Why We Invested: NatureLock
Food insecurity affects 55 percent of people in sub-Saharan Africa, who lack access to nutritious and affordable food. With 40 to 50 percent of people living below the poverty line, and an average daily income of less than $1.25, nutritious nutritional food is just out of reach for many. People on low incomes sometimes exchange more expensive fruit and vegetables for nutrient-poor, yet inexpensive starchy staples when they are in financial distress.
At the same time, many initiatives that serve smallholder farmers today are focused on increasing yields and productivity without considering barriers to market access, storage, and processing. This subsequently increases the amount of post-harvest loss experienced by farmers and increases market prices as product moves through multiple parties before getting to the end consumer, inflating prices along the way. Global food loss and waste is estimated at one-third of food produced, causing economic losses of $940B per year. It consumes a quarter of water used by agriculture and accounts for eight percent of global greenhouse gases (lost and wasted food is the third largest greenhouse gas emitter in the world after China and the United States). Post-harvest losses across sub-Saharan Africa can be as high as 50 percent due to logistical and infrastructure challenges and threaten food security, incomes, and livelihoods in sub-Saharan Africa.
Extending the Shelf-Life of Fruits and Vegetables
The food security challenge and negative environmental impacts of wasted food production are likely to continue to increase, as demand for food grows due to population growth and increasing incomes in developing countries. Reducing food loss and waste is critical to reduce poverty, improve nutrition, manage food security, and mitigate climate change. To date, sub-Saharan Africa has suffered from an inefficient ability to preserve fresh produce due to the costly technology requirements of refrigeration and dehydration. Existing preservation techniques that could be used for fruits and vegetables includes freeze drying, which requires significant investment in infrastructure and consumes a lot of energy, and dehydration which can degrade the nutritional value of product.
That is why FINCA Ventures invested in NatureLock, a food processing company in Kenya that designed a unique preservation method that blends natural starches and fibers that are readily available in Africa to dehydrate fruits and vegetables, protecting the finished product from oxygen, to retain nutrients and taste and increase the shelf life of the product. NatureLock’s first product launch, StewsDay, is an instant Ndengu stew designed for the low-income mass market urban consumer.
The company is looking to design healthy alternatives to less nutritional easy-to-prepare products currently available in the market while decreasing the preparation time for everyday local favorites. The products are rich in fiber and daily essential nutrients like natural vitamins, minerals, and proteins and the technology allows them to be preservative- and additive-free.
Preventing Food Waste One Vegetable at a Time
Naturelock sources 70 percent of its inputs from surplus or ready-to-expire produce to reduce food losses experienced by farmers, with the plan to bring this to 100 percent as they scale and build out their supplier network. To avoid disrupting the market, the company works with aggregators, like Farm to Feed, that are specifically buying food waste from farmers at less than market / farm gate price – instances in which farmers would otherwise throw their product away. As NatureLock expands their product offering and geographic scope, we are excited to find synergies among our other agriculture portfolio companies to continue to reduce market inefficiencies.
Investing in Women Across the Value Chain
In line with FINCA Ventures’ gender lens investment approach, NatureLock is committed to increasing economic opportunities for women throughout their process, starting with employing mainly single mothers at their production facility. NatureLock has created a daycare center for its employees to bring their children throughout the workday to make this more convenient for them. And to incorporate women into their distribution strategy, NatureLock is providing women with the opportunity to start their own micro-enterprises through turn-key street carts and kiosks used to boost brand awareness and increase sampling points of the StewsDay product in high traffic locations. The company will look to recruit entrepreneurs from the Chamas women’s groups (local community savings and investment groups) who will serve as brand ambassadors.
Bringing Technology to the Last Mile
The company has plans to build out decentralized collection and processing centers on mid-size farms, comprised of cold storage, wet processing, and dehydration, in addition to expanding this to equipping smallholder farmer networks with dehydration units to preserve their surplus and ripe produce and sell the products directly to NatureLock. This will help to further eliminate food loss that occurs during transport from farm to processing facility and increase income opportunities at the farm level.
Joining Forces to Reduce Post-Harvest Loss and Increase Access to Nutritious Food
Naturelock’s co-founders, Tei Mukunya Oundo and Wilco Vermeer, have extensive experience in the food and beverage space. Tei previously founded Azuri Health, a Kenyan company with the mission to reduce post-harvest losses by sourcing fruits from smallholder farmers to turn into dried snacks for the local market. Wilco was a co-founder of Tuttifoodi, a food processor in the Netherlands that sourced produce from farmers in Kenya to produce dry fruit and fiber mixes, after a career in operational and marketing roles at Unilever, Coca Cola and Nestle. The two joined forces to realize their passion of reducing post-harvest losses while increasing access to nutritious food for low-income consumers on the continent.
FINCA Ventures believes that NatureLock’s unique preservation method has the potential to become an effective solution to fighting the major post-harvest losses experienced by smallholder farmers across sub-Saharan Africa while enabling access to affordable, nutritious foods for mass market consumers. We can’t wait to feast our eyes on what future products Naturelock has on the menu for Kenyans and beyond!