Identifying Entry Barriers for Food Processors to Supermarkets in Kenya

Paul Kamau, Lotte Thomsen, Dorothy McCormick

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Abstract

In Kenya, as in many other countries in the Global South, there is a growing population of so-called middle-income consumers that buy products from supermarkets. The increasing number of supermarkets in Kenya that serve these customers have become a potentially important market channel for domestic food processors. This paper identifies the barriers that domestic food processors encounter to accessing supermarkets within Kenya. It is based on survey data from 48 food processing firms that was collected in 2013–2014 and a set of two in-depth interviews conducted among selected firms in 2015 and 2016.
The findings indicate that it is difficult for processed food products from Kenyan-owned firms to enter the domestic ‘modern’ retail sector. A combination of stringent entry and markets barriers such as strict legal requirements and licenses, unfair competition, and lack of capital means it is an onerous task to survive in the presence of cutthroat competition from imported food products. The food processing firms interviewed often view the emerging supermarket sector as offering promising new outlets for their products but also point to a number of entry barriers, typically concerning resources and the qualification requirements of domestically owned supermarkets. These requirements are primarily related to pricing and payment terms that are difficult for most interviewed food processors to comply with. Other barriers include standardisation, regulations and infrastructure. An overreliance on the largest supermarket chains has led to harsh competition among Kenyan food processors. While some struggle for mere survival, others have to refocus on smaller supermarkets and convenience stores.
Original languageEnglish
Article numbere00189
JournalScientific African
Volume6
Number of pages9
ISSN2468-2276
DOIs
Publication statusPublished - Nov 2019

Bibliographical note

Published online: 17. October 2019

Keywords

  • Food processing
  • Supplier entry barriers
  • Domestic market
  • Supermarkets
  • Kenya

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