Africa's billion-dollar food waste problem

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Now into this week’s edition!

Today we’re exploring Africa’s food waste problem and the different ways companies are tackling it.

This is also an investment memo for our next Tech Safari Syndicate deal: KaFresh (Sio Valley Technologies).

We look at the problem and how KaFresh has tried to address it.

ICYMI: We have a syndicate of over 250 members from around the world investing in African tech with us.

If you’re interested in the company, you can join our Tech Safari Syndicate and get access to the deal here.

We’re also hosting an AMA with the founders next week. You can save your spot (and submit questions here).

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Alright, let’s go!

Nakasero market in Kampala is a busy world.

It's the largest food market in Uganda.

By 4:00 am, farmers start arriving with truckloads of fresh produce, while traders hustle to snap up the best deals.

By 6:00 am, vendors start setting up their stalls for the day.

And by midday, Nakasero gets loud - with vendors calling out reduced prices on fresh fruits, fried fish, onions, beans, and grains.

For shoppers, these are great bargains to get through the week.

But for traders and the farmers supplying them, it's a race against time.

Because, as the day goes on, the fish and meat start to smell funky.

Fruits get overly ripe and turn mushy.

Vegetables lose their colour and go stale.

And at the end of every market day, Nakasero produces tons of waste, mainly unsold fresh food left to rot.

Like Uganda, the rest of Africa has many food markets like Nakasero.

They're the backbone of the food supply chain - stocking smaller markets, supplying big restaurants, and giving consumers a direct line to affordable food.

These markets have a huge food waste problem

And it’s not the traders’ fault.

Globally, one-third of all the food meant for human consumption is either lost or wasted along the supply chain.

That's 1.3 billion tons of food per year, while over 870 million people go hungry.

And the losses sting harder in Africa.

A 2019 report by Deloitte found that between 30% and 50% of produce never reaches the consumer.

Most of it goes bad.

Whether it’s in storage, on the road to the market or sitting in a stall waiting for a buyer.

And yet:

• Africa still relies on food aid more now than it did 35 years ago.

• About 282 million people in Africa (20% of the population) don't have enough to eat.

• And Africa's population is booming faster than anywhere else. And we need a plan to keep everyone fed.

So it’s worth asking:

Why are we letting food spoil when we need to preserve it?

Once a farmer harvests their produce, the countdown begins on how long it stays fresh.

Big commercial farmers have a way around it: cooling it right after harvest.

This means spending big on storage facilities like cold rooms or having temperature-controlled areas on your farm.

Those don't come cheap.

Setting up a standard cold room will set you back anywhere from $6,400 to $30,700 depending on functionality.

And once you start this cold chain, you've got to keep it going.

That means investing in cold chain transport for long trips, preserving the produce as it travels through rough, rural roads to reach urban markets.

But those are the big guys.

Africa’s agriculture industry is largely made up of small-scale farmers.

We’ve got 33 million of them across the continent - and they produce around 70% of Africa’s local food supply.

And if you’re one of these guys, you’re living off every penny of profit - and cold rooms aren’t an option.

So when the clock is ticking, you need to:

• Harvest fast

• Roughly load your produce onto a truck - because where’s the time?

• Then hightail it to the market so you can dump the burden of keeping it fresh onto the next in line - the trader.

This is what life after harvest looks like for African farmers.

It’s a constant race against time to sell your produce or watch it spoil away.

And it happened to this founder’s dad

In 2017, Jean-Paul (JP) Nageri’s dad planted 100 acres of plantain in Sio Valley, Uganda.

Like many farmers do to speed up the selling process, he struck a deal with a broker called a forward contract.

It's a handshake deal with a broker promising to buy your produce once it's harvested.

But the broker never showed up.

JP watched his dad struggle to keep his plantains fresh until he could find another buyer.

In the end, 99 acres of his plantains rotted. And he could only sell 1% at the last minute.

When his dad asked for a solution, JP suggested a cold room.

But his dad needed something cheaper.

So, armed with a Bachelor of Science in Agricultural Science, JP started researching why oranges outlast avocados and bananas.

He found that it’s got a lot to do with the thinner skin.

Bananas and avocados with thinner skin let in air and moisture more easily, speeding up ripening and eventual rotting.

After years of tinkering with the properties of fruits and vegetables in his makeshift lab, he found a way to give produce a ‘thicker skin’ or so to speak.

He ended up creating something that he called KaFresh.

KaFresh is a plant-based spray that creates an edible coating around produce to make it last longer.

The powder is mixed with water and then sprayed on harvested crops.

In 2018, JP kicked off his testing phase in a garage, spraying tomatoes and avocados and eyeing them for weeks.

After successful tests, he roped in his friend Trevor Siu, now his co-founder, and they began making it available to farmers across East Africa.

KaFresh extends the shelf life of fresh produce by 2-4 times

And when you compare the cost-effectiveness of a cold room, it’s a world of difference.

“Cold chain storage costs $600 per ton of produce every month. It takes 10-15 litres of KaFresh to coat a ton of produce, which is about $30-$50,” Trevor explains.

Cold rooms only make economic sense for large-scale operations.

You wouldn’t invest a fortune to keep just 1 kg of tomatoes cold.

On the flip side, KaFresh can coat anywhere from less than a kg to 100 tons of produce.

What does a solution like KaFresh mean for farmers?

Margaret, a Nairobi vegetable trader, used to go to a nearby town for her greens. Sometimes rising as early as 4:00 am so she can get the freshest ones.

But at the end of each day, she'd sadly throw away leftovers that wilted under Nairobi’s sun.

Now that she sprays KaFresh, her veggies stay fresh through the week, despite the heat.

And she just makes just one weekly trip.

This lets Margaret price better and save her produce so more can reach the market.

And it's not just a local impact

KaFresh is being adopted by exporters to preserve larger quantities of produce as they move across countries.

And on a large scale, KaFresh could change supply chains.

For instance - Kenya is the fourth largest exporter of flowers globally, and 40-50% of Kenya's flowers are exported to the Netherlands.

But flowers spoil in 2-5 days, which means they need to be flown out as soon as they are harvested.

KaFresh can extend the shelf life of flowers for up to three weeks.

This means farms and exporters can explore budget and environment-friendly options like sea freight instead of air freight.

Africa struggles with food supply.

About 20% of the continent is undernourished, and its population is booming, putting pressure on the need to make food available.

Yet, a lot of the food produced in Africa is wasted after harvest because farmers lack cheap and efficient ways to keep it fresh.

KaFresh is a good bet to help African farmers win the race against time.

Their vision is to expand across Africa and globally - turning surplus food into exports instead of waste.

What do you think of KaFresh trying to solve Africa’s food waste problem? Let us know here.

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