Grace Maina

Grace is the Marketing and Communications Officer at InspiraFarms. She holds a MA in Corporate Communications, Marketing and PR from the University of Leeds and a BA in Media Studies from Anglia Ruskin University, Cambridge. She has 3 years experience in Digital Communication across Europe and Africa where she implemented Search Engine Optimization (SEO) strategies, Marketing Research & Strategies and Social Media & Content Management. What excites her most is communicating to consumers through mediums that enable her to tell stories to reach a wider network in creative and alluring ways. Grace currently lives in Nairobi, Kenya.

An outlook: Lifetime value of cold chain systems for agribusinesses

Sub-Saharan Africa
26. Aug 2021

Cold chain developments are needed in Sub-Saharan Africa now more than ever. With food losses in Sub-Saharan Africa adding up to $4 billion annually according to FAO (Food and Agriculture Organization), cold chain technologies ensure a reduction of food losses and an increase in shelf-life, open opportunities to expand market growth of fruits and vegetables, and circle back to an increase in return of investments for agribusinesses.

In many African countries, access to appropriate cold chain technologies is almost inexistent. The lack of on-farm pre-cooling (quick extraction of field heat) and cold chain facilities cause mold and limit shelf-life. Long distances and limited control over logistics between farms and packhouses lead to an additional degradation of the products: Often, produce is left exposed to the sun for hours until all crates are filled and the trucks can depart. Remaining at ambient temperatures, the products are exposed to shrinkage, mold, and reduced shelf-life. In consequence, they face rejections by importers and retailers.

As much as we see the importance of a pre-cooling cold chain for agribusinesses and farmers, most rural areas lack access to affordable, field-based cold storage infrastructure. Most out-growers, such as small holder farmers, cannot afford on-farm cooling: They lack access to finance to invest in their own infrastructure and have limited land available on which to build. Exporters face the same challenges and therefore opt to rent the few cooling and processing/packing spaces that are available on contract, located far from farms.

The application of on-farm modular, prefabricated, and mobile components is bringing cost-effective solutions. Such cold-chain facilities have also become more efficient and less energy intensive, with an integration of solar powered systems if requested. This reduction of energy use significantly lowers the operational costs of post-harvest management, which increases farmers' profits.

Here, we look at two Sub-Saharan African agribusinesses which have benefited largely from the investment in cold chain facilities. By curbing post-harvest loss, they have added lifetime value to their businesses and the communities around them.

GreenPath Food, Ethiopia

We first head to Ethiopia, where GreenPath Food is located: an agribusiness that grows organic produce using the latest thinking in agro-ecology and regenerative agriculture, with production led by smallholder growers. They primarily export legumes, avocados, perennial fresh-cut herbs, and chili peppers.

Their main bottleneck used to be post-harvest management: Poor on-farm infrastructure made it hard to maintain quality. To store their products, GreenPath used inefficient iron sheet structures held together by wooden polls. The floors of the structures were uneven, and the space was quite small and often harbored a lot of dust. The structures were not optimal to be certified by the International Organization for Standardization (ISO), which kept them from accessing their targeted high value markets. In addition, limited space restricted their quantities.

GreenPath therefore purchased on-farm cold chain technology and infrastructure through a 250sqm packhouse that includes cold rooms and processing space. This enabled them to retain quality and extend shelf-life of their fresh products through prompt on-farm cooling. They later added another packhouse of the same size, with cold storage, reaching 480sqm total. The packhouse is efficiently upgrading their processes regarding quality control, packing and temperature management.

Over time, they levelled up to exporting to more countries and on-boarded more clusters of farmers. Their export volume nearly doubled from 2019, exporting three to four times a week. They also managed to grow their sales relationships and double their buyers. Since March 2020, they have been exploring other markets such as Singapore.

African women sorting herbs
© Greenpath Food

Lauetta, Zimbabwe

Lauetta Farm, an agribusiness in Zimbabwe about 40kms outside the capital, Harare, focuses on the produce of blueberries. As the first-time growers of Costa genetics blueberries in Zimbabwe, they aim to deliver premium quality fruit to final markets. Therefore, they need their cold chain infrastructure to be as close to the areas of production as possible to remove field heat and reduce product temperature of the finished goods, packed for export. This is because every fourty-five minutes out of the cold chain results in the loss of one whole shelf-life day.

With the help of a 240 square meter facility which includes two pre-cooling rooms to remove field heat, a temperature-controlled packing room and a finished product room with forced air cooling, they are bringing the final packed blueberries down to a temperature of zero to one degree. The facility includes special add-on features like humidifiers to reduce dehydration and remote monitoring technology.

Lauetta was able to access premium markets in Hong Kong, Europe, UK, and the Middle East based on the size of their berries and their quality on arrival in the market due to premium cold chain infrastructure and protocols.

Final Insights

In many cases, farmers are only able to invest in basic entry level infrastructure. However, this creates a more expensive supply chain with a higher carbon footprint and reduced profitability for the farmer. The key is investment in on-farm pre-cooling and cold chain infrastructure.

On-farm pre-cooling and cold chain technology facilitates the integration of smallholder farmers into valuable supply chains, ensuring constant market outlets and better pricing, resulting in better income. It also facilitates local job generation, especially for women, especially in manual processing such as grading and packing.

For instance, each InspiraFarms unit (packhouse) can generate more than fifty jobs. One packhouse can benefit over two hundred small scale farmers and increase their income by thirty percent. This is a result of different, concurrent factors: the reduction of post-harvest loss and rejections, the ability to achieve maximum quality, the increase in shelf-life, and the ability to access high value markets while reducing costs.

With on-farm pre-cooling and cold chain technology available, challenges remain on how to make them available and accessible to small farmers at a larger scale. InspiraFarms is developing new products and financial solutions that facilitate access. The newest mobile first-mile pre-cooler, for example, is more affordable than traditional cold-chain facilities and can be reused in various locations and seasons. The integration of remote monitoring – the use of sensors and Internet of Things (IoT) systems – also helps in supervising dehydration and shelf-life, while controlling energy consumption and machinery performance. Cooling as a service improves the financial availability of cold-chain technology, with farmers getting extended payment terms.

This makes the participation of smallholder farmers in valuable supply chains more attractive for local and international traders of fresh produce: a game-changer for global food security and livelihoods in Africa.