The local production of baby food in Africa is an unexploited opportunity, according to a new report by the International Trade Centre, titled Made by Africa: Creating Value through Integration.
Africa imports €570 million of food preparations for infant use every year, and this figure is projected to exceed €1.1 billion by 2026. This expected demand growth offers important investment opportunities in the infant food value chain in Africa.
Imports of baby food are 10 times higher than exports. At the same time, the continent has an abundance of fruits and vegetables, cereals, pulses and other ingredients used in infant food preparations, which are often exported without transformation.
The few companies that produce infant food in Africa source just 16% of their inputs from African producers. With 39 competitive input providers and an export value of €14 billion of untransformed products at the continental level, developing this value chain appears promising for investors and producers.
Most established African baby food producers (65%) focus solely on the domestic market, both for sourcing and selling. If companies export at all, they tend do so within Africa. Only 20% of firms generate sales beyond the continent, often through personal networks (friends and family members abroad) rather than commercial channels. Sourcing from other countries is usually limited to ingredients not available locally for which no alternatives exist, such as vitamins, minerals, dextrose or lactose, as well as machinery and packaging materials.
Hurdles to replacing imported baby food with local production include:
Little specialised machinery and equipment in Africa and dependence on imports from other continents as a result. The cost to import such equipment, including duties and taxes, inspection, shipping and installation, can be significant and often unaffordable, particularly for smaller companies.
Limited trust in local brands. Demand for local brands is growing, yet companies say many Africans believe that baby food products from other continents, especially Europe, are better quality and more reliable. This lessens the attractiveness of local brands, even when they comply with high standards of production and are certified.
Few sector experts. Hiring and retaining skilled professionals such as nutritionists, food scientists, quality controllers and engineers is a challenge, particularly for micro and small baby food makers. Value chain participants say there are few practical training opportunities for entrepreneurs and workers on quality requirements and best practices for processing food, as well as basic business skills, such as marketing and accounting.