eBusiness Weekly
Background
The local food processing market has seen the emergence of over 15 new companies in the last 5 years and several new products or brands that have entered the space that used to be dominated by international brands, multinational corporations, and established producers.
New products innovations have been necessitated by increase in consumption, changing consumer tastes, lifestyles, and health consciousness. CZI will be exhibiting some of these products at its Annual congress at Manna Resorts from September 7-9, 2022. The theme for this year’s congress is Glocalise.
The need to Glocalise
Zimbabwe’s import dependence on raw materials in food industry is estimated to be close to 65 percent (Huge import component).
This means the component of imported raw materials remains high, posing a risk for imported inflation. From January to April 2022, processed food exports increased by 41 percent from US$16,9 million in 2021 to US$23,98 million in 2022.
In terms of products under the sector, sugar exports increased from US$1,4 million to US$8,22 million while baked products exports increased from US$1,8 million to US$2,2 million, (ZimTrade, 2022).
The processed foods sector is one of the key sectors earmarked for continued export growth this year with an increased impetus to Glocalise.
This would entail import substituting to meet local demand while growing market penetration to new export markets and boosting export value to existing markets.
Changing tastes & preferences
Imports of cereals and other processed foodstuffs from South Africa have shaped local tastes and preferences away from the traditional food that dominated local shelves in the 80s and 90s.
Consumers are now more health conscious, thus shaping their tastes more to organic food, cereals, and energy drinks.
This has seen the emergence of companies such as Glytime foods which is in the production of health cereals. Nestle Zimbabwe launched sour cereal, which is also healthier.
Zimbabwe is an agro-based economy with the agriculture sector producing 60 percent of the raw materials used in the manufacturing sector.
This points to the economic linkage between agriculture and the local industry.
Therefore, increased impetus towards value addition is critical for Zimbabwe’s economic transformation towards Vision 2030.
Creating access to market for farmers
The emergence of companies such Richsky foods, which is transforming bananas into banana chips. Value added goods fetch higher prices and create access to market for local farmers who are contracted to grow bananas in Honde Valley, Manicaland. Zimbabwe is endowed with baobab (Adansonia digitata) trees, manly found in the Lowveld Region (Lupane & Beitbridge).
Dairibord Zimbabwe is now making baobab cascade which promises to be a game changer in indigenous flavours.
The success of Delta’s Chibuku brand has created an access to the market for small holder farmers across the country especially from the lowveld areas where rainfall patterns are erratic.
In 2021, Delta contracted 7 000 hectares under the barley crop throughout the country. Enough to yield 35 000 tonnes of barley (More than their requirement of 22 000 tonnes).
Barley is a cereal grain which, apart from being used in the brewing of beer and alcoholic beverages, is also used to make medicine for heart diseases by the local pharmaceutical industry.
Delta has annual requirements of at least 65 000 tonnes of Maize, 13 000 tonnes of red sorghum and 3 000 tonnes of eagle sorghum.
Huge Demand for cereal/import dependence
The 2022 production of maize (the main food staple) is estimated at about 1,6 million tonnes, slightly below the five-year average and 45 percent down from the bumper harvest of 2021.
According to FAO (2022) the yields of other cereal crops were similarly affected by the adverse weather conditions and the 2022 outputs of sorghum and millet are estimated to be around 40 percent below their respective averages.
Production of groundnuts, sweet potatoes and beans are also estimated to have declined from the high levels of the previous year and this may limit the capacity of farming households to substitute cereals in their consumption patterns.
Overall, cereal production in 2022 is pegged at 1,9 million tonnes, 4 percent below the short-term average. To compensate for the lower cereal outturn in 2022, import requirements in the 2022/23 marketing year are estimated to increase on a yearly basis.
Maize imports are expected to rise to over 300 000 tonnes in 2022/23, while a drawdown in stocks, which had been built up to above average levels in the previous two years, will contribute to meet the national consumption needs.
Imports of wheat, with the domestic harvest normally accounting for about 70 percent of the national demand, are foreseen to fall in 2022/23 to a below average level.
This article was prepared by the Confederation of Zimbabwe Industries (CZI).
