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A Nigerian start-up unlocking the potential of large markets for smallholder farmers

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Foodlocker is helping smallholder farmers to access large and lucrative markets

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Blog

One of 11 woman-led finalists in CTA’s 2019 Pitch AgriHack competition and, ultimately, a winner in the mature platform category, Nigeria-based Foodlocker is helping smallholder farmers to access large and lucrative markets. Jennifer Okoduwa, the company’s co-founder, explains how.

Femi Aiki, the company’s other co-founder and CEO, and I both grew up on farms in Nigeria. As teenagers, we played active roles in our parents’ businesses and understood the market access challenges we faced. In order to avoid farm produce wastage, we were forced to sell to middlemen, our margins were thin and unfair, and we were always short-changed on the fruits of our labour. Failure to sell that way meant wastage of close to 50% of our produce.

We established Foodlocker in November 2017 out of a desire to leverage the possibilities of technology and the growing demand for both perishable and non-perishable agricultural goods in Nigeria to bring smallholder farmers’ produce to market more quickly, efficiently and for a fairer price. For consumers, our ambition is to provide the right selection of quality foodstuffs through a no-frills, locally sourced and convenient shopping model. Alongside fresh items such as fruits, vegetables, tubers and eggs, we also offer staples such as beans, rice, flour and oil, snacks and condiments.

Femi and I previously launched a start-up in 2013. After it failed due to a lack of product-market fit, Femi went back to school to study for an MBA, majoring in finance and entrepreneurship. During that time, he interned at Infosys in India and worked with Amazon in the United Kingdom as an operations manager. I also worked in the UK at Bunnings Warehouse as an operations administrator.

On our return to Nigeria, we pooled our newly acquired skills and applied deep learning to solve the demand-supply imbalance issues in the food space and then developed an omnichannel distribution model. Following the launch of our website, we opened a physical facility in Ibadan. The facility doubles as a warehouse and customer-friendly order fulfilment centre, enabling us to consolidate our retail and wholesale activities in a single vertical operation.

Customers can order online, through our key account managers, or through a proprietary SMS-ordering platform that will be rolled out before the end of the year. We promise to deliver in the Ibadan area within two hours, or customers can pick up their items in-store. By owning the distributorship rights to our products, we can offer them at highly competitive prices while enabling farmers to sell directly to us and be fairly paid. Our demand-supply optimisation approach is a new concept in Nigeria. It is addressing many of the food security problems in Africa, and we anticipate it will create opportunities for local smallholder farmers to sell their produce across the globe.

Expanding customer base

In 2018, our first full year of operation, we realised over US$128,000 in sales. This year, we expect our turnover to be 2.5 times that amount. We have over 1,200 paying customers and we provide market access to more than 600 smallholder farmers. We currently have a team of nine full-time employees and five temporary workers.

Our first two years haven’t been without their challenges, however. Besides funding for working capital and strategic assets, talent acquisition is our biggest problem. Foodlocker’s founders and some angel investors put in the start-up capital of over US$55,000. We are in the process of raising an additional US$1 million to drive our growth and expansion into tier one markets. We keep adding to our team, and our expansion plans depend on our ability to acquire highly capable talent.

Scaling up operations

We took part in CTA’s Pitch AgriHack competition to grow our network and build relationships with investors and other start-ups. We also saw the competition as an opportunity to announce our arrival on Africa’s AgTech stage.

We were thrilled to be invited to attend the African Green Revolution Forum in Accra, Ghana from 3-6 September, where the Pitch AgriHack final was held. While there, we took part in a CTA-organised investment readiness boot camp and had several networking opportunities. We also met key partners such as Syngenta and pitched our business to venture capitalists, entrepreneurs, development agencies and industry experts, which we hope will lead to other partnership opportunities. It was a very valuable four days, topped off by our win of the Data Analytics prize on the final day.

With the prize money of €10,000, we will continue to invest in working capital, strategic assets and talent. This will help us scale up our operations to better serve larger customers and in turn increase revenue. We are planning to expand our footprint to other parts of Nigeria before looking to other countries in Africa as well as developing distribution channels in Europe and America.

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