Inclusive Business Model Review: Endline Report for GrowPact Limited, Kenya

Empowering Smallholder Farmers in Kenya's Horticulture Industry

Horticulture plays a vital role in Kenya's agricultural sector, with smallholder farmers contributing about 70% of horticultural production.

Tomatoes and cabbages particularly are widely cultivated due to their high demand in both local and regional markets. As of recent data, approximately 150,000 farmers grow tomatoes, producing around 4 million tons annually with an average yield of 20 tons per acre. For cabbages, over 100,000 farmers are involved, yielding about 25 tons per acre. These crops provide a significant source of income and nutrition for many households.

Horticulture farmers represent a unique demographic within agriculture, since they often earn above (SHF) average and as such demand high quality inputs. Recognising this, GrowPact ltd. has positioned itself a s key player in the sector, supplying a wide range of high-quality vegetable seedlings. Currently, 80% of its portfolio focuses on cabbage and tomatoes.

IDH and GrowPact partnership

In September 2022, GrowPact Ltd. partnered with IDH – The Sustainable Trade Initiative to expand its service delivery offerings to farmers. The collaboration aimed to enhance GrowPact’s operational capacity and improve farmer outcomes. This project, which ran until April 2024, began with a comprehensive baseline business analysis and a farmer survey. These initial steps provided actionable insights that informed technical assistance (TA) interventions focused on three key areas:

1. Acquisition of digital systems for management of processes
2. Recruiting staff to optimize service delivery
3. Investment in infrastructure i.e., machinery and fleet.

This endline analysis report evaluates the impact of these interventions on both the company's business performance and the livelihoods of the farmers it serves. The findings reveal how GrowPact successfully increased its sales while facing challenges in improving EBITDA margins. For farmers, the interventions translated into significant income growth, particularly for cabbage and tomato producers.

The report highlights the enablers of GrowPact’s success, driven by IDH’s targeted interventions, and offers valuable lessons for scaling similar initiatives in Kenya's horticulture sector.