Africa’s smallholder farmers lose untold millions due to post-harvest losses – and the race to sell their produce before it reaches that stage.
Among the simplest fixes to this problem are reliable storage, on the one hand; and links to a wider pool of prospective buyers on the other. Both help eliminate the flawed pricing models that stem from farmers’ desperation to sell.
“50% of all horticulture produce in Kenya fails to make it to market as a result of an informal and unreliable supply chains,” says the Kenyan company’s CEO Denis Karema. “Farmers frequently lose quality produce due to their inability to store it for longer than a day. As a result, they earn less, logistics costs are high, and vast quantities of food are wasted.”
“If produce is managed well from harvest to aggregation, then farmers have enough time to find better buyers or negotiate for better prices or even access international markets for their produce,” he tells AFN.
Founded in 2019, the Nairobi-based startup offers farm-level cold storage as a service, plus a digital market linkage platform, aimed at better integrating small- and medium-scale farmers into the commercial food value chain. Its mobile cold storage solution is based on a ‘pay-as-you-store’ business model, giving farmers, traders, and exporters an opportunity to preserve the quality of produce and increase their bottom lines.
Ensuring nothing goes to waste
SokoFresh mainly caters for producers of mangoes, avocados, bananas, and French beans at the moment, according to Karema.
While the issue of post-harvest loss cuts across most crops, SokoFresh has selected these specific varieties for a reason.
First, their value per kilogram is higher than for other crops and present a variety of processing opportunities. Second, cold storage enables the farmer to sell more produce, and potentially at a higher price point – thereby securing additional profit, which pays for the cost of the service.
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Second-grade produce or rejects that no-one wants to buy or eat are then moved to a third-party processing facility to ensure nothing goes to waste.
“Smallholder farmers cannot invest in refrigeration infrastructure because of the cost; and to add to this, the farmers are also in seasonal value chains, which means individual farmers do not have the volumes to make a business case that justifies such a costly investment,” Karema says.
By storing produce in cold rooms, finding buyers through its market linkage platform, and working with a processor to offtake any rejects, SokoFresh has managed to make sure that 100% of its farmer partners’ produce is used – thereby decreasing food waste and increasing food security at the same time, while boosting farmer incomes.
SokoFresh aims to have 190 cold storage units in operation during the next three years, reaching over 152,000 farmers — increasing their incomes by as much as 40% — and storing 500,000 kilograms of produce at any single time. Each unit will use only renewable energy, offsetting 121 tons of carbon dioxide equivalent per year according to Enviu, the venture builder which SokoFresh was spun out of.
The startup’s climate focus doesn’t end there; it also helps its farmer partners participate in awareness programs to adopt regenerative ag practices.
Now SokoFresh is ready to raise more capital. Karema says his team has been keen to find and work with both debt providers and equity partners who understand their business model and can help them grow, while being aligned when it comes to their impact goals as a business as well.
The startup intends to scale across East Africa, and has raised $1.1 million in funding to date.