Processing Food for the Domestic Market: Entry Barriers for Food Processors to Supermarkets in Kenya

Lotte Thomsen, Dorothy McCormick, Paul Kamau

Research output: Working paperResearchpeer-review

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Abstract

This paper addresses the domestically owned food-processing industry in Kenya and explores thesale of processed food products to the domestic ‘modern’ retail sector. Food processing represents astep up in the value chain compared to fresh food production and may thus, at least potentially, leadto economic development. In focusing on food-processing businesses and on domestic rather thanglobal market sales, this paper distinguishes itself from studies on Sub-Saharan African suppliers toglobal value chains. The potential importance of domestic ‘modern’ retail formats to Kenyan foodsuppliers is underlined by the fact that after South Africa, Kenya is Africa’s second largest marketfor ‘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 sourceprocessed food products locally and thus whether food processing – as opposed to fresh foodexports – retains importance for suppliers as well as for the Kenyan economy. This paper aims tocontribute knowledge to this subject on which very little research exists. Based on fieldwork, thepaper shows that a variety of entry barriers exist for Kenyan food processors that attempt to supplythe emerging ‘modern’ retail sector domestically. The paper also shows how the requirements thatprocessors must meet, especially for larger domestic supermarkets, tend to resemble thosecommonly described in the export sector, calling into question the extent to which domestic retail isa viable alternative in the longer run
Original languageEnglish
Place of PublicationCopenhagen
PublisherCopenhagen Business School, CBS
Number of pages20
Publication statusPublished - 2017
SeriesCBDS Working Paper
Number1, 2017

Keywords

  • Food processing
  • Retail
  • Supermarkets
  • Global value chains
  • Supplier entry barriers
  • Kenya

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