Agriko is at the forefront of disrupting a large industry – the agriculture and food sector. Leveraging on data and technology, the agro-based firm is gradually placing itself in the prime position for disrupting the food supply chain and for fundamentally changing the way consumers shop for food. In this interview, Wole Oluyemi, chairman of the Agriko Group, shares his goals and the business strategy with Odinaka Anudu, Start-Up Digest editor.
What is Agriko about?
Agriko was re-strategised in 2017 after being non-operational for about a decade. Our goal is to transform the agri-products supply chain. We recently started to implement our plan to deliver over 50 SKUs of fruits and vegetables, which include different varieties of plantain, banana, potatoes, strawberries, pineapple, mangoes, apple, carrots, ginger, tomatoes, red bell pepper (Tatase), scotch bonnet (ata rodo), African basil (efirin), bitter leaves (efo ewuro), water leaves (gbure), African spinach (efo tete), Lagos spinach (efo shoko), flute pumpkin leaves (ugwu), wild mango seeds (ogbono), and melon seeds (egusi), in addition to our existing drink distribution business which focuses on only drinks from natural fruits and not from concentrates.
You are known as a chartered accountant and a marketplace evangelist with strong presence on social media. How did you get into agriculture?
This question always comes up in every interview I have granted about Agriko. Gone are the days when agriculture is seen as a dirty business. I was literarily born and raised in a poultry farm in Ijebu Igbo, Ogun State. By the way, Ijebu Igbo is the largest town in Ogun State. My father is an agriculturist and rose up to very senior levels in the Ministry of Agriculture in Ogun State before his retirement. Poultry farming was his side hustle and that is where my parents got money to educate five children of which I am the youngest. From the proceeds of my father’s farming business, God blessed him with two civil engineers, two chartered accountants and a consultant urologist.
So, from my childhood, my parents built that love of agriculture in all of us, although none of us was really interested in studying agriculture as a course at the University level. In secondary school, I was also blessed with a very good disciplinarian teacher in agriculture by the name Adeshina. He is a brother to the former minister of agriculture – Akinwunmi Adeshina. By the way, my SSCE result in Agriculture was A1 (distinction) and I have my certificate.
While my father is a poultry and livestock producer and my eldest brother is also into cash crop production, I chose to focus on the downstream part of the agricultural value chain. I was not ready to face the production risks and the market dynamics of the upstream part of the value chain. I am more interested in positioning Agriko as a leading supplier of fruits and vegetables, focusing on the supply chain and logistics that starts from the farmgate until the produce gets to the fork at the dining table of the consumers.
Why do you think that there is a business opportunity in this area?
Like I said earlier, I have been in agriculture from when I was younger with experiences from my father’s farm. I sold chicken and eggs in several markets in Lagos, Ogun and Oyo States as a young boy. With all modesty, I think I have an idea of the agricultural market and value chain. Secondly, my work experience has also exposed me to diversified learning over the years. Above all, I am an Ijebu boy, so it is normal for me to focus on where I think the real money is.
In Nigeria, agricultural products have traditionally moved from farmer to consumer through a series of intermediaries. While this supply chain has been effective in moving produce, it also suffers from high wastage and inefficiencies. Over half of fresh produce is wasted before it reaches the consumer due to poor storage and transportation logistics. Fruits and vegetables cost three to five times more at the retail outlet, compared to the farm gate. Food is moved and stored in less hygienic conditions. These challenges, which have been there since I was born, create a good opportunity for a business like Agriko. We believe that wastage and inefficiency can be reduced, food hygiene transformed and then, ultimately, profitability of farmers improved, while still ensuring that consumers are able to get hygienic and nutritious food and drinks at very competitive prices.
As a result, we realised that most of our customers used to go to the Mile 12 market to haggle prices of food products. Now, they have a choice of dealing with a structured organisation for more hygienic products at very competitive prices.
So, who are your typical customers?
Our customers are categorised into five segments – modern retail chains, neighbourhood outlets, hotels, restaurants & institutional caterers, food processors & exporters, as well as families & cooperatives. We are working on a soft subscription model for families, as this will enable us to leverage our subscriber touch points to consistently manage supply chains and demand, and to optimise the customer experience as well as our business economics.
In order to serve our customers effectively, we have a team of Field Sales Consultants that manage the relationships with customers in their assigned geographic territory. These consultants are basically entrepreneurs as they get a percentage of their sales achievement, in addition to a guaranteed monthly fee. They are not employees; they are businessmen and women. We plan to have hundreds of such Field Sales Consultants by 2020.
Where do you get your produce from?
We currently procure about 50 varieties of fresh fruit and vegetables directly from over 12 partners such as farmer producer companies, farmer cooperatives and franchised aggregators with access to over 2,000 farmers across the various geographic regions of Nigeria. Our produce is moved in our fleet of GPS-enabled trucks, graded and sorted in our distribution centers (in Ogun and Lagos States) and delivered to our various clients within 72 hours.
We also recently signed a deal with an agritech company from Malaysia to support the production of some carefully selected exotic fruits and vegetables in Lagos. We plan to commence commercial production in 2020 after about 12-month trial production from the test facility in Lagos that is already under construction. This facility will enable us to simulate weather and humidity, in addition to water supply and other resources to allow the production of these exotic produce throughout the year in Lagos.
Agriko will continue to work with a number of technology partners to develop and consistently upgrade our post-harvest handling capability and reduce wastage and inefficiencies through the extension of shelf life, improvement in hygiene and reduction of wastage, at a cost structure suitable to the Nigerian market. These will be supported with the use of automated route optimisation and deployment of low cost refrigerated transport and storage with GPS tracking of vehicles.
Do you enjoy your foray into this business considering your other business interests and background in oil and gas, and in accounting and consultancy practice?
It is really fun for me. I enjoy being called a corporate trader by my customers in the modern trade – large supermarkets. The one I enjoy most is the unofficial title of ‘Sarki d’Abinci’ which I understand is a title that means ‘king of food’. I love food and people that follow my @WoleOluyemiCo page on Instagram know that for fact.
