Economic growth and urbanization has led to a rapid increase in the purchase of processed foods in East and Southern Africa (ESA) among all segments of society, with overall demand through markets projected to increase 7% to 8% per year over the next three decades (Tschirley et al., 2015a). This presents a major opportunity for the local food processing industry and for the economy as a whole. However, seizing this opportunity depends on the ability of the local food industry to compete with food imports, requiring investment in the capital (eg, human and physical) and technology necessary to cater to the evolving preferences and requirements of both a rising middle class of consumers and a modernizing retail sector.
Trienekens (2011) classifies three types of food systems:(1) an “A-system” which is characterized as low income, local, and traditional with mainly small firms and many links in the supply chain,(2) a “B-system” which has a mix of small and medium size firms (SMEs) and networks of collaborating firms, many of which engage in value added production and are linked to supermarkets, and (3) a “C-system” which is designed for export and is characterized by large economies of scale and high value added production. The focus of this paper is on A and B food systems, and more specifically, on the role of and opportunities for SMEs within them.