This is the third in a series of examples of companies successfully overcoming challenges to find profitability in smallholder markets. This week, we are looking at Tecnologia e Consultoria Agro-Pecuaria (TECAP), an input supplier in Mozambique that has developed a blended wholesale and retail model to reach more smallholder customers with mechanization and inputs.
Lack of access to improved inputs and equipment is a major hindrance for farmers in Mozambique. Farmers often have to travel great distances to obtain the inputs and mechanization equipment they need, making it a costly process and delaying their work. Agricultural retailers also face lack of or delayed access to mechanization and quality local products. However, one input supply company in Mozambique, TECAP, is blending wholesale and retail to build a supply chain that ensures that smallholder farmers and retailers have easy access to the inputs they need, when they need them, and at a price they can afford.
TECAP’s unique wholesale input and mechanization equipment business model, coupled with a network of agrodealers, franchisees, and agriculture development agents (ADAs), has resulted in significant reach into the Mozambican market. Investment in its distribution network and a product range of both local and imported products is increasing sales and the number of farmers accessing improved inputs. The keys to TECAP’s success are its wide distribution network and diversity of products.
TECAP’s distribution network of agrodealers, franchisees, and ADAs allows it to bring products and services closer to where smallholder farmers live, so farmers save on transportation expenses and time. Smallholder farmers can also purchase the inputs they need from a range of retailers selling TECAP products. TECAP ADAs, who also work as sales agents, demonstrate to farmers how improved inputs can improve yields and incomes, helping farmers see the value of investing their resources in improved inputs. In addition, TECAP trains agrodealers and franchisees on how to use the products they sell, so that they in turn can explain to customers how to correctly use products, avoiding loss of returns by misuse and increasing customer loyalty.
Farmers and retailers are also attracted to TECAP because of its diverse range of products. TECAP imports products in bulk, making them cheaper, and also buys local products to increase the variety of its stocks. This combination of imported and local products makes it a unique wholesaler in Mozambique with a wide distribution network that guarantees on-time access. TECAP’s bulk purchases of inputs and mechanization equipment allow it to competitively sell products in its farmer houses and through its franchises. Over the past year, TECAP, with the support of Feed the Future Partnering for Innovation, has reached 49,547 farmers and generated $1,721,836 in input and equipment sales since operationalizing three “farmer houses” – medium-size input supply shops that cater to individual farmers as well as small retailers – in Nampula, Tete, and Manica.
How are you making yourself competitive in smallholder markets? Tell us about it in the comments below!