The market for animal-sourced foods in Tanzania: Business opportunities for small-scale livestock...
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Joint project of the World Bank, FAO, AU-IBAR, ILRI with support from the Gates Foundation
The market for animal-sourced foods in Tanzania:
Business opportunities for small-scale livestock producers?
Derek Baker (International Livestock Research Institute, Kenya), Ugo Pica-Ciamarra (Food and Agriculture Organization, Rome),
Nsiima Longin (Ministry of Livestock and Fisheries Development, Tanzania), and Nadhem Mtimet (International Livestock Research Institute, Kenya)
19 th International Farm Management Congress
Transforming agriculture – between policy, science and the consumer 21-26 July 2013,
Warsaw University of Life Sciences Warsaw, Poland
Livestock Data Innovation in Africa Numbers for Livelihood Enhancement www.africalivestockdata.org
Outline
1. The issue: measuring market opportunities
2. Available data are not amendable to investment and exploitation of opportnities
3. Methodology: preferred retail forms / outlets and safety and quality attributes in developing countries
4. Evidence from Tanzania
5. Summary and conclusions
Acknowledgements • Livestock Data Innovation Project
https://www.africalivestockdata.org/ • Consultative Group on International Agricultural Research – Policies,
Institutions and Markets Program (PIM) http://www.pim.cgiar.org/
Livestock Data Innovation in Africa Numbers for Livelihood Enhancement www.africalivestockdata.org
The issue
• Growing demand for animal-source foods in developing countries
• Large share of rural households keep livestock
• Opportunities for a demand-driven and inclusive growth of livestock
• Smallholder-based supply chains need to be promoted
Sourc
es: E
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Livestock Data Innovation in Africa Numbers for Livelihood Enhancement www.africalivestockdata.org
The issue
• Growing demand for animal-source foods in developing countries
• Large share of rural households keep livestock
• Opportunities for a demand-driven and inclusive growth of livestock
• Smallholder-based supply chains need to be promoted
• Information available on quantity consumed
• Scattered if any information on retail forms / outlets and safety & quality attributes
Livestock Data Innovation in Africa Numbers for Livelihood Enhancement www.africalivestockdata.org
The issue
• Growing demand for animal-source foods in developing countries
• Large share of rural households keep livestock
• Opportunities for a demand-driven and inclusive growth of livestock
• How to promote smallholder-based livestock supply chains ??
• Information available on quantity consumed
• Scattered if any information on retail forms / outlets and safety & quality attributes
Livestock Data Innovation in Africa Numbers for Livelihood Enhancement www.africalivestockdata.org
Methodology: consumer preferences
• Identification of major livestock products consumed
• Typologies of retail outlets
• Typologies of retail forms
• Identification of 5 ‘safety and quality’ attributes, which are visible (no experience / credence attributes) - simple quality score
• Questionnaires developed and administered to > 144 consumers in 36 retail outlets
(stratification criteria: urban-rural / retail outlets)
• Data analysis based on consumer typologies (less-well off / middle class / better-off)
Livestock Data Innovation in Africa Numbers for Livelihood Enhancement www.africalivestockdata.org
Retail forms / outlets and quality: e.g. beef
Retail forms Retail outlets Safety / quality
attributes*
Large piece Abattoir Freshness (blood)
Small cut Butchery Fat content
Mixed beef Roadside outlet / wet
market Marbling
Ground beef Small retail shop Cleanliness of premises /
presence of flies
Offals Supermarket Packaging
*unweighted sum of presence/absence of safety/quality attributes = quality score
Livestock Data Innovation in Africa Numbers for Livelihood Enhancement www.africalivestockdata.org
Consumer type – means of transport as an income proxy
Less well off
40%
Middle class 33%
Better off
27%
Income bracket for 144 consumers
Consumers Less
well off Middle
class Better
off Total
Urban 26 25 21 72
Rural 32 22 18 72
Total 58 47 39 144
Livestock Data Innovation in Africa Numbers for Livelihood Enhancement www.africalivestockdata.org
0.0
1.0
2.0
3.0
4.0
5.0
Urban
Rural
Quality – scores achieved by outlets
Livestock Data Innovation in Africa Numbers for Livelihood Enhancement www.africalivestockdata.org
Consumers’ preferred retail outlets
0
20
40
60
80
100
Roadside Small retailshop
Wet market Supermarket Butchery Milk kiosk /vendor
Typ
e o
f co
nsu
mer
s (%
)
Less well off Middle Class Better Off
Livestock Data Innovation in Africa Numbers for Livelihood Enhancement www.africalivestockdata.org
Consumers’ preferred retail outlets
0
20
40
60
80
100
Roadside Small retailshop
Wet market Supermarket Butchery Milk kiosk /vendor
Typ
e o
f co
nsu
mer
s (%
)
Less well off Middle Class Better Off
Quality
dimension
Quality
dimension
Size dimension
Livestock Data Innovation in Africa Numbers for Livelihood Enhancement www.africalivestockdata.org
Preferred retail forms
Beef
Poultry
0
20
40
60
80
100
mixed pieces live bird dressed bird
Co
nsu
mer
typ
e (
%)
Less well off Middle Class Better Off
0
20
40
60
80
100
Offals Mixed beef Steak Sausage
Co
nsu
me
r ty
pe
(%)
Less well off Middle Class Better Off
Livestock Data Innovation in Africa Numbers for Livelihood Enhancement www.africalivestockdata.org
Preferred food ‘quality’
0
10
20
30
40
50
60
70
1 2 3 4 5
%
Quality/safety score
less well off middle class better off
Livestock Data Innovation in Africa Numbers for Livelihood Enhancement www.africalivestockdata.org
Preferred food ‘quality’
0
10
20
30
40
50
60
70
1 2 3 4 5
%
Quality/safety score
less well off middle class better off
Quality is valued by all consumers’ income classes
Less well off feature strongly at the higher quality end (due to occasional purchases?)
Livestock Data Innovation in Africa Numbers for Livelihood Enhancement www.africalivestockdata.org
Summary findings
• Rapid techniques developed for identifying market opportunities – larger samples needed
• Consumers’ product quality demands not greatly different across income classes
• Quality / safety attributes relevant for consumers in all income brackets
• Consumers’ retail outlet preferences are markedly different across income classes
• Consumers’ retail product form preferences are markedly different across income classes
Livestock Data Innovation in Africa Numbers for Livelihood Enhancement www.africalivestockdata.org
Discussion and conclusion
• 68 % of population live below the US$ 1.25 / day poverty line (HBS, 2007)
• Proportion of (rural) HHs keeping livestock = 51% (61%) (NPS, 2008/09)
• Proportion of HHs that currently do not consume livestock products = 38 % (NPS, 2008/09)
• Estimated growth of GDP (per capita) in 2011-2015 = 6.9 (3.7%) year (WB, 2013)
• Large high-volume / low value market coming: major opportunities for smallholder –based livestock supply chains!