Contributing to Food Security through Agro-Processing: The Story of Stawi Foods and Fruits Limited
This post was written by Sonia Gloss and Albert Mwangi of USAID.
With a desire to use smart business decisions to break the cycle of poverty among smallholder farmers and to feed Kenyan families with nutritious foods, Eric Muthomi started Stawi Foods and Fruits Limited, an agro-processing company based in Nairobi, Kenya, in 2012. The company empowers women and youth by creating employment opportunities and providing inexpensive nutrition sources for families.
Securing early-stage venture capital from Golden Palm Investment Corporation, Stawi Foods began its flour processing business by processing and packing banana flour for sale to various supermarkets in Kenya. Later, it diversified its products to offer instant fortified porridge flours. Stawi Foods successfully piloted gluten-free banana flour made from processed bananas with the support of the Kenya Industrial Research and Development Institute (KIRDI), the USAID-funded Kenya Horticulture Competitiveness Project, and farmer groups in Meru County in 2015. The product received phenomenal export demand, which proved that adding bananas into flour is a profitable venture for farmers and off-taker businesses.
Enterprising spirit nurtured by U.S. programs
In 2014, Eric Muthomi joined the Young African Leaders Initiative (YALI), an initiative of the U.S. Department of State, where he was placed on the business and entrepreneurship track. He has benefitted from business funding and regular technical assistance from YALI partners such as the United States African Development Foundation (USADF) and Regional Leadership Center East Africa. The YALI program also expanded Muthomi’s network of like-minded youth for business collaboration opportunities.
Partnership with Feed the Future
In 2019, Stawi Foods partnered with the USAID-funded Feed the Future Kenya Crops and Dairy Market Systems Activity (KCDMS), driven by its desire to expand its business. The partnership expanded access to more banana farmers by contracting additional farmers and expanding their capacity for solar drying, semi processing and processing into flour.
Before partnering with KCDMS, Stawi Foods was sourcing bananas from 1,000 farmers in Eastern Kenya. The collaboration with KCDMS will expand that number to 4,000 farmers in the western regions of Migori, Homa Bay and Kisii County by the end of 2021. One year ago, Stawi Foods was producing 75 metric tonnes of their nutritious flours. Currently, the output is 91 metric tonnes per year and is expected to increase to 126 metric tonnes after the targeted expansion into Western Kenya.
Dorothy Gesare from Kisii County learned about Stawi last year during training and mobilization that was supported by KCDMS. "They have trained us well and they are hoping to get more farmers to training. We are happy with Stawi for the support they're giving us," she said.
KCDMS also supported Stawi Foods' purchases of a hot air dryer and three solar dryers. The solar dryers will minimize post-harvest losses, increase the volume of banana flour processed and improve the quality of their final product.
Through the partnership with USAID, PKF, a business and financial advisory firm, is providing Stawi Foods with technical assistance on business plan development. This will ensure they have a solid business plan to guide their operations over the next three years.
The farmer recruitment efforts were affected by COVID-19, but these efforts will be increased once normalcy returns. Stawi Foods is training the contracted farmers on good agricultural practices for banana production. They have an assured market for their bananas since they will supply producer organizations (POs) that Stawi has subcontracted for primary processing. The POs are organized as self-help groups, co-operative societies, or producer and marketing organizations to improve compliance with the basic standards required for food safety for both local and international markets.
“From my interaction with farmers, I am able to understand what their strengths and weaknesses are in farming, not only in bananas as a crop but also in banana products. I have trained farmers and followed them up to see their performance and how practical they are in implementing what they are taught. My wish is for KCDMS to continue giving us more support so that we can explore more farmers. There are so many farmers who have not been reached due to constraints in movement due to financials, and sometimes we're left with minimal options but just to hold on," said Erastus Wasikoyo, Stawi Foods' agronomist.
The contracted farmers will increase their income by reducing their post-harvest losses and having a guaranteed stable price throughout the year. Additionally, Stawi Foods will create job opportunities for smallholder farmers through the three POs at the processing units. Youth and women will be working to clean and semi-process the banana into chips.
Eric’s vision continues to grow
Stawi Foods now specializes in the processing of dried bananas and indigenous grains into nutritious flour blends for domestic markets. They have a diversified portfolio of different blended flours targeted for the whole family. The company’s leading products are Stawi Banana Flour, Stawi Junior for children, and Stawi Family for the overall family nutritional requirements. The flours are a blend of bananas, soybeans and a variety of healthy grains, fortified with minerals and vitamins. Stawi’s research and development partners are providing technology transfer support for new product development of more nutritious food products.