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Reinventing the Co-packer model in Rwanda

We increase farmer and entrepreneur incomes and reduce post-harvest losses by providing affordable quality packaging and processing services

Photo of Tendai Pasipanodya
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EXPLAIN YOUR IDEA

Our model is a game changer. For the first time in Rwanda, it will be possible for farmers and agroprocessing entrepreneurs to process, package and market premium products effectively, at at an affordable cost and at high quality. We will do this by re-inventing the co-packer model and adapting it to our target clients needs. Our copacker will provide farmers, young entrepreneurs and exisiting agroprocessing companies with a customised support package that includes product development, quality control, branding, processing, packaging, marketing and financing. These services will be available at a certified processing space. A mobile-based IT platform will guide the clients through the process, provide transparency along the value chain, up-to-date market prices and standardized procedures. We offer both the option to sell the final processed products under the co-packer brand or under our clients own brand. We provide all clients access to supermarkets and other retail outlets.

WHO BENEFITS?

The pilot aims to bring 3 co-packer brand products to market. We will work with five coops each with about 50 members. As the average household in Rwanda is 4.3 members, we estimate that the pilot alone will directly benefit over 3000 individuals in farming households. We also aim to have five coops or entrepreneurs as clients with their own products; they will also source their raw products from farmers.

WHERE WILL YOUR IDEA BE IMPLEMENTED?

We’ll pilot the co-packer in Rwanda. However as mentioned in the full description our customizable business model has great potential across Africa.

ARE YOU IMPLEMENTING IN AN ELIGIBLE COUNTRY?

  • Yes

EXPERTISE IN SECTOR

  • I’ve worked in a sector related to my idea for over a year

EXPERIENCE IN IMPLEMENTATION COUNTRY(IES)

  • Yes, for more than one year.

TELL US MORE ABOUT YOU!

Our diverse and experienced team is associated with Endeva and united by our shared motivation and belief that the co-packer model will transform the lives of farmers and young entrepreneurs in Rwanda and beyond. See more on our profiles in the full description.

IS THIS IDEA NEW FOR YOU OR YOUR ORGANIZATION?

Our team has been working to find an effective way to help farmers and young entrepreneurs earn more by accessing premium markets over the past 3 years. We had the opportunity to explore how to help get the products of young African farmers into Whole Foods Markets through the Youth Trade Initiative. Our meetings with the Whole Foods buyers in the US confirmed a strong interest in stocking more products from African youth. However, existing solutions to get them into premium outlets are simply not effective enough. We therefore created our own solution: a co-packing facility for the African context. To implement the solution in Rwanda, we set up a spin off organization this year, a mission-driven start-up. Endeva is a company of experts with a common mission to accelerate entrepreneurial solutions for development challenges. Our core business is providing researching and consulting services as well as building ecosystems that support inclusive businesses. Endeva, encourages its experts to capitalize on their insights and networks to realize innovative and sustainable solutions through spin off ventures like this one. Agriculture is one of our key focus sectors.

HOW IS YOUR IDEA UNIQUE?

Existing solutions tend to overwhelm the farmers. They provide farmers with processing machinery, simple packaging and some training, basically asking the famers to run both their farm and a processing unit. This approach always fails. In the US, farmers and cooperatives can bring their products to a co-packer, who offers a wide range of services to produce high-quality food products. We are the first to adapt the co-packer business model to the African context. This new approach will drastically reduce the barriers to accessing premium markets. The co-packer will offer a full suite of affordable services, including, among others, processing, packaging and marketing. Our unique advantage is our team, which brings the right set of experiences and contacts (see next section). We also have the support of the Rwandan government. Rwanda is an ideal pilot country, with one of Africa’s most productive and organized farming sectors. Improving the quality of Rwanda processed agricultural products is an explicit government priority. The government has also signaled interest in co-financing the initiative.

WHO WILL IMPLEMENT THIS IDEA?

In Rwanda: Bruce will lead the in-country implementation, working full-time on general management and operations of the co-packer. Christian will support on a part-time basis with establishing partnerships and fundraising. From Germany: Tendai will provide overall management for the project and Megan will support with research, communication. Both will spend 1 day per week. Christina will provide strategic direction at 2 days per month. We are also creating an advisory board to support us.

HOW HAS YOUR IDEA CHANGED BECAUSE OF BENEFICIARY FEEDBACK?

The user experience map helped us clarify the flow of activities. We managed to simplify a rather complex process into four steps, that we can clearly communicate to our clients. Our new initial service package - the "starter package" - makes it easier for users to start using our service, knowing exactly what they pay and what they get for it. The feedback exercises also confirmed some of our critical hypotheses. • Interest of farmers and entrepreneurs in the service is high. • While farmers are skeptical about paying for support, they are willing to pay for packaging in particular, and their willingness to pay was higher for complete packages than for individual services. • Supermarkets are interested in stocking local products. • High-end consumers were unsatisfied with existing local and imported products, and articulated a demand for high-quality local products. Our images provide more detail on our feedback process and what we learnt.

WHAT ARE SOME OF YOUR UNANSWERED QUESTIONS ABOUT THIS IDEA?

We identified these key questions we need to answer to confirm assumptions made in the user experience map. • How can we ensure consistent cash flows given the long delay between developing products and getting paid? • How can we adequately price the various services and packages? • How can we guide clients through the product development process via an app, thereby minimizing staff hours spent per customer and enabling an affordable price of our service? • Can we assume that all clients will be able to interact with us online, e.g. to submit an application? • At what stage do we link our clients with other service providers and what kind of agreement do we need with these partners?

WHY DO YOU THINK THE PROBLEM YOUR IDEA SOLVES FOR HASN'T BEEN SOLVED YET?

Existing solutions focus on only one aspect of the problem. Our solution will change this monotonous pattern by bundled services into a comprehensive package and providing credibility for farmers to access premium markets. Until now, such a service has not yet been offered in Rwanda for several reasons, including: • the need for specialized skills to operate advanced machinery • the high costs of setting up and maintaining a facility and obtaining certifications • a lack of materials necessary for processing and packaging within Rwanda. As a German-Rwandan venture, FreshBlends can bring high-quality processing and packaging technology and knowhow to Rwanda.

WHAT WOULD YOU ULTIMATELY LIKE TO ACHIEVE WITH THIS IDEA? WHAT IS YOUR NEXT STEP TO GET THERE?

We want to catalyze a local food industry led by farmers and young entrepreneurs producing innovative, healthy and sustainable food products. Local production will create a range of positive effects in Rwanda: • reduce post-harvest loss by creating food products with longer shelf-life • increase income of local farmers by connecting them to premium markets • diversify local products for consumers • raise overall standard of packaging and processing Our next step is to pilot our idea!

MEMBERS OF MY TEAM HAVE BEEN WORKING TOGETHER FOR:

  • More than a year

MY INTENDED BENEFICIARIES ARE:

  • Within 50 km of where our team does most of its work

MY ORGANIZATION'S OPERATING BUDGET FOR 2015 WAS:

  • Under $100,000

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. 

Our services are bundled into 3 basic support packages that are targeted to the needs of clients.

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


Image title


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

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