Twiga, a B2B e-commerce food distribution network, has announced the establishment of Twiga Fresh, a new subsidiary that will harvest and distribute its own agricultural goods to traders.
Twiga stated that it has began producing horticulture products such as onions, tomatoes, and watermelons on its 650-hectare (1,606-acre) area, with a projected annual output of 150,000 tons of fresh produce. Twiga has already put $10 million into the new enterprise, which will be supported by debt from development finance organizations.
Twiga has employed technology to connect smallholder farmers with informal merchants from its inception, providing producers with access to new markets and a huge pool of clients while optimizing the food supply chain in its markets. However, Twiga claims that they have had to deal with traceability issues, stock outs, and price fluctuation along the way, making it difficult for the company to deliver on its promise of affordability and food security. Twiga Fresh, the company’s newest addition to its private label division, aims to improve production control.
Since launch, Twiga has used technology to link smallholder farmers with informal traders, giving the producers access to new markets and a large pool of clients, all while optimizing the food supply chain in its markets. However, along the way, Twiga says they have had to deal with traceability challenges, stock outs and price volatility – which have made it hard for the company to deliver on its promise of affordability and food security. With Twiga Fresh, the latest addition to its private label business, they project a better control of production.
“The volumes for other fresh products were low because we made a decision not to scale fresh produce where we did not have traceability from a food safety standpoint,” Twiga CEO and co-founder Peter Njonjo said.
Twiga said it will continue to source some produce from partner farmers, such as bananas, where the value chains are more “established and efficient,” to service the 45,000 traders it serves each month.
Because most large-scale horticultural firms in the East African country export their crops, the company claims its farm is one of the largest commercial fresh produce establishments targeting the domestic market.
“Most of the Africa based investment in modern commercial farming has been made in the export-oriented industry over the years because of the low formality of the domestic food market. This has led to decreasing productivity of local farming, which has impacted both quality and pricing in the market,” said Njonjo.
Twiga intends to launch operations in Uganda and Tanzania soon, and is also looking into other markets in Central and West Africa.