By renting out cold storage space per crate at a daily rate, ColdHubs helps to eliminate the impact of food spoilage and improve small-scale post-harvest infrastructure, saving 20,400 tons of food from spoilage in 2019 alone.
ColdHubs Ltd. Was founded in 2015, pioneering their bespoke pay-asyou-store Cooling as Service (CaaS) model for smallholder farmers, retailers and wholesalers of horticultural produce. The project eliminates food spoilage due to lack of cold storage at key points within the food supply chain by deploying and operating robust off-the-grid cold storage.
By improving access to cooling and eliminating associated food waste, they can subsequently increase the income of farmers and retailers, uplifting and empowering local Nigerian communities – women in particular. This is achieved by allowing them to rent storage space priced daily per crate, at a price they can afford, and on a scale that makes sense to each of them.
ColdHubs is a social enterprise that designs, installs, commissions and operates 100% solar-powered walk-in cold rooms, branded as “ColdHubs”, in farm clusters, produce aggregation centres, and outdoor markets. The Hubs are to store and preserve fresh fruits, vegetables and other perishable foods 24/7, extending their shelf life from two days to more than 21 days.
ColdHubs operates a simple pay-as-you-store model. Farmers and retailers pay 100 Nigerian Naira (equivalent of US$0.50) to store one 20kg (44lbs) returnable plastic crate per day, inside the cold room. Hubs are operated by a female Hub Operator, who monitors the loading and unloading of crates, collect the fees, and a Market Attendant who builds relationships in farm clusters and markets.
ColdHubs owns all the equipment with the assets on their own balance sheet, removing this barrier for small-scale operators who cannot afford the CAPEX investment.
In terms of future installations, these will be financed with a mixture of grants and debt investment. “The ColdHubs have a quick payback on CAPEX and OPEX, so we are more interested in long term loans with very low-interest rates instead of equities,” explained Nnaemeka Ikegwuonu, Founder/CEO of ColdHubs.
The cold storage process commences once the non-refrigerated trucks filled with fruits, vegetables and other perishable food arrive from the farms at the farm cluster’s aggregation centers or outdoor food market with the intention of storing the goods. The Hub Operator then transfers the food from raffia baskets or bags into the clean returnable plastic crate. The crates are stackable, and each ColdHub can contain up to 150 of these crates.
First, the Hub Operator completes the customer’s Storage Card. Each ColdHubs customer has a storage card that details their name; phone number; address and type of business. The Operator also completes the inside of the storage card detailing the commodity brought forward for storage, the number of crates for each commodity, the total number of crates and the total amount for storage. Each line of information must have the signatures of the Operator and the customer.
Then the Hub Operator issues a receipt for the cold storage cash payment to the customer. The Operator and the customer sign the receipts and the customer pays the Operator the due amount upfront. This amount is calculated based on the number of crates, the amount of storage per crate, and the number of days for cold storage.
After the first payment, the customer comes to pick up the stored crate and returns the crate again with the produce contained therein, paying once again to be granted cold storage entrance. Long-term, regular customers enjoy the privilege of paying only when they are coming to pick up their crates.
“The model works because it is very affordable and reduces the risk of spoilage on farmers, retailers, and wholesalers,” explains Ikegwuonu. “It enables them to focus on their core competence (which is to sell fresh fruits, vegetables, and other perishable food), while leaving the technical element of making sure the food doesn’t spoil within the duration of sales, to ColdHubs, which has the technical competence.”
Each Hub is made up of the following:
ColdHubs is currently serving 3,517 farmers, retailers and wholesalers using its 24 installed cold rooms in 18 farms, aggregation centres and markets within the Southern and Northern Regions of Nigeria. 30 more ColdHubs are presently under construction across Nigeria, bringing the projected total number of Hubs to 54 by the end of 2020.
According to CEO Ikegwuonu: “ColdHubs has created enormous social impact.”
The numbers speak for themselves. In 2019 alone, the 24 operational ColdHubs had the following impact:
The company has just concluded the design of its second-generation ColdHubs named “ColdHubs 2.0”, which additionally features thermal storage to minimise their impact on the grid even further. The prototype will be ready by the end of 2020.
These new Hubs will take in an 8,000kg (17,637lbs) daily load of fresh goods, such as tomatoes, loading in the afternoon (from 12pm to 5pm) with a product starting temperature of 30°C (86°F).
The cold room size will be 10m x 6m x 2.8m (LxWxH) / 32.8ft x 19.7ft x 9.2ft and can be kept on temperature for three days during power outages without starting the backup generator (if no warm goods are loaded during this time).
The refrigeration system operates an average seven hours a day and offers a cooling capacity of 40-45kW (11.4-12.9TR) to keep the cold room temperature at 5°C (86°F). Energy is supplied exclusively by solar PV for 50% of the days in long-term average with a solar fraction of power supply greater than 80%.
In August, ColdHubs was selected as the winner of the CaaS Prize. To qualify for this prize, companies had to share information on implemented pay-per-use cooling/ outsourced cooling projects from Asia, Africa, or Latin America to show how the model works in application. The winners were selected by BASE, leaders of the CaaS Initiative, after reviewing the various entries from around the world.
“ColdHubs’ solution is a perfect example of how Cooling as a Service can overcome key barriers to adopt clean cooling technology,” says Thomas Motmans, Sustainable Energy Finance Specialist at BASE. “We want to showcase this success story because here is a large opportunity for its wider application in agricultural supply chains to reduce food waste and increase the quality and value of food for small- and medium-scale producers.”