Reviving the groundnut sector in Nigeria: Ladipo & Lawani Foods Ltd
Ladipo & Lawani (L&L) Foods Nigeria Limited is a small-scale processing company based in Lagos. The founder, 32-year-old Ladipo Lawani says that he ventured into groundnut processing after realizing that this was an untapped market in Nigeria.
“A lot of people sell groundnuts here in Nigeria. However, a general observation is that most of it is unbranded and often sold in its raw form. Groundnut-based products are uncommon, creating an untapped opportunity for value addition. I thus settled on processing after realizing that it is a viable and sustainable business. Demand for ground-nut based products was also a key driver for me,” says Ladipo.
With the little savings he had, coupled with financial support from family and friends, L&L was born. This was in 2014, when Ladipo was 25 years old.
“The first product we developed was a sugar-coated peanut burger, bearing the brand name Mr. Ekpa. Been a relatively new product, acceptability levels by consumers were low, but gradually it became a highly sort out for product. However, we often experienced challenges with the quality of groundnuts we would get from farmers.”
One of the main objectives of the partnership between L&L and 2SCALE, is to enhance the productivity of smallholder groundnut farmers by improving productivity and agronomic practices. So far, 3,465 smallholder farmers have received trainings on Good Agronomic Practices. The target is to empower at least 4,000 smallholder framers to produce high-quality aflatoxin-free groundnuts by 2023. For L&L, receiving quality nuts is a key priority since they aim to process high quality and nutritious groundnut products, especially for low-income consumers.
2020: running a business in unusual circumstances
Like most businesses, the onset of the Covid-19 pandemic caused immense economic effect on the day-to-day operations of L&L. Surprisingly, demand for Mr. Ekpa peanut burger was high, but the major challenge was the surge in the cost of raw products to formulate the burger as Ladipo explains:
‘2020 was tough on us. Due to the uncertainties and measures put in place by government officials to curb the spread of the virus, we closed the processing factory for seven months! Production thus significantly reduced. In addition, the price of raw products went up as inflation rates went higher. The production cost of our peanut burger consequentially went up, putting us at a critical moment to innovate and build resilience.’
As most businesses around the world came up with innovative ways to survive and build back better to continue operations, L&L was not left behind.
The birth of an improved peanut burger amid the Covid-19 crisis
A 50 grams pack of Mr Ekpa peanut burger pack costs 50 Naira ($ 0.12) an amount affordable for Low-income consumers. With an increase in the cost of production, a possible solution was to increase the price of the product. However, this would have an implication on the purchasing power of low-income consumers, who were equally strained by the effects of the pandemic.
With 2SCALE’s support, the Business Champion found a viable solution to this challenge-reducing the cost of production by formulating a new recipe for an improved, more nutritious product. Initially, L&L lacked a partner who would provide technical support while formulating the value-added groundnut-based products. The sugar-coated peanut burger was thus improved to a burger coated with wheat flour, milk, vanilla flavor, sugar and vegetable oil. It is rich in Vitamin
E and protein. Ladipo comments:
‘The taste of the peanut burger is the same and consumers can’t quite tell that the formulation of the product is different. Unlike the initial formulation, which was developed without the technical assistance of experts, the improved peanut burger was formulated with the support of a food scientist.
With reduced production cost, we retained to initial price of 50 Naira for a 50g pack. All this was achieved thanks to the partnership we have with 2SCALE. Such operational efficiency is pivotal for the company, even as we work to develop more value-added products in future.’
With its commitment to avail nutritious food-products for BoP consumers, L&L is currently in the process of developing more groundnut-based products such a peanut butter and Kulikuli-a groundnut cake common in West Africa.