February 9, 2023


Business&Finance Specialists

Why B2B e-commerce platform Twiga ventured into farming

4 min read

Tomatoes from the Twiga New farm heading to sector.

Recognized in 2014, Kenya-based Twiga Meals connects farmers and modest shopkeepers by means of a cell application. If a seller is out of stock of bananas, for case in point, they spot an order on the Twiga app and the organization delivers inside of 24 several hours, sourcing from its warehouse or specifically from a smallholder farmer.

Twiga has typically been witnessed as mainly a technologies corporation, using software program to streamline Kenya’s food supply chain. Nonetheless, it just lately announced a US$10 million financial commitment into its have farming operations by new subsidiary Twiga New. Jeanette Clark speaks to co-founder and CEO Peter Njonjo about why the company determined to enterprise into farming.

A sensible next phase

When Twiga began, the company acquired all its new generate from smallholder farmers. Some of the farmers could provide significant-top quality generate whilst some others struggled, producing high-quality management complex.

“We realised we wanted to glance at methods of addressing this inconsistency,” suggests Njonjo.

Some value chains have been accomplishing superior than other individuals. Bananas, for example, normally did nicely as the farmers could make these without good quality or productiveness issues. Products like tomatoes have been a unique story. Farmers have been battling with minimal levels of productivity and professional key write-up-harvest losses.

“We tried using resolving these complications by sourcing from mid-sized functions but it remained a problem, so we made a decision to make investments in our personal farming functions.”

Whilst Kenya has a reasonably created retail sector, Njonjo claims there are continue to inefficiencies in food price chains aimed at the domestic sector.

He points out that the domestic primary agriculture sector has been starved of investment, innovation and productiveness gains for a extensive time. As a result, regionally developed produce is typically much more costly than the obtainable imports. “It has left us with a circumstance wherever the bulk of garlic in Kenya is now coming from China.”

Twiga realised it previously had a manage on the need aspect – providing create to modest merchants – and could grow even more if it could make sure reliable source. It resolved to concentration on crops the place scale was essential: onions, tomatoes and watermelons.

Harvesting of drinking water melons at the Twiga Refreshing farm.

Getting the appropriate farming model

Twiga is developing crops on 650 hectares of land, leased from large-scale farmers. Partnering with existing farms designed financial sense in accordance to Njonjo. Discovering accessible land on farms with the basic infrastructure in location and ample h2o source intended the business could use its expenditure precisely for the bespoke changes demanded for the cultivation of its picked crops.

“We also had to tackle the reality that the ability to manage farms at this scale does not exist locally. For illustration, we experimented with to hire an agronomist who experienced working experience in farming onions on a bigger scale than 100 hectares and could not find somebody outside of South Africa,” he explains.

The corporation experienced to establish a world-wide team of agronomy specialists – from South Africa, the US and the British isles – to attain bigger productiveness levels and create a system of traceability, all in a limited time.

Positive aspects to the retailer and finish buyer

The move into main agriculture has already resulted in a reduction in costs for develop purchased via Twiga Foodstuff. “We can sell at a a lot lower price tag and that preserving is handed on to the purchaser. We want to start a trend to bring in a lot more money for commercial farming aimed at domestic supply.”

It hopes to have an impression by formalising the source chain and not long ago commissioned a 20,000 m2 distribution centre with modern automation, from where its vans address shut to 12,000 km every single working day supplying generate to informal retailers.

“This enables us to prepare superior and reduce out much more inefficiencies, again lowering price ranges.”

Operating money is yet another obstacle confronted by casual suppliers. They usually only procure what they can manage at the time. “There are recurrent out-of-stock problems at retailers,” clarifies Njonjo. As a result, Twiga introduced a fiscal services small business to deliver the needed finance so stores can acquire what their consumers need when they need it.

Increasing traceability

Performing with casual smallholder farmers meant Twiga did not often have visibility of the form of pesticides or fertilisers getting utilised in their farming practices. “This developed issues about food security. If you are aggregating from several informal suppliers, you turn into the experience of that foodstuff safety,” provides Njonjo. Remaining equipped to provide traceability on the create it farms by way of Twiga Contemporary delivers peace of intellect for the conclude purchaser and safeguards the manufacturer from any probable status damage.

Aim crops

In Kenya, Twiga New will emphasis on tomatoes, onions and watermelon. As it expands into other marketplaces, the corporation will evaluate the benefit chains that call for commercial farming at scale.

“In West Africa, peppers could be a focus crop. We will be quite situational when we look at our farming operations but see possible in potatoes as perfectly. For anything else, we will continue on sourcing from smallholder farmers as a lot as we can,” says Njonjo.

Twiga Foods contact info

Get in touch with facts are only noticeable to our Month to month/Annual subscribers. Subscribe in this article.

Kenya: Why B2B e-commerce platform Twiga ventured into farming