Having secured sales in South Africa, US dairy protein specialist Davisco Foods is examining further opportunities in Africa - but insists it will not take a "shotgun approach" to the region.
While Minnesota-based Davisco Foods International it has no specific African “hit list” its sales force has its eye on markets such as Nigeria, Kenya, Morocco, Egypt and Israel, Frederic Narbel, European and African sales manager, Davisco Foods International, told DairyReporter.com.
Despite these ambitions, Davisco does not intend to spread itself too widely too soon, said Narbel.
“Each market has specific rules which make a uniform process difficult,” he said. “We need to learn how each market works.”
“We’re not taking a shotgun approach to Africa: we’re taking more a rifle approach.”
“It’s a question of finding the right partner in the market you are looking at.”
Demand for dairy in Africa, with its population of approximately 900m people and a growing middle-class, is expected to grow by 4% in the years running up to 2020, according to Narbel.
Seeing a significant opportunity for growth, the likes of Danone, Arla Foods, FrieslandCampina, and Fonterra have already planted roots in sub-Saharan Africa.
“When compared to China or Russia for instance the African market is relatively small,” said Narbel.
“On the other hand…one can see that the African continent is attracting global companies such as McDonald's and Burger King who are seeking to further expand in this region.”
“We believe that their move is a confirmation of the growing attractiveness of the continent for international companies,” he said.
“England with palm trees”
“Another factor one should not forget is that historically, Africa is a region which has been colonized by various European countries. This has resulted in the adoption of Western food culture by the local population.”
Nowhere is this more evident than South Africa, said Narbel.
“To me, South Africa is England with palm trees,” said Narbel. “South Africa has a very strong link to the UK and the Commonwealth.”
Demand for dairy protein in South Africa is far advanced of that in other African markets, which Narbel attributed to the country's exposure to foreign media.
“The reason that South Africa is quite aware of the benefits of protein is because it is getting information from the UK and Australia," he said.
Despite these opportunities for growth, the African continent, like many other developing regions, can be unstable, Narbel added.
“Everyone is the dairy industry recognizes Africa as the forgotten continent,” said Narbel. “The growing demand is a plus, but there is political unrest that one should not forget.”
“Iraq, for example, was considered relatively stable until a few weeks ago.”
“One has to be very careful in Africa," he concluded.