Charles Dhewa —
Value addition and beneficiation are some of the words that still dominate policy discourse in Zimbabwe. While it may make sense to process agricultural commodities for the export market, we have to start by exciting local consumers. That means fully understanding their preferences. To what extent do
Zimbabwean consumers buy and eat tinned beans, tomato sauce or canned beef? That is a fundamental question.
From a recent survey, eMKambo discovered that most local consumers prefer fresh tomatoes to tomato sauce. No one can buy tomato sauce when there is a pile of fresh tomatoes for two bond coins.
Some of the information we teased out is that Zimbabweans who do not mind tinned food are mostly urban consumers and those who have stayed in Western countries. Apparently, Zimbabwean’s largest population comprises rural consumers who do not really give a damn about canned food. Given this scenario, should we not be first cultivate deep interest among our local consumers before investing resources into meeting the needs of foreign consumers we barely understand?
Fully understanding our consumption patterns
Zimbabweans’ consumption of processed foods has not been fully explored. From eMKambo’s interactions with diverse classes of consumers in food markets across the country, most people prefer fresh food straight from the farm.
Over the past few years, there has been a proliferation of peanut butter processing technology at household level across Zimbabwe. This has presented competition to industrial peanut butter processing companies.
In fact, processing at household and local level has become good at meeting local food preferences. Some people can simply roast their peanuts, apply their preferred amount of salt and take them to a local peanut butter processor where they pay a small fee and return back home with their peanut butter.
That level of food personalisation has made it possible for consumers to control the amount of additives going into their food unlike would be the case if the peanut butter was wholly industrially produced.
Although flour and maize milling is common at industrial scale, grassroots consumers prefer taking their own maize to a local grinding mill which they are familiar with and from whom they can sometimes get back other by-products for poultry feeding.
Industrial milling does not have those opportunities. There have been cases where farmers take their sunflower, groundnut and cotton seed to a local oil expresser.
Besides building relationships between farmers and local processors, local people quickly understand what is involved in value addition. There seems to be a general social consensus among the majority of Zimbabwean consumers that non-edible products such as soap, toothpaste, lotion and others can be produced away from farmers and consumers without any problem.
For food products, it makes sense to add value and process at grassroots level in line with diverse preferences in terms of quality, quantity, taste, local brands and many other considerations.
One of the reasons Western consumers have become used to canned food is because they often experience extreme weather conditions like severe frost which make it impossible for growing anything.
They are therefore forced to conserve and store food to consume in winter when literally no plant grows. Yet for Zimbabwe and other African countries, there is never any extreme weather condition preventing plant growth across the country.
We always have vegetables, tomatoes and fruits in different parts of the country. That on its own is a disincentive for serious value addition and conservation of food. Perhaps a changing climate will transform some of these habits.
Why not concentrate on what we are able to do first?
Some of the observations echoed by many people to eMKambo included the fact that processing requires consistent production and supply which we cannot guarantee at the moment. Serious industrial processing cannot rely on rain-fed agriculture particularly in a changing climate.
Even where irrigation is available to produce tonnes of tomatoes for processing companies, there is still need to subsidise costs like electricity, water and other inputs. Grading, storage and logistical issues also generate costs that cannot be ignored if the total cost of production is to be managed in ways that ensure processing generates meaningful levels of profitability.
Given our national economic situation, it makes sense to concentrate on semi-processing instead of trying to produce finished products that require high tech machinery that is expensive to acquire for our economy. It is very important to know what we are able to do.
For instance, we need time and resources to develop high quality laboratories and capacity required for genetic engineering.
As indicated above, processed products do not seem very competitive on the Zimbabwean market. It is important to analyse the whole processing value chain. We have to conduct a thorough analysis from production and processing, comparing the performance of finished agricultural products with raw agricultural products.
We should not go and borrow processing equipment whose efficacy we are not sure about. Instead, we should generate income from our raw commodities and then buy appropriate equipment. This is where reliable and real-time data become very important.
We should be able to compare the cost of processing tomatoes versus producing and selling the product in raw form. There is need for evidence of production potential, production times as well as evaluating costs/benefit analysis by production zone.
It does not help to promote value addition without taking into account the competitive advantages of particular production zones.
Since our raw products have superior taste, rather than investing in expensive equipment, why not enter into bilateral arrangements with SA processing companies so that they process our raw products for a fee and we get back those products and sell them globally.
This will give us time to retool and build our processing capacity. Our products can easily be branded “Zimbabwean” but processed in SA and sold for a premium.
That will allow us to concentrate on what we are good at — taking advantage of our good climate to produce superior tasty products. For some products we can just semi-process and send to SA for the production of final products.
At the moment, the cost of production is being pushed to the processor who pushes them to the consumer and this is rendering processed products uncompetitive.
SMEs as new semi-processors
A key positive development is that SMEs have taken over the space, previously dominated by formal processors. A wide range of SMEs are now processing beans, producing scones and a diverse range of juices as well as modernising traditional beverages such as Mahewu.
Not to mention those who are drying fruits, vegetables and many kinds of mealie-meal. Rather than worry about processing, let us first fight for lowering the cost of production by streamlining the value chain.
One thing we have not done is create space for Zimbabweans in the diaspora to get into the processing business. Instead of sending money home for building houses, many can purchase equipment and send it home for processing abundant fruits and vegetables.
This can be one smart way of remitting money home and investing in business at home. As part of coping with climate change, we can semi-process our agricultural commodities so that they are easier to preserve.
Seasonal commodities can be semi-processed during gluts for release onto the market during periods of scarcity. That will also enable us to determine the amount of surplus commodities we can keep as food reserves.
We can take a cue from tobacco and mining. The tobacco industry grew through exporting raw and semi-processed tobacco. It is only recently that Savanna has joined BAT Zimbabwe in the tobacco processing business.
It is difficult to add value to commodities whose final consumers you do not fully know and understand. Production, semi-processing and preservation should be our main concern.
Taking advantage of global consumer awareness
There is a global movement against processed food in the world. Cordoning some of our production zones from industrial agriculture can enable us to produce high quality food free from chemicals for a big consumer base that is becoming healthy conscious.
While others fret about processing we can distinguish ourselves as a big producer of fresh and natural products free from additives. We can produce for diverse consumers and markets. Currently, there is a notion that processed food is superior and can fetch more money than raw and natural food.
That notion can be proven to be a dangerous myth. As eMKambo has discovered through interacting with Zimbabwean consumers, it is difficult to promote a canned product whose ingredients cannot be verified among consumers used to raw commodities whose freshness and naturalness they can prove.
Raw commodities are easy to promote because they connect with all human senses — smell, feel, touch, see, hear and taste.
Doing production and logistics very well will trigger many business models as investors come to see the actual source of particular commodities such as small grains, legumes and tubers. At the moment, the local processing industry has to compete with household processing.
That means processors have to offer better prices than people’s markets like Mbare. That is proving to be impossible. By identifying other markets for our raw and semi-processed products we will regulate urban informal markets like Mbare since most raw commodities will find a much bigger and diverse destination.
Processing also requires us to first of all address the energy side. For instance, solar energy hasn’t expanded as expected. While toll gates are solar-powered why don’t we have solar-powered food processing plants? Instead of buying processing equipment, we may need to start with understanding the whole processing technology, integrating use of solar energy.
This should inform us on the processing equipment to buy. The right sequencing makes all the difference. You may have all the ingredients but without a proper recipe which stipulates detailed ways of combining what is available, you will not produce an acceptable product.
Charles Dhewa is a proactive knowledge management specialist and chief executive officer of Knowledge Transfer Africa (Pvt) (www.knowledgetransafrica.com) whose flagship eMKambo (www.emkambo.co.zw) has a presence in more than 20 agricultural markets in Zimbabwe. He can be contacted on: [email protected] ; Mobile: +263 774 430 309 / 772 137 717/ 712 737 430.