Twiga, an e-commerce food distribution platform, today announces the launch of its new subsidiary, Twiga Fresh, through which it will grow and distribute its own agricultural products to retailers.
Twiga said it has started producing horticultural products like onions, tomatoes and watermelons on its 650 hectares (1,606 acres), with an estimated production of 150,000 tonnes of fresh produce per year. Twiga has so far invested $10 million in the new venture, which will be backed by debt from development finance institutions.
Since its launch, Twiga has used technology to connect smallholder farmers with informal traders, giving producers access to new markets and a large pool of customers, while optimizing the food supply chain in its markets. However, along the way, Twiga says they’ve faced traceability issues, stock-outs and price volatility – which has made it difficult for the company to deliver on its promise of affordability. and food security. With Twiga Fresh, they are planning better production control.
“Other fresh produce volumes were low because we made the decision not to scale fresh produce where we didn’t have traceability from a food safety perspective,” the CEO said. and co-founder of Twiga, Peter Njonjo, adding that the new business will not affect so many farmers.
Twiga said it would, however, continue to source products like bananas – where value chains are more “established and efficient” – from partner farmers.
The company says its farm is one of the largest commercial fresh produce establishments targeting the domestic market, as most of the major horticultural companies in the East African country export their crops.
“Most Africa-based investments in modern commercial agriculture have been in the export-oriented industry over the years due to the low formality of the domestic food market. This has led to a drop in the productivity of local agriculture, which has had an impact on both quality and prices in the market,” said Njonjo, who founded the company with the former CEO Grante Brooke.
“The current price of fresh staples is one of the highest in history and we are also seeing an increase in the importation of staple foods because of this. By building a B2B supply chain in informal retail, Twiga was able to formalize the national food market using technology, placing the company in a unique position to invest in upstream integration and solve the problem of declining productivity and the rising cost of food,” he mentioned.
Beyond Kenya, Twiga is looking to start operations in Uganda and Tanzania, and also plans to explore new markets in Central and West Africa.