Tawi Fresh platform eases traceability for commercial kitchensMonday May 22 2023
For nearly a decade, Cherotich Rutto, like most small-scale farmers across Kenya, toiled to produce fresh food only to get poor returns.
If she was lucky, she would get a buyer and sell her produce, albeit at throw-away prices. If Lady Luck didn't smile on her, she'd have to throw all the produce away.
Always being at a net-loss position served as a tough lesson for the passionate farmer who had together with her husband gone into the venture to supplement their income from their 8-5 banking jobs.
The pain of the huge losses inspired her to start Tawi Fresh Kenya, an online agricultural marketplace that connects farmers to commercial kitchens, mainly hotels, restaurants, caterers, schools and hospitals, easing farm-to-fork traceability.
Tawi Fresh sources fresh produce such as vegetables, eggs, and chicken from farmers.
Commercial kitchens then place orders on the platform and Tawi’s logistics team collects the produce from farms and delivers within 12 to 18 hours.
Ms Rutto says for farmers, the arrangement ensures that they have a ready market, eliminates price fluctuations, and more importantly, prompt payment (within 72 hours) which ensures that their ventures are sustainable.
For commercial kitchens, it helps them guarantee the quality of the fresh farm produce they feed their customers who have become more demanding as healthy eating awareness grows.
When Ms Rutto needed to scale up the business, she enrolled for an SC Ventures incubation programme.
SC Ventures is the fintech, investment and ventures arm of British lender Standard Chartered Plc.
“We started building the platform early last year in March and started testing it out with a few kitchens and farmers. We incorporated them throughout the building journey. Scaling the business was this year in February,” she says.
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Tawi has onboarded over 1,000 farmers and 250 commercial kitchens, doing over 1,000 deliveries.
Farmers in Kenya have faced challenges including difficulties in credit access, lack of collateral and inability to pay back due to poor investment, lower yields and returns that have continually pushed some farmers out of the sector.
The platform promises to make agriculture attractive by ensuring prompt and consistency of payment, and assurance of the markets.
The marketplace plans to provide financial services and connect them to agronomists, with the bank assisting in financing irrigation through solar power systems.
It will also support farm engagement on quality, production and client specification and guide farmers on sowing, planting and harvesting seasons.
“You cannot supply these kitchens and when something goes wrong, you are not able to zero down where the problem came from. Traceability for us is very important and it is going to be a key driver for Tawi,” says StanChart Bank Kenya CEO and Tawi board chairman Kariuki Ngari.
Sh118.14 million investment
The multinational pumped Sh118.14 million into Tawi Fresh, with the money used for market research on farms and commercial kitchens.
“We have an in-house team of experts and quality assurance and control expert within the Tawi team who ensures that the produce from the farm gate to the processing centre into the client's kitchen is safe and we have checked the quality throughout the entire process,” says Ms Rutto.
“What we were hearing from commercial kitchens, prompted reliability and traceability. On the farmer side, they want to ensure this consistency of payments and that is what Tawi Fresh promises to deliver,” adds Mr Ngari.
The platform's policy is to pay within three days, which is a better proposition for the farmers compared to supplying retailers such as supermarkets, most of whom pay after 60 days.
“The biggest challenge facing agriculture in Kenya has been a lack of market consistency where some farmers feed cabbages to cows or farmers pour milk. Yet some parts of the same country don't have enough food,” Mr Ngari notes.
“It becomes discouraging if you put all your efforts into farming but you can't get paid. So when you talk about Tawi, it will ensure consistency. We will tell you how much we need from you. We ensure a market that is there.”
Tawi Fresh charges a commission depending on different products and specifications of kitchen orders, like the grade of produce.
“Price differs and the farmers are aware of this price range, and therefore they can get value because we pick everything from their farms,” says Ms Rutto.
The platform currently facilitates supply in Nairobi, Machakos, and Kajiado and will be going to Mombasa as well as Masai Mara to leverage the hotel industry.
It targets commercial kitchens, which present around Sh28.7 billion ($210 million) in market opportunity.
SC Ventures in India and Kenya is designed for alternative business models and is set to be launched in Ghana, Malaysia, and Vietnam.
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“Tawi is a problem statement that is present in all emerging and developing markets. With the hypothesis having proven itself in Kenya, we will look at expanding this not only into Africa but also into the Asian markets,” said SC Ventures member Jiten Arora.
‘’Standard Chartered Group want this route because they want to ensure that the flexibility that comes with fintech and startups can be done outside of the bank,” adds Mr Ngari.