The Farm Fresh Food Company Research

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The Farm Fresh Food Company (“Farm Fresh”) is a private sector innovator in food processing. The company, based in Kigali, Rwanda, uses modern, environmental-efficient technologies to pressure-cook beans in recyclable, laminated pouches in large retort machines to certified quality standards. Farm Fresh sources high-quality beans from smallholder farmers, providing a lucrative, consistent market for excess production of both standard mixed beans and high-iron and zinc biofortified bean (HIBS+) varieties. Farm Fresh currently processes both “Mixed Beans” and “High Iron Beans” as per the Rwanda Standards Board “S-Mark” standard, allowing it to export duty free trade across the East African Community (EAC). The retail products are found in leading supermarkets across Rwanda, Tanzania and Kenya. The manufacturing process is highly flexible and scalable allowing the company to react to newly identified markets, such as the provision of catering-sized pouches to schools.

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Beans are among the leading contributors to nutrition security in the EAC and are considered a staple by largest proportion (41%) of population. For poor families, beans are main source of protein in their diet as well as being a major contributor to carbohydrates. Beans also form an essential component of meals provided by schools to their pupils. Indeed, school meals are recognized as an important incentive to send children to school and keep them there (especially girls) and so helps to increase school enrolment and attendance, decrease drop-out rates, and improve learning (WFP 2013).

The majority of schools in EAC, particularly those in rural area, still cook beans using fire-wood. Across the region, there is increasing environmental pressures to shift from reliance on fire-wood and the commodity is subject to price inflation and instability. Given the long preparation time in cooking beans, the cost of fire-wood is a major component to the overall cost faced by schools in providing beans regularly to their pupils. Moreover, bean supply chains across much of EAC are underdeveloped and not working to recognised standards so the dry beans sourced by many schools are of variable quality.

Farm Fresh and the research collaborators have conducted preliminary research with schools in Rwanda to launch a new catering-sized product specifically targeting the schools market segment. Although the initial response from the five-schools piloting the product has been overwhelmingly positive, the size of the market opportunity and the potential impacts unlocked by schools adopting product are poorly understood because of the paucity of available data on bean consumption in the EAC schools’ sector. This information is needed to provide the basis for making strategic decisions in scaling regional processing.

Under the proposed research, a survey will be conducted at schools across the four countries to understand the consumptions patterns, charcoal and fire wood usage, nutritional value and costs associated with current practice in feeding beans to school pupils. Follow-up surveys of those schools switching to the catering pack will then quantify changes in these usages and costs. These data will provide the basis for conducting a cost benefit analyses to determine the impact of schools switching to the catering packs of pre-cooked beans in terms of (i) costs saved, (ii) reduction in carbon emissions and (iii) improved nutritional value and food safety standards. The full characterisation of the schools’ beans sector and the potential impacts that adoption of the new processed product could help unlock, will be used to inform decisions on scaling advanced food manufacturing to address the regional opportunity.

Background to the Study

Farm Fresh is a Rwandan based food processing company which manufactures and markets a brand of precooked beans to various consumers including institutions across East Africa. Farm Fresh currently processes two types of beans: “Mixed Beans” made from Rwandan common beans and “High Iron Beans” made from, high-iron zinc-dense biofortified beans (HIBS+). Both products have secured the Rwanda Standards Board “S-Mark” which indicates the high levels of food-production and safety process adhered to, and also enable unrestricted, free trade across the East African Community (EAC). These two products are aimed at urban retail consumers and the pack sizes (700g) and price point reflect this. Farm Fresh is the only consumer-focused premium off-taker for Rwandan smallholder farmers who currently grow beans but have little or no access to high value markets. Farm Fresh was launched in 2015 and within two years was able to create significant brand awareness and have its products available in leading supermarkets in Rwanda, Tanzania and Kenya.

Recently, Farm Fresh has identified the potential of launching a new catering-sized pack targeted at schools. Preliminary research conducted with a small number of schools in Rwanda has been undertaken to help establish a price point that provides a cost saving to schools in switching from cooking dry beans on wood-fuelled fires. Sales have been piloted with five schools (using the retail packs in the first instance) since February 2018. The feedback has been overwhelmingly positive and the appetite in other schools to switch to the product is high. As such, Farm Fresh will launch a range of catering packs (2kg, 5kg, 10kg and 25kg options with a focus on 2kg products) targeted at Rwandan schools in August 2018. The Farm Fresh’s food technology, using biodegradable pouches cooked in industrial retort machines, and the market approach – targeting schools on a commercial basis unlocked by the scale of production – is unique to the sector in east Africa.

Across East Africa, the common bean (P. vulgaris) is a crop of major food security, economic and ecological importance, constituting the primary source of dietary protein and the third most important source of carbohydrates for low income household in the region. Beans are rich in quality globulin amino acids, energy, fibre, essential macro and micro-minerals and vitamins. Bean consumption across the target countries, but particularly in Rwanda, is amongst the highest in the world. If taken as single unit, the EAC would be the third producer of beans after Myanmar and India (Kilimo Trust). Despite the importance of beans to smallholder farming families, the analysis that exists on the beans sector markets concludes that for much of east Africa, the supply chains are much less structured than other staple crops, such as maize, with limited consolidation and a lack of modern storage facilities and the appropriate treatments meaning rural traders feeding provincial and main urban markets are working at very low quantities with limited, if any, focus on quality standards (e.g. USAID 2009). The levels of structured trade in beans across EAC is low relative to the potential opportunity (Kilimo Trust). Outside Nairobi and Farm Fresh in Kigali, there are few examples of bean processing companies of sizeable capacities in the region.

In East Africa, about 80% - 90% of cooking energy comes from firewood or charcoal sourced from forests, yet the forested land-area is being depleted and is largely well below global threshold of 30%. This is a particularly pertinent issue for beans which require long cooking times and so high levels of energy inputs relative to other food (Chirwa et al 2010, Adkins et al 2010). With increasing land pressure due to increasing human population densities, particularly in smaller countries like Rwanda, and greater awareness of the need to protect natural resources to mitigate associated climate change impacts, wood fuel is increasingly becoming scarce and expensive. Across EAC, most schools and other institutions and the poorer section of society, still use firewood to cook beans. These institutions face issues of accessibility and price uncertainty associated with firewood supply, as well as issues of securing consistent quality of dry beans sourced through the existing fragmented supply chains.

In the four target countries, cooked beans are an essential part of the daily school menu and important in providing the protein and calorie intake needed by children to function. Indeed, school meals are recognized as an important incentive to send children to school and keep them there (especially girls) and so helps to increase school enrolment and attendance, decrease drop-out rates, and improve learning (WFP 2013).

Despite the importance of beans to the diet of school children, particularly in rural areas, across the EAC, there is no readily available, detailed information on this important sub-sector. There is no consolidate information on the variety and amount of beans purchased by schools in the four target countries, the quality standards (if any) adhered to in purchasing and cooking beans, and the quantities of firewood used to cook this vitally important food. As such, the size of the market and the potential benefits (economic, nutritional and environmental) unlocked by schools switching from current practices to the use of environmentally-friendly, high-quality processed pre-cooked catering packs cannot be accurately quantified. Such information is essential for Farm Fresh, as well as aligned public institutions, to make decision on investing in regional processing plants, as well as understanding the commercial potential of promoting the pre-cooked catering packs, including the more expensive HIBS+ products that have improved nutritional value that may benefit school children (Nestel et al., 2006, Haas et al. 2016).

Across the target countries, the size of the schools’ bean market remains unquantified. In Rwanda alone, there are about 3,000 schools educating approximatively 3.4 million pupils. Most of these schools are cooking dry beans on wood fires every day. Work conducted with pilot schools in Rwanda indicates that a rural secondary school with 300 pupils consumes about 2-3MT of cooked beans for pupil’s lunch each month, with approximate 1m3 of fire-wood used per bean cooking day. This information is based on surveys conducted with a small number of schools in which pilot sales of the pre-cooked product has been conducted.

In this proposal, we plan to address this absence of information on bean consumption and associated fire-wood usage in schools using a detailed questionnaire survey together with analysis of beans to establish some key indicators of nutritional value. The information will enable the schools’ beans sector to be fully characterised and estimates of the impact of switching to affordable pre-cooked catering packs estimated. These estimates will be further refined by quantifying the chances associated with a selected number of schools switching to the Farm Fresh product with measure of reduce wood fuel usage, cost savings and improved nutritional intake measured empirically.

Conceptual Framework

Conceptually, a mixed methods research design will be adopted, and this will involve conducting a survey using a structure questionnaire and CAPI (computer assisted personal interviews) tools. The research tool modules will capture information on quantities of beans currently purchased and consumed; cooking time and practices and costs associated with feeding pupils beans cooked at school. This will help characterise the addressable market for a new catering pack of high-quality processed beans priced to offer a cost saving for schools. A follow-up survey of schools adopting the catering pack will allow empirical estimates of these costs savings as well as other benefits around reduced carbon (as the cooking process is more efficient and the amount of firewood used by schools will be reduced) and improved nutritional levels as the processed beans are of high quality and meeting recognised standards. The resulting information will enable estimates of the potential impact achieved through shifting to the catering packs across the school sector in the region and so help inform decisions about promoting regional expansion of the Farm Fresh food processing manufacturing plants. The framework for the study is structure around the following activities:

Questionnaire Survey

A questionnaire study will be designed, informed by the preliminary work conducted by Farm Fresh in Rwanda, to characterise the purchase, cooking and consumption of beans in schools throughout the four countries. The statistical sampling frame will be designed for each country based on the number and distribution of schools, with appropriate stratification for primary and secondary status, boarding and day school, and urban and rural settings. Sample size calculations will be guided by the preliminary results from the Rwanda schools on consumption patterns and wood-usage.

The questionnaire will gather details on: (i) the current costs associated with the purchase of beans, salt and water used in the preparation and cooking process; (ii) details of the source of beans, including any standards check and choice of varieties; (iii) the type and costs of the energy source used to cook the beans; (iv) the full cycle of the current preparation cycle of soaking and cooking dry beans including levels of salt and water used; (v) the current consumption patterns including frequency of serving and any seasonal variations; (vi) and details and associated costs of storing dry beans; (vii) the type and costs of labour used in the purchase, storage and cooking of beans and the associated energy source; (viii) preference on bean varieties and servings (e.g. portion sizes and frequency) (ix) Effect on special diets in schools (x) awareness of nutritional quality of various bean varieties and (xi) benefits of using processed beans ); and other transaction costs such as transport and communications costs.

Nutritional Analysis

Samples of the dry and cooked beans will be taken from a sub-set of schools selected for the study. The randomised sampling strategy will be designed following the design of the questionnaire sampling framework and sample size estimates based on a literature review of key indicator values. The samples will be analysed for (i) aflatoxin levels, (ii) iron levels, (iii) zinc levels (iv) bacterial contamination and (v) sodium levels (in cooked beans only).

Follow-up surveys following adoption of pre-cooked catering packs

All schools participating in the questionnaire survey will be offered the opportunity to switch to using catering packs. Follow-up surveys will be conducted with these adopter schools to measure changes in bean consumption, fuel usages and other changes in the costs and processes associated with serving beans to their pupils.

Cost Benefit analyses

By following up with schools and conducting surveys to collect detailed cost and consumptions data after they have switched to the pre-cooked products, a formal cost-benefit analysis will be done. This will enable a quantitative estimate of any cost savings associated with the switch in meal preparation as well as documenting other benefits including carbon reductions and improved nutritional intake by pupils. The results will be used to extrapolate to a potential addressable impact achieved schools adopting the precooked beans in terms of costs savings, carbon emission reduction and nutritional improvement. Sensitivity analyses will be undertaken to provide error margins around these estimates.

Informing regional processing

Ultimately, the information from the survey work and cost benefit analyses will help inform FarnFresh on the potential for expanding its food processing operational across the region based on the potential of the different country markets. Feedback from the surveys and the cost-benefit analyses will also inform potential for the HBIS+ products within the school sector – currently these varieties are more expensive than common mixed beans given their relatively low adoption.

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