EOI - Potential Market Opportunity for Low-Cost Nutrient Dense Peanut Based Products in Northern Nigeria at Mercy Corps Nigeria

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Applications are invited for:

Title: EOI - Potential Market Opportunity for Low-Cost Nutrient Dense Peanut Based Products in Northern Nigeria

Locations: Adamawa, Borno, Gombe, Kano & Yobe
Employment Type: Contract

About Ajrena Foods Limitedd

• Ajrena Foods Ltd is a peanut processing and distribution company based in Lagos, Nigeria. The company started operations in 2016 with the launch of the first peanut butter factory in West Africa. It has a production capacity of 220 tons of peanuts per month that is processed into peanut paste, or used to produce other peanut based products, whether under its own brand Nutzy or to external suppliers under a B2B contract.
• Our business model starts from the sourcing of peanuts from aggregators across Northern Nigeria; transporting them to our factory in Lagos State; processing the peanuts into peanut butter or coated peanut snacks; and dispatching the finished product to our various wholesale customers across different states in the country. The strong market that Ajrena Foods has established for peanut butter and coated peanut snacks across the northwest, south and southwest (mainly Lagos state) is largely the consequence of two reasons:
  • Ajrena Foods Peanut Processing facility is located in Lagos state which makes establishing a distribution and sales team in the surrounding vicinity possible.
  • The higher purchasing power of customers residing in Lagos and its surrounding states makes Nutzy affordable to the residing population.
• We are seeking the assistance of a research company to help us understand whether there is a strong market for Nutzy Peanut Butter and Peanut Snacks in the North and Northeast of the country, an area with significantly less purchasing power than the south.

Background on North/Northeast Nigeria

• With hunger and poverty on the rise an estimated 4 million children in Northern Nigeria are at risk of malnutrition and so increasing availability of nutritious yet affordable foods are paramount.
• Nutzy Peanut Butter and coated peanut snacks are nutritious and calorie dense product that tick many of the boxes in terms of affordability (made using local groundnuts), versatility (easy to consume and doesn’t require cooking), storage (doesn’t require refrigeration), nutrition and shelf life (ranging from 12-18 months).
• We believe that expanding the distribution of Nutzy and raising awareness on the benefits of consuming peanut butter will go a long way towards improving the health of low income families who are in dire need of a nutritious food source.

Objective

• The firm intends to serve customers in the North with its peanut based products and wishes to understand whether the establishment of a production plant in Kano would make economic sense.

Scope of Work

• Access to quality and affordable nutritionally enhanced foods can influence household food and nutrition security and increase household well-being and income. Ajrena has piloted several commercial products currently manufactured in Nigeria, sourcing about 90% of its raw materials (groundnuts) from the northern part of Nigeria. These products are currently accepted in various parts of the country but the business needs a better understanding on its packaging, and price point. What, if anything, should be changed so that the product is better accepted by both its existing and new portfolio of customers.
• In partnership with RRA, Ajrena Foods seeks the services of a competent consultant to build a business case to guide investments for local production of their commercial nutritional products (Nutzy Peanut Butter and Nutzy Coated Peanut Snacks). The consultant shall develop a business case for Ajrena on the potential benefits and the costs associated with such an investment. This business case shall include a detailed analysis of the market, an understanding of the key shoppers, their purchasing power, Nutzy’s competitive position vs other items they usually consume, and the potential revenue and cost structures associated with the investment.

This phase of the consulting will include the following tasks:
Investment viability analysis (4 Weeks):

• A study about customers in the North, their purchasing power and their understanding of peanut butter and coated peanut snacks.
• An analysis on the market acceptability of Nutzy’s products, pricing and packaging. Should anything be altered to assist in product acceptability?
• Conduct fundamental analysis to help Ajrena and its investors assess the financial soundness of large-scale production line for nutritious peanut snacks/peanut sachets within Kano. Is the north a potential and suitable market for the products? What is the market size of interested buyers?
• Develop underlying operational models to determine whether Ajrena should or should not invest in a local production line. The consultant will answer some key questions: Is the local production of its products a sound investment decision? What is the long-term business profitability implication? What level of investment gives Ajrena the most optimal return on investment? How will Ajrena measure this portfolio's performance throughout the investment's lifetime?
• Conduct a comprehensive portfolio analysis by evaluating this future investment to determine its performance by comparing it to the existing nutritious dense foods as a benchmark.
• Create a financial model to inform the new investments. The financial model shall cover fundamental ratio analysis for Ajrena to gain insight into anticipated liquidity, operational efficiency, and profitability.

Consultant Deliverables:
The Consultant will conduct the following tasks:
Activity - Expected outputs

• Kick-off planning meeting with the Management of Ajrena Foods and RRA team members and preparation for the field visit; review of proposal, work plan, and milestone deliverables. - Conduct an inception meetingwith Ajrena Foods and RRA team. Develop workplan and field work itinerary.
• Conduct market acceptability analysis of Nutzy’s products and purchasing power of targeted market segment in the north (Kano, Gombe, Adamawa, Yobe and Borno) - Submit draft copy of market analysis report highlighting customers perception of the product, packaging and pricing.
• Develop route to market business case. What is the market size? What is the financial soundness of large-scale production line for nutritious peanut snacks/peanut sachets within Kano. Is the north a potential and suitable market for the products? = Submit draft copy of route to market analysis report for review.
• Develop underlying operational models to determine whether Ajrena should or should not invest in a local production line. - Submit draft operational model for review
• Develop a financial model to inform the new investments, and portfolio analysis by evaluating this future investment to determine its performance by comparing it to the existing nutritious dense foods as a benchmark - Submit final analysis report on investment plan with recommendations on route to market analysis, operational and financial model.

Timeframe / Schedule:

• The assignment timeframe will begin upon signing the contract for four (4) calendar months, starting from May 2023. Applicants shall adhere to this timeline while developing the work plan in the technical proposal. - 4 months (June 1st –September 30th 2023).

The Consultant will report to:

• The consultant will report to Ajrena Foods Management and the Rural Resilience Activity on all aspects of processes and deliverables.

Qualifications, Skills, and Experience:

• University Graduate in Social Sciences, Agricultural Economics, Economics or a related field
• Minimum of 10 years of relevant experience in the development of investible business model in supply chain management and/or commercially driven nutrition business case.
• Work experience with USAID and/or other donor-funded projects is strongly preferred.
• Experience working collaboratively with institutional and private‐sector partners and stakeholders in Nigeria, preferably related on promoting nutrition.
• Demonstrated knowledge of agricultural value chains and an understanding of the agribusiness enabling environment
• Excellent analytical, written, and oral communications skills in English is a top priority.
• Ability to work well in diverse teams but also able to work productively as an individual with minimum supervision
• Well organized, strong analytical skills, creative thinker, innovative, demonstrated personal initiative, with unquestionable integrity and ethics.
• Ability to communicate in other Nigerian languages is a plus.
• A relevant network of policy related influencers and decision makers in Nigeria

Evaluation Criteria - Score

• Professional experience in the field of investment plan development in the nutrition sectors especially scaling up commercial nutritious products (reports, pictures, and other mode of verifications (MOVs) to be presented as evidence. - 30%
• In-depth knowledge in supply chain management, route to market analysis, operational and financial model development. - 50%
• CV and Cover Letter detailing Technical Expertise in conducting similar assignments and any outstanding case studies and success stories. - 20%
• Total - 100%

Payment Terms

• Consultants(s) or firms will be engaged based on previous relevant experience and will be remunerated on a daily rate as approved in Mercy Corps procurement policy.

Schedule - Professional Fee Proportion for Consultancy - Remarks

• 1st Payment - 20% - After planning meeting and submission of inception report, detailed workplan and deliverables; and approved tools for assessment.
• 2nd Payment - 20% - Submission of market analysis report and route to market strategies
• 3rd Payment - 20% - Submission and approval of operational model for review
• 4th and Final Payment- 40%- After submission of final and approved report on business model, investment plan and recommendations.

Application Closing Date
15th May, 2023.

Method of Application
Interested and qualified consultants, consulting teams, or consulting firms should send a technical and financial proposal to: [email protected] using the Job Title as the subject of the mail.

Note

• Related to financial proposals, please note that Mercy Corps will not cover the costs of travels, accommodations, meals, and incidentals.
• Thus, financial proposals should focus more on the overall daily rates and other related cost.

In addition to the technical and financial proposal, expressions of interest should include the following:

• For consulting firms, company profiles demonstrating relevant qualifications, skills, and experience of similar assignments conducted by the firm, or CVs of individuals representing the consulting firm on this assignment. Please note that firms are allowed to collaborate with other firms to deliver this assignment, however, payments for any services will be to one firm and not multiple firms.
• For consulting teams and individual consultants, CVs of Consultant or members of the Consulting team demonstrating relevant qualifications, skills, and experience.
• Samples of evidence of previous experience in conducting similar assignments
• A work plan showing an indicative timeline for each part of the assignment.
• Daily rate/fees.