Kenyan retailer Tuskys Supermarket is spearheading the support of small local manufacturers through its initiative that is targeting 1,000 such companies over the next three years. This initiative, which is offering small manufacturers a platform to market their products, is at the core of its competitive strategy for the future. So far, there are 100 manufacturers on board who will benefit from special access to the Tuskys shelves.
Tuskys chief executive Dan Githua noted that 80 per cent of what is sold in Kenya is made locally while 20 per cent is imported. In Uganda, the opposite is true. That means that Kenyan local manufacturers have a stronger foothold in the retail space.
However, the local manufacturing space is dominated by multinational companies such as Unilever who have a stronger competitive edge than small manufacturers. Tuskys Supermarket is, therefore, changing the landscape by offering these manufacturers a platform where they can market their products and become competitive.
Mr Githua told Kenyan Wall Street that these companies have the same quality of products, if not better, than the multinationals and that all they are lacking a marketing platform.
The Impact of the Tuskys Initiative
By supporting small manufacturers, jobs are created and the entire economy eventually thrives, Mr Githua said. For instance, the 3,000 dairy farmers that supply milk for Aspendos Dairies are guaranteed a consistent price at which their milk is bought thereby securing their financial situations.
Aspendos Dairies is one of the small manufacturers Tuskys is working with under the intiative. Other companies include Countryside Dairies and African Leather.
The partnership between Tuskys and African Leather has resulted in the company making shoes and selling them in Kenya. Previously, the company would buy hides from farmers, manufacture it into leather and export it to India for shoes to be made. The partnership has led to the hike of hides’ prices and it is supporting beef farmers from Northern and Eastern Kenya.
Mr Githua observed that the dairy companies that have joined its initiative are doing well, commanding a 15 per cent share of the sales under this category in Tuskys’ outlets.
Eliminating the Middleman
Tuskys is also supporting small-holder farmers by engaging with them directly rather than through middlemen who make the process ineffective and expensive.
“We have an imbalanced economy where on one side farmers are throwing away surplus produce while retailers on the other side are encountering a shortage of the same. […] It is expensive,” Mr Githua said. “In between, you will find that there is someone playing games, which is why we want to go directly to the farmer.”
Middlemen are often to blame for farmers giving up on growing certain crops because of low prices that cannot sustain financial needs.
Tuskys is also supporting small manufacturers through partnerships for the supply of other products such as furniture, cable extensions, and electric kettles which are of the same quality as imported products but more affordable.
Mr Githua emphasised that this initiative aims to not only support local manufacturers but to also help the consumers save money.