Banana business

In Kenya, farmers have increased banana production, and in doing so they have increased their income both directly and indirectly. They not only have more income from their banana crops, but they are developing new income streams from the banana tree ‘stems’. The benefits of this initiative are financial, ecological and social. David Parrish tells their story…
Published —
02.12.19
Writer —
Movement —
,
Industry —

Farmers in Kirinyaga county in Kenya support each other through an association based in Kutus Town called ICOSEED: Integrated Community Organization for Sustainable Empowerment and Education for Development. Established in 2008, it’s a not-for-profit organisation or ’NGO’.

ICOSEED enables farmers in the local community to learn from each other about farming techniques and collectively research new production methods. When I visited their headquarters in Kutus Town, they showed me a field growing a new variety of rice, which yields a better crop. Naturally, farmers are reluctant to change traditional methods or crops, so they need to be convinced that any change will produce results. In this way they can collectively test new ideas with minimal risk to any individual farmer.

The members of ICOSEED are developing their organisation in an ambitious and strategic way. As well as continuing the core work of supporting farming and increasing production, they are identifying new opportunities. In 2016, ICOSEED set up a business arm called ICOSEED Enterprises, as a wholly-owned subsidiary, to generate income for the parent organisation and its work. Thinking in a businesslike way, ICOSEED Enterprises has been identifying options for generating new streams of income.

ICOSEED’s managing director, Patrick G. Muriuki explained to me before I arrived in Kutus Town: “With the help of ICOSEED, local farmers have increased banana production by an impressive 40% in two years through the Njaa Marufuku (Hunger Eradication) project, supported by the Central Government of Kenya.”

Muriuki also explained that farmers therefore had also produced an excess of banana stems. I wasn’t really clear what ‘stems’ were until later than day I saw them. Like many people in the west, I’ve eaten bananas all my life but we don’t usually see the bananas as they are growing. Unlike a normal tree, with a trunk and branches, a banana plant grows a branch directly from its root system, which produces one bunch of bananas and then dies. This temporary ‘trunk’ is called a stem. Once the bunch of bananas is harvested, the stem is amputated by the farmer and new stems grow directly from the stump. As production of bananas increased, the number of discarded stems also increased. At first the farmers fed them to their cattle but the nutritional value wasn’t good enough and milk yields decreased. So what were they going to do with all these stems?

This is where they thought creatively and found a new opportunity. They heard about farmers in India who had invented a small machine for shredding banana stems into fibre that could be then used for other purposes. After some online research and emails, a small group from Kenya went to India to find out more. Soon after, they took delivery of their first banana stem shredding machine in Kutus Town.

Despite the machine, it’s still a process that requires manual labour. Each stem is fed into the shredding machine and then the roughly shredded fibre is washed and hung out to dry. Once dried, women pull apart the shreds into finer fibres and then they are spun into yarns of different thicknesses. These yarns can be dyed and then woven, to provide the material from which a range of products are made. There are numerous possibilities but the main products produced so far are bags of different sizes, ranging from shopping-bag sized, down to laptop pouches and small purses.

The fact that the bags don’t look particularly ‘African’ is a deliberate and smart business strategy. Masha Vernik, who is working with ICOSEED, explained:
“The idea is to make products that will be from Africa but don’t necessarily look African. The reason is that we don’t want our products to be an African souvenir that a tourist would buy for a few shillings, take home, then never use. The same tourists, when they are back home, would buy a product to use, and pay a higher price. For example, they might buy a laptop case for 50 USD. This is why we are not going for “African” or “ethnic-looking” products. Moreover, if we try selling to tourists it will be very hard to compete with the cheap produce on sale in the local markets.”

ICOSEED has won two awards for its banana fibre enterprise initiative: NetFund, Green Innovation Award (2016); and Switch Africa Green-SEED Innovation award (2017).

Despite devising a smart approach to business, the execution of a strategy is always the most difficult thing. Business developments always take more resources than expected, particularly the time of staff and volunteers. In businesses around the world, the challenge is to find enough time to invest in the new plans whilst keeping the core business running smoothly. This is a challenge for ICOSEED too, and so it takes time to put all their ideas into practice.

The challenges should not be underestimated. Their plans are ambitious and international. This means they need to understand potential customers in Europe and North America, where consumer behaviour is completely different. Increasingly, in economically developed societies, consumers want to buy much more than basic products. A bag, for example, to a Western consumer is not just a functional item: it is also a statement. More and more, people are buying into a story, a feel good factor, an experience, or a connection to the producer or to a ’tribe’ of fellow users. This phenomenon provides abundant opportunities for ICOSEED’s commercial plans, but these concepts are generally not well understood in Kenya because there, the economic situation is quite different. Nevertheless, ICOSEED knows it needs to sell not just products but also the ’story’, because that’s what will make give them a competitive advantage over other similar products. And importantly, this ‘story’ increases the value to the customer, so prices can be higher.

Like the fabrics it creates, the story woven into its products is rich and multi-coloured. Ecological and social aspects of the story might appeal to different types of Western consumers. Some might be most interested in the “eco-friendly” benefit of its goods. It’s using farm-waste to make environmentally friendly items made out of 85% decomposable material. That’s not all: it is also decreasing the need for pesticides on farms by removing banana stems that serve as breeding grounds for plant diseases.

The social angle is strong too and this aspect is part of the story that many consumers will buy into. These banana fibre products are an alternative source of income for 400 farmers who benefit every year. Also, ICOSEED is stimulating the wider local economy and creating jobs in transportation and extraction of fibres, twining, dyeing and accessory-making. Furthermore, it is introducing a new fabric-making technology into the Kenyan market.

ICOSEED has other challenges, particularly its supply chain to Western customers. Without the resources to sell directly to consumers in Europe and America, it will need to work with wholesalers and retailers. Establishing these partnership agreements isn’t easy and there is still work to be done to get it right in each of the different international markets. The reality is that the more it depends on others for logistics, branding and retailing, the more other organisations and businesses will profit, leaving only a small proportion of the income for ICOSEED.

Ironically, another challenge is the number of exciting options open to ICOSEED. I know from my work as a business adviser that an enterprise with too many options can try to do too many things at once and become unfocused. Diversification is appealing in terms of reducing dependence on one product or market, potentially creating stability. On the other hand, developing a new product for a different market is akin to starting a new business, with all the learning and risk associated with it.

This is relevant because there is another use for banana fibre, but this time for the local rather than international market. Here, functionality rather than ‘story’ is paramount. And it’s important because of its impact on the education of young women. Here’s the thing: banana fibre can also be used to make sanitary towels. In a country where many school students cannot afford sanitary products, they avoid classes when menstruating, and so regularly miss out on crucial education. ICOSEED has developed a prototype sanitary pad using banana fibre and sees its paying customers as educational authorities rather than the girls themselves. This is socially important and potentially profitable, but it’s clear that there is work to be done on various fronts, not least in product development and negotiating contracts to supply to institutions.

Right now, ICOSEED is aware that it has limitations and that it will take time to develop its own capabilities to do more in the supply chain. While many services can be outsourced (design, branding, website, brochures, even the management of sales and customer care…) the production itself cannot. In order for it to scale up to a factory-like size, the organisation will probably need to find a partner who will be able to help with production at source. If a commercial partner cannot be found, or finds the profitability unattractive, then it might look in the direction of other NGOs for production partnerships.

Clearly, ICOSEED has many opportunities to develop its work commercially in a number of ways. This is an exciting situation for any non-profit to be in, and dealing with each opportunity as part of a coherent strategy is a complex exercise. That would be the case even in an economically advanced country such as my own, the United Kingdom. But there’s another dimension that was explained to me when I was spending time with ICOSEED.

As in NGOs in the West, there is a lack of commercial experience and business education within the organisation. But there is another missing ingredient: lack of consumer experience. People working in Western NGOs are Western consumers too: they know how marketing works and how it affects them; they know what customers want; and they know what consumers will pay, and why. This consumer behaviour is beyond the experience of most Kenyan people working in and around ICOSEED, so the opportunities for merchandising, selling the ’story’ and charging high prices are not so obvious. The worrying aspect of this is that ICOSEED will not be even able to envisage, never mind achieve, the commercial success it could have, unless there is a change of perspective based on an appreciation of Western consumers’ tastes. Fortunately, ICOSEED has colleagues and friends from developed countries who will help to bridge this gap in understanding in order to commercialise potentially lucrative Western markets.

In conclusion, I’m optimistic about ICOSEED’s future, and have faith in its leaders, managers and its wider community. There is still a long way to go, but ICOSEED has already shown initiative, resourcefulness and creativity. The organisation’s approach is ambitious, imaginative and energetic. I was deeply impressed by its commitment to its community objectives and its willingness to learn from others with different knowledge and experience.

So I hope it won’t be long before I’m proudly using a banana fibre laptop case – and telling the story of its provenance to anybody who will listen.