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Executive Summary

Sun Fresh Foods

affordable Solar Food Dryers for businesses and entrepreneurs in rural Kenya

Ruhie Patil, Will Dawson, Alysa Darrenkamp

PI: Khanjan Mehta, Director, HESE Program

Humanitarian Engineering and Social Entrepreneurship (HESE) Program The Pennsylvania State University

I: The Problem 40-60% of produce harvested in Kenya spoils before it can be sold to a consumer at market. This contributes to food insecurity, because that produce is not only a food source for millions of people, but the sole source of revenue for the 70% of Kenya's population who rely on agriculture for their livelihoods (Federal Research Division 2007). Each year, farmers don't make enough money to keep their land productive, and are forced to look for stable employment in another sector. In the aggregate, these individuallevel decisions result in declining agricultural production and increasing urbanization. Simply, fewer people farming and more people living in dense areas that are already experiencing famine. Subsistence agriculture is becoming less sustainable in developing countries like Kenya, and food spoilage is a large part of that trend. At an individual level, the trends described above aren't pretty. Agriculture supports the livelihoods of over 20 million Kenyans (Federal Research Division 2007), and is important to the lives of hundreds of millions of people across East Africa. As long as a market for their produce exists, and they can sell that produce, there is no problem. When they can't sell their produce however, that's a decrease in income. The children of these farmers are then less likely to go to school, there is a serious risk there will not be food on the table each night, and the family has less to invest in their plot of land for next season. Declining sales and yields are a vicious cycle, and it is difficult for families to haul themselves out. If they can't support themselves with their farm, a parent may go to a city looking for work, or the whole family may uproot itself. Urban unemployment and food security issues notwithstanding, such a move is not an ideal move for any family in a developing country. Helping farmers reach sustainability is what social ventures in the region should be striving towards. II: Our Solution Sun Fresh Foods has developed a solar food dryer to combat food shortages and while provide partners with an opportunity to improve their livelihoods and make money. The dryer is simple to use. The first step is to place the dryer in direct sunlight, and turn the fans on in the beginning of the day. While the dryer is heating up and reaching steady-state conditions, the user should prepare the food to be dried. For most produce, the preparation is minimal. The user must slice the food and evenly distribute the slices on the drying trays. The next step is to place the trays into the drying chamber. After about 8 hours the user will remove the trays from the dryer. The food should be tested to validate that the proper moisture content has been achieved. At the end of the drying day, the trays should be cleaned of any remaining food product. Dryers like ours do not currently exist in the market. Many dryers cost thousands of dollars and are difficult to maintain. Though many farmers do use small-scale dryers in this context, many of these dryers are 'do-it-yourself' dryers. Farmers often build them based on a design that they saw someone else use. They are not consistent and often have very little output. Sun Fresh Food's solar dryer has been designed based on research of food dryers that have been modeled and tested. By creating our own prototypes and models, we have developed a design that is ideal for food distribution companies and entrepreneurs. Sun Fresh Foods retains a competitive advantage due to the precise design of our dryer. It has been modeled using COMSOL, and we know that the design works. Our innovation, in addition to the dryer itself, is the business model that allows our partners to create value with our technology. We will take it to market quickly, and establish a branded solar dryer product that FDCs can trust. Furthermore, our partnership with Azuri, and their success over the next few years will cement the reputation that Sun Fresh Foods Solar Dryers are a sustainable product around which a profitable business can be built. III: Serving a market and creating value The market for dried produce is currently under-served. Food distribution companies like Azuri Health Ltd. currently dry produce and package it for sale domestically. Some of their produce is also exported to Europe. Food Distribution Companies (FDCs) are our primary customer. They have the capital, resources, and market linkages to procure, process, and sell produce. Our dryers are an affordable and durable tool to enter a new market or expand existing food drying operations. When Sun Fresh Foods dryers are implemented in Kenya next year, they will immediately help FDCs enter the domestic and export markets for dried produce. This strategy means an immediate increase in revenue for FDCs that purchase our dryers. These ventures will become more profitable, and more sustainable, and will contribute to the economic future of small-scale farmers in Kenya as more produce will be purchased. The social mission is applied at every step of our venture. The farmers that supply us, our employees, and the companies with whom we partner all benefit from an economic perspective, but they are all helping us to fulfill the social mission of our venture. When the dried food products are actually consumed by food insecure Kenyans, we fulfill a distinct portion of our social mission, however even before that SFF will be helping to make small-scale farming a sustainable occupation.

IV: Business Model Sun Fresh Foods is a unique venture operating as a subsidiary of the Humanitarian Engineering and Social Entrepreneurship (HESE) Program at The Pennsylvania State University. Sun Fresh Foods will have a rotating team of student volunteers working to constantly develop and revise the technology and accompanying business plan, but our faculty advisers, namely Khanjan Mehta (HESE's Director), will continue to work with the venture as it evolves. When the venture starts this spring, Sun Fresh Foods will hire a local entrepreneur to direct the venture on the ground in its fledgling stage. We will also lean heavily on Azuri Health to ensure that our criteria for success are met and business operates ethically. In the future, we will likely partner with Mavuuno, an affordable greenhouse company that HESE has an outstanding relationship with, to manufacture our dryers. For all intensive purposes, Sun Fresh Foods will be run from the United States through our stakeholders and partners on the ground in Kenya. Our revenue streams come from the sale of solar dryers. In Phase 1, we will loan five dryers to a local entrepreneur. The price of the dryers, as well as a small start-up investment, will be recouped after Phase 1, and Sun Fresh Foods will retain a small profit. This money will come from the entrepreneur, who is making money by selling the dried produce to Azuri Health, who in turn will package the product and sell it to consumers. After we take our dryer to Kenya, prove its legitimacy, and establish market linkages, we move to Phase 2 and begin manufacturing and selling dryers on a consistent basis. In Phase 2, our revenue stream comes entirely from the production and sale of solar dryers to FDCs like Azuri Health. We will sell 15 dryers to Azuri Health in the first year, and we anticipate that word-of-mouth marketing will provide us with 5 additional sales that year. After the first year, we will sell more dryers to Azuri on a consistent basis so that they can scale up their operations and process food closer to where it is actually being grown. As we scale up our production to meet Azuri's demand, we will market our dryer and forge partnerships with other FDCs that could use our dryer to enter the market. We estimate 10 sales to outside FDCs in the second year, and as many as 50 in the fifth year of implementation. Our sales are dependent on the ability of HESE and SFF to partner with new companies in Kenya, and we will work hard to forge those partnerships in the coming years.The dryers will be sold for $500, and constitute a sustainable source of revenue for Sun Fresh Foods. Once the venture is implemented in Kenya, the costs are relatively straightforward. We will rent a space in which we can manufacture our dryers, and will pay two individuals to construct them. One of these people will be a skilled worker. The labor cost to Sun Fresh Foods to construct a single dryer are around $7. The material costs are more significant, at about $150 when they are purchased on the ground in Kenya. When we scale up our venture, we will hire a foreman to oversee the whole process, who we will pay $180 per month. We plan to produce 20 dryers in the first year, which will cost $6800. About half of this is the cost of the materials, monthly labor and rent costs make up the other half. Sun Fresh Foods will incur monthly costs of labor and rent, and will purchase the dryer components locally, reducing our costs, which are relatively straightforward and easy to break down. V: Assessing success and moving forward with our primary partner Our primary stakeholder is Azuri Health Ltd. Their willingness to buy dried produce from our entrepreneur, and to purchase 15 of our solar dryers next year are vital to the success of our venture. In Phase 1, they will pay market value for small quantities of dried produce that a jointly-selected entrepreneur will make using our dryers. In Phase 2, they are a valued customer, we will sell them our solar dryers, and they will provide us with feedback about the dryers, the market for dried produce, and how the dryers are helping them serve that market. As we expand, other food distribution companies will become stakeholders in our venture, and assume similar roles to Azuri Health. In the future, we will work closely with our partners to evaluate the success of Sun Fresh Foods from an economic and social perspective. Sun Fresh Foods will track the number of solar food dryers sold, the number of new companies purchasing them, the price of a bag of dried produce, the profits of FDCs using our dryers, and how much produce is being purchased from small-scale farmers. Rotating teams of students will work closely with our partners on the ground in Kenya to maintain progress towards our ultimate goal of improving livelihoods and food security by assuring the sustainable future of small-scale agriculture.