the way of Kenya’s agricultural success.
FOOD SECURITY AND SAFETY
“Skill
challenge is a bottleneck that has become clear only recently. We have
dozens of people with medium-sized farms ready to be developed, but
skill is an issue,” says Brooke.
Kenyans spend 55 per
cent of their incomes on food, a figure that is way higher than the
sub-Saharan average of 44 and Njonjo believes fixing the country’s food
production and distribution system will fix the economy.
“Countries
that have a more organised agricultural ecosystem spend less of their
income on food. In South Africa, it is 16 per cent while in the UK it is
eight. This means if we have double digit food inflation as we often
do, we suck in valuable resources from other important areas.”
He
reckons that government’s support on seeds, irrigation and fertiliser
is critical since agriculture has the potential to employ hundreds of
thousands of youths.
“I recently met people who do blue
berries in Kenya for export. These usually grow only in winter, but
technology has made it possible.”
He says while the
export subsector was fairly well developed, it is time attention was
turned to the domestic market that remains largely untapped.
“Every
time I speak to people they ask if we export and when I say no, they
wonder if the domestic market is that big. How can we stop imports and
produce all this food that we need? Answering this question will be the
beginning of creating massive jobs,” he notes.
He says
food security and safety must go together. “We have had our system
certified because we believe safe food shouldn’t just come from the
supermarket but kiosks and market stalls too.”
The
company has now set sights on Mombasa and other major cities in Africa
such as Abuja, Dar es Salaam, Addis Ababa, Lagos and Port Harcourt.
Njonjo believes the ambitious expansion plan will be aided by his
experience managing business in nearly 40 countries in Africa and
Grant’s hands-on agronomical expertise.
****
Get it fast
How to partner with Twiga foods
One can join either as a grower or a buyer of fresh produce.
One needs to log onto the Twiga Foods website and enter his or her details.
As a grower, the firm contracts you and buys produce at an agreed price.
As a buyer, the company sells you produce collected from farmers.
Through the use of mobile technology, Twiga Foods gets orders, packs and delivers the produce to the buyer.
Fruits and vegetables are the main supplies, but fast-moving goods like cooking oil are also delivered.
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