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Twiga Foods: The disruptors in the ‘mama mboga’ market

ENTERPRISE
By Mona Ombogo | March 6th 2019
Twiga Foods workers

“We were part of an international investment forum in Washington DC. We were standing side by side with people who had solutions for global warming and electric cars, while we were asking for money to distribute bananas to small-scale retailers in Kenya,” says Grant Brooke, co-founder of Twiga Foods.

“We couldn’t believe it when we won the overall pitch and attracted a huge investment, which transformed our business.”

Twiga Foods is a business that delivers fresh produce to small-scale retailers, like mama mbogas, and finances small-to-medium-scale farmers who grow and supply the company with produce.

Getting started

“I discovered there was a gap in the market when I did research on Kenyan agricultural practices for my doctorate at Oxford University,” says Grant.

“I was living in Kenya at the time and part of my field study was small-scale retailers of fresh produce. I realised how difficult it was for them to get their daily supplies.”

Grant, 33, observed that many of these vendors would wake up at 4am, go to the market, and then procure and ferry stock to their premises using handcarts, mikokoteni.

Because they were dealing with fresh produce, they couldn’t buy in bulk, especially when it came to highly perishable products like bananas. It was a cumbersome process to repeat every single day.

“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,” Grant tells Hustle.

“We did a test run and took some bananas to Kaloleni market, asking vendors if they’d be interested in us delivering produce to them every morning. The idea was a hit.”

In November 2014, Grant and Peter invested in five tuk tuks, which they used to ferry 10 tonnes of bananas to Kaloleni every day.

Despite their investment of Sh15 million in the first six months, they were constantly short of capital and struggled to meet the rapidly growing demand.

The situation changed for the company when they got a call asking them to pitch their business to a global forum of venture capitalists.

“They flew us out to Washington DC for this pitch. It was a humbling experience, being in the presence of such genius minds. We couldn’t believe it when we won the investment.”

Raising cash

It took six months for due diligence and other legal factors to be finalized before the funding was released.

By this time, Peter and Grant had put in approximately Sh30 million in total into the company, including money they got after Peter sold his house.   

“It was a tough first year, but it yielded fruit, with our turnover coming in at Sh25 million,” says Grant.

“Getting the investment from the venture capitalists, took us to a whole other level. I remember in one of our initial meetings, our investors challenged us to expand our product line. We were only supplying bananas and pineapples, but they asked us, ‘Why not tomatoes? Potatoes? Don’t the vendors of these products go through the same transportation problems?’”

Grant and Peter took up the challenge and expanded their distribution to 17 products over four years, including flowers, rice and cooking oil.

They also went from five staff and five tuk tuks supplying two tonnes of bananas a day, to 500 employees and 100 trucks, supplying 2,500 vendors a day with more than 1,000 tonnes of fresh produce.

“People ask how we managed to grow so fast. We had a ready market. Farmers were having a problem delivering their goods, vendors were having a problem sourcing for their stock, we simply bridged that gap,” says Grant.

“Many people don’t know that the small retail market turns over far more produce than tier-one retailers. For example, while tier-one retailers sell approximately four tonnes of bananas a day combined, vendors and kiosks sell up to 70 tonnes combined.”

Even at these figures, there is not enough supply around the country to meet consumer demand.

“Most of this is due to a poor farming culture, because many farmers are not educated on good agricultural practices,” Grant says.

“We discovered that it was very hard for us to get good quality products consistently since most farmers were held hostage by the weather elements, for example, if there was flooding or drought, it would reflect on the quality of the crop output.”

The vision

It was because of these inconsistencies that Twiga Foods branched into financing and educating farmers around the country.

They subsequently opened collection centres for produce in 29 counties. Farmers can deliver their goods to these collection centres, after which the goods are transported to Nairobi and its environs for distribution.

In some cases, when dealing with highly delicate produce, Twiga will harvest the crop on the farmers’ behalf.  

Grant says they’ve received exceptional support from the agricultural community, which is truly interested in improving food safety in Kenya.

“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.”

Grant believes that as farmers become more efficient in their farming skills and vendors get more convenient methods of acquiring their produce, the price of food in Kenya will inevitably go down.

“This is crucial for any emerging and growing economy, and Twiga Foods wants to be counted among the changing forces in the country. One of the ways we’re doing that is by giving farmers a sense of financial stability because we buy their products at the same price, regardless of the season,” he says.

“A kilo of tomatoes goes for approximately Sh17 in low season and Sh90 in high season. Twiga offers a blanket Sh40 all year round, making it easier for farmers to calculate their profit and plan for the growth and sustainability of their businesses. Let farmers farm, let someone else grapple with the changing figures.”

Yet 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.

“Every 12 months, we’re reinventing, and every six months, it seems something will happen to kick you in the gut and turn everything upside down,” he says.

“For instance, we’ve lost millions of shillings-worth of produce to blackouts and faulty generators. You learn to roll with the punches; isolate the problem and work it.”

It’s because of these 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.

“I find that the prospect of success can be as daunting the prospect of failure. When we started out, I tried to explain to my parents in Texas what I was doing out here in Kenya. I was an academic who’d studied at top universities like Princeton and Oxford and I was now selling bananas,” he says.

“It took them travelling out to Kenya a few times to understand why Twiga Foods is important and how, in collaboration with other like-minded people and organisations, we could transform the agricultural industry in Kenya.

“Many Kenyans spend 45 per cent of their income on food, and the sad truth is that we’re not producing enough to sustain that. It’s an issue that will not get better with the growing population unless we cultivate better agricultural practices and standards.”

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