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With massive swathes of arable land and an enormous food import invoice, Africa’s agriculture and food industry holds immense potential. However, figuring out the right alternatives and devising a profitable technique round them might be troublesome. How we made it in Africa’s editor-in-chief Jaco Maritz seems at some attention-grabbing agribusiness-related concepts and success strategies that got here throughout our desk in the primary half of 2022.
1. Industry-focused B2B marketplaces. Singapore-headquartered GUUD has carried out quite a few tech-enabled options to streamline commerce in Africa. For occasion, in the East African Community it has developed a Single Customs Territory platform, and in Togo, it launched a digital commerce certification system. Apart from implementing methods for governments, the corporate now additionally needs to launch non-public sector-focused options in Africa. One promising concept is industry-specific business-to-business (B2B) on-line marketplaces.
GUUD has developed Singapore’s first digital B2B seafood market that helps merchants promote their items extra successfully. The firm believes there may be potential for related platforms in Africa, and is already in discussions with stakeholders in a number of African international locations with massive fishing industries. GUUD’s marketplaces are differentiated from platforms like Alibaba, in that they aim particular industries. “Our take on B2B platforms is to focus on an industry and then bring all the stakeholders in that industry together and create a community,” says founder and CEO Desmond Tay.
In addition to connecting consumers and sellers, GUUD integrates the complete ecosystem – together with the certification course of and logistics – into its marketplaces. “Seafood trade is not as simple as someone selling the fish and someone buying the fish. For example, supplying seafood to a retail chain is very different from selling seafood to a processing plant that makes fish filet or fish fingers. There are also different stakeholders for farmed seafood versus wild caught seafood. Likewise for logistics – there is frozen seafood, there is fresh seafood, there is live seafood and all of these have different logistics requirements,” Tay explains. Beyond seafood, he sees potential for related marketplaces for numerous different commodities. For occasion, GUUD is engaged on launching a market for the espresso industry. Read extra: Singaporean entrepreneur spots hole to streamline African commerce
2. Niche food objects in Zambia. The native manufacturing of processed food objects which might be presently imported presents engaging alternatives in Zambia, in accordance to Tue Nyboe Andersen, managing director of Lusaka-based Kukula Capital.
“For processed food products, I think the opportunities really lie in niche products with limited competition. As a landlocked country, Zambia has some built-in import barriers; imported products need to be transported over long distances. For example, there is a company called Meraki that produces cakes and supplies them to big retailers like Shoprite. It has grown rapidly with decent margins because its competition is imported products that are way more expensive. Zambia has limited food processing and a lot of items are imported.” Read extra: Zambia-based investor highlights promising enterprise alternatives
3. Growing Rwanda’s fleet of refrigerated vehicles. Rwanda has a scarcity of economic refrigerated automobiles, presenting a possible enterprise alternative for entrepreneurs. So says Mark Sproston, CEO of food distributor GET IT. The firm is a Rwanda-based distributor of fruits, greens and dry items to companies and households. It sources its recent produce from each its personal farming operations in addition to third-party smallholder farmers.
“At one point there were only six refrigerated trucks available for commercial rental in Kigali. While there are more now, it is still not enough, and we often have to rent directly from private operators. I have been approached by various players in the region who are considering a business to address this shortage. I expect a large player on the ground very shortly,” he explains. Read extra: Building a food distribution enterprise in Rwanda and past
4. Using expertise to predict fish gross sales. Kenya’s Victory Farms, which produces the tilapia fish species, has constructed a vertically built-in enterprise that features all the pieces from a fish-farming operation in Lake Victoria to its personal distribution community and retail branches.
The firm has a extremely environment friendly distribution and retail mannequin powered by expertise. It has 56 branded retail branches, which in flip sells fish principally to casual shopkeepers. None of Victory Farms’ shops have ice or refrigeration gear; all of the fish is bought inside in the future. To make this attainable and not lose any fish to decomposition, Victory Farms maintains an information set on each single market dealer to predict how a lot fish they’ll promote. The market merchants enter orders and gross sales through an SMS platform. “We can accurately forecast exactly how much fish to stock in the branch tomorrow, so we have no spoilage. Our wastage is below 1%,” founder and CEO Joseph Rehmann reveals. Read extra: Kenyan firm tapping into ‘multibillion-dollar’ fish-farming alternative
5. Replacing Congo’s palm oil imports with native manufacturing. I just lately attended the Forum PPP convention in the Republic of Congo, my first go to to the central African nation. At the occasion I met Michel Djombo – founding father of Congolese palm oil firm GTC and managing director of fertiliser producer CA Agri. In an interview following the convention, he highlighted palm oil as a commodity with vital progress potential in the Congo.
Palm oil is used all through central and west Africa for cooking and additionally it is an necessary ingredient in the worldwide processed meals and magnificence merchandise industries. Djombo says it isn’t mandatory for in depth market analysis to gauge the potential for the native manufacturing of palm oil: Congo’s official customs information exhibits the big volumes of oil presently introduced in from as far afield as Malaysia. The costs at which the commodity is imported will also be discovered in the customs numbers. And if potential traders need to know the yields that oil palm bushes in Congo can ship, they will simply go to a number of the small- and medium-enterprises already rising in the crop. According to Djombo, the Congolese market can take in a couple of hundred thousand tonnes of palm oil yearly. Read extra: Mango, maize and palm oil – alternatives in Congo’s agriculture sector
6. Insect farming. Several entrepreneurs (listed below are a few of them) in Africa have tapped into the chance to use bugs in its place type of protein and different merchandise reminiscent of fertiliser. In 2018, economics graduate Simon Hazell co-founded the South African insect protein firm Inseco with Jack Chennells. Its core enterprise is to use black soldier flies to convert low-value natural waste into insect-based animal feed, oil and fertiliser. Read extra: Building an insect farming enterprise in South Africa
In Zimbabwe, Brighton Zambezi additionally ventured into black soldier fly maggot farming after figuring out demand for cheaper, extra nutritious animal feed for yard hen farmers in Harare. “I don’t think I will ever return to formal employment. I have found my calling. I want to be a commercial black soldier fly farmer,” he stated. Read extra: Zimbabwean proves maggot farming generally is a viable enterprise
7. Increasing gross sales by revealing details about a product’s origin. In the previous, many customers haven’t thought an excessive amount of about the place their food got here from, and details about its origin was opaque and troublesome to monitor. However, considerations over components reminiscent of environmental impression and farmers’ dwelling situations imply many individuals are paying much more consideration to the place their merchandise come from. Some African firms are actually trying to interact with prospects and improve gross sales by permitting folks to hint every bag of produce all the way in which again to the person farmers who harvested the components.
Tahira Nizari, founding father of Tanzania-based tea producer Kazi Yetu, has made transparency a core a part of the corporate’s id. Each packet of Kazi Yetu tea bought in the United States, Europe and East Africa is printed with a QR code. When scanned with a smartphone digital camera, it reveals an online web page containing detailed data such because the title and location of the farm the place every ingredient was sourced, and a step-by-step description of how the merchandise was made.
Cashew nut firm YYTZ Agro-Processing, based by Fahad Awadh, additionally based mostly in Tanzania, believes that sharing with its prospects how the merchandise had been made and who grew them is a key a part of the model’s enchantment. Awadh additionally makes use of QR codes on his packaging to permit folks to be taught extra concerning the origins of YYTZ’s cashews. “I can’t quantify the exact effect the codes have on the sales, but it is an important part of our brand and our commitment to transparency. We put our code right on the front of the pack, so it stands out on the shelf. It’s definitely something that sets the product apart.” Read extra: By uncovering the story behind their merchandise, these African firms are boosting gross sales
8. The enduring superfood development. As customers worldwide undertake more healthy life, demand for well being and wellness meals is booming. US-based African-food firm Yolélé is betting on surging demand for the West African historical grain fonio in the American market. Fonio – a gluten-free grain with many dietary advantages – has been cultivated as a subsistence crop in West Africa for 1000’s of years. It is drought-resistant, can develop with out the assist of fertiliser and restores natural matter in fallow soil. Yolélé’s merchandise are presently obtainable at over 2,000 grocery shops in the US, together with Whole Foods and Target. Yolélé just lately partnered with Mali-based agribusiness firm Mali Shi to set up a brand new enterprise, referred to as West African Ancient Grains, that plans to course of 1000’s of tonnes of fonio in Mali to meet rising international curiosity in the superfood. Read extra: Company bets on surging demand for West African historical grain fonio in US market
How we made it in Africa just lately additionally interviewed Zambia-based Moringa Initiative that has established itself as a considerable worldwide bulk provider of dried moringa leaves in addition to branded merchandise that comprise the nutritious superfood. The firm grows moringa on the household farm exterior of Lusaka and processes the dried leaves into seed oil, tea, powder and capsules. Read extra: Superfood enterprise tapping into well being development in Africa and overseas
9. Solar-powered chilly storage. The United Nations’ Food and Agriculture Organisation estimates over 40% of food in sub-Saharan Africa perishes earlier than it reaches a client. This might be as excessive as 60% for recent produce, pointing to unmet demand for temperature-controlled cold-storage warehouses and transportation companies. There are quite a few explanation why chilly storage is underdeveloped in many sub-Saharan African international locations, together with a scarcity of native producers of cooling expertise, insufficient financing choices and poor electrical energy.
Nigerian entrepreneur Nnaemeka Ikegwuonu is addressing this problem via his firm ColdHubs that operates solar-powered chilly rooms, offering a pay-as-you-store service for recent produce to smallholder farmers and market retailers. A buyer pays 200 Nigerian naira (about half a US greenback) to retailer recent produce in a 20kg returnable plastic crate, for in the future. Today, the corporate has 54 hubs in 22 states, with a complete employees of 68. Read extra: Pay-as-you-go chilly storage – businessman needs to increase past Nigeria
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