When President William Ruto presided over the opening of Twiga Foods’ new distribution facility at Tatu City in Kiambu County last week, it highlighted the start-up founder Peter Njonjo’s entrepreneurial and fundraising ingenuity.
Impressed by Twiga Foods’ innovation story, President Ruto ordered the ministries of Trade and Cooperatives to give an additional Sh300 million from the Hustler Fund to Twiga Foods for lending to its suppliers.
What does this mean to him as an entrepreneur? Mr Njonjo, the Twiga Foods CEO, says funding is a means to an end rather than an end in itself.
‘‘What problem do you [intend] to solve? What vision do you have in terms of solving this problem? Is the vision compelling enough to get people to sit around you and to want to be part of your story?’’
Mr Njonjo says that his experience with Twiga Foods providing market access to smallholder farmers showed him that some of the fundamental challenges producers encounter could best be solved using public money.
‘‘Mobilising farmers, building their capacity and developing local infrastructure is a public money-driven initiative. It is not an easy problem to solve with private money,’’ he says.
‘‘For us, providing an efficient supply chain to the informal retailer such as ‘mama mboga’, kiosk owner, and the shopkeeper was where we felt we could play.’’
Twiga Foods serves 140,000 suppliers and delivers different products to 12,000 customers daily across the country. The company employs 1000.
READ: State to give Twiga Foods Sh300m Hustler Fund for suppliers
They supply outlets with different wares and fresh produce.
‘‘We see ourselves more and more as a one-stop-shop to the informal retailer,’’ Mr Njonjo says, noting that his time at Coca-Cola shaped his vision.
‘‘I got to see a lot about the state of retail in Africa in terms of how fragmented it is. I wanted to provide smallholder farmers with a structure to access the domestic market for their produce.’’
Twiga Foods is one of the best-funded start-ups on the continent today, at about $157 million (Sh18.8 billion) as of 2022, according to business information platform Crunchbase.
The Twiga Foods CEO possesses as much audacity as entrepreneurial ingenuity and foresight.
In a bold but unpopular move, the Harvard Business School-trained executive left a high-flying 21-year career at Coca-Cola in 2019 to run the business he had started six years earlier.
He was then the Coca-Cola president for West Africa and a member of the company’s global leadership council.
To him, it is one thing to have an audacious vision and another to summon the courage to pursue the dream. ‘
‘When you do something about your vision, it starts to make a difference in your life, whether at a personal level or in business,’’ he says.
‘With every successful run, you are gauged based on whether you met the commitments you had made to the previous investors. It is all these factors that drive funding.’’
This success has also come with dents.
In November, the company cut down its workforce, with more than 200 jobs lost.
Twiga also slashed allowances for its employees by more than 75 per cent as it seeks to transition into an agency model.
To execute this, he says he needed ‘‘strategic latitude’’ by thinking about business at a macro level while still engaging small retailers.
‘‘At the same time, we need to go to the farm level to talk to the producer to understand their challenges and why it is not possible to get the yields we need to lower market prices,’’ he says.
He admits that leaving a hugely successful career at a global corporation to run a start-up was a major decision and a turning point in his life. But what was the transition like?
He says: ‘‘It is one of those questions you ask yourself: when you are older in life, would you ever look back and regret opportunities you had but never took?’’
His desire was to make a difference in the market with the knowledge he had about technology and distribution to ‘‘impact the lives of ordinary people.’’
‘‘We complain about the things that do not work. But I think people have an opportunity to figure out what they can do to transform their country,’’ he says.
The journey has been a long learning curve of having to approach every problem with ‘‘iterative thinking’’ rather than ‘‘a know-it-all mentality.’’
‘‘It is important to leverage the collective genius of those around you and to build a great team. Unless you have a good team, it becomes difficult to solve all the problems that arise in business. You never stop learning,’’ Mr Njonjo says.
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The Twiga Foods boss says the aggregated nature of demand for different products in western markets generates a lot of information that allows the optimisation of supply chains, thereby reducing the cost of foodstuffs.
‘‘This data informs what products people require, their pricing and even the type of packaging. Many companies are, therefore, able to produce these in the most cost-effective way,’’ he observes.
In Kenya and Africa where households spend $680 billion on food and beverage every year, there is minimal information flow from retail, logistics and production levels. This makes commodities more expensive, he argues.
‘‘In California, the wholesale price for tomatoes is $100 (Sh12,000) per metric tonne. In Kenya, the same volume costs $400 (48,000). This means California, which is in a wealthy geography, pays only 25 per cent of what we pay for this commodity,’’ says Mr Njonjo.
It is this high cost of inefficiency that Twiga Foods is seeking to address, by building ‘‘a unified system’’ that connects all components of the value chain for food and other essential commodities.
‘‘You are able to track what is coming from farms and manufacturers, how it is transported, stored, distributed and paid for. Having this data allows you to streamline the supply chain and to lower the cost of food,’’ he says.
Before Twiga Foods, he had other ventures, some that fell flat-out. ‘‘Every business that fails makes you wiser as you undertake the next. From how you select your partners to how [you structure] governance,’’ he says.
His wife, Tina Njonjo, is a lawyer and former head of legal at Safaricom. Now an entrepreneur, she runs Call Board, an art company. The couple has four children aged between 17 and six.
‘‘I read a lot,’’ he says on personal development. ‘‘I listen mainly to audiobooks. I try to read at least a book every month.’’
Integrity and honouring commitments drive him because ‘it does not hurt to be a good person’’, especially in a world where it is harder to be.
‘‘If you have principles and values that you stand by, they come back to pay much later in life,’’ he says. Njonjo believes organisations reflect the personal biases of the people who run them.
Is he happy with the team he has since assembled? ‘‘I think we have done this to a great extent. The capabilities we have within the business create the momentum we need going forward,’’ he says.
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