Urban markets are key for TruTrade's growth
TruTrade is now directly linking smallholder farmers’ to consumers in towns and cities. We are particularly focused on meeting the needs of less-well-off clients who want to buy small amounts on a regular basis, they care about food safety and quality and need produce at an affordable price.
The advantage of the Base Of Pyramid (BOP) market is that it can provide TruTrade’s franchisees, with a year-round regular outlet. As Jacinta from AgriNet explains, "small-scale vendors pay on the day of delivery, unlike large-scale buyers or institutions, and this helps us to turn round our trade finance quickly."
In April, TruTrade decided to test a range of products on the BOP market, including: maize flour, high quality cassava flour (HQCF), beans, millet flour, simsim paste and sunflower oil. TruTrade has packaged these products and supplied them to stallholders in Kansanga, Makindye, Mbuya, Makerere, Mengo and Ntinda.
Mark Namara who has been working on the trial remarks that "during the first month, the experience with the different products has been varied. Our maize flour and high quality cassava flour have been very popular but our costs are high. With beans and sunflower oil, we need to improve our cleaning and packaging.
"We have just started testing simsim (sesame) paste and millet flour, and the early signs are positive. The clients like the product, we have the right quality and there is good potential to get some bonus back to farmers."
Consumers prefer buying small amounts of good quality produce at a relatively low price, without expensive packaging, as opposed to paying supermarket prices for the same quality of the same produce. We are testing our flour products packed in sachets of 500g and 1kg; the 500g is most popular, although the cost of packaging produce this way is also higher.
As the stall holders at the local markets have little space for storage they demand regular supplies of small quantities and this in turn means many small payments. So developing distribution operations to be able to manage this in a cost effective way is another key area.
These trials have provided essential experience and feedback from retail outlets and final consumers which will enable TruTrade to develop its marketing further. Getting good quality at a price the market can afford is the critical issue.
The BOP market has great potential for TruTrade since it constitutes such a large number of people. The key is to understand customers’ tastes and preferences and working with our networks along the different value chains to produce quality produce at an affordable price; and to make sure that after processing, packaging and distribution that there is actually a profit; which goes back to farmers as bonus and increased commissions across the network .