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Four steps to entering sub-Saharan Africa’s food industry

Meeting the needs of consumers in sub-Saharan Africa presents an opportunity for global food and agribusiness companies, says Dutch-based lender Rabobank in a new report.

“There are enormous opportunities and challenges for the food industry in Africa, as well as for global food processors that have the technology, know-how and brands to make an impact on the market,” notes the bank.

In the report, Rabobank highlights four basic steps international food companies can follow to enter the African processed food market.

1. Evaluate consumers’ needs and wants

Rabobank says the first step for any company looking enter sub-Saharan Africa’s food industry is understanding exactly what the consumer wants, and then establishing how that company’s capabilities can be deployed to meet consumer needs.

The report notes that the trends that have driven the global food industry over the past three decades are also visible in sub-Saharan Africa, with local consumers increasingly looking for higher quality Western and international-style food.

“As households change and out-of-home employment increases, consumers have more money and less time for traditional food purchases and preparation,” says the report.

However, Rabobank cautions that the African middle class still have less money than in many other parts of the world. Global companies targeting these consumers therefore need to “balance the consumers’ desires for the latest Western convenience with the reality of what they can afford and what they actually need”.

According to Rabobank there is a growing opportunity for “nutrient-rich packaged food in smaller package sizes African consumers can afford”. Quick service restaurants are also growing in some urban areas, a trend which will require the development of more modern food chains.

2. Identify latent potential

“The second step is indentifying the latent potential available in a market to allow the food processing company to successfully cater to the consumer’s need. This is often very complex in Africa and is built on two supply chain drivers: the ability to consistently source the quantity, quality and variety of commodity ingredients needed for local processing, and the ability to deliver the product to the consumer in the most efficient and convenient way,” notes the report.

For example, it would be pointless for a company to build a state-of-the-art food processing and packaging plant in an African country if there are uncertainties about the availability of input commodities required.

3. Test the market

To reduce the risk of failure, food companies could first test the market through exports prior to committing to a large-scale investment.

Rabobank says the brewery industry offers a good example of how companies are testing the market. Multinational breweries “are generally following a progression from importing beer to brewing it locally using locally grown ingredients. The advantage of importing beer is that brewers can test market appetite and establish their brands while retaining control over quality. They shift to local production because of high costs of transportation (beer is over 90% water) and import tariffs. As confidence in the local market grows, brewers move through a progression of importing malt for use in local brewing to producing malt locally, before the process becomes fully local.”

4. Co-invest with strong local players

Rabobank notes that multinational companies entering sub-Saharan Africa should consider co-investment with strong local players.

In the developed world food processors can pretty much count on secure supply of safe, high-quality ingredients to feed their processing operations. However, this is often not the case in many parts of Africa, and food processing companies need to be prepared to build their own value chains, such as growing their own agricultural commodities that are needed to produce products. Companies will often also have to take responsibility for their own distribution, handling and primary processing.

“This means partnering with credible and capable local champions with local market insights and connections to leverage access to global know-how and capabilities. It may also require global players to collaborate and partner with other global companies to bring the value chain capabilities required to the local market,” says Rabobank.


  • moses achile

    i need help to be vast about the preparation and packaging of local African foods and drinks. i even need suggestions and courses in this regard if possible and where. i want to develop a career. thanks

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