by Donald Makoka
Chapter 5 in: Takane, T. (eds.): Agricultural and Rural Development in Malawi: Macro and Micro Perspectives, A.R. Series No.11/2005.
In the past decade, many countries in eastern and southern Africa have witnessed a rapid rise in supermarkets, which are quickly transforming the agrifood systems that form the economic backbone of these countries. Propelled by the strong forces of globalization and urbanization, the rapid rise of these supermarkets throughout the southern and eastern Africa has been inevitable. At a regional level, the rise of supermarkets has been rapid, though it is lagging about a decade behind the expansion of supermarkets in Latin America. The take-off of supermarkets in Malawi, though slow, has significant implications on different actors in the agrifood system.
In countries where they had their earliest foothold, supermarkets have completely taken over the urban areas which are the most dynamic segment of the food retail markets. These are the type of food markets that small agrifood producers need to target to be able to escape from poverty. In Malawi, where supermarkets are in their take-off stage, their existence has the potential to completely transform the agrifood market, and this could imply great challenges for the smallholder farmer and agrifood processors. On the other hand, the rise of supermarkets could also bring about great opportunities for the players in the agrifood market in Malawi. However, to be able to benefit from the great opportunities that supermarkets could bring, the local agrifood suppliers need to do their business differently. Strict adherence to supermarkets' procurement procedures would enable the local suppliers to access this highly rewarding agrifood market.
The paper proceeds as follows. Section 2 discusses the main players in the agrifood market in Malawi. In section 3, the pattern of the development of supermarkets in the eastern and southern African regions is presented. In particular, we focus on the trends in South Africa and Kenya where supermarkets had the earliest foothold. The section also discusses the nature of supermarkets in Malawi. Section 4 considers the determinants of the rise of supermarkets in the regions, with a particular emphasis on Malawi. Section 5 presents the changes in the procurement systems for supermarkets globally, particularly in those countries where they are well developed.
The nature of the agrifood products available in supermarkets in Malawi is outlined in section 6. It also considers the socio-economic characteristics of current suppliers of agrifood products to supermarkets and the determinants of supermarkets choice of suppliers. Section 7 outlines the major challenges facing local suppliers to penetrate the supermarket markets. It also describes how two cooperatives in Malawi are faring with respect to their ability to supply agrifood products to high-value markets. The effects of the emergence of supermarkets on the fruit and vegetable supply chain are presented in section 8. The next section outlines the expectation of the rise in supermarkets and its implications on the smallholder farmers. Finally, section 10 utlines thepolicy implications.
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