Kenyan Breakfast Cereals Market

An Expert's View about Specialized Food Retail in Kenya

Last updated: 7 Apr 2011

Kenyan breakfast cereals imports are growing at an average rate of 44 percent annually. The United States is the largest supplier of breakfast cereals to Kenya with more than half of the market.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 3/31/2011 GAIN Report Number: Kenya Post: Nairobi Kenyan Breakfast Cereals Market Report Categories: Product Brief Approved By: Souleymane Diaby Prepared By: Carol N. Kamau Report Highlights: Kenyan breakfast cereals imports are growing at an average rate of 44 percent annually. The United States is the largest supplier of breakfast cereals to Kenya with more than half of the market. However, consumption is expected to remain flat during the next five years. Market Overview: According to Euromonitor International data, the breakfast cereals market in Kenya increased at an average annual growth rate of four percent, rising from $1.8 million in calendar year (CY) 2006 to $2.1 million during CY 2010. However, Euromonitor forecasts a slow growth during the next five years (CY 2011-2015) due to declining sales of hot cereals and changing consumer tastes. Kenyans appear to favor the lower-quality and lower-cost local products (bread, porridge, and arrow roots) than imported products. The family cereals category is the largest segment of the total market as noted in the graph below. The United States is the largest exporter of breakfast cereals to Kenya and held 54 percent share in CY 2010. This position is largely due to the recognition of the superior quality of U.S. products. U.S. brands accounted for nearly a fourth of the retail sales. Other major suppliers included the European Union, South Africa and India. Market Summary 2006 2007 2008 2009 2010 Agricultural Products Imports ($1,000) Total Imports of Agricultural, Fish, and Forestry Products from the World 781,599 1,138,089 1,470,119 1,632,805 1,977,066 Total Imports of Agricultural, Fish, and Fishery products from the United States 46,752 85,782 77,288 193,451 208,719 Total Imports of Consumer- Oriented Food Products 92,310 122,446 157,187 150,836 169,854 Total Imports of Consumer- Oriented Food Products from the United States 5,880 13,566 17,883 16,259 28,988 Total Imports of Breakfast Cereals/Pancake Mix Group from the World 1,436 10,733 3,484 2,273 5,904 Total Imports of Breakfast Cereals/Pancake Mix Group from the United States 467 8,157 995 266 3,259 Major Competitors ($1,000) United Kingdom 433 1,375 608 484 1,007 Egypt 158 107 243 215 630 South Africa 130 574 277 467 347 India 75 140 212 275 223 Source: Global Trade Atlas (GTA) Trends According to research by Consumer Insight, a local market research firm, only 30 percent of the total population and more than half of consumers earning over $3,756 per year eat breakfast cereals in Kenya. In general, Kenyans perceive breakfast cereals as food for children. Local manufacturers now offer a choice of sizes to consumers: 37 grams (g), 112g, 225 g, 450g, and 900g. Market Entry Strategy Kenyan retailers do not directly import consumer-oriented products including breakfast cereals but purchase them from local importers. In general, retailers submit a list of products to local importers who source them from consolidators in the U.S., Dubai, Europe, and South Africa. Currently, there are nine companies that import food products for retailers. U.S. consolidators should work directly with local importers to meet retailers? requirements (orders smaller than normal, small pack sizes, mixed products in one shipment, share a shipment with other U.S. suppliers) and Kenya?s import regulations. U.S. consolidators can also attend the Gulf Food Show in Dubai where they can acquaint Kenyan importers. Local importers prefer U.S. food products for their quality, packaging, and wide range. Import Requirements All processed foods including breakfast cereals are subject to: MNF Tariffs: 25 percent of ad-valorem Import Declaration Fee (IDF): 2.25 percent of Cost, Insurance, and Freight (CIF) value Value Added Tax: 16 percent Other requirements: Certificate of Conformity (CoC) For additional information, please see the following reports: Food and Agricultural Import Regulations and Standards Exporter Guide
Posted: 07 April 2011, last updated 7 April 2011