Tomatoes are one of the most popular vegetables and a staple in many Nigerian dishes. However, the poor quality of locally grown crops, combined with a weak transportation infrastructure, causes the country to import almost $500 million in tomato paste every year, according to a recent Harvard report.
The sad thing is tomatoes are grown in abundance in countries like Nigeria and Kenya, for example, but a huge chunk of harvests is wasted and rots away. The irony is that when you go to local supermarkets in these countries you find tinned tomatoes paste, but it‘s always difficult to find fresh peeled and liquidized tomatoes packed in simple cartons the way you would find them in European or American groceries.
Now, let‘s have a look at the wider market dynamics for vegetables in Africa: According to the UN, Africa‘s urban population will increase from 414 million today to over 1.2 billion by 20505. This population boom will likely lead to an increased demand for vegetables in Africa, especially in the cities.
Interestingly, vegetable farming is becoming a common phenomenon in Africa‘s urban areas. It is estimated that urban vegetable farming is responsible for a growing proportion of the vegetables consumed in many African cities today (we told you, you can start in your backyard!). Closeness to the city and much lower transportation costs have made this venture a very lucrative one.
Business Concept
Most of you who read this probably do not own hectares of land where you can start mass production of vegetables next week. You may have access to a small piece of land (to start with) or some modest space in your backyard.
It is absolutely vital that you do not use your little plot to grow onions or carrots, which are already widely available across local markets. The likelihood of growing your business with this approach is limited, because you simply may not survive and will have no competitive advantage regarding the product, its quality, or price.
The best thing you can do to reap visible success as soon as possible with a small piece of land is to do something different from the norm. We have witnessed a couple of concepts that work: One is to produce high-quality vegetables under greenhouse conditions. Take tomatoes, for example. Fact is that many of the tomatoes on the local markets do not meet the high standards of the growing number of hotels, fast-food chains, and restaurants. You will usually find a market for vegetables of higher quality, because high quality is rare.
The other approach is to start growing something that hardly anyone is growing, for example mushrooms, gourmet garlic or other vegetables that are not commonly grown in the country of your choice. This will make it easier to attract retailers, hotels, restaurants, and households to your product, because you are one of the few (or the only one) who offers it.
Remember that your success potential can be increased if you add value to your vegetables. For example, you could process your vegetables in some way and package it – creating your own local brand. For inspiration, you could follow the lead of vegetable products widely sold in Europe and America, much of which is simple convenience food. These vegetables are cut, packed and sold as frozen food.
One other product that is now spreading across the West is mixed salads, already washed and cut; you could even add ready-prepared salad dressing to it. With a growing number of professional women with little time, vibrant expat communities, and an increasing health awareness that can be witnessed in Africa‘s middle class, this is a product that could work well in large African retail stores. It‘s all about finding a distinct niche for yourself that allows you to stand out with your vegetable-based product.
Niche Ideas
Mushrooms (growing them in big numbers requires relatively little space)
Gourmet garlic
Frozen peas, green beans, spinach, mixed vegetables (Italian mix, Californian mix, Chinese stir fry mix)
Frozen vegetables: sambusa or spring roles for family and business events
Processed carrots, tomatoes, potatoes and other vegetables into ready-made baby food
Top Countries & Policy Guidance
Vegetables enjoy a huge and ready market across Africa. Whichever country you choose, you must always remember that the best opportunities and markets for vegetables are in the big cities and export.
Action & Tips
Do a quick research with your target market. Find out the vegetables that high-income families, restaurants, hotel chefs, and expats wished they had simple access to.
If you can, visit supermarkets in developed countries or browse online (most leading supermarkets in the UK, for example, like Tesco or Sainsbury‘s, allow online food shopping) and see what kinds of vegetables are being offered – both in raw and in processed/frozen form. Get ideas and see what could work in Africa.
Success Story
Tunde Felix Ogunde – QSR Consult (Nigeria)
Tunde Felix Ogunde ran operations for Burger King in the UK for several years before he decided to return to Nigeria to start his own business. He founded QSR Consult, a consultancy that helps entrepreneurs to set up restaurant businesses in Africa. Observing some gaps in the market, he recently started to produce tomatoes in greenhouse environments and told us that after just eight weeks he received over $200,000 in investment.
Right now, the demand for his high-quality tomatoes, which meet certain standards during production and delivery, is so high that his supplies cannot keep up. So he is expanding his greenhouse production plans. Tunde is not processing or branding the tomatoes in any way, and they are still an absolute hit.
We heard from an agricultural accelerator in Nairobi that the situation there is the same. The need for reliable delivery of good-looking, high-quality tomatoes remains high and there is still a big shortage in the market.