Why Kenyan Manufacturers Are Going Direct-to-Farm (And Why It Matters for Your Food)

For decades, Kenya's agricultural supply chain operated through a layered system of middlemen. A farmer in Western Kenya would sell groundnuts to a local trader. That trader would sell to a regional aggregator. The aggregator would sell to a broker in Nairobi. The broker would sell to a manufacturer. At each step, a margin was added, quality oversight was reduced, and the link between the farmer and the final product grew weaker.

This system is changing. Across Kenya, food manufacturers are restructuring their supply chains to buy directly from farming cooperatives and individual producers. The movement is driven by three converging forces: the need for better quality control, the commercial advantage of shorter supply chains, and growing consumer demand for transparency about food origins.

At Jetlak Foods, we began our own direct-to-farm transition in 2018. This article examines the broader industry trend, the evidence behind it, and what it means for the food on your table.

The Middlemen Problem

Middlemen serve a real function in agricultural markets. They provide liquidity (farmers get paid immediately), logistics (they transport goods from remote farms to urban centres), and market access (they connect small producers with large buyers). In a country with limited rural infrastructure, these services have genuine value.

The problem is not that middlemen exist. The problem is how much value they extract, and what happens to quality when no single party in the chain has full accountability.

The World Bank's 2019 report on agribusiness in East Africa found that in Kenya's groundnut value chain, the farmer's share of the consumer price averaged 28%. By comparison, in direct-sourcing models where manufacturers buy from cooperatives, the farmer's share typically rises to 45 to 55%. The difference is not because the manufacturer pays more per kilogram overall. It is because the layers of intermediary markup are eliminated.

On the quality side, multiple handling steps increase the risk of contamination, moisture damage, and mixing of different quality grades. When a manufacturer buys from a broker, the peanuts in a single delivery might come from dozens of different farms, harvested at different times, dried to different moisture levels, and stored under different conditions. Tracing a quality problem back to its source is nearly impossible.

The Direct-Sourcing Model

Direct-to-farm models vary in structure, but they share common principles.

The manufacturer establishes relationships with farming cooperatives or groups. Pre-season agreements specify the quantity, quality standards, and pricing. The manufacturer often provides agronomic support, including training on best practices, improved seed varieties, and post-harvest handling. At harvest, the manufacturer's agents purchase directly from the cooperative, bypassing all intermediary layers.

This model requires investment from the manufacturer. Training programmes, field agents, quality testing at collection points, and logistics all cost money. But the return on investment comes through better raw material quality, supply reliability, traceability, and often, lower total procurement costs once the intermediary margins are removed.

Evidence from Kenya and Beyond

The trend is not limited to groundnuts or to Jetlak Foods. Several sectors of Kenyan food manufacturing are moving in this direction.

In the dairy sector, companies like Brookside and New KCC have long operated direct collection models, picking up milk from farmers through cooling centres. The Kenya Dairy Board reports that direct collection accounts for over 70% of formally marketed milk in Kenya.

In the tea sector, the Kenya Tea Development Agency (KTDA) manages a direct relationship between tea factories and over 600,000 smallholder tea farmers, according to KTDA's own reporting. This model has been credited with maintaining Kenya's position as the world's largest exporter of black tea.

In the horticulture sector, which is Kenya's third-largest foreign exchange earner, direct contracts between exporters and farming groups are the norm. The FAO's 2021 review of Kenya's horticultural value chains highlighted that contract farming arrangements improved farmer incomes by 20 to 35% compared to spot-market selling.

What makes the current moment different is that the model is expanding beyond these established sectors into categories like groundnuts, pulses, oilseeds, and fruits for juice processing, where middlemen have traditionally dominated.

The AgriFI Catalyst

A significant catalyst for this transition in Kenya has been the AgriFI Kenya Challenge Fund, a programme co-funded by the European Union and the Government of Kenya. AgriFI provides grants and technical assistance to agribusinesses that invest in smallholder farmer integration.

Jetlak Foods received AgriFI support to develop our direct-sourcing programme for peanuts. Other Kenyan food companies have received similar support for crops ranging from sorghum to macadamia nuts. The programme's design is smart: it de-risks the manufacturer's initial investment in supply chain restructuring, making it commercially viable to make the transition.

According to AgriFI's published impact data, the programme has supported over 60 agribusiness projects in Kenya, benefiting more than 300,000 smallholder farmers with improved market access, higher prices, and agronomic training.

Quality Benefits for Consumers

For the person buying a jar of peanut butter or a carton of juice, direct-to-farm sourcing delivers tangible quality improvements.

Traceability improves. When a manufacturer knows exactly which cooperative grew the raw material in their product, they can trace any quality issue back to its origin and address it.

Consistency improves. Direct relationships allow manufacturers to specify variety, growing conditions, and handling practices, leading to more uniform raw material quality.

Safety improves. In the case of groundnuts, direct sourcing with farmer training on drying and storage significantly reduces aflatoxin contamination risk. Our own experience at Jetlak Foods shows a reduction in batch rejection rates from 12% to under 4% since implementing direct sourcing.

Freshness improves. Shorter supply chains mean less time between harvest and processing. For fruit used in juice production, this can mean better flavour and higher nutritional content.

Challenges and Limitations

Direct-to-farm sourcing is not without challenges. It works best for manufacturers with sufficient scale to justify the investment in field operations. Small manufacturers may lack the resources to run farmer training programmes and collection networks.

Logistics in rural Kenya remain difficult. Poor road infrastructure, limited cold-chain facilities, and seasonal accessibility issues can make direct collection expensive and unreliable.

Farmer cooperation is not guaranteed. Some farmers prefer the immediate cash payment that middlemen offer, even if the price is lower. Building trust with farming communities takes time and consistent follow-through on commitments.

Finally, direct sourcing does not eliminate all intermediaries. Manufacturers still rely on transport companies, testing laboratories, and other service providers. The goal is not to remove all middlemen, but to remove the layers that add cost without adding value.

What You Can Do as a Consumer

Consumer demand is one of the most powerful forces driving supply chain reform. When you choose products from manufacturers who invest in transparent, direct supply chains, you send a market signal that this approach is commercially rewarded.

Look for brands that communicate their sourcing practices. Ask questions. Check whether the manufacturer is involved in farmer welfare programmes or industry initiatives. These are indicators of a company that takes its supply chain seriously.

At Jetlak Foods, we are committed to transparency about how we source. Our peanuts come from Kenyan farming cooperatives through a direct relationship. Our fruits for FruitVille are sourced from Kenyan growers wherever possible. We are not perfect, and we are still expanding our direct-sourcing capabilities, but we believe the direction is right.

The Future of Kenyan Food Supply Chains

The movement toward direct-to-farm sourcing is still in its early stages for many Kenyan food categories, but the trajectory is clear. Consumer expectations for transparency are rising. Regulatory requirements for traceability are tightening. The commercial benefits of shorter, more accountable supply chains are increasingly well-documented.

Kenya has the agricultural base, the manufacturing capacity, and the entrepreneurial energy to build food supply chains that deliver quality for consumers and fairness for farmers. The manufacturers who invest in direct relationships today are building the food system of tomorrow.

Every product on your shelf has a supply chain story. The question is whether that story is one of accountability and investment, or one of opacity and extraction. As more Kenyan manufacturers choose the former, everyone benefits.