Twiga Foods, a Kenyan agri-tech company known for disrupting the distribution of fresh farm produce, is taking a significant step toward diversification.
The company has recently acquired majority stakes in three regional fast-moving consumer goods (FMCG) distributors: Jumra, Sojpar, and Raisons.
This strategic move signifies Twiga’s expansion into new product categories, moving beyond its core focus on fresh produce to encompass a wide range of FMCG products.
A New Chapter for Twiga Foods
The acquisitions of Jumra, Sojpar, and Raisons extend Twiga’s reach into several key regions across Kenya: Nairobi and the Central region (Jumra), Kisumu and Western Kenya (Sojpar), and Mombasa and the Coastal region (Raisons).
While the financial details of these transactions remain undisclosed, the expansion allows Twiga to enter new product categories such as food and beverages, personal care, baby products, household goods, cleaning supplies, cosmetics, and stationery.
This strategic shift allows Twiga to build a more comprehensive distribution model. The company is now positioning itself as a player in the FMCG space, leveraging its technology capabilities to modernise the distribution process.
By combining its tech-driven approach with the established market presence and networks of the acquired distributors, Twiga is positioning itself to serve a much broader customer base, retailers and consumers alike.
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Strengthening Operational Reach
By incorporating Jumra, Sojpar, and Raisons into its fold, Twiga gains access to these companies’ well-established market positions and operational efficiencies.
Jumra operates in Nairobi and Central Kenya, Sojpar serves Kisumu and Western Kenya, and Raisons covers Mombasa and the Coastal region.
Twiga can now tap into these regional networks, enabling faster and more efficient distribution of its newly expanded product range across Kenya’s diverse markets.
Moreover, Twiga plans to integrate its cutting-edge technology, real-time data analytics, logistics optimisation, and digital credit tools into these operations.
This will enhance the efficiency of distribution networks, improve retail access to products, and offer more value to consumers.
A Strategic Response to Supply Chain Challenges
One of the most notable aspects of Twiga’s expansion strategy is its approach to addressing the deep-rooted inefficiencies in Kenya’s supply chain and retail sectors.
For years, the FMCG sector has been constrained by supply chain challenges, with informal retail players dominating the market and limiting access to goods, especially in rural and peri-urban areas.
By embedding itself in regional distributorships like Jumra, Sojpar, and Raisons, Twiga is not only solving for scale but also for inclusion.
The company aims to bring efficiency to these legacy retail networks while improving their overall operational capacity.
The integration of real-time data and logistics tools will likely empower these distributors to provide faster deliveries and access to more products in regions where retail access has traditionally been limited.
The Hybrid Approach: Tech Meets Tradition
Twiga’s decision to acquire established regional distributors rather than building new infrastructure from scratch is a smart business move.
The company’s strategy highlights how homegrown innovators in Africa can bypass the capital-intensive process of building infrastructure by partnering with well-established small and medium-sized enterprises (SMEs) that already have deep local roots.
This hybrid approach could offer significant insights for other sectors as well. From pharmaceuticals to school supplies, the model could be replicated in various industries, especially in rural and underserved regions, where access to goods and services remains a challenge.
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Overcoming Internal Struggles
Despite its recent success in acquiring regional distributors, Twiga Foods has not been without challenges.
In early 2024, founder and former CEO Peter Njonjo resigned following a period of operational difficulties that included staff layoffs and delayed payments to suppliers.
These challenges were compounded by financial struggles, such as a dispute over a $261,878 debt to Incentro Africa for Google Cloud services, which led to a threat of liquidation.
Thankfully, the dispute was settled out of court after Twiga secured fresh investments, and the company worked through its restructuring efforts.
As part of these efforts, Twiga reduced its workforce by 40% to streamline operations and reduce costs. New CEO Charles Ballard, formerly of Jumia Kenya, was brought on board to guide the company through this critical phase of transformation.
Ballard’s leadership will be pivotal in steering Twiga through the integration of its new acquisitions and ensuring long-term financial stability.
The Road Ahead: A Bold Vision for Twiga
Looking forward, Twiga’s strategic acquisitions are a clear indication of the company’s commitment to growth and diversification.
The success of this strategy will depend on how well the company can integrate the newly acquired distributors, maintain leadership continuity, and stabilise its finances while adapting to the dynamic FMCG landscape in Kenya.
As the company continues to integrate Jumra, Sojpar, and Raisons into its ecosystem, it will need to balance efficiency with resilience, especially as it ventures into lower-margin products like FMCG goods that have longer shelf lives and slower turnover compared to fresh produce.
The way Twiga adapts to these challenges will be crucial in determining whether this expansion model can scale across other sectors and regions in Africa.
Ronnie Paul is a seasoned writer and analyst with a prolific portfolio of over 1,000 published articles, specialising in fintech, cryptocurrency, and digital finance at Africa Digest News.
