Apr 26, 2023
Tags: Agriculture, Tech Entrepreneurship, Impact Investing,
Thinking Outside the Ice-box: The Opportunity to Combat Food Waste in Sub-Saharan Africa with a Single Point of Dehydration
Cold chain infrastructure for agricultural produce still has a long way to go in Africa. Leapfrog solutions like food dehydration can be easier to implement and faster to scale, showing marked potential to capture post-harvest losses and boost smallholder farmer resiliency.
Post-harvest food loss in Africa is a complex issue. Factors like insufficient cold chain and transport, poor market linkages, and consumer preferences all contribute to harvested crops not being monetized or used—reducing income for smallholder farmers and increasing food prices for consumers. The prevailing theory to address these challenges is to rebuild the developed market model, namely through distributed cold chain infrastructure and improved commodity marketplaces.
However, any chain is only as good as its weakest link, and the cold chain needs building across large businesses, small businesses, and final consumers in Africa. Cold chain is capital intensive, and the costs only rise without access to cheap and reliable grid power. Businesses and consumers need financing in local currency, and some links are difficult to finance at all where assets are not income generating (i.e., in the home). The integrated cold chain vision has therefore been slow to scale.
While cold chain infrastructure for agricultural produce still has a long way to go in Africa, leapfrog solutions like food dehydration can be easier to implement and faster to scale. Such solutions show marked potential to reduce post-harvest losses, boost smallholder farmer resiliency, and place less of a burden on end consumers.
Factor[e] looks beyond the cold chain for solutions to food waste
Food processing provides a leapfrog solution to post harvest losses because dehydrated products can be stored at ambient temperatures. Production can therefore be scaled to accommodate seasonal supply gluts, a significant driver of upstream post-harvest losses. End products can be moved and stored in the home without cold chain, minimising the potential for downstream food losses resulting from produce going bad. Dehydrated food products also provide nutritious, affordable meals that taste the same as freshly cooked meals whilst reducing the energy consumption of the end consumer.
NatureLock, a portfolio company of Factor[e] Ventures, is a Kenyan food tech start-up specialising in dehydration. NatureLock has developed a unique process for producing nutritious, dehydrated food products, starting with StewsDay, that can help move the needle on post-harvest losses. We provide a detailed summary of their approach below.
Why Factor[e] invested in NatureLock
NatureLock’s vision for affordable, nutritious instant foods in East Africa aligns with Factor[e]’s objective to reduce post-harvest losses to below 30%, in this case via first-mile processing and ambient storage. NatureLock sources a portion of their products from farmers with either a surplus of produce or harvests that will soon expire. Their model could also scale to install small hubs near farms to capture post-harvest losses in the first mile for local distribution, reducing logistics costs while improving resiliency for smallholder farmers and increasing access to affordable, nutritious meals for end consumers.
For example, NatureLock’s debut product, StewsDay, is a dehydrated version of the popular Kenyan stew ndengu, containing green grams, onions, tomatoes, carrots, and spices sourced directly from farmers. StewsDay is then sold in a sachet and can be cooked in just three minutes by adding boiling water. This is the first offering from an exciting product roadmap to be taken to market by a Kenyan team with deep expertise in food and Fast-Moving Consumer Goods (FMCG).
StewsDay launched in Nairobi at the beginning of 2023, serving the retail sector with partners including Quickmart and the informal sector in partnership with Twiga Foods. This partnership is particularly noteworthy for its potential circularity. In other words, NatureLock has the potential to buy back unsold produce for processing and redistribution because of their dehydration process (e.g., tomatoes), boosting small-holder farmer resiliency not only at the gate but after produce has gone to market.
It is this dehydration process that differentiates NatureLock in the sector. Dehydration can be tricky, as foods can often lose their texture, taste, colour, and nutrition due to high temperatures and inconsistent exposure. To solve this, Naturelock has developed their own unique approach which allows for lower drying temperatures which preserves both the nutritional benefit and quality of produce sourced at the farm gate.
To better understand the impact of such a process on the sector, Factor[e] performed a techno-economic analysis (TEA) comparing 4kg of ndengu for both cold chain and dehydration processes from farm to fork.
Factor[e] Techno-Economic Analysis
Our analysis modelled the energy consumption and costs for preparation of 4 kg of ndengu. It compares 1kg of dry StewsDay being rehydrated with 3 kg of fresh produce going through the cold chain and being cooked from fresh.
This TEA makes assumptions for the number and duration of cold chain steps and assumes an electric induction cooker as the appliance for boiling the stew. This is a conservative assumption given that it is the most efficient but not widely used, and hence may understate end consumer energy consumption.
By comparing Figures 1 and 2, we find that:
An equivalent amount of lifecycle energy (the total amount of energy required to process the produce, bring it to market, and prepare the ingredients for a meal in a customer’s home) consumed at approximately 4.5 kilowatt per hour (kWh).
NatureLock’s dehydration concentrates the energy consumption to Naturelock as opposed to multiple cold chain links. This allows for a single point of investment at a process step with reasonable margin and economies of scale.
Energy consumption by the end consumer is 10x lower in kWh terms in Figure 2 and forgoes the need for a fridge, an item unaffordable for many.
At a recommended retail price of 1000 Kenyan shillings for a 1 kg bag of StewsDay, the ingredient cost per satchel versus 3 kg of fresh produce is ~1.5x higher. NatureLock hopes to reduce costs over time.
Looking beyond the quantitative benefits evident through this analysis, dehydration brings other benefits for end consumers. Our TEA assumes electric cooking and, though many families cook stews using charcoal or gas, the elimination of either method has positive health and climate impacts. Electric cooking is also much faster, saving 40 minutes per meal.
Though this study replicates very specific conditions, it demonstrates the marked potential to capture the quantity and quality of harvests through a single point of dehydration for the benefit of both smallholder farmers and end users.
Investment insights and next steps for the sector
Looking ahead, NatureLock has several interesting avenues to explore. To better understand the opportunity to reduce post-harvest losses through low-cost farm-gate food storage like dehydration and food processing, more work is needed to understand different value chains. Dehydration has a strong value proposition because of its reduced cooking time. Other food groups like starches should be compatible, whereas meats may not easily rehydrate. The near-term opportunity for NatureLock is to explore yellow beans and other legumes and lentils to increase their positive impact on small-holder farmers and the instant food market in Kenya.
A thorough analysis of consumer adoption can help the product scale. Like any leapfrog opportunity, instant food products require a behavioural change. Certain products have already made significant progress in Kenya, with instant noodles being a $700m+ market, but there remain a limited number of food types available, and consumers will need to overcome habits that don’t support the adoption of products like StewsDay.
We at Factor[e] Ventures have taken the position that food processing, and NatureLock’s dehydration process, is a game changer in reducing post-harvest losses in Africa whilst improving nutrition for consumers. Such solutions are poised to scale faster than cold chain infrastructure with less burden on the end-user, bringing better resilience for smallholder farmers in Africa and an improved outlook for global hunger and the climate.
This research was produced by Factor[e], with funding from Shell Foundation (SF), and the UK Government’s Foreign Commonwealth and Development Office (FCDO) under the Catalysing Agriculture by Scaling Energy Ecosystems (CASEE) programme.
NatureLock is a Factor[e] Ventures portfolio company and they are fundraising! StewsDay is only the beginning. For more information, please visit https://naturelockfoods.com/
About Factor[e] Ventures
Factor[e] Ventures specialises in global technology brokering, a strategy connecting innovative global technologies with market application. We are a team of pre-seed investors and venture builders dedicated to supporting the growth of early stage, technology-enabled companies solving global challenges in energy, agriculture, mobility, and smart infrastructure with a focus on Africa. For more information, please visit www.factore.com.