ColdHubs - A cool new way to tackle food loss

FOUNDED IN 2014 — BASED IN NIGERIA — PRIVATE COMPANY 6 minutes read

ColdHubs designs, commissions, installs, and operates "plug and play" cold rooms located at major food production and consumption centers in Nigeria, including farm clusters and outdoor markets. Through its pioneering "pay-as-you-store" system, small-scale farmers can safely store produce in solar-powered walk-in cold rooms, extending the shelf life of perishable goods from two to 21 days and post-harvest loss by 80 percent. ColdHubs is looking to expand across sub-Saharan Africa and roll out a franchise model.

Challenge: The rotten truth about food waste

Combating food waste is one of the biggest challenges of our time. According to the Food and Agriculture Organization (FAO), every year, we lose or waste an astonishing 1.3 billion tons of food, about a third of all the food produced. In fact, about 45% of fresh fruits and vegetables are never eaten.

“The consequences of food loss are devastating. In Africa, Latin America, and Southeast Asia, 470 million smallholder farmers lose about 25 percent of their annual income because of spoiled food.”

 

On the one hand, industrialized economies have high levels of “food waste,” where retailers throw food away on aesthetic grounds, and consumers do the same because they buy more than they can eat. On the other hand, developing economies have higher levels of “food loss,” where food is unintentionally wasted, typically because of inadequate transportation and storage options. Here, more than 40% of the food loss occurs at the post-harvest and processing levels, the UN organization estimates.

Perishable goods start spoiling right after harvest – losing weight, texture, flavor, and appeal, as well as nutritional and financial value. The consequences for people and the planet are devastating. And farmers, retailers, and wholesalers who lack access to cooling storage are hit the hardest. In Africa, Latin America, and Southeast Asia, 470 million smallholder farmers lose about 25% of their annual income because of spoiled food. In the blistering heat of the tropics, it’s practically impossible to keep food fresh without refrigeration.

Food loss contributes to malnutrition and hunger too. Research on the type of food prepared for school children in Nigeria, where ColdHubs operates, suggests that quickly perishable foods are underrepresented, with access to cool storage facilities being critical for increasing their share. An international study found similar results. It identified lack of storage as a frequent constraint on the provision of fruit and vegetables in 11 out of 18 surveyed middle-income countries.

Furthermore, food waste and loss cause about 8% of global greenhouse gas emissions, unnecessarily wasting land and resources. Despite a shortage of research on sustainable “cold food chains” in general — and in sub-Saharan Africa in particular — it is highly plausible that solar-powered food-cooling solutions would significantly reduce food loss with low energy and carbon footprint.

Initiative: ColdHubs offers a cool new way to tackle spoilage

A radio story founder and journalist Nnaemeka Ikegwuonu produced in 2013 inspired ColdHubs. Reporting from one of Nigeria’s outdoor food markets, he met a farmer who had abandoned his crops because they had wilted in the heat. Realizing that farmers in Nigeria rarely had a way to store perishable goods, Ikegwuonu asked a simple question: What if you could put walk-in refrigerators on farms and allow farmers and other food producers to store their crops in them?

ColdHubs was the result of his inquiry. Launched in 2014, its innovative “plug and play” cold rooms (aka hubs) can extend the shelf life of perishable goods from two days to 21. With stainless steel floors, 12 cm (4 inches) thick insulated panels, and solar panels on the roof, they can operate without needing backup generators nor for the sun to shine. Their refrigeration unit uses propane — a natural refrigerant with no ozone-depleting potential and very low global warming potential.

ColdHubs installs their cold rooms at big food production and consumption centers, such as farm clusters and outdoor markets. They currently operate 54 hubs. Each can store three tons of food in 150 plastic crates.

Preserving quality, value, and nutrition

The impact of ColdHubs is extraordinary. Its model can either directly or indirectly improve the outcomes of 12 of the 17 Sustainable Development Goals. For instance, by preventing food from rotting right after harvest, hubs ensure that available food lasts longer and is consumed farther from where it’s produced.

Extending the shelf life of perishable goods also helps preserve their nutritional quality, which combats malnutrition. Namely, a 35 percent reduction in post-harvest loss of tomatoes would provide a daily source of vitamin A for more than 1 million Nigerians. Moreover, hubs improve food safety by reducing exposure to harsh direct sunlight as well as chemical, bacterial and parasitic contamination.

Storage of fresh produce in a ColdHubs unit in Uratta

The units also preserve the economic value of food, enabling farmers to take a more significant share of their harvest to market. Farmers, wholesalers, and retailers pay a flat fee of 100 Nigerian Naira (about US $ 0.25) per crate per day. Despite being an extra cost, hub ensure their produce stays fresh and maintains its value — allowing them not just to sell it for a profit but to cope with any market fluctuation and sell when the price is right. Hubs increase their household income.

Designed by small-scale farmers for small-scale farmers

Unlike other companies that make and sell solar-powered walk-in cold rooms, ColdHubs makes its units to serve farmers. It does so thanks to its unique “pay-as-you-store” model, which ensures access to the very poorest farmers.

“ColdHubs isn’t the only food-cooling service in sub-Saharan Africa. But it is unique in several respects. What sets it apart first is that it works directly with its customers.”

 

ColdHubs also involves small-scale farmers in its work, and that marks it out. Not only were its cold rooms designed by them, but they also inspired its focus on job creation. Women fill many of these roles. Each hub is, for example, managed by a Hub Operator who monitors the loading and unloading of crates and collects fees.

Hub operator helps retailers move grean beans from raffia baskets to plastic crates at Relief market

What’s also distinctive about the ColdHubs model is its pioneering use of post-harvest management education. Its Market Managers offer complimentary classes to farmers, teaching them best practices for handling fruits and vegetables once picked — including advice on cooling, transporting, and storing them.

Key facts

  • Finalist: ColdHubs
  • Type of organization: Private company
  • Year of establishment: 2014
  • Headquarters: Imo State, Nigeria
  • Founder: Nnaemeka Ikegwuonu
  • Number of staff: 71
  • The big idea: Solar-powered “pay-as-you-go” cold rooms to store perishable goods in developing economies
  • Goal: Install 10,000 cold rooms serving at least a million farmers, wholesalers and retailers in 10 years and 10,950,000 tons of food each year?

Scaling up across the continent with a franchise model

Since its launch in Imo State almost eight years ago, ColdHubs has expanded to 21 states in Nigeria. Its goal is to be present in all 36. Nigeria produces 35 million tons of fruit and vegetables annually and 93 million smallholder farmers. The majority of them are women. ColdHubs is also looking to enter other sub-Saharan African countries. Its targets include Benin, Rwanda, Sierra Leone, Zimbabwe, and Kenya. The latter produces 22 million tons of fruits and vegetables annually and employs 33 million smallholder farmers.

As ColdHubs increases its reach across Nigeria, it’s developing a franchise model, which it hopes will reduce the complexity of owning, managing, and operating many hubs. Also on its way is its second-generation unit, ColdHubs 2.0, which is bigger and will run on thermal energy rather than electrical energy storage. With this shift, the founder aims to make cheaper hubs that have significantly improved lifetimes.

Long term, ColdHubs also wants to integrate refrigerated transportation services so that farmers and vendors can move food to and from hubs, creating a so-called “full cold chain.”

Potential shortcomings

Some experts say there is no better way to address the food-cooling challenge in low-income countries than ColdHubs’ approach, but there are two main hurdles to overcome.

First, because ColdHubs retains ownership of its assets, high upfront investment costs may be required, in an environment where finance for private companies is typically hard to secure. Second, as ColdHubs must manage a large number of customers at any one site, it may complicate its ability to carry out operations as well as incur relatively high transaction costs. Its franchise model may help to address these challenges.

What would ColdHubs do with the Prize sum?

Were ColdHubs to win the Food Planet Prize, it would build 40 new cold rooms in Nigeria. The numbers make plain the consequences of this. Each new cold room would serve almost 100 farmers, retailers, and wholesalers – meaning as many as 4,000 people would start using a cold room to store fresh food. Each new cold room would create 40 jobs for women as Hub Operators and another 40 as part-time or temporary Market Managers. And each new cold room would save at least three tons of food every day. So, if ColdHubs were to win the Food Planet Prize, it would make 120 tons of high-quality fresh food available for local consumption every single day.

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