What problem are we trying to tackle?
Agriculture is the backbone of the Rwandan economy, it generates more than 70% of the country’s export revenues, accounts for a third of GDP and engages close to 80% of the total population. However, the majority of smallholder farmers remain poor and the scarcity of land closes opportunities for young people in the sector. The government and experts alike have stressed that agro-processing is the key to unleashing the full potential of the agricultural sector in Rwanda. However, at present the sub-sector remains very weak.
Major constraints include inadequate processing methods and standards, a lack of access to equipment and unsatisfactory marketing and packaging of products. The cost and complexity of turning agricultural products into high-quality processed products that can be sold in supermarkets and compete with imported products are insurmountable for farmers and young entrepreneurs. Value addition is, thus left to entrepreneurs with the backing of big investors, leaving the sub-sector largely underexploited. This results in a high post harvest losses of about 30% on average.
To date, supermarkets offer mostly imported products and a few poorly packaged local products. The problem extends beyond Rwanda. These challenges can be observed across the continent, which is a growing importer of processed foods. According to the World Bank, it imports nearly $400 million of processed fruit juices and canned fruits and vegetables. The irony is that many of the processed products are grown in Africa, shipped abroad for processing only to be returned as higher value products. There is also a demand for quality, fair trade and inclusive African products in Europe and the US, however the low quality and packaging of products remains a barrier for exporting processed goods.
What is our solution?
We believe that a key ecosystem player is missing! In high-income countries, like the U.S., farmers as well as micro- and small entrepreneurs can contract a co-packer that can cost-effectively produce high quality products according to their specifications. Co-packers allow small players to be able to enter the booming specialty food sector without the constraints of setting up their own certified manufacturing plant and distribution logistics. The co-packer offers this, as well as advice, guidance and a range of complementary services to support entrepreneurs and farmers successfully get their products to supermarkets.
We are reinventing the co-packer for Rwanda; a one-stop service center that enables farmers, cooperatives and young entrepreneurs in Rwanda to access specialty food markets by offering a comprehensive support package consisting of a range of services. We will link clients to already existing services and provide in-house only those services that fill current gaps in the market. Every new client will receive a business-checkup to determine specific needs. From there, we will, together with clients, develop a premium product, create a brand (incl. logo, corporate identity and marketing materials), and link them to potential financing partners and retailers. Services are bundled into 3 basic support packages that are targeted to the specific needs of clients, as detailed in the photo below.
What services will we offer?
- A business check-up to create a support plan
- Step-by step support on creating a specialty food product, guided through an app and individual consultancy sessions
- Advice on product development to ensure high quality and adding an innovative edge
- Support with marketing and communication
- Support the set-up and management of quality and certification systems
- Access to processing facilities certified by the Rwandan Standards Board
- Advice and provision of suitable packaging
- Access to storage facilities
- Advice on and provision of transport logistics
- Access to strategic partners and investors
- Access to markets through our retailer network
Where did this idea come from?
The idea for the co-packer was inspired by our past experience with the Youth Trade Initiative, which supports young farmers and entrepreneurs gain access to premium markets through their partnerships with leading retailers like Whole Foods Market. Through Youth Trade, we had the opportunity to explore helping young farmers in Sierra Leone get into Whole Foods’ supermarkets. Our meetings with Whole Foods buyers in the US indicated a strong interest in stocking more products from African entrepreneurs, they also helped us understand what it would take to get into such markets and stay on the shelves.
We spent over a year researching the most effective and sustainable approach to achieve this goal, and discovered that most of the current solutions to value addition were not working. Many programs offered farmers inputs, machinery and training. However this is fixing the wrong problem! As long as farmers don‘t have access to markets, they cannot reap the benefits of increased productivity. Other programs add on processing machinery and more training but that just overwhelms the farmer. They now have to run their farm and a processing unit. When one factors in the cost and complexity of repairing and maintain machinery in the rural context, its easy to see why such programs often yield limited results.
We watched Youth Trade young entrepreneurs and farmers in the US get into Whole Foods within months once they had the right access to marktes. Their advantage was that they could rely on a co-packer to package and process their product at an affordable cost. This is what was missing in the African countries we worked in! We chose Rwanda as a pilot country and are adapting the co-packer model to this context.
Who are we?
The co-packer is a spin off initiative of Endeva. Endeva is a company of experts with a common mission to accelerate entrepreneurial solutions for development challenges. Since 2007, we have implemented more than 100 projects with a diversity of partners and a global network of experts. Endeva encourages their network of experts to capitalize on its deep insights and broad network to realize innovative, local, sustainable solutions through such spin off ventures
The co-packer venture is implemented by a mission-driven team, seeking the most efficient and sustainable solution to help smallholder farmers and young entrepreneurs add value to local produce. Please see the image below for more details. Our multicultural team based in Rwanda and Germany brings over 25 years of multi-disciplinary knowledge and experience in several key areas:
- an understanding of sustainable and inclusive agriculture
- experience working closely with smallholder farmers
- working experience on specific value chains
- inclusive agro-processing
- relationships with key political and private actors in Rwanda as well as internationally
- corporate partnerships management
- starting and managing a business across borders
Where are we now ?
We’ve achieved a lot on our own, but now we need the support of others to continue our success. So far, we’ve:
- Conducted extensive research on the co-packer model in the US
- Conducted a two-month feasibility study in Rwanda to identify partners, research the market and speak with small holder farmers and young entrepreneurs
- Developed an initial business plan and financial model
- Officially registered as a local company in Rwanda
- Recruited team members with extensive experience in agri-business in Rwanda
How AMPLIFY can help us move forward?
Currently, we’re seeking partners to provide the necessary financial and technical support to help us implement the pilot phase. If our solution works in Rwanda, we believe it can be adapted and replicated across Africa and beyond.
The Amplify program would be an excellent opportunity for us to take our idea to the next stage. Particularly, we would benefit from:
- Using a human-centered design approach to guide us further adapting the co-packer model
- Design support to help us test parts of our model
- Seed funding to pilot the idea