Vetting of food-processing options for their potential to utilize clean energy and food grade steam

Vetting of food processing
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Situation

A recent investment in generating clean and renewable energy (co-generation) in a remote part of Kenya’s Rift Valley brought a potential new supply of food-grade steam and reliable green energy.

The client, a county government, required a detailed opportunity assessment to evaluate the commercial potential of a food processing cluster leveraging the region’s agro-climatic advantages in vegetable production and now the opportunity to commercially utilize clean, renewable energy.

Industries
Market Analysis & Opportunity Scoping
Smallholder Agriculture Development
Agribusiness & Food Systems
Electric Power & Clean Energy
Engagement

ORI applied its proprietary approach to sector analysis and industrial cluster evaluation to arrive at a shortlist and final selection of the most attractive value chains. Broadly, the methodology included: First, a detailed assessment of market systems to identify main drivers of growth and value chains with the highest market and growth potential, potential for inclusiveness, and degree of relative complexity, among others. The result of this stage was a longlist of high-potential value chains. Second, a shortlist of value chains was generated by ranking the longlist based on criteria, including market size, competitiveness, attractiveness, and feasibility of potential interventions to drive lasting change. Third, the shortlist was further assessed to select and arrive at one to two best opportunity value chains/options.

Consistent with this broad methodology, ORI designed a context specific due diligence approach and shortlisted attractive industries/value chains from a longlist of possibilities. We vetted the market attractiveness of those found viable by the technical analysis. Our approach was to surface high-potential “steam intensive industries” within the food and beverages sector.

ORI supported the county government by:

  • Gathering, compiling, and analyzing national level market data to arrive at a long list of six value chains.
  • Examining potential opportunities for investment in processed nutritious foods, including those derived from livestock, vegetables, and fruit, based on the agricultural potential of the county and arriving at a longlist.
  • Carrying out – with the help of a technical partner – due diligence on farmland suitability for various agriculture and livestock production options, topography, soil factors, water, and climate suitability.
  • Evaluating the results of the technical due diligence against the longlist of potentially attractive value chain opportunities.
  • Assessing a range of competitive business models and sustainability/impact models, building on ORI’s team expertise.
  • Building a business case for investment in agro-processing, technology, and facility options, including the growth trajectory of commercial-scale processing operations.
  • Designing a smallholder vegetable supply chain development project and mapping potential funders and partners. This included engagement with target smallholder farmers, community leaders, produce off-takers, and logistics and transportation companies.
  • Preparing a resourcing plan and work plan for delivering key activities.
Outcomes
  • The county government utilized ORI’s findings, insights, and recommendations to engage in structured negotiations with the energy generating company and potential food-processing investors.
  • A smallholder development project proposal was used to productively engage identified funders and partners.
  • Critical dependencies and process analytics were utilized to identify and manage risks and community expectations, paving a path for successful project launch.