Philemon Jambaya
Assistant Editor
National Foods Holdings Limited, a Zimbabwean giant in the food industry, is making a strategic shift by directly engaging with informal traders. This move sheds light on the evolving business landscape in the country and NatFoods' determination to solidify its market position.
The company's decision stems from the vast potential of the informal sector. With an estimated US$2 billion circulating within this network, NatFoods sees an opportunity to expand its reach beyond traditional channels. This is particularly relevant for their new product lines like breakfast cereals and pasta, which differ from their established offerings like flour and rice.
NatFoods CEO Mike Lashbrook emphasizes that the primary driver isn't currency acquisition, but rather ensuring their products reach the end consumer. While wholesalers remain crucial for staples like mealie-meal, new products necessitate a more targeted approach. By engaging informal traders, NatFoods aims to make these products readily available throughout the market.
The company isn't setting specific revenue targets for the informal sector. Lashbrook highlights their commitment to serving all market segments. Their goal is to make their products accessible everywhere at fair prices, regardless of the consumer's location or preferred shopping channel.
This strategic move coincides with NatFoods' recent investments in expanding their production capacity. Their new pasta plant, a US$5.6 million investment, boasts a production capacity of 2 metric tonnes per hour. Similar investments were made in biscuit and breakfast cereal production lines, showcasing the company's commitment to product diversification.
NatFoods' strategy reflects a wider trend in Zimbabwe's economy. A 2022 Reserve Bank of Zimbabwe study estimated the informal sector generates a staggering US$14.2 billion annually. This highlights the sector's growing influence and its potential to be a significant driver of economic activity.
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