An emerging African middle class that spends 20-30 percent more of its income on food is pushing up demand for fresh fruit and vegetables in Africa, according to a report in BusinessDayLive.
Growth in African demand for fresh produce is averaging 6. 8 percent a year. This rate is “the highest in the world,” said Bryan Silbermann, global president of the Produce Marketing Association.
Half of the apples grown in South Africa are “going into Africa,” up from just 10 percent a decade ago, Johan van Deventer said Thursday at the association conference in Cape Town. He is managing director of Freshmark, one of the largest produce buyers in South Africa and a subsidiary of the Shoprite Group in the Western Cape.
African markets to the north of South Africa are proving lucrative for local fruit and vegetable retailers, with business accounting for at least 10 percent of turnover for the industry, the report said.
It’s often more viable for local retailers to grow crops in other African countries rather than export locally grown produce and try to sell it at high prices. “We have made small starts in growing food locally in many countries, involving small local farmers,” van Deventer said. “Often there are no seeds there, so we smuggle (them in).”
South Africa’s black middle class is now economically stronger than its white counterpart, van Deventer added. This provided a bonus for food retailers because it had more-than doubled their potential customer base.
“But there is fierce competition in the market, not just on price but on quality, freshness, convenience, safety and merchandising,” van Deventer said.
For South Africa, the African market is supplementary, but has the potential to offer an alternative to the traditional European export markets for fresh produce. “We are blessed,” van Deventer said. “We are in the right place at the right time, in the right industry.”