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Responding to Consumers' Preference in African Rice

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Responding to Consumers' Preference in African Rice Responding to consumers’ preference in African rice markets: experiences of Africa Rice Center R. Fiamohe, S. Ndindeng, G. Mujawamariya, S. Sanyang, and K. Futakuchi Invited poster presented at the 5th International Conference of the African Association of Agricultural Economists, September 23-26, 2016, Addis Ababa, Ethiopia Copyright 2016 by [authors]. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies. Responding to consumers’ preference in African rice markets: experiences of Africa Rice Center R. Fiamohe1*, S. Ndindeng1, G. Mujawamariya2, S. Sanyang3, and K. Futakuchi1 1AfricaRice Center (AfricaRice), 01 BP 2031, Cotonou, Benin 2AfricaRice Center (AfricaRice), P.O. Box 33581, Dar-es-Salaam, Tanzania 3Africa Rice Center (AfricaRice), 01 BP 4029, Abidjan 01, Côte d'Ivoire *Corresponding author: Tel.: +229 64181313; fax: +229 64227809; E-mail: [email protected] Abstract The main objective of this study is to decrypt Africa Rice Center (AfricaRice) research for development strategies implemented to respond to consumers preferences for rice in sub-Sahara Africa. To achieve this, the study adopted case studies evidences and experimental approaches 1) to provide insight on urban consumers’ preferences for rice (local and imported rice) in relation to their willingness to pay and 2) to illustrate with the key value addition strategies implemented by AfricaRice to response to consumers demand in term of quality and attractiveness of rice products in Africa. The results of the decryption show that rice varieties grown locally in many African countries have good organoleptic and nutritional attributes that meet urban consumers’ preference if properly processed and branded. The out-scaling of the improved GEM rice processing plants developed by AfricaRice is not only playing a significant role in the upgrading of the quality of locally produced rice, but it is also beginning to improve the urban consumers’ acceptability of locally produced rice. Keywords Consumers’ preference, women-friendly parboiling technologies, branding and packaging, local rice, sub-Saharan Africa. 1. Introduction Most efforts to stimulate rice sector in Africa have focused on increasing farm-level production without adequate attention paid to post harvest processing and marketing activities, which constitute major bottlenecks in the availability and pricing of locally produced rice on African markets. It is well documented that high demand for rice exists in Africa since its consumption outpaces the production, leading to a relatively self-sufficiency ratio estimated at 60% (USDA, 2015). To response to the increasing rice demand in most African food markets, especially in urban markets, a huge volume of imported rice from various sources is deversed in both urban and rural markets. As a consequence, several brands of rice of which the sale is dictated by consumer preferences are observed in those African markets. Especialy in coastal countries, the imported rice still dominates the market due to the primary urban center which is also a port with easier access to food imports than food grown locally (Demont, 2013; AfricaRice, 2013, Fiamohe et al, 2014). This situation leads to rice market segmentation in termes of rice types according to origin, processing, grades, brands, labels, etc. This nature of rice markets raises the question related to how is the market share of locally produced rice in those markets? The question has a strong linkage with what kind of rice African consumers prefer among the wide range of products existing on markets. The responses of this question is crucial to provide evidences supporting the investment efforts which are being made to boost the rice sector in Africa with the objective to improve food and nutrition security in the continent. Rice has become a strategic commodity to fuel economic growth and to contribute toward hunger and poverty reduction across the continent AfricaRice (2013). Some evidences from literatures indicated the problem of availability and affordability of local rice compared to imported rice especially in urban markets. The analysis by USAID (2009), Kinkpe et al, (2012) and Fiamohe et al. (2014) showed that imported rice is mostly sold in urban markets while local rice is mainly sold and consumed in rural areas except in certain countries. The factors behind this fact can be explained by the spatial dispersion of production and consumption which often results in high transaction costs that prevent farmers from accessing urban markets (Fiamohe et al., 2012). Usually, consumers are very concerned about the quality and price of the commodity when they made a purchase (Diako et. al., 2010). Many authors have analyzed this situation and their results showed that consumers in urban areas are more demanding in quality. This is why they prefer imported rice to local rice because of its good physical attributes such as color and absence of impurities (Naseem et al., 2013; Demont et al., 2013; Fiamohe et al., 2014). With this increasing demand for high quality rice in African markets, AfricaRice Center (AfricaRice), since 2012 has made attempts to increase the quantity of rice grown in the continent to meet the needs of African consumers through reduction of yield gaps, post-harvest losses, and ensuring better quality and attractiveness of end-products. According to Futakuchi et al. (2013), matching the quality of imported rice can be an excellent target for the improvement of locally produced rice. These actions should improve access to niche and urban markets, incomes of value chain actors, and ensure food and nutrition security. To reach its objective, the Center has adopted participatory strategies for upgrading rice value chains, starting from end-markets to farmers and including processors using the multi-stakeholder innovation platforms (IPs) of the rice sector development hubs. The IPs are usually used as a vehicle for system-wide performance and change, as well as impact on beneficiaries to diagnose and find solutions to problems, act collectively and collaboratively learn to catalyze business opportunities for women and youth for example (Tollens et al., 2013 and Sanyang et al., 2014). It consists of a local network of inter-related business actors organized around a so-called business champion, which can be a farmer or association or small and medium-sized enterprises (SME). The IPs also includes support services like financial services, input providers, technical support, etc. IPs are located in Hubs which are the main rice growing environments where research products are integrated along the value chain to achieve development outcomes and impacts (Africarice, 2012). The study adopted case studies evidences and experimental approaches 1) to provide insight on urban consumers’ preferences for rice (local and imported rice) in relation to their willingness to pay and 2) to illustrate with the key value addition strategies implemented by AfricaRice to response to consumers demand in term of quality and attractiveness of rice products in Africa. The outcomes of this study will help to better understand the profile of rice to be promoted in selected African countries. It will guide the development of new rice products or the reformulating of existing products to increase consumers appeal and orient the postharvest investments for effective improvement of key factors driving rice demand in Africa. The rest of the paper is organized as follows. Section 2 analyzes the prevalence of imported and locally produced rice in rural and key urban markets using the baseline information collected by AfricaRice in 2013. In section 3, we describe the key challenges faced by the marketing of locally produced rice in urban markets. Section 4 provided insights on AfricaRice’ s research and development products currently being developed by AfricaRice to response to consumers demand, and section 5 concludes the paper with a key recommandation to reach AfricaRice objectives. 2. Prevalence of imported and locally produced rice in selected African urban markets The question on what rice consumers purchase on the markets is very relavant to identify the products which are regulary found in the consumers’ food baskets. This question is very important to generate information which will guide the upgrading strategies of the rice value chains in the continent. This development involves closely all the stakeholders in rice research and development platforms. This is why for any analysis, it is very important to start first by end-markets and next, provide feedback to other values chains stakeholders who need this information for their respective research actions. The main idea is to ensure that all stakeholders are working to satisfy the market’s needs based on the same markets’ information. The contribution of this section is to gather information on the rice which prevails on selected markets. To achieve this, the baseline surveys conducted in 2013 in rice sector development hubs covering the main rice growing environments including key rural, semi urban and urban markets were analyzed. The surveys adopted a two-stage stratified sampling method to ensure a fair representation of the main concentrated rice zones in the hubs. The first stage target sampling in two strata: rural and urban zones purposely selected in hubs to represent local rice crop surplus area and the main consumer markets respectively in
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