This daily series focuses on business ideas for those looking to launch new ventures in Nigeria (and Africa in general). The short ideas are archived here.
The Problem
Nigeria has electricity problem and that makes it very hard to preserve food items. The implication is that we produce fairly enough during harvest time and within weeks, we are on scarcity. Besides, due to poor road networks, inadequate food preservation/storage systems and pricing asymmetry, prices are uncorrelated with some foodstuffs in villages being far cheaper when compared to the prices in nearby cities.
Opportunity
Nigeria is experiencing heavy dose of rural urban migration. Yes, more people are moving from villages to cities. Those people in cities will need to be fed. Increasingly, they want fresh vegetables and other food items from rural communities. There is a clear business opportunity to provide them with these food items.
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Action Roadmap
Rent a truck [Toyota Hilux]], visit a village market, buy food items like dried fish & like (in Cross River state), garri & like (in most South East states), etc and then come to the nearest major city and supply wholesale. Do not go retail as that will increase your risk [you would need storage, rent shops, etc]. Focus on the wholesale phase and distribute to market women at discounted rate. They would buy from you and then go and resale. You would need to know the exact market days in the rural areas so that you can have volume as more farmers come to sell on those market days.
People are doing this already in many towns in Nigeria. However, I believe we need to modernise the processes. The hygiene conditions most foodstuffs are conveyed in these trucks as dealers do it presently is unclean. But I believe we would get there soon! Because I see how supplies are delivered in the UK, I begin to question whether the ways I saw dealers handle food supplies in my own state was acceptable hygiene-wise.
I think it’s already in practice, at varying degrees in some localities. The clincher would be to solve the preservation/storage puzzle; so that all the bumper harvest don’t disappear within weeks. At the end of the day, people need money to buy food items; and the money doesn’t seem to be in many people’s hands at the moment. Billions of dollars need to be injected into this economy, without money; all the great ideas and innovations just look like child’s play.
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Another great piece from an erudite scholar. However, modernizing this process will result to a raise in the cost of these commodities such that it become difficult to sell them. Majority of our people live below poverty line and are therefore less concerned about the state of foodstuffs health wise. For instance, in Benin City, a toilet roll without branding sells better than those with branding because its cheaper even though it is poorly presented. Until our people become liberated financially, most of these great ideas may fail to scale in Nigeria.
Actually you got it all wrong. If a village that supplies vegetables to Benin City produces 2 tons and one ton wastes, the cost of the remaining 1 ton that reaches market will be more expensive. But where the whole 2 tons make it to market, supply goes high and price drops (assume demand stays constant). Process efficiency reduces transaction and distribution cost which you pay in the final product cost. Your argument if totally off – it is like saying we do not need roads as having better roads will lead to higher cost!
On branding, certainly, there is a price on premium brands. But that is not the focus of the discussion here. Foodstuffs in Nigeria are not at the level where they are sold with brand positioning. Who cares who produced the tomato? Pepper? That concern is not relevant here.