Local Response to the Rapid Rise in Demand for Processed and Perishable Foods: Results of an Initial Inventory of Processed Food Products in the Markets of Dar es Salaam

This trend has been observed in Tanzania, where the penetration of processed foods in consumption patterns has been deep, with an overall share in purchased food of nearly 70%. The penetration has been broad, with the share of all processed food in total food purchases being nearly as high in rural areas as in urban, and nearly as high among the poor as among the upper classes. In Tanzania, the main difference across types of households is that low value added processed foods, such as purchased maize meal and milled rice, predominate among lower-income and rural households, while high value added processed foods, such as vegetable oils, bread, and food away from home, predominate in urban areas and among higher income households. Expenditure elasticities of demand are highest, and all above 1.0, for perishable high processed foods, perishable low processed foods, and non-perishable high processed foods. A study conducted in Dar es Salaam, Tanzania, identified nearly 500 processed food products across five product categories: milled grains, packaged rice, dairy, fruit juices, and poultry. Contrary to common views, local and regional processing, not imports from outside the continent, dominate this market. Tanzania dominates processed grains, packaged rice, dairy, and poultry, with 61% of the identified products manufactured in Tanzania. Locally and regionally processed foods account for over 70% of all processed food items available for sale in Dar es Salaam. Branding has expanded dramatically in the city in recent years, with over 60 brands of Tanzanian maize meal found, and the research team expects that more are available in the market. Branded maize meal now appears to dominate the market in all types of retail outlets from sokos to supermarket chains. Fifty different blended flour products were found, and this category was completely dominated by Tanzania. These blended flour products sell for far higher prices than maize meal and may be far more profitable for the companies producing them. The study also found that the size distribution of local firms is diverse, with many small- and even micro-sized firms producing maize meal and blended flours. The retail sector in Dar es Salaam is changing rapidly, with new types of stores and new types of food-oriented retail developments opening regularly. The study suggests that local processing firms may face challenges in remaining competitive in this rapidly changing market, and that policies and programs may be needed to sustainably enhance their competitiveness. The growth of the processed food market in Tanzania is expected to be rapid, with market demand for perishable high processed products, perishable low processed products, and non-perishable high processed products increasing by factors of 10, 8, and 7, respectively, over the next 30 years. This growth implies huge business opportunities for entrepreneurs in the region's agrifood system, as well as the potential for rapid growth in employment in the post-farm segment of the agrifood system. However, the sector's consolidation and the impact on employment are concerns that need to be addressed through further research and policy interventions.