Forget Bananas: Twiga Foods Is Selling Total Distribution Chain Disruption
“Simplify your story.”
That’s the three-word piece of advice Venn Strategies’ Penny Lee gave to Twiga Foods Cofounder Grant Brooke earlier this month. The two were meeting during a pitch coaching session at 1776’s Challenge Festival, just 24 hours before Brooke was set to deliver his two-minute pitch.
According to Lee, the first version of Brooke’s pitch contained too many complicated terms, background data and unnecessary details. And, more importantly, it didn’t capture the full story and vision of Twiga Foods.
“We told him to simplify the jargon and just show the company’s potential,” Lee said.
Brooke did exactly that. At the Challenge Cup Cities & Transportation Semifinals on May 14, Brooke nailed his two-minute pitch, presenting his big vision for a digitized food and consumer goods distribution chain throughout Africa. Two days later, at the Global Finals, Brooke’s pitch helped him win a $150,000 investment and the title of Challenge Cup Champion.
“Grant stood on stage and made the bold claim that he wanted Twiga to be the company that solved product distribution across Africa,” said Donna Harris 1776 cofounder and co-CEO who judged the final competition. “And then he showed undeniable traction to demonstrate that his big idea just might work.”
It was exactly what the judges wanted to hear. After all, 1776 created Challenge Cup to showcase startups with big ideas. Over the past two years, however, Harris has noticed that many companies—even very strong competitors—offer only “incremental innovation.”
“An incremental-innovation pitch might be, ‘We used to do it on paper, and now we do it on a tablet,’” Harris said. “What we want to see are ideas that are truly disruptive—completely rethinking or upending the way a market operates today. Twiga is doing that, and doing it in a massive untapped market.”
Compared to the many apps and online platforms that get pitched on the Challenge Cup stage, Twiga offers something different: Total distribution-chain disruption.
And that starts with bananas.
According to Brooke, Twiga currently buys and sells more than 70,000 bananas every day. Over the coming months, Twiga will increase its processing capacity to 45 tons of produce per day and expand its product line to include pineapples, avocados, tomatoes and onions.
In other words, bananas are merely the top of the metaphorical shopping cart for Twiga. The ultimate goal for Twiga is to control the distribution chains for all fast-moving consumer goods (FMCG)—anything from light bulbs and batteries, to fruit and vegetables—in Africa.
That’s no small task: In Kenya, people spend 50 percent of their monthly income on these FMCG—the things that any Westerner can pick up easily at a convenience store or local Wal-Mart. In Nairobi, however, 96 percent of FMCG transactions occur at one of the city’s 18,000 local markets or kiosks, rather than at retailers.
“So if we can create a digital platform to control supply and put that platform in retailers’ hands, we can own the FMCG market,” Brooke says. On one side, Twiga aims to create an app that can digitally manage kiosks’ supply based on actual customer demand. On the other side, Twiga also aims to manage the distribution chain all the way from farm to shelf, cutting out costly middlemen and formalizing what has been, until now, an informal market.
“The businesses seem informal, but there’s a whole lot of value in each of those stalls,” he says. “Every retailer is worth about $50 every day—and there are 18,000 in Nairobi alone. From an IT platform perspectives, the metrics are off the charts in terms of revenue per customer.”
And that massive vision—to disrupt the distribution chain for the entire African content, changing the way that everything from produce to household items reaches customers—starts with a banana. Or rather, with 70,000 bananas.
That’s the story Brooke told the Challenge Cup audience in his pitches—and that’s what judges and mentors saw and heard throughout Challenge Cup.
“It’s bold and ingenious,” Lee said. “It takes a lot of character and fortuity to see it and say, ‘I’m going to do something about it.’ It’s also pretty high on the social benefit side, and truly disruptive.”
But that means that Twiga could have a tough road ahead. In Kenya, the combination of the entrenched distribution model and the current political environment poses inherent risks —such as vandalism or physical danger for Twiga’s sales employees and distributors. In that sense, it’s not much different from the uphill battle that sharing-economy startups have faced in the U.S.
Yet, Twiga potentially could solve the fundamental distribution-chain problems that plague the FMCG market—and as an investor, Harris thinks Brooke has high likelihood of success.
“There’s a much higher return that can come if he is successful in becoming the de facto last-mile distribution for the developing world than in apps that are incrementally changing the way we think about things,” Harris said. “It just speaks to the size of Twiga’s idea.”