During the first Techpoint Tour, I visited the large expanse of land housing the Railway Station fruit market in Kaduna. Everyday, vegetables, watermelons, oranges, bananas and different fruits are brought from farms around and in neighbouring states to this market.
In trying to strike a bargain for an extra large watermelon, the trader agreed too quickly. I was surprised, but our host explained the catch.
Everyday, a cargo train left Kaduna laden with fruits from this market and headed to Lagos. Only one train can leave in a day so every trader cannot get all their goods on. This meant that if the trader did not sell off this watermelon, it would go bad the next morning as they did not have any storage facility until the next transport schedule.
Fruit rotted on a daily basis incurring loss to their owners and this is the major reason I got my watermelon at a bargain.
According to the Food and Agriculture Organization of the United Nation (FAO), every year 1.3 billion tonnes of food are either lost or wasted. Ironically, regardless of a reported 220 million undernourished people, Sub Saharan Africa is the location for most of this food waste.
Because of the perishable nature of fresh food, fruits and vegetables, their life cycles are very short. And this already shortened lifetime is even further reduced under heat in the tropics.
So in Nigeria, fruits and vegetables are a seasonal affair. Once a fruit goes out of season, it is usually goodbye till the next year or cycle.
Around the world, businesses involved with food usually have the lowest entry barriers and are also some of the most profitable.
Because of this, there is an abundance of start-ups and SMEs in Nigeria delivering fresh food; there seems to be a new one everyday.
Nigeria has a population in the hundreds of millions who need to eat. So online greengrocers, fresh food start-ups and businesses should be breaking the bank, yes? NO.
Saudat Salami is the CEO of EasyShop EasyCook, an ecommerce grocery store that has been online going on 13 years now. Hers is arguably one of Nigeria’s oldest ecommerce stores.
In a series of tweets, Saudat said;
“Building a website or an app is the simplest thing in an online grocery business. When you finish that then you realise the agric industry is the bedrock of your success.”
In summary, she opined — from experience — that every chain of Nigeria’s agricultural industry is broken; from logistics, equipments to financing and storage. And all these are problems that surpass building fancy websites.
As this graph shows, in all the food waste in Sub Saharan Africa, most of the losses happen in production and retailing stages. And most of this losses can be linked to inefficiencies in the different stages of production.
Like its name implies, Post Harvest Losses (PHL) are losses incurred on fruits and vegetables after harvest. From inadequate farming equipment, seeds to transportation, PHL occurs for a lot of reasons, but storage is the biggest of these problems especially in Nigeria.
The aforementioned problem has ironically rendered the most profitable of businesses useless in these climes.
In order to increase the farmer’s income, make sure the middle men (fresh food delivery startups and grocery businesses) earn enough money and still reduce food waste we need to first fix the storage aspect of the agricultural food chain. How can this be done effectively?
Some vegetables lose flavour and essence when refrigerated, but a larger number need to be stored in cool temperatures. So freezing and cooling still remain the best options for keeping vegetables fresh in the tropics at least till they reach market.
Andrew is a Lagos based Heating, Ventilation, and Air Conditioning (HVAC) expert and according to his estimates, a cold room may be prohibitive for an average farmer or fresh food delivery startup to own.
These things [cold rooms] are in different sizes. A pre-owned 12 by 12 can go for as low as ₦500,000 to ₦700,000. While a 20 ton cold room can go for as high as ₦40 million depending on the location. And refrigerating vans are anything from ₦5 million to ₦20 million for second value.
A more detailed pricing list from Akpo Oyegwa does not differ too much from Andrew’s.
These prohibitive amounts have not factored in the cost of fueling the cooling engines on a daily basis considering Nigeria’s epileptic power supply. Collaborative infrastructure is the only way a growing or struggling business can take on these costs. What is this?
Collaborative infrastructure is two or more parties working together to provide basic physical and organizational structures and facilities necessary to the effective running of their businesses that will not have been easily achieved individually because of finances or a number of reasons.
Saudat Salami is an advocate of collaboration. She says collaboration and not competition is the only way farmers and greengrocers in Nigeria and Sub Saharan Africa can make optimum profit on their produce.
Nigerian entrepreneurs are currently not very strong on collaboration, but Saudat says there is no other way, especially in the agricultural space.
Collaboration is the only way for SMEs and startups to scale up as there is no room for anything else. There are too many people doing the same things and wasting resources operating alone. Small business owners need to come together with like minds and vision and find ways to merge businesses for scale.Go big or go home is the popular saying but you can’t go big all by yourself.
A number of farmers and greengrocers can come together, form a cooperative and build a standard cold room and storage facility. When this is not financially feasible, there are cheaper options.
Fishmongers in Lagos and other parts of Nigeria have since mastered this art of collaborating on infrastructure. Their fishes are cold for most of the day as resources are jointly pooled to use portions of a commercial cold room. Apart from commercial cold rooms, there is another unexplored way.
Cooling vans for party and event planners are always empty when they are not in use. Farmers and green grocers can jointly pay for this idle machines and use them.
Madam Tee is an event planner and owns a cooling van. I asked if she will accommodate farmers and greengrocers for a fee. She was excited at the idea of making extra revenue from storing produce in her van when it was not in use but expressed doubt at the flexibility of the price.
Nnaemeka Ikweguonu’s ColdHubs are good examples of how collaborative infrastructure can be deployed.
Farmers in developing countries lose annual income because they can’t refrigerate their produce. A small firm in #Nigeria is tackling the problem with mobile solar-powered fridges #EcoAfrica @AnthoniaOrji pic.twitter.com/LBGpexNsUd
— DW – Environment (@dw_environment) March 7, 2018
The ColdHubs are “120mm insulated “plug and play” modular, solar-powered walk-in cold room, for 24/7 off-grid storage and preservation of perishable foods. Adequately addressing the problem of post- harvest losses in fruits, vegetables and other perishable food.”
During the 1849 in California, very few prospectors found gold and became rich. But those that sold tools and supplies to these miners became richer; Levi Strauss was one of them.
In September 2016, the then Minister of State for Agriculture and Rural Development, Heineken Lokpobiri, said Nigeria spends about ₦6.6 trillion annually year on food importation. The amount was more than the 2016 national budget of N6.06 trillion.
At this rate, agriculture will become Nigeria’s — and indeed the continent’s — goldmine. This “goldmine” will be bigger than any actual goldmine that every existed because of Africa’s teeming population and the simple fact that ‘everyone has to eat’.
But like those goldmines in old California, the men that sell the shovels and tools will enable this revolution and be rich. The owners and investors, and enablers in collaborative infrastructure will trigger this agricultural revolution and become rich in the process. Like Levi Strauss.
In the words of Saudat Salami, “Whoever builds and or owns the infrastructure wins.”
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