Kenya: Kenya's mobile-based supply platform
Agriculture and Food
5,000 km is the distance a banana travels for a consumer to pay 49 cents a pound at a Texas Wal-Mart, while 200 km is the distance the same banana travels for a consumer to pay 63 cents a pound at a Nairobi grocer. Across urban Africa, prices on basic consumer goods are skyrocketing, as inefficient, informal, value chains cannot keep up with rising urban demand. In Kenya, the innovative company Twiga Foods responds to this problem by rebuilding marketplaces with smart-tech, cold-storage, and efficient distribution. Advance Consulting assisted the company in obtaining a grant from the Feed the Future Partnering for Innovation Programme (USAID).
Despite ample arable land and agricultural production, Kenya has witnessed a 13% inflation on food prices in 2014-2015. As urban populations boomed, the market infrastructure remained the same. Lorries in Nairobi cue for up to 24 hours, in the heat, before exiting their perishable stock in open air markets. This expensive and wasteful way is how 96% of Nairobi inhabitants access their foods.
The Kenyan company Twiga Foods smartly circumvents those open market dynamics. The company targets small fruit and vegetable vendors who previously sold their produce at the market, and provides them with ordering platforms to get stock delivered to them. Twiga Foods uses their collective purchasing power to work back to farmers organized around collection points, eliminating middle-men and reaching farmers directly.
The company operates a logistical fleet and cold stores to dramatically reduce post-harvest supply chain loss. For example, whereas over 30% of bananas in informal supply chains is lost through multiple trades, poor handling and lack of cold chain, Twiga’s banana stock losses are around 10% only. Twiga passes on part of these post-harvest loss savings to the farmers by paying them a higher price and providing them with training to improve agricultural practices and productivity. They are included as its long-term partners in a formal supply chain that gives them access to finance and makes them increasingly included in the formal economy.
The Twiga Foods solution is highly innovative over current practices in the informal chains that account for more than 95% of fresh fruits and vegetables supplied to Africa’s urban centres. The near-perfect match of demand and supply, elimination of intermediary trading and smart cold chain with direct delivery to the vendors makes the Twiga Foods solution very appropriate for minimizing the post-harvest loss in the fresh fruit and vegetable supply chain that connects smallholder farmers to small vendors in African urban markets.
Please contact Krisje Theuns-van Hees for more information on this project. Refer to the video below for a better understanding of Twiga Foods.
USD 680,000 grant from the Feed the Future Partnering for Innovation Programme (USAID)
2017 - 2019