Cold storage for African farmers: Entrepreneurs see big potential

A SokoFresh solar-powered cold storage facility.

A SokoFresh solar-powered cold-storage facility.

A growing number of entrepreneurs and investors in Africa are recognising the potential of providing smallholder farmers with cold-storage solutions.

Africa’s farmers often lack a place to store their harvested perishable crops, which creates an urgency to sell their produce quickly and exposes them to exploitation from brokers. Additionally, it is estimated that 30-40% of horticultural produce in sub-Saharan Africa does not make it to market, hindered by informal and unreliable supply chains.

Earlier this month, US-based impact investment fund Acumen announced its investment in SokoFresh, a Kenyan enterprise that offers smallholder farmers solar-powered, mobile cold-storage facilities for vegetables and herbs in rural areas. Businesses that purchase perishable crops from local farmers can rent storage space from SokoFresh. The company also provides farmers with a service that connects them directly to large-scale buyers of agricultural produce, including retailers and exporters.

Another business tapping into this opportunity is Savenda Capital, which is in the process of establishing a modern, purpose-built fresh produce market in Zambia’s capital, Lusaka, providing small-scale farmers an alternative to informal open-air markets that lack cold-storage space and often have exploitative commission structures. The 6,400m2 ZAMBIAFresh Lusaka Market will feature refrigeration and ripening rooms to reduce spoilage and ensure freshness. The venture aims to offer fair prices for buyers and sellers through transparent market rules and a trading software system. It will implement strict food handling and hygiene standards and traceability of all produce to its original producer. [Read more: Rethinking the traditional open-air fruit and veg market]

In Nigeria, ColdHubs also operates solar-powered cold rooms, supplying a pay-as-you-store service for fresh produce to smallholder farmers and market merchants. Each 3m2 cooling unit can hold three tonnes of food. A customer pays 200 Nigerian naira (about half a US dollar) to store fresh produce in a 20kg returnable plastic crate, for one day. Founded in 2015, today the company has 54 hubs in 22 states. [Read more: Pay-as-you-go cold storage – Businessman wants to expand beyond Nigeria]

The demand for refrigeration is not limited to small-scale farmers. Market merchants and other businesses in countries with limited power supply from the grid also require these solutions. Nigeria-based Koolboks is targeting this group and has developed an off-grid, solar-powered unit that works as a refrigerator or freezer, which can stay cool for up to four days without power and sunlight. The units also come with two LED lighting bulbs and USB ports for charging mobile phones. Koolboks has integrated pay-as-you-go technology, which makes the units more affordable. Last year, the business closed a $2.5 million seed funding round, led by Aruwa Capital Management, bringing its total investment to date to $3.5 million. [Read more: Nigerian entrepreneur sees opportunity in off-grid freezers]