Shaping a circular food marketing approach with consumer insights from Kenya

By the O-Farms Team

More than 30% of all food produced worldwide is lost or wasted, squandering an enormous investment of effort and resources. Fortunately, agribusiness entrepreneurs in East Africa are reclaiming - and ultimately preventing - food waste with circular business models that create new products from discarded food. Bopinc’s Managing Director for East Africa, Beryl Oyier, describes a circular economy as,? “an economy where the idea of waste is designed out of the system and inputs maintain their value as long as possible. So, for example, a circular agribusiness is a commercial venture that brings food losses from waste and spoilage, or by-products from food production and processing, back into the food system.”?

Circular entrepreneurs are showing us what’s possible, producing dried snacks made from rejected fruits, compostable food packaging made from banana pseudostems, and yoghurt made from the leftovers of cheese production. Yet, even entrepreneurs with great ideas like these run up against a common barrier: how should they market their circular food products to customers, especially those who are low-income??

In this article, we share insights from a small-scale consumer perception study in Kenya on how to break through this critical barrier. Partnering with UsabilityHub, we reached an online panel of 54 participants in Kenya in October 2022. Our sample comprised 30 women and 24 men between the ages of 20 and 40 who purchased groceries frequently and had incomes lower than USD 10,000 per year, the lowest income band represented in the sample.?

What they told us, in brief, was that circular entrepreneurs can break through and connect with customers if they employ smart marketing that connects circularity with things consumers already know and value. Circular entrepreneurs and supporters of this emerging sector can use these insights to market their circular food products more effectively to Kenyan consumers.?

Who wants upcycled food??

Circular agribusinesses turn food waste and by-products into valuable new products such as organic fertiliser, biomass fuel, all-natural packaging and animal feeds, and also create “upcycled” foods like the dried snacks and yoghurt mentioned above. Rescuing food waste and turning it into new food products for people has tremendous potential to support sustainable food security within and beyond Africa. However, getting consumers, especially those with low-incomes, interested in buying upcycled foods has proven to be challenging. Why??

For starters, circularity is a little-known concept in markets like Kenya and unfamiliar to most of the respondents in our study. When asked what words came to mind when they thought about a “circular product”, more than half of the respondents took a literal approach and gave us words like “round”, “circle” and “shape” (although “recycling” and “available” also featured among the word-association results). For most consumers in our sample, circularity was a new concept.??

Another challenge is that most upcycled food products available now are marketed mainly to middle- or higher-income segments. While marketing upcycled foods as premium products can make sense, low-income consumers are a large share of the population and drive at least one-fifth of all consumer spending in Kenya. When circular entrepreneurs ignore this segment, they don’t only miss out on a massive market for their products. They also miss out on contributing to food security and equitable economic development, turning food waste into new nutritious products for people who need them while creating jobs and contributing to local economies. Consumer research in other markets has even shown that upcycled food products may appeal more to lower-income customers than those with higher incomes.??

Consumer behaviour is also inherently hard to change. Our research shows that circular food producers can meet these challenges head-on through smart marketing that connects their products to values their customers already know and care about.?

Connecting circular to what consumers value

Kenyan consumers may not be very familiar with circularity, but sustainability is something that many recognise and value when making purchasing decisions. Respondents chose words like “environment”, “affordable” and “quality” when asked for words they associated with a “sustainable product”.?

Respondents also showed a preference for products branded as sustainable when they are priced similarly to standard alternatives. We asked respondents to choose which bag of maize flour they would purchase under two scenarios: scenario A, where the “sustainable” product is the same price as standard maize, and scenario B, where the “sustainable” option costs 10% more. The result was quite clear: in the first scenario, when price wasn’t a consideration, consumers opted for the sustainable option by a decisive margin. But when the sustainable option costs slightly more, only a small minority chose it.

Does this mean that consumers don’t care about sustainability? Hardly. The preference for lower prices is understandable, especially given the rising cost of food products in recent years. But respondents also value sustainability when making purchasing decisions.?

We asked respondents to rank a list of factors that influence their food purchasing decisions in order of their importance to them. Respondents ranked sustainability fifth, less important than the ease of finding products but more important than product appearance. Interestingly, “sustainability” ranked higher than “environmental impact”. Our results gave no clear reason for this split, though many respondents told us they do associate sustainability with the environment. It may be that “environmental impact” sounds more technical and is harder to relate to than “sustainability”. Either way, results suggest that for many respondents, sustainability is something they consider when purchasing food, and that product quality, brand familiarity, nutritional value and easy access factor strongly into their decisions.?

Other findings from this study shed more light on the relevance of sustainability and the environment for consumers in our panel. For example, more than half of the respondents agreed that climate change affects them personally. And more than three out of four felt that their actions can make a difference in reducing environmental damage. And as the hypothetical maize flour question showed, many would choose the more sustainable food product, especially when cost is less of a consideration.?

Back to basics

What can circular entrepreneurs take from these results about how consumers perceive circularity to help them market their upcycled food products, especially to low-income consumers??

Before reviewing the key points, we must acknowledge that our study has real limitations. The sample was very small, panel members opted-in, and respondents reacted to images of hypothetical products, instead of interacting with real ones. Furthermore, including truly “low-income” consumers proved difficult in the online panel since consumers of modest means face higher barriers to internet access and are less likely to participate. But even if taken as anecdotal, these results point to some practical suggestions for circular entrepreneurs, including:?

• Lead with sustainability - Our findings suggest that Kenyan consumers recognize and appreciate “sustainability” much more than “circularity”, and see how sustainability is relevant to their own lives. Use branding, packaging and other messaging to show the sustainability benefits of upcycled food products.
• Don’t forget the basics - Sustainability alone isn’t enough though: circular products still need to compete on quality, nutritional value, consistent availability and most of all, on price. Especially for newer products in the markets, the novelty of a new, exciting product may attract consumer interest, but it’s the basics of quality, accessibility and affordability that drive their satisfaction and loyalty as customers.
• Educate consumers about circularity - Don’t give up on circularity just because it’s poorly understood. Circular agribusinesses can help change this through their branding and advertising to educate consumers about circularity and the positive impacts these products can have on the environment and society.

About O-Farms

This research was produced by the O-Farms program, Africa’s first accelerator focusing entirely on circular agribusiness. O-Farms supports 40 innovative small and medium enterprises (SMEs) in Kenya and Uganda. Funded by the IKEA Foundation and implemented by Bopinc and Village Capital, the project engages local entrepreneur support organisations (ESOs) E4Impact and HiveColab to implement its SME accelerator activities.?