Agri-tech company in Kenya, Twiga Foods has launched a new farming subsidiary, expanding its business beyond supplying fresh produce and commodities through a mobile-based platform.
The firm has injected $10 million (Sh1.16 billion) into Twiga Fresh for farming onions, tomatoes and watermelons. Twiga Fresh has leased a 650-hectare farm in Taita Taveta, where it intends to employ modern farming techniques to boost yields. The rollout of the new subsidiary is part of its product diversification strategy, coming just months after it added more of its own branded products to its offerings.
“Twiga Fresh, in addition to our growing range of private label products, will ensure we drive growth in customer numbers and broaden the basket size by offering quality produce at a discount against prevailing market prices,” said Peter Njonjo, Twiga Foods chief executive and co-founder.
The firm, which connects producers to end consumers and vendors, said it would continue to work with smallholder farmers for produce such as bananas. In January, the firm added sugar, salt and snacks to its own branded products, consisting of rice, cooking oil and maize flour, to attract customers with relatively lower prices.
Product diversification
Product diversification came after the company, in November 2021, raised Sh5.56 billion from international investors such as Creadev, OP Finnfund Global and Endeavor Catalyst Fund, among others, for East and West African expansion.
The firm said Twiga Fresh would, in the long-term, be funded through debt in partnership with development financial institutions focused on primary agriculture and food security. The Sh1.2 billion investment in Kenya makes it one of the largest single horticultural farms, focused purely on the domestic market. Twiga is betting on lower pricing to attract end consumers and small shops that rely on small margins.
“The commodity-driven volatility in the world today is causing an unprecedented level of food inflation across the world. In Africa, we can least afford this disruption, and that is why we are excited about the imminent impact our technology-enabled supply chain will have in reducing the cost of food,” said Mr Njonjo.
Twiga is among a growing number of tech-enabled firms seeking to disrupt food and other consumer supply chains, connecting producers to consumers and reducing the number of middlemen in the process.
