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Outline

Triggering Value Chain Development through Supermarkets: The Key to Transforming the Agro-Food Industry in Africa Emmanuel Tambi, Odularu Gbadebo, and Idowu Ejere, Forum for Agricultural Research in Africa (FARA) November 06 – 09, 2012 Addis Ababa, Ethiopia. Outline.

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Outline

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  1. Triggering Value Chain Development through Supermarkets: The Key to Transforming the Agro-Food Industry in Africa Emmanuel Tambi, Odularu Gbadebo, and Idowu Ejere, Forum for Agricultural Research in Africa (FARA) November 06 – 09, 2012 Addis Ababa, Ethiopia

  2. Outline • Evolution of supermarket development in Africa • Effects of supermarket transformation on value chain development • Observed effects of supermarket development • Successes and failures of supermarket-related value chain development • FARA’s interventions and conclusion

  3. SUPERMARKET DEVELOPMENT IN AFRICA • Growth of supermarkets triggered by: • Demand and supply factors • Macroeconomic reforms & favorable environment for investment • Advent of supermarkets in Africa is relatively recent: East and Southern Africa – pioneers • Evolution and spread of supermarkets to other parts of Africa

  4. EFFECTS OF SUPERMARKET DEVELOPMENT ON VALUE CHAIN DEVELOPMENT • Value chain development – Chain of activities performed by a firm/business in order to deliver a valuable product or service • As business entities, supermarket development can have important positive effects on value chain development: • Product development/customization • Service provision • Value addition • Linkages (downstream and upstream) • Planning/logistics • Distribution • Research and development • Cost reduction and economies of scale

  5. SUPERMARKET DEVELOPMENT AS TRIGGERS OF VALUE CHAIN DEVELOPMENT OBSERVED EFFECTS • Enhanced functioning of food value chains in Africa • Timely delivery of value added products to consumers (Shoprite and Pick n Pay fresh fruits and vegetables) • Product transformation and value addition (Farmer’s Choice meat & meat products and Brookside dairy products in Kenya) • Connecting key players to match supply and demand • Transparency – price transmission • Strengthened linkages between farmers/agro-processors and markets (domestic/international) • Increased sales volume (S.Africa about half of national food retail market; pig, poultry & dairy farmers in Kenya & Uganda) • Gain and sustain markets

  6. SUPERMARKET DEVELOPMENT AS TRIGGERS OF VALUE CHAIN DEVELOPMENT OBSERVED EFFECTS • Enhanced welfare of producers and consumers • Quality and safe food products for human and animal consumption (e.g imported products of plant and animal origin that comply with SPS measures) • Increased smallholder farmer incomes • Scale economies • Lower cost structures • Lower consumer prices • Order and sanity in retail food sector • Enhanced competitiveness with traditional retailers – corner stores, public market places

  7. SUCCESS AND FAILURE OF SUPERMARKET-RELATED VALUE CHAIN DEVELOPMENT

  8. CONCLUSION • Africa has experienced an expansion in the number of supermarkets in the last 2 – 3 decades • Supermarkets have enhanced the development of agro-food value chains in Africa but have not fully integrated a majority of smallholder farmers • Contribution of supermarkets to local economies will depend on how well the integrate local producers and processors in the agro-food value chain. • Policies to promote smallholder farmer access to markets should focus on supermarkets as a key component of the agro-food value chain

  9. Thank you for your attention!! www.fara-africa.org

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