In Kenya, urban produce vendors in Nairobi get up as early as 4 a.m. to purchase fresh produce grown in rural areas from urban wholesale markets, which account for more than 95 percent of fresh produce sold in the city. But urban vendors face high prices for the produce they source, because the supply chain includes multiple middlemen, long distances traveled to get the produce from rural farmers to urban markets, and fluctuations in quantity and prices at wholesale markets. Bananas, for example, are sold by urban vendors and have the potential to be very profitable. However, the average farm-gate price of bananas, at just 14 US cents per kilo, increases to about 50 cents per kilo by the time it gets to urban vendors. Twiga Foods, a Kenya-based fresh fruit and vegetable supplier, developed and is using a mobile platform to decrease these costs so that producers get more income, vendors get a higher return, and consumers can access higher quality and more consistent fresh produce. To find out how, watch this video and check out the details below.
In partnership with Feed the Future Partnering for Innovation, Twiga Foods is expanding its network of rural collection centers to source more quality fresh produce from rural farmers to supply vendors in Nairobi. The mobile platform allows for “smart” collection in order to create efficiencies across the value chain. Farmers sell more produce, vendors don’t need to travel early in the morning to wholesale markets where prices fluctuate day-to-day, and Twiga stays in business to continually provide economic and social value to the market. Twiga Foods is making its technology company a successful venture that creates added value for smallholder farmers, vendors, and consumers. Some of the ways it is doing this are:
- The Twiga mobile platform aggregates more than 600 vendors in Nairobi and then customizes purchases from smallholder farmers to supply vendors with more accurate volumes of fresh produce. This cuts costs for the vendors because of reduced (or zero!) travel costs, time savings, and getting consistent price and quantity that wholesale markets do not guarantee.
- The Twiga platform allows the vendors to offer consistent quality and volume to their customers, thus helping to stabilize and/or increase their sales and also helping Twiga to source ever more accurate volumes of fresh produce from smallholder farmers.
- Twiga’s model helps rural farmers sell more of their produce directly to Twiga, rather than less of their overall crop to multiple middlemen. Additionally, producers are able to diversify their income by selling a variety of grades of produce to fulfill diverse inventories that vendors in urban markets demand.
- The Twiga business model is that of a technology company rather than a food distributor, adding efficiencies within its supply chain and also across the value chain that equal gains for Twiga, smallholders, vendors, and consumers.
- Twiga is focusing on continually innovating its technology platform and operation plan to maximize the gains it is currently seeing. This pathway will take it from supplying 600 vendors to 9,000 in Nairobi alone.
Check back on the Learn blog for updates from Twiga, write them directly through the AgTechXChange, and/or post your comments and questions below!