Processing Food for the Domestic Market

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Processing Food for the Domestic Market

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Title: Processing Food for the Domestic Market
Entry Barriers for Food Processors to Supermarkets in Kenya
Author: Thomsen, Lotte; McCormick, Dorothy; Kamau, Paul
Abstract: This paper addresses the domestically owned food-processing industry in Kenya and explores the sale of processed food products to the domestic ‘modern’ retail sector. Food processing represents a step up in the value chain compared to fresh food production and may thus, at least potentially, lead to economic development. In focusing on food-processing businesses and on domestic rather than global market sales, this paper distinguishes itself from studies on Sub-Saharan African suppliers to global value chains. The potential importance of domestic ‘modern’ retail formats to Kenyan food suppliers is underlined by the fact that after South Africa, Kenya is Africa’s second largest market for ‘formal’ retail, mostly because of the growing Kenyan middle class (EIU, 2013; Business Daily, 2015). What is not clear, however, is the extent to which retailers in Kenya currently source processed food products locally and thus whether food processing – as opposed to fresh food exports – retains importance for suppliers as well as for the Kenyan economy. This paper aims to contribute knowledge to this subject on which very little research exists. Based on fieldwork, the paper shows that a variety of entry barriers exist for Kenyan food processors that attempt to supply the emerging ‘modern’ retail sector domestically. The paper also shows how the requirements that processors must meet, especially for larger domestic supermarkets, tend to resemble those commonly described in the export sector, calling into question the extent to which domestic retail is a viable alternative in the longer run.
URI: http://hdl.handle.net/10398/9525
Date: 2017-10-02

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