2 Posts authored by: community.manager2

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!

This is the second in a series of examples of companies successfully overcoming challenges to find profitability in smallholder markets. This week, we are looking at Twiga Foods, a tech company in Kenya that has successfully entered the urban produce supply chain with support from its strong human resources department and design-centered approach.

In Kenya and in many workplaces around the world, the human resources department is not considered an important tool when it comes to business growth. When a company expands rapidly, managing personnel is always lower in priority. In Kenya, when undergoing a large or rapid expansion, rather than using their human resources team to recruit and train quality, local, long-term staff, most tech companies hire expatriate consultants who have impressive pedigrees but are expensive and do not necessarily yield good results because they lack understanding of the local context. But one company has made human resources its number one priority, and, in addition to a strong research-focused design strategy, is finding success in smallholder markets. Twiga Foods, a tech company in Kenya that is connecting rural vegetable growers with urban produce vendors using a mobile business-to-business platform, has sustained high growth by focusing on human resources and design principles.

Twiga does not view human resources as an isolated department, but rather as an integrated part of its operations that should provide its other business units and employees what they need. The HR department collaborates closely with other departments to understand their recruitment needs and identify the best people to carry out the company’s strategy. Instead of hiring expensive outside consultants, Twiga recruits Kenyans and provides them with trainings on growth and planning strategies, business practices, and corporate culture. Because Twiga is growing quickly, its human resources department continuously reviews the effectiveness of its staff and leadership trainings while focusing on its corporate culture. With so many new employees joining the company as it expands, Twiga is working to standardize its onboarding trainings to ensure that the quality of these trainings doesn’t suffer. It holds employees to high standards of conduct; for example, it follows a zero tolerance policy on sexual harassment, which is uncommon in other workplaces. In a recent anonymous survey of all staff, employees expressed a high level of respect for company leadership, which suggests the focus on a positive corporate culture and training works.

Twiga’s other important strategy is to continually analyze its model and practices, which is why it formed a design team to evaluate every part of its operations, including its farmer strategies. A research and data focused design approach allows emerging companies to monitor their progress and customer feedback. Twiga’s design team uses design principles for growth and planning Twiga’s collection centers and interactions with smallholder farmers. Through its farmer surveys and observations, the team noticed a lot of the farmers would side sell to brokers and under-deliver the quantity of produce they had promised to Twiga, even though Twiga pays more than local brokers. Farmers preferred the brokers’ quick and easy purchasing approach to Twiga’s, for which farmers must accumulate their produce, deliver it to Twiga’s collection point, and then receive their payment via M-Pesa mobile money. As a result, Twiga’s design team came up with a quicker way to weigh farmers’ produce to make their process more convenient and retain suppliers.

Thanks to these corporate strategies and the support of Feed the Future Partnering for Innovation, Twiga Foods is expanding its network of rural collection centers, where it collects produce from smallholder farmers for sale to urban vendors, from the existing eight to 33, benefitting 7,500 new smallholder farmers.

Next week, we will highlight another successful company and its work in tapping into smallholder markets. How are you making yourself competitive in smallholder markets by improving management practices? Tell us about it in the comments below!

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