When
people make it in life, many people see the success but not the struggles which
created that achievement.
For
one Peter Njonjo, the Co-Founder and CEO of Twiga Foods, getting to the top was
not easy and the journey continues.
Speaking with GAFSP Private Sector Window’s Daphna Berman, Njonjo reveals that he had to go through myriad challenges before finally making head or tail of his business.
Njonjo says that building a start-up on the continent is a
significant challenge.
“When
we started Twiga, for example, I didn’t have access to credit and couldn’t lease
distribution vans and so instead, I needed to buy them outright. That meant
that instead of developing Twiga’s intellectual property, I used my limited
resources to create and develop an ecosystem to help my business grow,” he
says.
He
adds: “That’s a huge hurdle for many businesses. In 2015, we had raised some
money, but not nearly enough to unlock enough capital for Twiga, and so my wife
and I agreed to sell our matrimonial home in Nairobi. I was working at Coca-Cola
at the time and my wife had a very senior position at a Kenyan telecom company,
and yet in addition to our life savings, we also needed to put our house on the
market. Investors who are not familiar with emerging markets have a hard time
understanding this ecosystem, but this is the reality for many African
start-ups. This presents a huge opportunity for organizations like IFC, with
support from blended finance, to provide an opportunity to create that
ecosystem.”
Coca-Cola President
Who Quit
Twiga started from an idea of exporting bananas but
for Njonjo, the challenge was in getting enough bananas in a traceable way.
“Initially,
my co-founder Grant Brooke and I wanted to export bananas from Kenya and though
we got many orders from the Middle East, we quickly realized that we couldn’t export
even a single container.’
He
says that farmers had no traceability or record-keeping, agronomic practices
were poor, and there was a lot of informality in the farming sector. Thus, he
and his co-founder needed to pivot and quickly saw how inefficient the sector
was.
“Consumers
in Africa spend about 50% of their disposable income on food and the source of
this inefficiency is retail fragmentation: Nairobi has 6.5 million people fed by
180,000 individual retailers,” he adds.
Njonjo
says that in countries with a more consolidated retail market, consumers spend
less on food.
“By
using technology to aggregate the retail demand in the informal market, Twiga
creates an efficient supply chain, so that we’re able to supply lower cost and
better quality food to retailers,” he notes.
On why he left the prestigious Coca-Cola job for a start-up,
Njonjo says growing Twiga needed him so he had to move.
“I had a very illustrious 21-year career with Coca-Cola and was one of the youngest business unit presidents in the company. But I could see that Twiga had gotten to a point where it needed more structure. My co-founder got Twiga off the ground, but we needed a strategy to continue growing. My experience at Coca-Cola is very valuable to a company like Twiga and since making the transition to Twiga in April 2019, it has worked out very well. We’ve quadrupled our monthly revenue this year, which is testament to the fact that the opportunity is there. What we need is the organizational structure to help Twiga realize its vision.”
Doing Good Can be Good
Business
Njonjo notes that the experience at Coca-Cola played a huge part in his taking the reigns at Twiga.
“At
Coca-Cola, we learned how to better distribute products in very small villages
across the continent. I directly managed about 40 countries for Coca-Cola in
Africa—an experience that helped me understand how to structure retail
processes. Coke is a very well-distributed product across Africa because the company
has done a great job in building a brand, creating demand, and ensuring momentum
to support the distribution infrastructure,” he says.
Njonjo
adds that Twiga now supplies high-velocity food such as bananas, potatoes,
tomatoes, onions, and watermelons— foods that you find on the table every day.
“The idea is to leverage the velocity that exists in these foods to build a cost-effective distribution network. There’s a strong parallel there with the work I’ve done previously at Coca-Cola, but it’s also allowing me to leverage the expertise and knowledge I’ve accumulated over the last 20 years to lift up my community and remove barriers to commerce.”
Today, Twiga has about 8,000 retailers with some 4,000 active retailers ordering every day.
“We
have more than 17,000 farmers, which shows you that doing good can be good
business. Businesses like ours are changing lives on the ground and giving
people opportunities to earn livelihoods where they could not before.”
Njonjo reveals that over the next year, they are planning to expand across Kenya and have already lined up operations in Mombasa and Nakuru.
“We’re also looking at international expansion—either in East Africa or West Africa— and have just closed an additional round of financing.”
Njonjo
attributes their success to the assistance offered by IFC and GAFSP which he
says were instrumental in helping them overcome barriers that many African
entrepreneurs face.
“They
have provided buying power that we’ve been able to harness for our retail aggregation.”
In
addition to equity from IFC and GAFSP, IFC is putting together a guarantee that
is available to local banks where farmers can go to those local banks and
borrow against that facility to better capitalize their farms, improve
agronomic practices, and become more reliable suppliers for Twiga.
“IFC
has given us a lot of credibility with different stakeholders and by virtue of
their stature, they’ve provided us with a seat at the table when it comes to
agricultural policy. Indeed, GAFSP and IFC have provided us far more than just financial
backing, because as I like to say, not all money is created equal,” he adds.
Read >> 7 Deadliest Career Mistakes to Avoid Like Plague
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