Would you like to open a Kenya food business? Doing business in Kenya is a very dynamic affair, I can certainly confirm this now that I have witnessed it more closely on the ground. And when you combine one of Africa’s busiest business hubs with one of the continent’s fastest growing sectors – agriculture – you become part of a well, ….very vivid undertaking.
Some may argue that Kenya’s agricultural sector is already quite competitive, or in other words, producing carrots or stepping into the booming flower industry may not be your best strategy to get your foot into the market. But there are gaps, huge gaps, and well-kept secrets!
I spoke to representatives of GrowthAfrica, the Ministry of Agriculture, the sales manager of a top hotel chain (I will write a separate post about this), two farmers from the Western Province who I met in Nairobi, and I kept my eyes wide open – observing. In fact, I was strolling through two local supermarkets for over half an hour emerging out of it with a single item. I was not interested in doing grocery shopping after all, I was just in there to do some research…
Let’s get started, shall we:
1. Strawberries and mushrooms in Kenya are in demand
This has been confirmed to me by several sources, both strawberries and mushrooms are in high demand. Strawberries are especially bought by the food processing industries In Nairobi for the production of yohgurt and marmalade and by hotels. You hardly find them in supermarkets or at the many fruit markets, which is just another sign of the shortage. Mushrooms are in particularly easy to grow and there are techniques that allow you to grow big number in relatively little space – for example insight traditional sheds. Kenyans follow increasingly Western eating habits and the demand for strawberries and mushrooms is right at the top.
2. African Dairy business! Anything with dairy will work!
Again, this was confirmed to me by Growth Africa, the hotel sales manager and the Ministry of Agriculture. Everything related to diary will sell! There was especially a shortage of qualitative milk on the market. Having worked with East Africa’s nomadic communities and livestock herders through most of my career, this is a success secret I have known for over a decade. The lack of commercialized dairy production in Africa has always puzzled me given the high number of lactating livestock – and even today, Kenya seems to be no exception. Produce dairy and your market will grow fast beyond Kenya, because of a chronic Pan-African shortage in this regard. It’s a business that requires a bit of investment at your end, but you will be selling almost immediately. Take Rwanda: the government invested in a dairy plant a couple of years ago or so and this year the income exceeded that of coffee – they are now exporting into the region, in particular into Tanzania. It was an immediate success story.
3. Doing business with improved seeds for tomatoes, peppers, and water melons
I have no idea why those three, but Growth Africa staff who are working with agricultural entrepreneurs and start-ups confirmed to me that it there was a very high demand for improved seeds of yellow pepper, melons, and in particular tomatoes. This could go hand-in-hand with what I wrote in my last post on Kenya that there was a very significant market for high-quality tomatoes needed by supermarkets, food processing companies, restaurants, and hotels – something most small-scale farmers were unable to deliver. This may be an excellent business opportunity for those residing outside of Kenya, too.
4. Delivering native Kenyan vegetables after 12 o’clock
The lady from the Ministry of Agriculture insisted that the demand for traditional, native vegetables is currently not being met and that markets have usually sold completely out by noon. Supermarkets were therefore not able to buy sufficient amounts. She mentioned Saga, Manage, and Terere.
5. The win-win solution with organic fertilizers
I met a Somali woman named Shukri during a breakfast organized by the Kenyan Chamber of Commerce who was selling organic fertilizers, which she imported. It was some kind of compost soil fished out of northern lakes. It worked extremely well for her and the farmers who saw a huge increase in their harvest. Several Africans have established successful businesses with all sorts of natural fertilizers (just yesterday I heard the story of a man from Madagascar who set up a million Dollar business with the collection of bats feces). Organic fertilizers are not only very efficient in multiplying farming production, but they also prevent high chemical residues on agricultural produce, which is bad for public health and has often caused losses during export when the levels exceeded EU regulations or other.
6. Fruit juices, pastes, and snacks – Value addition in simple terms is very profitable
I have written many times about it, and it was now also confirmed to me once more by experts on the ground in Kenya that your farming business would become far more profitable if you don’t just grow and produce, but if you add value through processing. Mangoes were often in surplus in Kenya during season, but there was a demand for juice. The same situation you would get with tomatoes, yet in the supermarket you are unable to find a diverse range or locally processed items such as tomatoes pastes and sauces. Process your produce in the most simple terms, pack it, brand it.
7. Baby food? aahmmmm…..?
I looked for baby food in a relatively big supermarket in the prominent Westlands area and except for some highly priced porridge there was almost nothing there. I asked two workers who did not even understand the concept of ready made baby food in jars. They showed me the porridge – the pack by Nestle with added banana flakes cost 540 Shilling, that’s US$ 6 ! Imagine the huge market you have at our feet!
8. Why importing refrigerators for your African business will make you very competitive
Not everyone may think of this, but investing in refrigerating systems can make all the difference to your success. The manager of KenInvest told me an interesting story. Do you know how Kenya became a major exporter of flowers, he asked me. He explained that the flower business was mainly driven my small farmers, but then someone (or some people) invested in a refrigerating system allowing a big number of farmers to bring all their flowers there for storage. It was then suddenly possible to preserve and export the flowers in large numbers. The refrigerators were a missing link. You can use that concept for many other areas. Think of milk collection networks among farmers or nomads that you could coordinate this way without taking care of a single cow yourself. And suddenly you have a new source for larger scale production that allows your to quickly grow your business (just add more farmers to your network!), but also provides the all important income generation for Kenya’s rural population.
9. Food: Why You should serve the airline industry in Kenya and Africa
It’s time for take-off. I have been flying rather a lot in my life having lived and worked in different countries, but I have to confess, hardly have I ever received such bad food on board like the one I ate after our transit in Mombasa. It was quickly clear that this had been produced locally, also because the side dish served with the chicken was made of local millet. The ingredients were surely not the problem at all, but the lack of knowledge and experience how to prepare something that stays in little boxes for hours before it gets heated up again. The millet balls were soaked and had half dispersed in the water of the chicken, and around the chicken was some kind of white fatty jelly accumulated. It wasn’t a pretty sight. The vanilla pudding was so yellow that passengers struggled with a yellow mouth and tongue after indulging in it, it looked like a lot of coloring gone bad. Neither the look nor the taste of the meal were good and that although I have eaten the most amazing fresh food in Kenya, both in simple traditional restaurants and in 4star hotels. Africa air travel is said to hugely increase in the next few years and after that experience there seems to be room for you to come in with a reliable and qualitative food delivery service.
I hope I was able to provide you with more valuable insights into Kenya’s markets and business climate, today with some tips for the agricultural & food sectors. And I am sure there are many more success tips, so I certainly did not cover it all. But the beauty of such information is that you will usually find very similar market gaps across the wider East Africa region and the continent. So if one of the above areas is of interest to you and you want to operate in another country, just do a quick feasibility check.
And as always, we look forward to hearing your feedback, questions, and ideas in the comment section below!
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