#23

Peter Njonjo

FOUNDER & CEO TWIGA FOODS

Twiga runs a Business to Business (B2B) e-commerce platform, whose core is creating an efficient supply chain in the highly fragmented informal retail, which accounts for 70 percent of the industry in Kenya and in a few months, across a few more cities across Africa. Twiga achieves this by aggregating the market demand of both manufactured and fresh produce, leveraging the ubiquity of the mobile phone to interface with its customers and disintermediating middle men in the value chain. Food and Beverage accounts for circa 50% household expenditure across Africa, which is about $700Bn and about $40bn in Kenya.

Twiga is transforming the supply chain in 3 ways:

• Twiga mobile app, Soko Yetu, allows retailers to order from the comfort of their shops and not have to wake up at 4:00am to buy produce in the wholesale markets.
• Modernizing warehousing and last mile logistics, allowing Twiga to guarantee a 24-hour delivery window across the firm’s customer base.
• Providing working capital financing through Twiga’s embedded Buy Now and Pay Later (BNPL) proposition by the name of Soko Loan and other digital services like, pre-paid airtime.

Like any business, Twiga has had to overcome a number of challenges in the last few months. These include:

• Talent: Twiga has managed to mitigate this challenge by focusing on making Twiga a great place to work. The firm’s internal Net Promoter Score (NPS) stands at 63, up from 39 a year ago, with a focus on clarity of expectations, performance management, cadences and compensation. Twiga also introduced the Agile methodology as a way of tackling big problems that require break through thinking.
• Technology adoption in informal retail: because someone has a smartphone, the inclination to use it for business is not obvious. Twiga has had to invest significant resources in optimizing user experience for low end smartphones and co-creating with its customers. The latest customer NPS score here has improved to 70, up from 44 a year ago, compared to an average of 40 for modern retail stores in Kenya. Twiga has seen a significant growth in digitally originated revenue through its mobile app, now standing at circa 75% from 25% in September of 2020.
• Regulatory: This is a major challenge for most businesses. The approach the firm has taken as Twiga is to position itself as solving a challenge that is much bigger than the Company and at the heart of every government’s agenda in Africa. This is food security. By streamlining supply chains, from farms and manufacturers, eliminating waste, it contributes to reduction of food prices in the urban cities, where food inflation has hit hardest. This has created a platform where Twiga works with government to find win/win solutions as Twiga rolls out the infrastructure to support the firm’s vision. In this, Twiga acknowledges the support from the Ministry of Finance, Ministry of Trade and Industry, Kenya Ports Authority, Kenya Revenue Authority and the Office of the President.

Twiga is using technology to build and sustain its competitive advantage in several ways, including the following:

• Go To Market: The company has invested a significant number of resources in optimizing how the customers experience its products and services, which includes the mobile app and services, such as the embedded BNPL and other digital products. Twiga works with the Mama Mboga’s on the streets, to get feedback on features and how the app should work. Embedding design thinking into Twiga’s development process has been transformational.
• Supply chain: In the absence of a postal code system, Twiga uses the customer location data to build algorithms that help them optimize the supply chain from procurement to delivery and an increasingly lower cost per unit. Today, Twiga delivers 600,000 kgs a day to 10,000 customers and with the commissioning of the firm’s new state of the art 200,000 square foot Distribution Center (DC) at Tatu City, this will increase the installed capacity to 5.0M kgs per day. This new DC will also host Africa’s largest banana ripening facility. This will allow Twiga to reach any kiosk within Kenya in 24 hours with everything they need and more.

• Sourcing: Better demand planning is helping Twiga optimize its sourcing strategies, helping streamline the supply and operations of the entire value chain. The firm can now plan what is required by the market in the next week, month, quarter.
• People Management: A big challenge in fast growing companies is the dissonance between strategy and operations. In Twiga, having real time data across the business helps us better manage the alignment between strategy and what happens in the business on a near real time basis, allow Twiga to solve problems as they arise, with full visibility across the organization.

Twiga managed to quadruple the business during the COVID Pandemic through home grown strategies.

When Peter Njonjo took over the role of CEO from his co-founder two years ago, he made a decision to pivot the business, from having a focus on a specific value chain of fresh produce, geared to solving the challenge of market access for small holder farmers to a B2B e-commerce business, focused on demand aggregation and supply chain disintermediation. Three trends have favoured this kind of business and are bound to continue:

• Declining household incomes when adjusted for inflation: consumers are hurting from the income disruption that came with COVID-19 and commodity price increases have significantly impacted the affordability of basic goods. With this type of cost pressure, consumers have lower loyalty to brands and making more decisions based on price. This trend favours companies that are focused on the elimination of waste and passing it on to the market in the form of lower prices.
  • Urbanization: people are moving to urban areas at twice the rate of population growth. These migrants are mostly poor, creating an explosion of informal settlements and small retail outlets. Solving the challenge of affordability for this type of consumer, who is becoming the driver of consumption growth across Africa, is key.
  • Digitization: Telecommunication companies are moving to a data first strategy with the disruption of their voice and text revenues from apps like WhatsApp. This is creating a surge of new internet users. So, adopting your business for technology is not a nice to have, but a must have.

Twiga has been busy in the last 12 months being recognized for what the firm is and what it is pioneering and innovating. These have not gone unnoticed. For instance, Harvard Business School has done a case study of how Twiga is transforming the informal retail sector. This case is being taught in the MBA class on Scaling Companies at the prestigious study address, where the key facilitator has been Peter Njonjo, in person.

Twiga was nominated as the 35th Most Innovative Company Globally by Fast Company in 2020, in addition to being selected as a Technology Pioneer by the World Economic Forum in 2020 and 2021. In the meantime, Twiga raised a Series C financing round of $50M and an additional $30M of secondary share buy backs in November of 2021.

Our nominee, Peter Njonjo is – Co-Founder and Group CEO, Twiga Foods. Twiga currently employs 1,000 people and has 100,000 customers, delivering to about 10,000 every day. Prior to taking up his current role, Peter spent 21 years with The Coca-Cola Company with his last role being President of the West and Central Africa Business Unit, made up of 33 countries, based in Lagos, Nigeria. Previously, Njonjo also led the Coca-Cola business in East Africa, overseeing six countries including Kenya.

Njonjo was President of the American Chamber of Commerce in Kenya, a director of the American Business Council in Nigeria and has been voted among the top 100 young leaders in Africa by Forbes Afrique and “Top 40 under 40” by The Business Daily in Kenya. He currently serves on the Global Board of Junior Achievement and on the Executive Committee of the YPO Chapter in Nairobi.

A native of Kenya, Peter Njonjo holds a Master of Business Administration (MBA) in Strategic Management, a Bachelor of Science (B.Sc.) degree in International Business Administration from United States International University-Africa, in Kenya. Peter has attended an Executive Leadership Program from Harvard Business School and is a Certified Public Accountant (CPA).

Peter Njonjo is nominated 2022 Business Monthly EA Top 25 Most Influential CEO Impacting Business, for a second year in a row.