"More volume means more impact." A great opportunity for small potato farmers in Kenya
Written by Hans Kramer on 19 May 2022
Humphrey Mburu, the managing director and founder of Kenyan enterprise Sereni Fries was one of the very first investees on the PlusPlus platform. During an interview in May 2022, he explained that thanks to the PlusPlus loans this past year and a half, they were able to scale. Now, they are about to outgrow PlusPlus. And that’s a positive development.
Humphrey founded Sereni Fries in 2012. Before becoming an entrepreneur, Humphrey was working at a bank. He graduated from the University of Nairobi with a Bachelor in Arts, Economy and Sociology, and also studied accounting. Humphrey is very good with numbers, which he believes has a positive effect on the success of the company.
Sereni Fries is now even entering a new line of frozen potato products that will allow them to enter a brand-new market. They are growing almost exponentially, with a remarkable impact on the local economy that effects thousands of farmers and we’re of course very happy to share with you that they are about to sign an agreement with the Kenyan Kentucky Fried Chicken!
This great news! Can you tell us more about this important deal?
Humphrey: “We started our engagement with KFC franchises in Kenya, and we received a letter of intent to be their next frozen French fries supplier. This was a very big ask for us at first because the level of standards they require is so high, and it would take a lot of time for us to reach those requirements.” says Humphrey. “KFC is importing so many potato products and there are a lot of small sized farmers inside Kenya that can be included in this process. Because of our direct link with the farmers, we can ensure that. So they came back to us, agreeing that they will help us with the new challenges we were facing.
We worked on the product, and eventually agreed that what we have is good enough for mass production. We can also use the machinery that we previously used for crisps, add some components and increase their capacity to meet KFC demands and orders. The components needed were cooling equipment and oil remover. We ordered this equipment from China and by the end of April KFC visited our factory and approved that with the new components of machinery we would be all set. You need better and bigger equipment to have a bigger impact.”
Speaking of impact, can you explain briefly the progress Sereni has made regarding the number of farmers you were sourcing from this past year and a half?
“Right now, we source from about 2,000 farmers, and we have started new programs. Normally these programs or trainings involve demonstrations to the farmers, and then we try to onboard these farmers as direct suppliers. It has been really interesting for us to see the process of growth in this area, to see the farmers building trust in our business model.
When we started this business, we were buying potatoes at the local market. There was a system built on the middleman back then, cutting between the farmers and the buyer. The middleman dictated everything, and this caused a lot of problems. We were not able to control the prices. So, in 2014, I made the decision to approach the farmers directly.
Initially, we had very few farmers that agreed to work with us. But throughout the years, more and more farmers wanted to work with us, as we offer a more beneficial business model by purchasing the product directly from the farmer and not via the middleman. Our prices are better than what the middleman offers. The quality and the volume of their potatoes are also much higher due to the training.
Another advantage – and with big impact – is that Sereni pays the farmers within 15 days after delivery. This used to be after almost 45 days, so for the farmers it is a big advantage to access their payments so much quicker.”
What are your short term and long-term plans?
Sereni Fries wants more farmers to benefit but ran into its own limitations. “Our challenge became that our capacity at factory level was not very big. With our original production line, we had reached our maximum. To be able to onboard more farmers to source from -and create more impact- we needed a new market strategy. This deal provides that.
For this new product line with the coming investments, it’s safe to say that within 6 months’ time we will be fully prepared and advancing in our growth plan. To supply us for that future, we want to be able to onboard 80 new farmers per month. This would benefit 480 extra farmers in just one crop season, and almost 1,000 new farmers in a years' time.”
The frozen fries that KFC uses are currently imported from other countries. On average, Kenya imports 500 ton frozen potato products every month. KFCs intention to start sourcing this locally is a very exciting opportunity for Sereni and for many small farmers. “For the short term, we’re about to increase our capacity from 300 kg per hour to 4 tons to meet the market demand sufficiency. In the long term we will need an ideal, automated factory for frozen French fries production.”
So why do you still need another loan?
“Because we need working capital to grow. We’re anticipating 2,5 times growth. For that, we’re going to need more potatoes. That’s the main reason why we are applying for another loan. More potatoes also means more packaging materials but also more power for processing. And we’re using more frying oil, which has recently increased in value remarkably everywhere around the globe. Prices for oil are through the roof right now” states the CEO of Sereni. “So to grow, we first have extra expenses. That’s why we still need the support of PlusPlus’ investors, to be able to address the new challenges we face, in order to grow. Ultimately, these loans will help us reach more farmers, while entering the new market of frozen French fries which unlocks opportunities for even more farmers.”
Click here for more information on Sereni Fries.