B2B food commerce startup, Twiga Foods has commenced maize farming as part of a public-private partnership with Kenya’s government to scale up food production, reports BusinessDaily Africa. The Galana-Kulalu Food Security Project is a pilot research project within the Galana Irrigation Scheme, an ambitious 1 million-acre agriculture project designed to improve food production in Kenya.
Under the Galana-Kulalu Food Security project, 10,000 acres were designated for a model farm with the aim of testing the performance of modern irrigation systems on a large scale. But since 2014, the project has struggled to meet expectations owing to fluctuations in budgetary allocations and bad weather. In 2019 the model farm was projected to make Ksh 1.2 billion in maize sales per season. But it only managed 119,000 90 kg bags of maize, worth about Ksh 273.7 million.
In January 2023, Kenya’s Ministry of Water announced that it would open up 5,000 acres of the Galana-Kulalu Irrigation Scheme to private companies under a government-private partnership to enable the government to increase food production. Twiga Foods, which was celebrated as the top paying Medium Taxpayer last year by the Kenya Revenue Authority, appears to be the first private company to begin commercial farming in the Galana-Kulalu project area.
In May 2022 Twiga Foods opened its first farm, as it moved to integrate part of its supply chain. Launched under a new subsidiary, Twiga Fresh, the company invested $10 million to produce onions, tomatoes and watermelons on 1,606 acres of land, with an estimated yearly output of 150,000 tons of fresh produce.
“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, Twiga CEO and co-founder said at the time, highlighting the trend of large East African B2B food commerce firms seeking to integrate backwards in order to get a much firmer control of their supply chain.
Kenyan government officials were impressed by Twiga’s commercial farming ambitions and resolved to incorporate one of their favourite taxpayers to help bring life into the Galana-Kulalu Food Security Project.
“We have visited the farms where Twiga is doing production and we were convinced that they are the best. They will not only help us in achieving food security but also create employment,” said Mugambi Gitonga, Principal Secretary for Irrigation, per BusinessDaily Africa, a Kenyan business media publication.
Kenya is facing record-high prices in food staples that have forced the national government to intervene with subsidies for unga (maize flour) and other staples. To stave off the crisis, Kenya’s government signed agreements that waived the import of genetically modified produce as well as special import agreements for key food staples. Both moves have been widely criticised by Kenyan farmers.
According to the Kenya Institute for Public Policy Research Analysis, 14.5 million Kenyans face food insecurity and poor nutrition each year with 2.6 million Kenyans considered to already be in a food insecurity “crisis”.
Twiga Foods has raised a total of $157.1 million from venture investors since its founding in 2013 and is one of Africa’s largest retail B2B food commerce companies.
