Researchers flag growth and big profits in fruit and veg
By Farmbiz | Tue 12 Jun, 2012

Local fruit and vegetables deliver better profit margins than manufacturing, according to recent research by TNS, which found the top fruit market - for bananas - drawing sales income of Sh30bn last year, while tomatoes, classified by the study as vegetables, earned Sh39bn.

The 10-month study by TNS RMS East Africa, sponsored by USAID revealed marked shifts in the fruit and vegetables market, with kales, commonly referred to as sukuma wiki, losing their lead position to cabbage, due to price fluctuations, in a shift that took the cabbage market to sales of Sh14.5bn.

The second most used vegetable is now the potato, followed by cabbage, then sukuma wiki, the sweet potato and green maize.

However, despite securing the largest sales, tomatoes were achieving lower profit margins than both cabbages and Sukuma Wiki, said TNS.

Overall, the tomato business was worth Sh39.46bn last year, on the trade of 611.4 tonnes of tomatoes, while the potato market achieved sales of Sh27.6bn.

In the fruit market, Kenyans consume more bananas (both green and ripe) than any other fruit, with total sales of Sh30bn last year. Ripe bananas are the most consumed fruit everywhere except Western Kenya, where the green ones lead.

The banana's lead position is excellent nutritionally, say scientists, who claim the fruit can provide enough energy to work all day long. Bananas also contain vitamin C, vitamin K, vitamin A, and vitamin B6. Vitamin C helps to retain Iron in the body and enhances the blood formation system. The fruit is also rich in potassium, which helps the growth of body muscles.

The second biggest fruit market in Kenya is mango, but it is seasonal. Passion fruit comes third.

However, the researchers reported that the distribution of fruits across the country was “pathetic”. At least 64 per cent of all stalls sell ripe bananas. But, substantially, only the banana business had achieved an adequate distribution network. At present, some 97 per cent of the country’s local fruits and vegetables sales are through small scale outlets, while supermarkets, grocers and shops share just 3 per cent.

And that despite the fact that fruit and vegetables have better profit margins, at 20-35 per cent, than manufactured goods, at less than 25 per cent.

“This represents a huge opportunity for growth in the domestic fruit market,” said the TNS director of Research and Insights Ann Mutahi.

For traders and farmers, passion fruits presented the single best current business opportunity, with prices that have doubled in the last ten months, mainly due to scarcity.

The report further highlighted the need for the country to break away from rain-reliant fruit production, which causes supply constraints that are preventing producers from tapping into the burgeoning horticultural export market.

“There is a need to adapt irrigation in the production of fruits and vegetables and to train farmers on better farm practices and grading of their commodities,” said Ms Mutahi.

Kenya's horticultural exports were worth Sh93.5bn last year, with the figure expected to climb considerably after Kenya received clearance from the United States to export snow peas and French beans.

Written by Bob Koigi for African Laughter

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