Twiga Foods, a Kenyan B2B E-Commerce startup, has launched a new subsidiary focusing on modern and commercial farming. Twiga Fresh will scale up the efficient production of local horticultural staples such as onions, tomatoes, and watermelons, making it one of Africa’s largest single horticulture farms focused solely on the home market.
Twiga is investing $10 million in Twiga Fresh, which will be funded in the longterm through debt in partnership with Development Financial Institutions and will focus on primary agriculture and food security.
Twiga Foods said it would continue to engage with small holder farmers to address the challenge of food security in specific value chains that are well established and efficient locally, such as bananas.
“We will continue to run the B2B e-commerce business under Twiga, focused on building a one-stop supply-chain solution for informal retailers, delivering both Twiga and non-Twiga owned products. 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, CEO and Co-Founder of Twiga.
“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,” he added.
Twiga has been working to alleviate the problem of rising food costs in urban areas for some years. In Africa’s major cities, food accounts for about 60% of household expenditure.
The retail industry and consumers have had a particularly difficult few months, as disposable income has been slashed by both the COVID pandemic and rising commodities inflation induced by the Ukraine crisis.
Additionally, there has been little investment in improving the productivity and modernization of food production in Africa, resulting in a huge increase in basic food imports, making food security an increasingly unattainable aim.
In March, Twiga Foods announced that is targeting a pan-African expansion to East African markets like Uganda and Tanzania The company also stated that it is investing in the development of a new method of manufacturing food on the continent that addresses both traceability and mass production. The initiative it says aims to reduce consumers’ prices for popular fresh food products by over 30%.