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#AfterOfficeHours: Grant Brooke on the journey to transforming the agricultural retail market
Agriculture is big business in Africa. According to the World Bank, the sector employs 65 per cent of the continent’s labor force, and accounts for 32 per cent of gross domestic product (GDP).
In Kenya Agriculture dominates the economy, accounting for 70 percent of the workforce and about 25 percent of the annual GDP. The sector also accounts for at least 65% of the export earnings.
Yet it is affected by myriad problems. Let’s face it, Africa’s population is growing it is projected to reach two billion by 2050 but farm productivity is low, as a result of climate change, change in weather patterns, lack of technical equipment and expertise, perennial seasons of a prolonged drought threatening low farm yields resulting in food shortage and famine and the movement of young people away from farming areas to cities.
However, all hope is not lost. African entrepreneurs are increasingly seeing the inherent opportunities within the agriculture sector, developing solutions that do everything from help farmers increase their yields to providing better access to markets.
AgriTech in Africa is increasingly becoming huge and quite attractive to investors. This is evident thanks to a report released in 2017, by Disrupt Africa, where African AgriTech startups operating in the market grew by 206% over the past two years, and over US$19 million invested over the same period.
In Kenya AgriTech comprises the use of technological innovations and capabilities that change how agricultural products are grown, harvested, packaged, stored, transported, processed and sold with the aim of increasing efficiency and sustainability.
The AgriTech sector in Kenya is mainly divided into four sub-sectors addressing multiple challenges which include Analytics, Resource Access, Market Place and Knowledge Access.
One great example of an AgriTech Company in Kenya that is impacting the Agriculture Market Place Sub-Sector is Twiga Foods. Founded in 2014 by Grant Brooke and Peter Njonjo, Twiga Foods is a mobile-based supply platform that allows vendors who operate kiosks and market stalls in Nairobi to order the supply of fresh produce at low-cost, better quality and timely than what informal markets can provide.
Twiga Foods is one of the highest funded startups in Kenya having secured a total of US$30.4 million with half of that raised in 2018.
With the vision to become Africa’s largest grocer without opening a single grocery store, the startup partnered with IBM Africa to develop blockchain-enabled finance lending platform for its customers in a bid to expand its logistics services into a total market ecosystem by adding financial services for its clients.
Speaking at the #AfterOfficeHours session held last week at our Kilimani Office Space, outgoing CEO and Co-Founder of Twiga Foods, Grant Brooke, said that he discovered there was a gap in the Agriculture sector when he came to the country to carry-out research on Kenyan agricultural practices for his doctorate at Oxford University.
“My friend and business partner, Peter Njonjo, and I had been looking for a venture to get into. The idea of supplying produce to retailers seemed like a viable one because we would be solving a problem faced by a multitude of vendors,” he added.
In 2014, the duo started off Twiga Foods with only five tuk tuks, which they used to ferry 10 tonnes of bananas to Kaloleni every day. At some point he admitted that he was even forced to sell the bananas from the boot of his car.
Fast forward to today, the company has risen to have a team of over 500 people, a team, Mr. Brooke said was mostly created from the networks they created therefore helping the company grow its vision and mission.
He also added that the company growth has also been highly contributed to the fact that they have maintained most of the team that they started off with.
“We are one of the few organizations where making oneself redundant is a key performance indicator. We try to grow people into new layers of management that are always ready. Making oneself redundant is how to grow the organisation,” he added.
“Food security is a difficult vision to achieve because 98 per cent of produce in Kenya is sold informally, with no overseeing governing body. This means it is a challenge to judge the quality of produce coming out of our farms and the shortfalls that the industry faces from day to day,” said Brooke
This is why Brooke thinks that the Twiga Model was important and why he would advocate for more people to adopt the model.
“Having a model in place that helps you handle food safety and food security is crucial for any emerging and growing economy, across the continent. We can’t have cities of about 6 million people letting food distribution be on carts and open markets,” said Brooke.
He added, that also the sector needs to invent around cold stores and efficient logistics and help farmers pair orders and their delivery. Farmers also need to be equipped with farming skills and vendors get more convenient methods of acquiring their produce, a move he added that they had taken as Twiga to educating farmers around the country.
“Right now, we lose over 30% of stock between farms and the market. We have a problem where food is 45% of consumer spending but when you go to the farms the farmers still complain of not getting reliable market .This is a huge problem that needs to be addressed It’s an issue that will not get better with the growing population unless we cultivate better agricultural practices and standards,” he said.
On whether the journey has been easy? Grant admits that the journey to transforming the agricultural retail market has not been easy. Twiga Foods has had to make significant changes to keep up with the growth. It’s because of the evolving challenges that Grant says, despite reaching the $30 million (Sh300 million)-mark in investment, Twiga Foods it still a long way from achieving everything it set out to.
In conclusion, Mr Brooke said, “I hope Twiga continues to be the leader in this space. But it is also essential that Kenya and the whole continent embraces similar models like this if we do not want food to grow to a 50 – 60% of consumers spending. This just eats into the economies.”
Today, Twiga works with more than 13,000 farmers and 6,000 vendors in Kenya. The company started off connecting banana farmers to vendors in cities, but it now works with other produce such as cabbage, mango, potato, onions and tomatoes.
Twiga has also opened collection centres for produce in 29 counties as well as a central pack house with cold storage facilities. The company also owns a large fleet of mobilized trucks and vans for swift collection and distribution of produce, thereby creating an efficient logistics system that limits Twiga’s post-harvest losses to 5 percent, as compared to 30% at informal markets, where many Kenyan farmers usually sell their produce. Farmers who sign up with Twiga also receive payment within 24 hours.
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