The Silicon Review
“We have a very high velocity of perishable product, where stock holding is less than two days, apart from bananas, where we must ripen the same in our cold rooms and hold for 6-8 days.”
Today’s agriculture players face an increasingly challenging environment, but technology offers powerful sets of tools to unlock new value for those who know how to use it. While pitfalls abound on the journey to adoption, the benefits of success are clear. Technology can arm well-placed industry leaders with a new source of competitive advantage by unleashing untapped value within the agriculture supply chain.
In light of the foregoing, we’re thrilled to present Twiga Foods Limited — a B2B technology-enabled food distribution platform.
The company was incorporated in 2013 and is headquartered in Nairobi, Kenya.
Peter Njonjo, Twiga Foods Limited Co-founder and CEO, spoke exclusively to The Silicon Review. Below is anexcerpt.
Q. Explain your services in brief.
Twiga Foods is a B2B e-commerce company that focuses on food and grocery in the informal retail. Twiga currently employs 1,000 people and serves 30,000 customers every month. The company was voted as the 35th ‘Most Innovative Company Globally’ by ‘Fast Company’ and selected as a ‘Technology Pioneer by the World Economic Forum’, both in 2020.
Q. What motivated you to address the challenges faced by African small and medium-size vendors?
Across sub-Saharan Africa, consumers spend about 50 percent of their disposable income on food. This is what consumers in the US were spending 150 years ago, compared to about 10 percent today. At the heart of this problem is an inefficient supply chain with the challenge of fragmented retail at the heart of it. So, we use technology to aggregate retail demand through our B2B e-commerce platform and help organize a more efficient supply chain to mainly lower the cost of food.
Q. How do you manage the supply chain of low shelf life products?
We manage the shelf life through a dual approach: a) we improve the handling of products by crating them, which reduces damage and post-harvest losses. b) Through our platform, we have a very high velocity of perishable product, where stock holding is less than two days, apart from bananas, where we must ripen the same in our cold rooms and hold for 6-8 days.
Q. Taking your generous motto of giving ‘highest quality at the lowest price’ into consideration, how do you manage to maintain your profitability?
This is anchored on output in the production of food. Besides, we transition to more commercial farms with better agronomy is how we maintain our profitability.
Q. How efficient is your distribution platform?
Our distribution is very efficient and a lot of it is anchored on our technology platform and the strength of the portfolio that we carry. This has allowed us to lower our cost of distribution by optimizing the density and frequency of our orders with the small vendors we serve. The technology also empowers our teams to provide consistent service.
Q. Operating losses take the largest toll on the revenue in this business. Have you incorporated smart and intelligent management strategies to minimize operating?
We have implemented activity-based costing across the business which allows us to have a better understanding of the various drivers of efficiency and profitability, and with our advanced analytics capability, we now have dashboards that help us understand this in near real-time across the business.
Q. How do you market your services?
We have a sales team engaging our customers and our main recruitment points are price, quality, and service.
Q. Do you have any new services launching soon?
Working capital is a big challenge for most informal retailers and we are looking at partnering with financial institutions and offering fintech solutions through our platform.
Q. What are your trajectories for the next five years?
We plan to establish ourselves as a pan-African player in this space, with a presence across key cities in East, Central, and West Africa.
Peter Njonjo: A Dynamic Leader
Peter Njonjo, Co-founder, serves as the Chief Executive Officer of Twiga Foods Limited. A native of Kenya, Peter holds an MBA in Strategic Management, an undergraduate degree in International Business Administration from United States International University in Kenya, and an Executive Leadership Program from Harvard Business School. Peter is also a Certified Public Accountant and spent 21 years with the Coca-Cola company with his last role being President of the West and Central Africa Business Unit, made up of 33 countries, based in Lagos, Nigeria.
Njonjo was President of the American Chamber of Commerce in Kenya, a director of the American Business Council in Nigeria, and has been voted among the top 100 young leaders in Africa by Forbes Afrique and ‘Top 40 under 40’ by The Business Daily in Kenya. He currently serves on the Global Board of Junior Achievement and is the Vice-Chair of the COVID Advisory Board to the ICT Ministry in Kenya.