KENYA – Kenyan-based technology food distribution platform, Twiga Foods, has invested US$10 million in the expansion of its private label business with the launch of a new subsidiary dubbed Twiga Fresh.
The new division is focused on modern and commercial farming of domestic horticultural staples like onions, tomatoes and watermelons, making it one of the largest single horticultural farms in Africa, focused purely on the domestic market.
To this end, the B2B e-commerce food distribution platform will farm and distribute its own agricultural produce to traders.
Production is undertaken on a 650-hectare (1,606 acres) parcel of land, with an estimated output of 150,000 tons of fresh produce annually.
Development of the project follows its close of US$50 million Series C funding round, aimed to scale its efforts in the East African nation and other neighbouring countries.
Streamlining traceability along fresh produce value chain
Since launch, Twiga has used technology to link smallholder farmers with informal traders, giving the producers access to new markets and a large pool of clients, all while optimizing the food supply chain in its markets.
But having worked with local farmers at scale and distributing fresh produce over the years, the Kenyan company has identified some challenges, especially in the traceability of some produce like tomatoes.
They have also had to deal with stock outs and price volatility – which has made it hard for the company to deliver on its promise of affordability and food security.
“We will continue to run the B2B e-commerce business under Twiga, focused on building a one-stop supply-chain solution for informal retailers, delivering both Twiga and non-Twiga owned products.
“Twiga Fresh, in addition to our growing range of private label products, will ensure we drive growth in customer numbers and broaden the basket size by offering quality produce at a discount against prevailing market prices,” said Peter Njonjo, CEO and Co-Founder of Twiga.
With Twiga Fresh and the company’s other private label lines such as its rice dubbed SokoYetu Rice, Twiga projects a better control of the value chain.
For specific value chains that are locally well established and efficient, like bananas, Twiga Foods says it will continue to work with small holder farmers in addressing the challenge of food security and the 45,000 traders it supplies every month.
Twiga food focuses on driving down food prices
The last few months have been particularly difficult for the retail business and for consumers as disposable income has taken a beating from both the COVID pandemic and the increasing commodity inflation caused by the war in Ukraine.
Additionally, there is limited investment in revolutionizing the productivity and modernization of food production in Africa, which is leading to a significant growth in the importation of basic food, making food security an increasingly elusive goal.
By developing an alternative way of producing food on the continent and covering both ends of traceability and mass scale, Twiga Fresh aims to reduce consumers’ prices for popular fresh food products by over 30%.
“The commodity-driven volatility in the world today is causing an unprecedented level of food inflation across the world.
“In Africa, we can least afford this disruption, and that is why we are excited about the imminent impact our technology-enabled supply chain will have in reducing the cost of food,” added Njonjo.
To launch the Twiga Fresh line of products, the company shall sample one million Kilograms of fresh produce to customers under our 21-day promotion by the name of “Bidhaa Freshi na Safi” that commences on the 23rd of May 2022.
“We shall deliver the produce at no cost to the door of every retailer who participates across the sixteen cities and towns we operate in Kenya. This will also help boost working capital in their businesses,” stated the company.
Beyond Kenya, Twiga plans to start operations in Uganda and Tanzania soon, and is also exploring new markets in Central and West Africa.