Podcast | The Low-How Ep5

Nuts about the circular economy

January 2023

Welcome to The Low-How, from Bopinc. Where we share our know-how about low-income markets.

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In this episode: We’re going nuts about the circular economy

Food waste and post-harvest losses in value chains around the world result in tremendous amounts of nutritious food being lost. Fortunately, circular agribusiness entrepreneurs in East Africa are working hard to turn food waste and byproducts into affordable, nutritious foods and organic fertilisers. Through programmes like O-Farms and BeniCaju, Bopinc works with local circular entrepreneurs in countries like Kenya and Benin to create new value from food waste. In this episode, The Low-How talks with Doreen Nyambura Njau, Factory Manager at Big Thunder Nuts, and Valentin Sènou Atchaoue, Regional Business Manager at TechnoServe, about their experience creating new value with waste from macadamia and cashew value chains. Join Bopinc as we go nuts about the circular economy in this episode of The Low-How!


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About the podcast

The Low-How is a new series of podcasts, launched by Bopinc in October 2022. In each episode, the Bopinc team will share our know-how about low-income markets. By harnessing the power of entrepreneurship across the value chain, we aim to improve the quality of life for consumers and entrepreneurs at the base of the economic pyramid.


Akoji John: You are listening to The Low-How from Bopinc, where we share our know-how about low-income markets. Bopinc works with entrepreneurs and companies to make the best products and services available where they matter the most.

Beryl Oyier: We are all about using the power of entrepreneurship to fulfill aspirations and meet the needs of people at the base of the economic pyramid.

Sumaiya Bushra: Come along with us as we seek out the right innovations, right for low-income markets.

Patrick: Hello, my name is Patrick Guyer and I'm the Impact Measurement and Insights lead for Bopinc. 

Beryl: And I'm Beryl Oyier, the Country Director for Bopinc Kenya. 

Patrick: Hey Beryl, nice to see you today. 

Beryl: Nice to see you Patrick. 

Patrick: So Beryl, what are we talking about today on the Low-How? 

Beryl: Today we are talking about nuts, so we are nuts about the circular economy. And we are going to look at, uh, cashews and macadamia in particular, and reducing food waste and circularity as a topic. 

Patrick: Okay, so that was the jargon alarm that goes off when we get a little bit too carried away with terms that maybe not all our listeners are familiar with. Okay? What do we mean when we say circular?

Beryl: So when we talk about the circular economy, uh, we mean an economy where the idea of waste is designed out of the system and inputs maintain their value as long as possible. So, for example, a circular agribusiness is a commercial venture, uh, that brings food losses, from west and spoilage, or by-products from food production and processing, back into the food system. 

Patrick: Okay, for the big picture, can you tell our listeners why circularity is so important? What would it mean to build a circular economy and why does that matter? 

Beryl: Well, this is for plenty of reasons, Patrick. For example, if you take food waste as an example, and looking at what the World Food Program mentions, that one third of all food produced around the world is either lost or wasted.

Patrick: One third. 

Beryl: One third. Yes. So that works out to roughly 1.3 billion tons of food per year. And this is enough to feed all who are currently undernourished, twice over. 

Patrick: Wow, that's amazing. So, so what you're saying is that we can bring that food back into the food system? 

Beryl: Yes, precisely. And this can feed people and animals, and it can also nourish the soil, through organic compost, for example. 

Patrick: Okay. And what, so you've already mentioned a couple, but are there other benefits of moving towards circular business models and a circular economy as well? 

Beryl: Yes, definitely. And we are optimistic that circular holds the potential to feed the world, like I said, more sustainably, keep nutritional value in the food system and even regenerate natural ecosystems at the same. So we also see supporting circular agribusinesses here in East Africa as a way of bringing quality foods and fertilizers to market, uh, that are locally produced. Also generating employment and economic development in the communities that we work in.

Patrick: Okay, so Beryl, can you share an example or two of a business that's actually working with a circular business model, right now? Perhaps start here in Kenya? 

Beryl: Yes, sure. Uh, so in Kenya, uh, there's a business, called Safi Organics, and this is a company that helps rural communities create their own organic fertilizer out of rice husks using an energy-efficient process that they have developed. 

Patrick: Okay, cool. And then I think there's some nice examples from Uganda too, right? 

Beryl: Yes. So in Uganda, we have, RENA Beverage Solutions Limited. And what they do is that they brew a heathful tea from unused seeds and flowers of hibiscus and passion fruit plants. 

Patrick: Okay, cool. So, Beryl, what kinds of things is Bopinc doing now to support circular agri-businesses like the ones that you just mentioned? 

Beryl: Yeah, Bopinc is doing this through a few projects that we are running both in East and West Africa, and I'll pick two projects and highlight one for East Africa and one for West Africa. So for East Africa, we are working with O-Farms, that is being implemented in Kenya and Uganda. In West Africa, we are working with, BeninCajù, that is being implemented in Benin. 

Patrick: So can you tell us a little more about O-Farms? 

Beryl: Yes, O-Farms is an accelerator program, for small and medium-sized circular agri-businesses, run by Bopinc, but we also partner with the Village Capital and entrepreneurship support organisations in Kenya and in Uganda. So, we are funded by the IKEA Foundation and the program aims to accelerate 40 circular agri-businesses and to make circular a mainstream approach in East Africa. 

Patrick: Okay. And you mentioned an example from Benin also, right?

Beryl: Yes. BeninCajù. So here we supported a group of Beninese entrepreneurs to valorise the forgotten treasure of cashew, which is the cashew apple. 

Patrick: Okay, well, I love cashew nuts, but what is a cashew apple?

Beryl: So the cashew apple is, you know, cashew nuts grow on an apple-like fruit, that is edible and highly nutritious. Yet most cashew farmers discard the fruit when harvesting the nuts. 

Patrick: Wow. And so, when we're talking about cashews, uh, that reminds me that you said earlier we'd be talking about nuts today. Is that also an O-Farms tie-in here? 

Beryl: Yes. One of the businesses we are working with in the O-Farms accelerator in Kenya is Big Thunder Nuts, and this is a company that is making new products out of macadamia nuts that can't be sold for retail.

Patrick: We traveled out of Nairobi to the Kenyan city of Thika, where Big Thunder Nuts opened its new facility earlier in 2022. I had a chance to sit down with Big Thunder's factory manager to talk about what kinds of circular products you can make from macadamia, and the opportunities and challenges facing circular agri-businesses in Kenya.

Doreen: My name is Doreen Nyambura Njau. I'm the factory manager at the Big Thunder Mining Company. Currently, the circular products that we are working with is the shells from macademia nuts. We have cracking dust that is gotten when we have cracked our nuts. And also we have moulded nuts and also we have the grade B, the rejects that have insect damage.

So that's what we work with in our agri-circularity sector. The dust and the moulded nuts are used in making chicken feeds and also pig feeds. The biomass shells, they're used as a biomass as the name says. The idea is to help reduce the cost of production when it comes to chicken feeds. And since we have the material that is part of formulating the feeds, we are ready to partner with different stakeholders in the sector to help us come up with a feed that will enable us and farmers to acquire a feed that is of high quality, but over that is quite affordable. The market is big. It is big.

Patrick: I asked Doreen, what makes doing business as a circular enterprise in the nuts sector particularly challenging.

Doreen: Well, our business is seasonal. That's one of our biggest challenges because we are open from February and most of processors we close at October. So we really have a short span, and that's the challenge. For entrepreneurs, we really need our regulatory bodies to meet us halfway because it's very challenging. We cannot really know all the regulatory bodies that we have, so that's one of the key challenges in our businesses. When it comes to penetration in a market, it's never easy. It's hard work. We have to wait for a period that you, you, you are not in control of. But once the market is open, you can't even satisfy it. There's a challenge in penetration and satisfying the market. 

Patrick: I also asked about what kinds of positive social and environmental impacts Big Thunder contributes to. 

Doreen: One, I would say we really are contributing to employment when we are in the full production season. We create a lot of employment. Secondly, environmentally, we are promoting it by selling these shells to other processors and us using them, they're environmentally friendly because they do not emit a lot of smoke. So one, it's the environmental part and also the social, the social impact part.

Our farmers as, the Big Thunder, we give them trainings on good agricultural practices, on taking care of their macadamia so that we can get high-quality macadamia.

Patrick: You know, Beryl, that was really cool, visiting Big Thunder and talking with Doreen. All the things they're doing with macadamia nuts and the impacts they're contributing to. 

Beryl: Yes. And now let's go all the way to Benin in West Africa and we'll hear from Valentin Atchaoue, the regional business manager with our partner TechnoServe, about their work on commercializing cashew apples.

Valentin: If you take cashew, cashew is not just a nut. The full product comes with the nut and a fruit. And the fruit is, let's say eight times heavier than the nut itself, actually. So if you have like, one gram for the nut, you have eight grams for the fruit. Okay? So this is quite, you know, big. So it is well known actually, but people-I mean, let's say in West Africa, is considered as a waste. Why? Because there is a kind of, uh, I mean perception that it is very dangerous. Like when you consume it, for example, and you, you consume like, uh, sugar or milk product, you can, you may die, which is absolutely wrong actually. So that is the reason why actually people consider this as a waste and nobody's interested in that.

But if you take your food, it's actually let's say health benefit, you have it, contains more vitamin than orange, than lemon. All these things. And, some other, I mean things like magnesium and all these things. So it's actually a very healthy product. The first product that people know is, uh, made juice, which you can make from the apple. When you crush it, you just sell the juice, which is a pure juice that you can make. You can make wine from it. You can make beer from it, you can make, I mean hamburger and I mean a lot of product from it actually. So you have, you have like candies, sweets, all these things that you can make, uh, the country that is actually adding value to that product, um, to that product is Brazil.

And, I think, African countries which are producing, uh, cashew, will gain a lot, you know, by taking the example from Brazil.

Patrick: I asked Valentin what cashew producers stand to gain by turning cashew apples from waste into new products. 

Valentin: Let me make it simple. In a country like Benin, for example, okay. Where I'm from, producing let's say, uh, 150,000 metric tons of raw cashew nuts, okay? Will be producing kind of, uh, 1.2 million tons of apple. So can you imagine even if like you create value by selling it simply, okay, a hundred francs CFA [West African CFA franc] per kilo, you see what can be the benefit in terms of, revenue to the producers? And, for now, it is just like, let's say the nut that is commercialized, and the nut is considered as a man, man product.

So if you take typically a farm, for example, though, the whole family is working on the farm, the revenue that is generated from the nuts is going directly to the man. Now, if you make the apple, let's say a woman’s product, because as for now is just considered as a waste. So, if the women can just use that product, the apple, which is considered the waste and sell it, let's say even 25 fracs CFA per kilo, you see the revenue that it can generate.

We started in Benin. I mean, there used to be some initiative in terms of, you know, apple processing. Making the juice and all these things. So I mean, with the help of BeninCajù and the contribution of building as well we were able to like, you know, to upscale it actually. And then to make it like, a very good business model. So, we started, when BeninCajù was alone, we started with, a volume of 60,000 bottles. And, uh, later on it went up to 200,000 bottles. Okay? The market was very small and the demand was not that strong.

But with the help of, you know, campaign, let's say marketing, all strategy and all these things here, we created that demand in Benin for that. Most of the consumers are not like, uh, you know, the producers themselves, they're not really like, I mean literate people, you know?

Uh, so the only thing you can do to really convince them that, they need to consume that product and if they consume it, it’s not going to be dangerous for them is to show them, actually to show it yourself. So what we used to do is, uh, take the product and mix it. We created a kind of cocktail, you know, with the product and milk and you can drink it in front of them actually. And you come back and show them that, yeah, you are still alive. You are not dead. So we did, I mean we did a lot. I mean, different places at street fairs and so and people now, started believing that now, I mean, like fighting the idea that, if you eat it, it's not dangerous for you or whatever.

So yeah. So that's basically what we used to do. And yeah, the research was, quite good. Yeah. So, 200,000 bottles could, like easily be sold. Nobody could imagine that in the past, this could be done actually. Okay. So now while the demand in Benin is there, more people can come, make like apple processing a business idea and make it successful.

So the demand is there actually, and the market is there now. So we've been able to create the market for that, let's say, out of nowhere actually. Nobody could imagine that one day, apple could be processed and, you know, be sold in the market.

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Patrick: So, Beryl, I'm thinking that circular has a lot of advantages. For consumers, for small businesses, and probably most of all for the planet. Uh, what's the downside? Is anyone against circular approaches to agriculture and food production?

Beryl: Well, I don't think anyone is really against it, but it's a big shift from the kind of linear, “take-make-waste” mentality that remains the status quo. Uh, there's a lot of work to be done to make circular a mainstream approach for sure. 

Patrick: I can imagine. So what, from your perspective, what are some of the things that need to be done if we're serious about taking the economy in a circular direction? 

Beryl: Yes. Uh, one is to raise consumer awareness about circular products. Uh, people just don't know enough about circularity and its benefits. For example, entrepreneurs have a big role here, uh, as well as agricultural trade organizations and other actors that support entrepreneurship. Yeah. So we need to look at the whole ecosystem and the stakeholders that are involved. 

Patrick: And it sounds like the two Bopinc projects we've looked at, the O-Farms and BeninCajù, those are the sort of beginning steps of doing that. Right. Um, and what are we learning from those projects about how to do this? How to actually support the growth of this ecosystem? 

Beryl: So our research shows, uh, that consumers here in Kenya do care about sustainability, and the environment as well. But they're very focused on getting value for money. Especially for the base of the pyramid consumers. Yeah. Uh, so they like the idea of sustainable, or sustainably produced products, uh, circular products, for instance, but they're unlikely to pay a premium price for that. Uh, so circular products need to be high quality. They need good marketing and distribution so that the consumers also acccess it as, uh, something that they can pay value for. 

Patrick: Mm. Okay. So that sounds like a challenge that lots of businesses face. 

Beryl: Yes, definitely. Um, it's not any different, uh, but circular entrepreneurs need to educate the public through their marketing and branding to show why circular products are better for everyone and the planet.

Patrick: Okay. So that's what entrepreneurs need to be working on. And of course, it sounds like we're trying our best to support some of them through our projects like O-Farms and BeninCajù, uh, but what else needs to be done? What other actors are involved in this? 

Beryl: Yeah, so another area of need is in the policy space. Small policy changes can make a big difference for circular entrepreneurs, for example, uh, in ensuring that national regulators have specific standards for circular agribusinesses, modifying subsidy schemes to keep circular products price competitive and extending tax incentives to circular producers are all urgent, but attainable policy goals. 

Patrick: Okay. And, and what about the investment side? Are circular entrepreneurs able to access the kind of financing that they need to scale up their businesses? 

Beryl: This is definitely a big challenge, uh, because some businesses in our O-Farms program, came into the accelerator with external financing, but not so many. So what we are seeing is that investors, especially impact investors, uh, and “patient capital” investors are very curious about circular agribusiness. But they want more evidence about the viability of circular business models. So we are supporting research and case studies about successful, circular businesses to help make that case.

Patrick: Okay. So, it sounds like there's quite a lot that needs to be done. 

Beryl: Yeah, there is. But there's also a lot happening and it's very exciting. 

Patrick: Yeah. Really sounds like it. So from macadamia-based animal feeds in Kenya to cashew apple juice in Benin, we've heard about quite a few compelling examples today already.

Beryl: And there's so much more. For example, companies making low-cost yogurt out of whey, making cheese, or animal feed from processed sugarcane. And those are just a few of many, many more examples that we're seeing. 

Patrick: All right. And many of these sounds delicious. Is there anywhere around here we could get some circular lunch after we finish recording?

Beryl: Uh, not, no, not yet. But I hope there will be some soon! 

Patrick: Okay. I hope so. Maybe by my next visit. 

Beryl: Yes, definitely. 

Patrick: Wow. Well Beryl, pleasure talking with you about this today. Thank you so much.

Beryl: Karibu sana. Thank you.

Patrick: And we'd also like to thank Doreen Nyambura Njau, Moses Wachira, Valentin Atchaoue, Valéria Varga, and Brenda Wangari for their contributions to this episode. We'll talk to you next time!