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KENYA’S MUSHROOM INDUSTRY BUSINESS INVESTMENT OPPORTUNITIES
Overview of the Study • Agri-Pro Focus initiated an exploration to identify business opportunities in Kenya’s mushroom industry. • Objective; To facilitate business linkages across countries. • By sharing information across countries and to industry actors on market size of potential opportunities, • And brokering linkages to potential business partners – directly and indirectly.
Methodology • Interview of key actors in mushroom value chain; input suppliers, producers, and marketers. • Focus was on actors that can engage potential partners on a B2B level. Limitations • Few B2B level players in the mushroom industry • Getting information from market actors. • Estimation of the market size was therefore based on information from very limited actors.
Findings: Overview • Kenya has an estimated demand of between 540-1200 tons of mushrooms annually. • Commercial production started in 1997 with 4 firms; Agridutt, Eldoret Mushrooms, Rift Valley Mushrooms and Olive mushrooms. • Commercial varieties produced are button and oyster. Others are Shitake, Reishi, Gernoderma and Potabela.
Production and Marketing • The industry is still nascent with an estimated 200 with less than 5 large scale growers. • Large scale producers account for about 60% of production estimated at 500 tons annually. • Average production capacity is; 8 tons monthly for large scale producers and 20 to 100 Kg for small scale producers. • Tourists and the upper and middleclass population in Nairobi and Mombasa constitute the largest market. • But the demand outstrips supply – Kenya imports approximately 150 tons annually.
Limitations in the industry • Technology; most small holder producers have inadequate skills in mushroom production. • Production structures; control of the environment in mushroom growing structures is a challenge. • Spawn; 80% of spawn used in Kenya is imported. Some firms multiply and sell to small holder producers but failure rate is high. • Substrate; most farmers have challenges developing their own substrate. • Value addition technologies are limited making marketing of mushrooms a challenge
Business Opportunity • Production and supply of quality spawn; • Production and supply of substrate • Supply of production technologies. • Supply of Post-harvest handling and processing technologies
Demand Drivers • Large scale producers’ demand for inputs is influenced by the market demand. • Small holder farmers get into mushroom production as a result of influence from others.
Businesses Partnerships Olive Mushrooms Ltd. • Establishing a modern lab to produce spawn • Processing mushroom and access to European markets