At COP26, Sokofresh was announced as a Dutch Fund for Climate and Development (DFCD) Scalable Climate Solutions Challenge finalist. In this article, Rosemary Nzuki, DFCD communications manager for Africa, tells the story of their journey.
In 2018, Enviu began a study focussing on fighting post-harvest food loss in Kenya. The vision was to develop interventions to reduce food loss by 80% by 2030. Denis Karema was by then a venture builder at Enviu and was part of the team that conducted deep dives into various horticultural value chains and identified key issues contributing to the high rates of post-harvest food loss. The deep dives were in the mango, avocado, potato, tomato, and other value chains.
During the research phase, Enviu engaged multiple expert organisations, including SNV.
‘The team at SNV was instrumental in providing insights on systemic issues and opportunities in each of the focus value chains since they were also working closely with farmers through the Hort Impact project,’ Denis says.
Following the successful research, the team identified several potential interventions that would be key to realizing their vision of up to 80% reduction of food loss in Kenya. The interventions included the provision of first-mile cold storage, professionalization of the Agri value chains, financing products for farmers and efficient distribution of produce from farm to market. They chose to start with cold storage and in the year 2019, SokoFresh was established with Denis Karema as the CEO of the venture.
Keen to establish a starting point, they selected avocado as the initial value chain since it is a fast-growing crop in Kenya. The value of the fruit in export markets was also a trigger, as Denis vividly recalls walking into a supermarket in Europe and getting a surprise when he discovered that a single avocado was retailing Eur 1.5 (Kenya Shillings 191.20). Yet, in his home country Kenya, the same would retail for only five Kenya Shillings (Euro 0.039). This looked like a lot of profit, yet a quick flashback to the farmers back home reminded him that very little would end up with the farmers.
‘The problem is not just limited to avocados, but it applies to multiple horticultural value chains,’ he adds.
As he wondered what could be done to address this problem, it occurred to him that the solution lay with bringing the farmer to the decision-making table. In addition, granting them a voice so that together they could create a solution that would see the farmer getting the lion’s share of the proceeds for his labour and produce. This would eliminate brokers who were ripping off the farmers and creating a shorter value chain. Consequently, this would mean two people would share the profit margins instead of three.
Given that most avocado farmers are smallholder farmers, there was a problem regarding the amount of harvest per season. However, the team also realised that if they could get the farmers to aggregate produce, it would give them bargaining power. This would result in a decent income for the farmers while solving the problem of cash flow.
‘It was at this point that we realised the access to technology was the missing link to ensure that the product maintained its quality,’ Denis says.
Although small coolers were readily available in the market, they were limited because they could not offer traction for farmer purchases. The market needed one that would consider the farmer’s cash flow model based on harvest seasons.
This gap created the challenge of designing an intervention to serve the farmers during the market season while making a service out of the assets offseason by either buying or renting them out. To remove the bigger challenge of upfront purchase and address the issue of seasonality, the idea of mobile solar-powered cold storage facilities and providing cooling as a service was born.
Mobile solar-powered refrigeration units would link the off-takers with the market by ensuring value for pricing throughout the season. The SokoFresh team would ensure pricing for value by starting from the farm to the aggregation point. With this, the first set of SokoFresh mobile solar-powered coolers were established in 2019 in Muranga County, Kenya.
The idea was to provide solar-powered storage facilities to farmers to maintain the quality of the harvested fruit and provide market linkage to increase the farmers’ income. The mobility of the units also ensured that they could serve value chains in different counties depending on the harvest season. E.G avocado and banana in Muranga and mango in Kitui.
‘We provide storage crates to ensure produce is not pressed to maintain limited cosmetic damage. In addition, Denis adds that this is the standard way of handling produce and it ensures traceability of the produce (whom and where it came from when advertised).
In the first mile of production, the produce that leaves the farm is selected, weighed, put in crates, and finally transported to the cold storage rooms.
‘The rooms have a capacity of up to 5000kg at a time. In the avocado season, we offer cold storage facilities to the farmers in Muranga county. During the offseason, we increase the temperatures of the cold rooms to offer ripening services to banana farmers in Muranga county”, Dennis adds.
In the second mile, buyers are informed of the available volumes to plan when to collect or buy. Buyers have an option to collect or send trucks to make deliveries to forwarding companies for export.
‘Since we started, we have seen post-harvest statistics drastically come down to 0 – 2% in the areas we work with even though the industry standard remains 30- 40%. This is largely due to poor post-harvest handling and storage’.
Apart from offering cold storage facilities, SokoFresh provides training for the local communities (young men and women) on harvesting skills and provides them with the appropriate tools.
‘The farmers are pleased with this arrangement because it has reduced crime cases since the young people have a source of income,’ Dennis adds.
Surviving COVID 19
SokoFresh continued to grow despite the challenges presented by COVID 19. To stay in business, they ensured that all their employees and farmers were among the beneficiaries of priority vaccination and that the process for cold storage was adequately set up and maintained.
Partnership with DFCD:
SokoFresh has been working with the DFCD since 2019. The Investment Committee for the Origination Facility of the DFCD approved a EUR 236,000 grant and SNV technical assistance package for SokoFresh Off-Grid Cold Storage on 20 May 2021.
They participated in the recently concluded Scalable Climate Solutions Challenge. They were among the top three finalists who made their presentation at the COP26 side event held in Glasgow in November 2021.
Through SNV, we had the privilege of showcasing our business model at COP26. Through this opportunity, we have been able to network with like-minded companies and look forward to new partnerships post COP26Denis Karema, SokoFresh CEO
As he looks back on the numerous interactions he had, Denis cannot help but notice an urgent need to have scalable solutions to the climate-related challenges that impact smallholder farmers.
‘We are keen to engage like-minded partners to unlock faster growth as frontier climate-smart solution providers,’ he concludes.