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Tendai commented on Reinventing the Co-packer model in Rwanda

Thank you for the feedback! We’ve spent a lot of time working on the details of our idea, and are very happy to hear that it shows!

Here are our responses:

What if any parts of it have already begun? E.g. is there a mobile platform or prototype? A processing center?

Answer: Our goal is to create partnerships wherever possible. Rather than starting from scratch or competing with existing businesses and organizations, we want to leverage their core strengths and build a strong network around the co-packer. By doing so, we can save time and resources for development.
To our knowledge, there are currently no processing centers in Rwanda that are accessible to entrepreneurs and smallholder famers. However, we would like to work with companies with processing machinery to make use of existing resources. We also plan to partner with mobile platform developers in Rwanda, who can tailor their platforms to our needs.
Although both food processing and packing facilities are highly in demand in Rwanda, we’ve learned from our beneficiary feedback that packaging is urgently needed. Therefore, we plan to run a lean pilot before the end of this year, which would initially offer sustainable packaging solutions to farmers and entrepreneurs with their own products, and later incorporate the entire co-packing service.

Could you tell us more about what you mean by associated with Endeva? Is your team a part of Endeva? Is this something that you are working on in your spare time right now? Or as part of an Endeva project?

Answer: FreshBlends is an initiative of Endeva and thus a part of our core internal activities. For nearly 10 years, Endeva and our dedicated network of experts around the world have worked on research and consultancy projects, as well as building ecosystems for inclusive business. Through past projects and independent research with farmers in Africa, and Rwanda in particular, we know that smallholder farmers lack access to premium local and international markets due to the poor quality of processing and packaging. We believe that our model offers a business solution to connect smallholder farmers to these markets.
The initiative was developed by a team within Endeva. As we are moving into pilot phase, we recruited a local team to manage the day-to-day activities of FreshBlends. Bruce will operate the business in Kigali full-time, and Christian will develop the relevant partnerships in Germany and Rwanda with half of his time. The Endeva team in Berlin will maintain a regular role in providing strategic direction and communication with our partners.

What are your initial thoughts about overcoming the concerns of farmers over the pricing of this service, especially since they perceive their crops to be higher value than their consumers? The value proposition for consumers seems clear, but what makes this a problem that farmers will want to solve?

Answer: First, farmers can get a premium price for their products if they are processed and packaged in a way that creates access to high-value markets. This is what FreshBlends offers. Currently supermarkets sell mainly important goods, and locally manufactured products can easily compete with their prices.
Second, FreshBlends will offer different payment options to farmers. In one package, farmers have the option to have their product completely processed, packaged and marketed by us, and they are simply paid for their raw material. Farmers can also choose to market the product themselves, paying Freshblends up to half a year after they receive the finished products.
Our research shows that price in itself is not the main issue, but affordability, which can be addressed through innovative payment options. Our pricing philosophy is based on cost-plus strategy, which is not only justifiable towards farmers but also assures that we recover our costs.

You mention having the support of government, which is great. Have they agreed to provide a certain level of financing to this idea? Are there other ways they are supporting it? What do you imagine it would cost to begin implementing this idea in Rwanda? What part of your idea would you begin with?

Answer: The government has expressed their interest in supporting us financially once a pilot is on the ground and running. In the meantime, they have offered us a range of other support, including connecting us with potential partners for technical expertise, guiding us on adhering to the legal standards and obtaining certifications and officially endorsing our idea!
We expect our first year expenses including capex, working capital and overheads to be around US$ 150,000.
To get the project rolling, we will pilot a lean version this year. As packaging is most urgently in demand, we will start with a purely packaging service. After achieving initial success, we will incorporate the entire co-packing service package and help Rwanda become a model for sustainable co-packing in Africa!