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Tanzania French Fries Industry Introduction

Tanzania-French-Fries-Industry-Introduction

Tanzania is is one of the largest potato producing countries in eastern Africa countries, yet it has very limited storage and processing facilities, as a result of that a substantial proportion of production is wasted. Due to inadequate storage and an less developed processing industry, prices fluctuates and not all of the excess production can be stored or processed for consumption during the off-season. The pr-feasibility here will indicate the current state of the potato production in Tanzania.
potatoes

Tanzania Potato Production

Potato is an important food and cash crop in Tanzania and other eastern African countries. Potato production is growing faster than other major root crops and cereals. Yields are low due to shortage of appropriate varieties, chronic shortage of quality seed of the improved varieties, cultural practices, and poor access to market.

Most potatoes produced in the ECA region are consumed fresh, mainly boiled. With population doubling every 25 years and urbanization continuing to grow by 13% in the next 10 years, feeding habits are rapidly changing in favor of easy-to-prepare foods such as chips. There is good potential for the growth of processing industry and also good market access for both fresh and frozen potato chips in the region.

Tanzania produces potatoes not only for domestic but for exportation. Every year, Kenya will import lots of fresh potatoes from Tanzania. Therefore, processed potatoes can be great potential in this country as there are so many material supply.

Potato Whole-Sale Price Trends

Due to lack of adequate cold storage facilities, during the harvest time, huge supply of potatoes comes on the market, which drives the prices down. In the contrast, if storage devices are available, price fluctuation could be stabilized during the whole year.

Africa Potato Exports

Reports have shown that potato sub-sector in Africa is expanding faster. For instance, during the period 1998-2004, estimates indicate that over 18 million metric tons of potato worth over USD 1.9 billion was produced in Burundi, D.R. Congo, Eritrea, Ethiopia, Kenya, Madagascar, Rwanda, Sudan, Tanzania and Uganda. Potao production has also expanded to non-traditional areas. Adoption of improved varieties has also significantly improved household food security and income. It was also reported that regionally released varieties are being used for processing instead of imported ones in a few cases, substituting for imports. For instance, the use of processing potato varieties, such as Asante and Tigoni in Kenya resulted in an aggregate annual net benefit of Ksh 10 million. These varieties covered approximately 10% of all the area under potato production in 2002. Farmer-based improved seed production was also found to be economically viable. For instance, in Uganda, mean returns of 216% and 82% were obtained in 1998 and 1999, while in Kenya the use of Asante and Tigoni potato varieties increased farmers’ returns by 22-53%. In Ethiopia, ownership of livestock and other animals has increased and overall living standards greatly improved from the incomes by 280% by using improved potato varieties as compared to the use of traditional varieties. This evidence implies a huge potential for expansion of the market for processed potato products, especially chips, in eastern and central African region.

FAO statistics of 2002 also indicate the fast growth of the potato Sub-Saharan Africa(SSA). The area under potato in SSA accounts for about 5% of the world potato area and it increased by about 250% in 2001 as compared to 1993. The area potato in the eastern and central African region accounts for 71% of the total area in SSA. The statistics also indicate that the rate of growth in area coverage of potato in SSA is faster than other crops such as wheat, rice, maize, sweet potato, cassava and yams. This is true partly because commercially-oriented farmers are responding to increased demand from the growing urban centers and subsistence-oriented farmers are responding to shrinking farm sizes. The revenue from potatoes is generally 10 times greater than that from grains. Policy makers have also noticed and believed that potato exports offer a potential source of foreign exchange. The findings also indicate that in most SSA countries potato is a highly commercial crop. Hence, to avoid the risks of commodity trade, policy makers seek value addition as part of trade through potao chips.

7.Market Information about Potato Chips

7.2 Market Research, Trend & Analysis
Tanzania’s food consumption is changing significantly as lifestyles and traditional eating habits are changing. Retail sales of processed foods, especially potato chips, are expanding. As people pay more attention on the health issues, demand for international quality snacks is growing, particularly among educated, middle and upper income urban consumers due to changing lifestyles and change in the taste of the consumer, influence of foreign media and increasing awareness. Referring to other factors influencing the demand, there are the growing population, increase in income level and improved living standards. Advertising is also contributing to stimulate demand for potato snacks.

Following are some analysis on the factors that stimulate the demand of potato chips:

Increasing urbanization and urban population

Urbanization and urban population are constantly increasing in Tanzania (Urbanization: urban population: 26.7% of total population rate of urbanization: 4.77% annual rate of change (2010-15 est.) (2011)). This leads to an increasing demand for food, including potato chips. The age groups below 30 in the urban population accounts for more than 70% of the population and for this category, the demand of potato chips is more than the old age category, which contributes the increasing demand for chips.

Increasing tourism industry

Over the years, tourism industry is increasing . In Tanzania, with the development of globalization, the tourism industry grew by an estimated 10%, especially more than the global average of 5.5%. The increasing tourism industry expand the market of potato chips, and also leads an increasing of the demand for potato chips.
Affordable prices of chips

Comparing with the import frozen French fries, chips processed in domestic are sold on the street and in shops in various packs can be sold for as low as less than half a dollar which is much lower than imported frozen fries. This is suitable for people of various income groups.

Increasing incomes of urban households

In Tanzania, income of urban people is increasing at a high speed year by year. The increasing urbanization and tourism industry leads to the increasing income of urban households, which creates more demand for potato chips.

 

Tanzania & Snacks Industry

Globalization, population growth, urbanization, and increasing in income contributes the Tanzania snacks industry in an annual growth rate of 20%-30% per annum. With lots of market research, it indicates that children, teenagers and young people are the target customer of potato chips. The changing eating habits of the target customer and inclination towards western lifestyle contributes more towards having snacks for the target customers. In Tanzania, potato chips/crisps or French fries are labelled as a meal replacement, and are becoming more and more popular in people as a light fast food.
With the development of urbanization and improving of lifestyle, people have an increasing income which is another plus point for the investor. Also, tourism industry, globalization are also factors that can attract investors and boost the snacks market.

Demand and Supply

Through amounts of market research, the demand for potato chips is increasing in Tanzania and other eastern African countries and central African countries. 63% of the outlets in Tanzania said that the annual demand for chips is steadily increasing over the years. The demand in Tanzania is showing a net increment as evidenced by 47% of retail outlets.
The supply of potato chips has two channels in Tanzania, which is simple chips processing and not a developed industry.

Retail outlets

Retail outlets cover mostly hotels, bars and restaurants, mobile box retails. The retail outlets process and prepare ready-to-eat chips themselves and sell to consumers directly.

Imports of frozen chips

The second source of chips in Tanzania is imports. As five star hotels and some high income group need international standard and high quality potato chips, imports is the only way to sole it, though the import chips has a higher price than local chips.
Good potential exists for a new brand to compete and capture a market share provided the product has:

  1. Premium quality
  2. Unique packaging
  3. Customers’ preferred tasted
  4. For the industry, it should have:
  5. A wide distribution network
  6. Professional industry knowledge
  7. Financial support
  8. Market feedback system

Target Customers

Through market research, in Tanzania, youngsters, the middle income people, and the rich and the foreign tourists are target customers. The urbanization contributes an increasing income for urban people which improve their life standard and increase the demand for valued snacks. Recently, people pay more attention on their diet and demand high quality potato crisp. With the development of globalization and the media, the western life style and taste have influenced the native a lot and have a big attraction towards them about the western things.

Conclusion

In Tanzania, the most distinctly observable source of new growth in demand is from processed potato market in the form of chips. Yet commercial chips processing enterprises are not well established and in its infant stages in Tanzania. Therefore, there is a good potential for the developed potato chips manufacturing industry to capture the market.

Company Profile

Adhering to the principle of managing scientifically and honesty and credit,our factory has passed ISO9001-2000 quality system certification. Now, Our factory can provide potato dry cleaning machine, potato washing machine, potato peeling machine, potato sticks cutting machine, potato grader, potato chips production line, potato starch production line, potato mesh bag packing machine, potato dosing packing machine.

Our potato processing products have passed with CE,ISO and SGS Certificates and has been widely sold all over the world.


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