Eight agrifood and food ideas to pursue in East Africa
Here are eight agribusiness and food opportunities in East Africa, highlighted by top entrepreneurs and investors.
1. Supply of frozen bakery products to hotels in Kenya. The lack of a constant supply of quality products means that many hotels, restaurants and catering businesses depend on expensive imported products. It is estimated that last year Kenya imported $ 2.5 billion worth of food, much of which can be produced locally. Hotels in Kenya are increasingly outsourcing activities such as baking, as large kitchens take up space that could be more cost-effectively used for beds and conference rooms. Steven Carlyon, president of SimpliFine Foods, explains that Kenyan hotels import large quantities of frozen baked goods – such as bread and croissants – from Europe and the Middle East, as there are very few local companies producing consistent quality frozen bakery products on a large scale. Read more: Fries, croissants and frozen vegetables: Gaps in Kenya’s food industry
2. Storage of crops. The storage and preservation of agricultural products in East Africa is an area with interesting opportunities. David Owino, founding partner of East African private equity firm Ascent Capital, is optimistic about opportunities in crop storage: “We looked at a company that builds silos; we are interested because you can add value to farmers by allowing them to choose when to sell their crops. If farmers have a bumper harvest, they could store their grain and sell it at the right time. In Africa, farmers lose around 40% of their harvest due to inadequate storage space. Read more: Investor reveals the most attractive opportunities in East Africa
3. Produce affordable fish in East Africa. For decades, the wild catches of the African Great Lakes have declined; local markets increasingly depend on imported frozen fish, often of poor quality. This indicates the potential for domestic fish production at an affordable price. Victory Farms, a Kenyan aquaculture company founded in 2015, seized this opportunity to provide affordable protein to consumers by growing tilapia, a native species. “We see huge potential for the nascent East African aquaculture industry to grow and develop in a sustainable manner, which should help relieve pressure on wild fish stocks,” says Chris Isaac, Director investments from AgDevCo, which recently invested in Victory Farms. Read more: Money-making idea – aquaculture in East Africa
4. Tailored financing solutions for agriculture in Tanzania. In Tanzania, the share of loans to the agricultural sector as a percentage of total loans from commercial banks was about 40% (in 1994). While the banking sector has continued to grow steadily since reforms began in the 1990s, the percentage of agricultural loans fell to 6% in 2018.
Hadija Jabiri, CEO of GBRI, a Tanzanian company that grows vegetables primarily for export to Europe, says she is part of that statistic. “I have been in the agricultural business for about six years and although I wanted to get financing from normal financial institutions when I started, I couldn’t… There are huge untapped opportunities in the agricultural value chain and the ‘tailor-made agro-financing. is one of them, especially for small farmers. Read more: Tailored financing potential for Tanzanian farmers
5. Export of high added value niche vegetables from Rwanda. According to Laurent Demuynck, founder and CEO of Kigali Farms, Rwanda is ideal for growing and exporting some high-value vegetables and fruits to other East African countries. “I believe there is a future for good quality, organic and intensive horticulture in Rwanda. Due to its proximity to Kenya – where there is a lot of purchasing power – I think it is a great business idea to set up the production of high value crops. In terms of product, it would probably be something like specialty or niche vegetables that you can’t find on the shelves – not even in Nairobi – products that you can sell for a decent price because it doesn’t. is not yet a commodity. Read more: Learn more about horticultural options in Rwanda
6. Alternative packaging for the Tanzanian food industry. In 2019, the Tanzanian government banned plastic bags and banned people from selling drinks or other products packaged in plastics unless the nature of the product requires it. Even for exempt industries (such as food processing, agriculture and medical services), government regulations require suppliers and users to ensure that waste is managed and disposed of in accordance with good environmental management. .
According to Tahira Nizari, co-founder of Tanzanian agribusiness Kazi Yetu, which produces organic and fair-trade tea for export, the impact of the ban offers major opportunities for producers of alternative packaging. “A lot of the options available locally in the country or region are still plastic or in boxes that are not suitable for food. If you package food, it must be sealable and meet current health and hygiene standards, ”she says. “It cannot go straight into the box without being sealed first.” Read more: Money-Making Idea: Alternative Packaging and Carrying Bags in Tanzania
7. Production of essential oils. Maxima Nsimenta, CEO of Livara – a Ugandan brand that makes natural and organic products for hair, skin and body – believes there is potential for the transformation of essential oils in East Africa. “We import a lot of essential oils, yet it is possible to produce them locally. We grow flowers in Uganda and Kenya but mainly for export to Amsterdam and Europe. We don’t go any further by using parts of these plants to extract essential oils. For example, lavender is a beautiful flower, very rich in oils; we could extract the essential oil from lavender. A small bunch of lavender sells for around 15,000 shillings (about $ 4) in Uganda; however, 20ml of lavender oil will cost around $ 40. There are many local industries that require essential oils. They are used in baking and beverages, as well as in everyday cosmetics such as lotions, creams, hair products, and perfumes. Some small industries – like those that make scented candles – also use essential oils. ” Read more: Essential oil production could be a lucrative opportunity
8. Harnessing the potential of camel milk. Africa is home to 86% of the world’s camels. The urbanized public is beginning to recognize the value of camel milk, which is beneficial for lactose intolerant and lower cholesterol consumers. Kenyan entrepreneur Hassan Bashir is exploiting this opportunity through his company Nourishing Nomads and aims to produce 30,000 liters of camel milk per day over the next five years. Read more: How Bashir aims to build a whole value chain around camel milk in Wajir County, Kenya