Getting from Farm to Table in Africa: Why We Invested in GET IT
July 23, 2020
For a moment, imagine travel restrictions are lifted. You’ve just returned to your safari lodge after an awe-inspiring trek observing a family of gorillas in their natural habitat at Rwanda’s Volcanoes National Park. You sit down for lunch and you’re welcomed with the freshest meal you’ve had in ages — tree tomato gazpacho and roasted beetroot tartar as appetizers and roasted duck with butternut squash puree as your main course. You may be surprised at the quality of the food. You may be wondering where and how this remote lodge sourced such fresh ingredients. Of course, East Africa, and Africa more broadly, has long been known for its incredible wildlife and landscapes, but not necessarily its culinary scene. As tourism continues to grow, establishments like restaurants, hotels, and conference venues also become more suitable for global travelers like you. This doesn’t happen overnight, however — a significant amount of time, money, and energy was required behind the scenes to serve the mouth-watering meal you just had. With $194B in African GDP driven by travel and tourism, we believe there is a huge opportunity to accelerate the emerging formal food service market, which can in turn provide a spark for Africa’s economic transformation.
Sysco, the world’s largest food distributor, alone earns $60B in annual revenue³. They operate more than 320 distribution facilities serving more than 650,000 customers. However, its success is highly dependent on strong existing infrastructure, including warehouses, cold trucks, commercial farming, and sophisticated manufacturing. Across the majority of the African continent, this infrastructure is underdeveloped or simply doesn’t exist. Ever wonder why McDonald’s is only present in 4 of 54 African countries? In addition to impacting the tourism and hospitality industry, this poses a significant threat to the long-term food security of Africa’s 1.3B inhabitants.
The Status Quo in Rwanda
Fruits and vegetables are grown on 150 square meter plots of land by smallholder farmers. Once harvested, these farmers need to immediately sell their produce to aggregators. Those aggregators sell this produce to informal traders. Those traders then sell to informal grocers in open-air markets. Individuals and commercial kitchens alike then procure their food supply from these crowded open-air markets that do not always meet the highest sanitary standards. Along the way, there are high spoilage rates due to the lack of cold chain infrastructure, price increases with each additional intermediary, and little transparency over the origins of the produce. The result is an end product that is of varying quality with no tracing to where, when, or how it was produced. Stock-outs are common and prices fluctuate every day. As a restaurant business, you’re spending hours at the market haggling over prices and searching for the quality and variety that you need. It is therefore difficult to build high-quality, reliable menus that keep customers coming back, while also building a profitable business with predictable cash flows.
Enter GET IT
What started as a personal frustration of GET IT’s founder Lauren Nkuranga in finding quality ingredients while living in Kigali in 2014, has since turned into the first fruit and vegetable supplier across East, West, and Central Africa to be ISO 22000 food safety certified, serving some of the largest hospitality customers in Rwanda. Quickly recognizing that infrastructure in Rwanda was a real barrier, Lauren decided that backward and forward integration would be required to build a successful food service business. What that meant was the Company found access to the handful of cold trucks that were functional in the country, built a cold storage facility from scratch before eventually upgrading to a internationally-certified packhouse, and formed sourcing relationships with Rwanda’s few “commercial” farms (in addition to other smallholder farms).
By establishing itself as a reputable business supporting the growth of the Rwandan economy, GET IT has also built relationships with the government. So when the government wanted to introduce commercial horticulture farming schemes on aggregated smallholder land, GET IT was top of mind as a potential partner. Starting in 2018, GET IT laid down the groundwork for the farming of ginger and chilies for export, leveraging their network in South Africa for offtake agreements. Their first harvests and exports began in May 2020.
The eventual goal here is to reach a level of scale that can support both the international and domestic market as well as expand processing capabilities to locally produce dry goods like chili and ginger powders.
What GET IT Customers Have to Say
Mythos Hotel -- “Our previous supplier delivered products in the back of a car. When we switched to GET IT, it looked completely different. They source from great producers, have cold chain, better consistency, clean crates. The quality is important because governance is increasing, we get inspections regularly. We no longer order produce from anyone else. Our pricing is set for the month and GET IT is flexible and understanding when we pay slow. If GET IT expands its product mix, we would love to have access to syrups, garnishings, and high-end baking products⁴.”
Singita Lodge -- “Currently we source produce and dry goods from GET IT. Recently, Mark (GET IT CEO) has been working on getting us meat. They’re also always willing to help us with logistics in getting products from South Africa. Their pricing is half that of other suppliers. If GET IT can add meat, dairy, and seafood, we will procure 100% of our food needs from them. Quality and reliability are the most important factors⁴.”
Griffith Foods & Crown National -- “We want to shift market segments in the US and Europe towards organic produce. Annual demand for chilies in India is 1 million MT — it’s much easier to teach new farmers sustainable farming practices compared to traditional farmers in India who have been farming for 30+ years. We would also love to see the processing of chilies locally in Rwanda to reduce the cost of transport internationally. We have known Mark for years and recognize the businesses he has previously built up in South Africa. He’ll figure out how to make this work⁴.”
VestedWorld is excited to lead GET IT’s $1M Series A round, with participation from Chandaria Capital and angel investors. With this new investment, they’re further expanding their product line to include a wider range of dry goods and adding new product lines including meat, dairy, and seafood. The problem GET IT is trying to address is not unique to Rwanda. Formal food distribution is a gap across East, West, and Central Africa and GET IT strives to become a leader in the region.
You might be wondering how has COVID-19 impacted a business primarily serving the tourism and hospitality industry. Rwanda has had only about 1,400+ cases since March and 4 deaths. The government implemented a nationwide lockdown on March 20. As you can imagine, the vast majority of hotels, restaurants, and safari lodges were closed. As of June, some restrictions have been lifted with further reopening expected in the coming weeks. This has of course affected GET IT’s core business of B2B food distribution but in response, the Company reintroduced direct-to-consumer food deliveries and expanded its shelf-stable dry goods portfolio. In addition, the first harvests from their ginger farms occurred in May and are providing a critical secondary revenue stream.
At a time when investors globally were pulling out of investment deals or drastically cutting agreed-upon valuations, we were forced to ask ourselves what was the right decision for VestedWorld. We had the choice of investing in a food service startup that serves the very industries that have been halted in the midst of a global epidemic, and ultimately recognized that the broader needs in the market don’t disappear. We’re long-term investors who believe in GET IT’s vision of transforming Africa’s formal food service sector and unlocking greater food security in the process, one country at a time. We also strongly believe this is the right team to take on the challenge. Lauren’s resilience and visionary nature perfectly complements Mark’s operational expertise and no-nonsense approach. COVID or not, we are incredibly excited to join them on this journey!