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Poultry marketing

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Presented by Pauline Kariuki, Kenya Poultry Farmers Association, at the FAO-ILRI Regional Training Workshop on Proven Livestock Technologies, ILRI, Addis Ababa, 3-5 December 2018

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Poultry marketing

  1. 1. Poultry Marketing Pauline Kariuki, Kenya Poultry Farmers Association FAO-ILRI Regional Training Workshop on Proven Livestock Technologies ILRI, Addis Ababa, 3-5 December 2018
  2. 2. OUTLINE • Training Objectives • General Overview of the Poultry Industry in Kenya • Challenges in Production • Poultry Marketing • Areas to prioritize in Poultry Marketing • Marketing Strategies • Challenges in Marketing • Role of Farmer Organizations in Poultry Marketing • KEPOFA Experience • Players Involved in the Industry • Opportunities • Recommendations • Key Take Home Lessons • Conclusion
  3. 3. TRAINING OBJECTIVES • Enhance the participants knowledge with information that will support their farmers in effective and efficient marketing and profitable business, • Know the main components of marketing poultry and poultry products, • Learn the steps involved in implementing marketing strategies, • Identify the key stakeholders,
  4. 4. CONT’D (TRAINING OBJECTIVES) • Train other Trainers who will gain the capacity to cascade the training further to other smallholder farmers, • Appreciate the relationship of the actors in the value chain, • Recognize the role and importance of upscaling their production, • Recognize opportunities and challenges in marketing of poultry and poultry products.
  5. 5. GENERAL OVERVIEW OF THE POULTRY INDUSTRY IN KENYA The poultry industry is key in food & nutrition security; offers income and employment Poultry Production Systems Can be classified into 3 distinct production systems based on scale, functions, breeds, husbandry and productivity. FAO has classified based on biosecurity levels at the farm 1. Commercial Intensive 2. Semi Intensive (backyard) 3. Free range (village) - most dominant in Kenya, concentrated in rural areas; unconfined birds scavenge around homestead and fields
  6. 6. CONT’D (GENERAL OVERVIEW OF THE POULTRY INDUSTRY IN KENYA) Producers in the industry 1. Small Holder Producers -These are the majority in terms of bird population and mainly producing Indigenous chicken. Broilers and layers are mostly reared near the urban centers. 2. Large Scale- Mainly contracted by large companies rearing more than 10,000 birds.
  7. 7. CHALLENGES IN PRODUCTION • High mortality rates (attributable to preventable poultry diseases) • Inadequate supply of indigenous day-old chicks, • Inadequate credit facilities, -This subsector is mainly donated by women and youth. These constituencies have no means to securing their loans • High cost of feed and sometimes poor quality feed-Raw materials are not available locally • Limited knowledge on production and management-Extension service is inadequate
  8. 8. POULTRY MARKETING Marketing is the process of taking your product to the end user Market facilitation will equip poultry producers with knowledge and skills in order to enhance commercialization. Will involve researching; • What does the consumer want?-Understand consumer preference • Distribution - How does your product reach the end user?-Timely and quality maintained • Promotion - How does the customer know about your product?- You look for the customer not the customer to look for you • Pricing - How do you set prices for your products?-Compare with other but remain profitable
  9. 9. AREAS TO PRIORITIZE IN POULTRY MARKETING Know your market • Why should your customer buy from you?-Sustain the royalty Competition • Who are your competitors?- Understand who else is in the market and their strength • What is the market trend?- What is selling and what are the scenarios' • How do you rank against the competition?-Is it likely that the competitor will knock you out • Are there any substitutes to your product? Are they a threat?- People could be changing their eating habits
  10. 10. CONT’D (AREAS TO PRIORITIZE IN POULTRY MARKETING) Market segment • What is your market segment?-It is important to know your market segment it helps increasing your production and monitoring your competitors Distribution and service delivery • Why should your customer buy from you?-it is important to focus on your competitor • Time - Do your customers get their supply on time?-If you are unreliable the customer will by from your competitor • Quality - Do your customers quality products?-Understand what your customer want • Distribution cost - is distribution eating into your profit?-pool transport • Are you responding to the consumer queries/feedback? - This builds customer loyalty
  11. 11. CONT’D (AREAS TO PRIORITIZE IN POULTRY MARKETING) Consistency • Is your supply reliable? Does the customer get the product when needed or as per the contract? Traders and consumers want to be assured that the products are available when needed Visibility • Promote your products (internet, print and electronic media) Technology is critical in marketing because most clients are doing their purchases' in the comfort of their homes Pricing • How are you pricing your products and what informs the pricing? The prices of the products should be friendly to the trader and customer but should be based on the production cost for the producer to make profit.
  12. 12. MARKETING STRATEGIES • Farmgate marketing - Accounts for the majority of products sold by semi- commercial poultry keepers. –Aggregating will work better for the farmers and traders will not cover huge distances to pick the products. Prices are reasonable because there is no transport cost, the transaction cost is low because farmers and traders rely on regular buying and trust • Contract marketing - Link rural producers and urban market and offer pre-fixed prices and quality assurance. • Broiler contract farmers are contracted by big companies have their chicken picked up at source. The model can also work for indigenous chicken
  13. 13. CHALLENGES IN MARKETING • Low volumes - inadequate supply of ready birds and eggs, • Fluctuating market demands – seasonal and unreliable supply, • Poor marketing infrastructure - bad roads, lack of electricity and cold storage, • Inadequate credit facilities – financial institutions consider poultry farming high risk, • In availability of processing facilities - slaughter slabs and egg processing units, • Lack of business management skills amongst producers.
  14. 14. ROLE OF FARMER ORGANIZATIONS IN POULTRY MARKETING • Improving market linkage between farmers groups and traders, • Collection and provision of information on chicken production, • Market development and advocacy awareness creation along the value chain • Link farmers and traders by giving relevant information • Supporting farmers on access and availability of production inputs and lobbying for good market prices.
  15. 15. KEPOFA EXPERIENCE • Mobilizing poultry farmers - enable farmers to produce sustainably • Training on farming as a business (FaaB) – equip the poultry farmers with skills to market their products. • Training on organizational development – to address group dynamics because many groups have a very short life • Partnered with the government to develop the National Poultry Policy and Draft Poultry Development Bill-Work closely with the decision makers
  16. 16. CONT’D (KEPOFA EXPERIENCE) • Developed a manual for production of indigenous chicken – teaches the skills needed for production and management of indigenous chicken • Poultry magazines to connect with other actors and advertise - to keep in touch with members and for communication. • Creating Poultry Platforms-Responding to the devolved system of government
  17. 17. POULTRY COLLECTION CENTRES(PCCs) (3 PER FACILITY) POULTRY FACILITY FARMER GROUPS (5 GROUPS PER PCC) 350 BIRDS PER GROUP PER DAY 20 TRAYS PER GROUP PER DAY Functions PRODUCTIONBULKING SLAUGHTER, PROCESSINGAND WHOLESALING CONSUMPTION Enablers FINANCIALINSTITUTIONS,DLP,DVS,PRIVATEEXTENSIONSERVICEPROVIDERS 1050 CHICKEN PER DAY 60 TRAYS PER DAY Chain actors Supermarkets, hotels 1050 BIRDS PER DAY 60 TRAYS PER DAY RETAILING PLAYERS INVOLVED
  18. 18. The marketing model is based on a three-tiered system with a single Poultry Products Facility and three Poultry Products Collection Centres
  19. 19. POULTRY PRODUCTS FACILITY • The Poultry Products Facility (PF) will be the hub of the system. The facility will consist of a collection area for chickens and eggs, a slaughter facility, a processing area for packaging, a shipping area and inputs such as vaccines and feed. • Cold storage facilities will ensure biosecurity. The development and maintenance of these markets will be key to the success of each PF. The facility will receive support in developing brands and marketing those brands to consumers. An identification system will be developed so that each farmer group becomes responsible for the quality of their product. Training for each farmer group will be important to this function.
  20. 20. POULTRY PRODUCTS COLLECTION CENTRES • Poultry Products Collection Centres (PCs) are the next hierarchy of the facilities to be developed to provide the raw materials for the PFs. • Each PC will have facilities for administration, egg collection, live chicken collection, vaccine storage and distribution, day-old-chicks reception, storage and distribution as well as other services as needed.
  21. 21. FARMER GROUPS • The farmers will aggregate their production in groups and form working agreements with the PCs for supply of chickens and eggs and supply of other support services. • The vision for these agreements is to establish a 4 month cycle for indigenous chickens with each farmer’s growing cycle being properly staggered. • Business skills, biosecurity and poultry management among others will be topics for training.
  22. 22. OPPORTUNITIES Despite the challenges faced, there are opportunities that make poultry rearing attractive. In Kenya, per capita poultry meat and egg consumption stands at 0.65kg-3kg meat and 36 eggs. The is way below the World Health Organization (WHO) recommendation of (182) eggs and 12kg poultry meat per Year • Increased demand of poultry products-When accessible and affordable • Low start-up capital and requires less space compared to other livestock • Indigenous chicken rearing is not labor intensive and are resistant to most poultry diseases
  23. 23. CONT’D (OPPORTUNITIES) • Increased economic growth - people will have the purchasing power • Investment in processing infrastructure, cold storage and transport systems • Smallholder chicken farming is mainly undertaken by women and the youth • Cross cutting issues are adequately addressed in the poultry value chain, giving opportunities to Women, Youth, People living with HIV/AIDS, People living with disabilities and orphans
  24. 24. RECOMMENDATIONS To enhance production of poultry there’s need to create awareness on the importance of the sector in securing household food and nutrition security. There is need to; • Train and facilitate production of indigenous chicken-This is the chicken of choice as most become health conscious • Lower production costs will make poultry and poultry products affordable • Encourage farmers to form cooperatives –This will give famers bargain power. Institutional strengthening for farmer organizations • Address poultry feed supplementing ( not scavenging) by introducing appropriate feed ensuring a balanced diet to increase numbers • Develop reliable quality assurance programs for all hatcheries and multiplication farms to cushion farmers against losses-Launched in Kenya
  25. 25. CONT’D (RECOMMENDATIONS) • Establish collective marketing of poultry products • Establish markets and slaughterhouses specializing in the processing of both indigenous and exotic chicken • Improve the extension services rendered to poultry farmers rearing indigenous chicken • Financing the sub-sector by mainstream financial institutions and others • Popularize consumption of poultry products in collaboration with media to disseminate information- there is a lot of misinformation especially on eggs(print electronic social media, exhibitions • County governments to prioritize poultry farming and finance
  26. 26. KEY TAKE HOME LESSONS • We will not market effectively when fragmented or individually-We have to be consistent in supply and quality. We can only do this in synchronized production system • There is huge potential to tap into by exploiting the niche market that we have • Think value addition-Value addition gives the producer premium prices
  27. 27. CONCLUSION • Marketing should be critically considered by industry players as an important aspect of the poultry business and lobby • Build the capacity of farmers to effectively coordinate, monitor and participate in the market- • Facilitate the small holder farmers’ access to viable markets for indigenous chicken and eggs.

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