The men changing face of food business

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.

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.

“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.

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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.