Required Report - public distribution

**Date:** 11/26/2007

**GAIN Report Number:** GH7006

GH7006

**Ghana**

**Retail Food Sector**

**Ghana\'s Retail Sector**

**2007**

**Approved by:**

![](media/image1.wmf)Ali Abdi, Agricultural Attaché

U.S. Consulate General, Lagos, Nigeria

**Prepared by:**

Elmasoeur Z. Ashitey

**Report Highlights:**

The Ghanaian market continues to offer many opportunities for U.S.
exporters of high-value food products. Demand for these products is
rapidly expanding, but the U.S. share remains relatively low at five
percent. Ghana is also a key access point for market entry into the
larger West Africa region.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Lagos \[NI1\]

\[GH\]

Table of Contents

[SECTION I. MARKET SUMMARY 3](#section-i.-market-summary)

[SECTION II. ROAD MAP FOR MARKET ENTRY
6](#section-ii.-road-map-for-market-entry)

[MARKET STRUCTURES 7](#market-structures)

[Distribution Flowchart for Convenience Stores
9](#distribution-flowchart-for-convenience-stores)

[SECTION III: COMPETITION 10](#section-iii-competition)

[SECTION IV. BEST PRODUCT PROSPECTS
12](#section-iv.-best-product-prospects)

[SECTION V. POST CONTACT INFORMATION
13](#section-v.-post-contact-information)

# 

# SECTION I. MARKET SUMMARY

A.  According to industry sources, retail food sales totaled \$1 billion
    in 2006. This consists of:

-   Imported high-value food products (34 percent)

-   Products partially processed and packaged in Ghana (11 percent)

-   Products completely processed in Ghana (9 percent)

-   Local, unprocessed foodstuffs and staples including fresh fruits and
    vegetables, fish, meat, etc. (46 percent)

B.  The retail food sector in Ghana consists of three main sub-sectors:

-   Supermarkets (accounting for approximately 2 percent of total retail
    sales)

-   Convenience stores and small grocery stores (30 percent)

-   Traditional open air markets (68 percent)

C.  In terms of retail sales of imported high-value food products,
    supermarkets are estimated to account for 1 percent, convenience
    stores 34 percent, and traditional markets 65 percent, according to
    industry sources.

D.  Features of Retail Food Outlets

+-----------------+-----------------+-----------------+-----------------+
|                 | Supermarket     | Convenience     | Traditional     |
|                 |                 | Stores /Small   | Markets         |
|                 |                 | grocery         |                 |
+-----------------+-----------------+-----------------+-----------------+
| Average size    | 10-200          | \<10            | 5-10            |
|                 |                 |                 |                 |
| (sq.m)          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Number of       | 18              | Over 500,000    | Over 3,000      |
| Outlets         |                 |                 | (locations)     |
+-----------------+-----------------+-----------------+-----------------+
| Market size     | 2%              | 30%             | 68%             |
|                 |                 |                 |                 |
| Served (%)      |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Average Annual  | \$5 million     | \$5,000         | \$3             |
|                 |                 |                 | m               |
| Turnover (\$)   |                 |                 | illion/location |
+-----------------+-----------------+-----------------+-----------------+
| Location        | Urban           | 8               | 7               |
|                 |                 | :2(Urban-rural) | :3(Urban-rural) |
+-----------------+-----------------+-----------------+-----------------+
| Stock level     | Full line       | Limited         | Very limited    |
+-----------------+-----------------+-----------------+-----------------+
| Service method  | Self-Serve      | Assisted        | Assisted        |
+-----------------+-----------------+-----------------+-----------------+

E.  The following chart illustrates the sales trend for food products
    sold in Ghana's retail sector between 2001 and 2006 and illustrates
    the growth in imported products.

![](media/image2.wmf){width="6.164583333333334in"
height="2.8333333333333335in"}

F.  Ghanaian consumers are price sensitive. Retailers prefer stocking
    relatively small consumer-ready food products, prepared and packaged
    for one time use only. Consumer demand for these products is high
    due to their relative affordability.

Suppliers pricing pattern

  -------------------------- ---------- ---------------- -----------------
  Description                Domestic   Other country    US Products

  Average retail mark-up     1          1.15             1.20
  (/100)                                                 

  Average price ratio (/100) 1          1.15             1.20
  -------------------------- ---------- ---------------- -----------------

Pricing pattern for the retail sector sub-groups

  ----------------- ----------------- ----------------- -----------------
  Description       Supermarkets      Convenience shops Traditional
                                                        markets

  Retail mark-up    1.50              1.20              1
  (imports)                                             

  Retail mark-up    1.20              1.15              1
  (domestic)                                            
  ----------------- ----------------- ----------------- -----------------

Pricing pattern among retail sector channel members

  -------------- -------------- -------------- -------------- --------------
  Description    Importer       Wholesaler     Retailer       Consumer

  Average price  1              10             15             25
  Ratio (/100)                                                
  -------------- -------------- -------------- -------------- --------------

### Advantages and challenges in the Ghanaian market.

+-----------------------------------+-----------------------------------+
| Advantages                        | Challenges                        |
+-----------------------------------+-----------------------------------+
| -   Ghana's population of 22      | -   Ghana's estimated per capita  |
|     million is growing at 2.7     |     income is only \$300.         |
|     percent per annum.            |                                   |
|                                   | -   The monthly minimum wage is   |
| -   Continued strong growth in    |     only approximately \$30.      |
|     rural to urban migration is   |                                   |
|     increasing demand for         | -   U.S. HVPs are currently not   |
|     high-value products (HVPs).   |     readily available in Ghana.   |
|                                   |                                   |
| -   The Ghanaian market is        | -   Competition is strong from    |
|     relatively open with tariff   |     traditional suppliers in      |
|     rates relatively low and      |     Europe and Asia.              |
|     banded at zero, five, ten and |                                   |
|     twenty percent.               | -   Many U.S. exporters lack      |
|                                   |     sufficient information        |
| -   Ghanaian consumers associate  |     regarding the Ghanaian        |
|     U.S. food products with being |     market.                       |
|     of high quality and value.    |                                   |
|                                   | -   Many U.S. exporters view      |
| -   Growth in the tourism sector  |     Ghana as too small a small    |
|     and demand from neighboring   |     market and there are few U.S. |
|     countries is creating new     |     freight consolidators who are |
|     opportunities for HVP.        |     willing to meet the           |
|                                   |     requirements of Ghanaian      |
| -   U.S. HVP items entering Ghana |     importers                     |
|     can be re-exported into       |                                   |
|     neighboring West African      |                                   |
|     countries (a market of 250    |                                   |
|     million people).              |                                   |
|                                   |                                   |
| -   Insufficient domestic         |                                   |
|     production and processing     |                                   |
|     means import demand in Ghana  |                                   |
|     for HVPs will remain high.    |                                   |
+-----------------------------------+-----------------------------------+

### 

# SECTION II. ROAD MAP FOR MARKET ENTRY

A. The major players for distributing imported HVP in Ghana are:

-   Importer/distributor

-   Agents/Sole representatives

-   Wholesalers

-   Sub-wholesalers/Super retailers

-   Retailers

B.  The first point of contact for entry into the Ghanaian market is
    typically the importer/distributor. U.S. exporters should take one
    or more of the following steps to assist in entering the Ghanaian
    market:

    -   Contact the Agricultural Attache/Agricultural Specialist at the
        USDA/FAS office located in the US Embassy in Accra, Ghana, to
        assist in selecting one or more importer/distributors.

    -   Directly contact the selected importer/distributors or the local
        agent that would usually register the products with the Foods
        and Drugs Board.

    -   Identify and sell through consolidators based in the United
        States who are already serving the West African region. Such
        consolidators usually already have a good understanding of local
        market practices.

    -   Exhibit at the FMI supermarket trade show in Chicago, which is
        well attended by Ghanaian importers and is a venue for follow-up
        contacts/face-to-face meetings.

    -   Offer flexible shipping volumes and small-sized packaging which
        includes readable manufacture date and date of expiration.

## MARKET STRUCTURES

### A. Supermarket Procurement and Distribution:

**Distribution flow** **chart for Supermarket Market**

### 

-   Supermarkets procure goods from the wholesalers or local
    consolidators depending on size and financial capabilities.

```{=html}
<!-- -->
```
-   Some supermarkets in Ghana import HVP products directly. These
    supermarkets register trading/importing firms distinct from their
    supermarket operations. These firms source the supermarket's
    merchandizing requirements as well as sell some imported products to
    competing retailers.

-   Supermarkets purchase more than 90 percent of their HVP stocking
    from importers and wholesalers located in the traditional, open
    markets.

### 

### Company Profiles of Major Supermarkets/Wholesalers

+----------+----------------+------+------+--------+----------------+
| **Re     | **Ownership**  | **S  | *    | **Lo   | **Purchasing   |
| tailer** |                | ales | *No. | cation | Agent type**   |
|          |                | (    | of   | (C     |                |
|          |                | \$MI | O    | ity)** |                |
|          |                | L)** | utle |        |                |
|          |                |      | ts** |        |                |
+----------+----------------+------+------+--------+----------------+
| Maxmart  | Leb            | 2.5  | 3    | Accra, | Imp            |
|          | anese/Resident |      |      |        | orter/retailer |
| Sup      | in Ghana       |      |      | Legon, |                |
| ermarket |                |      |      |        |                |
|          |                |      |      | Ta     |                |
|          |                |      |      | koradi |                |
+----------+----------------+------+------+--------+----------------+
| Kwatsons | Leb            | 4.0  | 3    | Accra, | Imp            |
| Impex    | anese/Resident |      |      | Tema,  | orter/retailer |
|          | in Ghana       |      |      | Kumasi |                |
+----------+----------------+------+------+--------+----------------+
| Koala    | Leb            | 2.0  | 1    | Accra  | Imp            |
|          | anese/Resident |      |      |        | orter/retailer |
| Sup      | in Ghana       |      |      |        |                |
| ermarket |                |      |      |        |                |
+----------+----------------+------+------+--------+----------------+
| Shoprite | South African  | 2.0  | 1    | Accra  | Importer/      |
| Sup      | (just opened   |      |      |        | Retailer       |
| ermarket | Nov 1, 2007)   |      |      |        |                |
+----------+----------------+------+------+--------+----------------+
| Park and | Leb            | 0.8  | 1    | Accra  | Imp            |
| Shop     | anese/Resident |      |      |        | orter/retailer |
|          | in Ghana       |      |      |        |                |
+----------+----------------+------+------+--------+----------------+
| To       | Leb            | 0.8  | 1    | Accra  | Imp            |
| -in-Town | anese/Resident |      |      |        | orter/retailer |
| Sup      | in Ghana       |      |      |        |                |
| ermarket |                |      |      |        |                |
+----------+----------------+------+------+--------+----------------+
| All      | Leb            | 0.7  | 1    | Accra  | Imp            |
| Green    | anese/Resident |      |      |        | orter/retailer |
| Sup      | in Ghana       |      |      |        |                |
| ermarket |                |      |      |        |                |
+----------+----------------+------+------+--------+----------------+
| Ghana    | L              | 0.5  | 1    | Accra  | Imp            |
| G        | ibyan/Resident |      |      |        | orter/retailer |
| roceries | in Ghana       |      |      |        |                |
+----------+----------------+------+------+--------+----------------+
| A Life   | Ghanaian       | 0.5  | 3    | Accra, | Imp            |
| Sup      |                |      |      |        | orter/retailer |
| ermarket |                |      |      | K      |                |
|          |                |      |      | umasi, |                |
|          |                |      |      |        |                |
|          |                |      |      | Oboasi |                |
+----------+----------------+------+------+--------+----------------+
| Melcom   | Mala           | 0.2  | 3    | Accra, | Imp            |
| Stores   | ysian/Resident |      |      | Kumasi | orter/retailer |
| Ltd      | in Ghana       |      |      |        |                |
+----------+----------------+------+------+--------+----------------+

# 

### B. Convenience Stores/Grocery stores/Kiosks/Gas Marts Procurement and Distribution

-   Convenience shops (500,000 total) include mini-supermarkets, small
    grocery stores (over 200,000 in Ghana), gas marts (approximately
    500), numerous kiosks, and roadside stalls.

-   Convenience stores have limited capitalization and significant space
    limitations. Most of these stores buy from sub-wholesalers or
    super-retailers located in the traditional market. Only those few
    with relatively large capital buy from wholesalers.

-   Kiosks are usually located at prime locations where high sales
    potential exists. Municipal authorities typically only issue
    temporary building permits for kiosks and they are fewer in number
    than roadside stalls.

-   Gas marts are growing rapidly, although their food sales are
    minimal. Product prices at these outlets are usually much higher
    than at other convenience stores.

-   Due to the unreliable supply of electricity, less than two percent
    of convenient stores sell frozen foods.

# 

## Distribution Flowchart for Convenience Stores

# 

### C. Traditional Markets Procurement and Distribution

# 

-   Retail outlets at traditional markets consist of small stalls
    clustered in a large grouping under a single roof or open-air venue.

-   Retailers buy from sub-wholesalers or super-retailers due to limited
    capital.

-   More than 90 percent of imported HVPs are sold through channel
    members located in the traditional market and about 80 percent of
    all wholesalers, sub-wholesaler and super-retailers are located in
    the traditional markets.

-   Products at traditional markets are priced about 5 percent lower
    than in retail outlets.

```{=html}
<!-- -->
```
-   Sale prices are often fixed and not negotiable for HVPs in the
    traditional open markets, as opposed to staple foodstuffs.

```{=html}
<!-- -->
```
-   More than 90 percent of the local staple foodstuffs, including fresh
    fruit and vegetables, meat and frozen fish (imported or local), are
    sold to consumers at the traditional markets.

-   Traditional markets organize promotional activities that tend to
    have significant consumer impact.

**Distribution Flow Chart for Traditional Market**

### 

### 

### 

### 

### 

# SECTION III: COMPETITION

# 

A.  Import demand for HVPs continues to grow as Ghana's domestic food
    processing is underdeveloped.

-   The average capacity utilization within this sector is less than 30
    percent.

-   Deteriorating infrastructure

-   has limited the growth of domestic food processing.

-   Domestic HVP supply (currently at about five percent) is
    experiencing only slow growth and does not meet the rapidly
    expanding demand by Ghanaian consumers for HVP.

> B. Export competition for imported HVPs into Ghana is strong.

-   The European Union, Asia and South Africa are the dominant suppliers
    of imported consumer ready food products in Ghana.

-   Asian HVP products are increasing market share in Ghana due to their
    more direct participation in distribution channels as well as
    promotion of their products.

-   South Africa's market share has been growing as a result of an
    increased bilateral trade promotion with Ghana.

> 2007 industry estimates put the origin and supply of high-value
> consumer-ready food products as presented below:

![](media/image3.wmf)

C.  The low U.S. market share is mostly due to:

-   Higher freight charges for shipments from the United States to
    Ghana. There are few direct sea routes from the United States and
    most U.S. goods are transshipped through Europe, adding to shipping
    costs.

-   Lack of expiry dates/best before labels on some U.S. HVPs creates
    difficulty for the Ghanaian importer during clearing process and in
    marketing products.

-   Lack of awareness of the availability of U.S. products in Ghana.

-   Some U.S. exporters are unwilling to meet Ghanaian importer demands
    especially on product specification and documentation.

-   Insufficient contact between U.S. HVP exporters and Ghanaian
    importers.

D.  Competitor advantages include:

-   Freight consolidators located in the EU are readily available to
    Ghanaian importers.

-   Products from the United Kingdom usually have manufacturing and
    expiry dates on the products.

-   Freight costs on shipments from the EU, Asia and other African
    countries to Ghana are relatively lower compared with those from the
    United States as a result of shorter distances and more frequent
    routes to West Africa.

-   Asian suppliers are responsive to Ghanaian-importer demands
    especially on quantity, quality, packaging, pricing, documentation
    and payment schedules.

-   Asian firms (agents or representatives) obtain essential market
    information from the Ghanaian buyers by frequent face-to-face
    interaction.

E.  Market requirements by Ghanaian importers include:

-   Requiring services of freight consolidators in the United States to
    handle their ordering and shipment to minimize cost of shipping.

-   Purchasing mixed containers is preferred.

-   Seeking exclusive distribution/agency agreements from exporters.

-   Sometimes anticipating under-invoicing of imports in order to reduce
    import duties.

# SECTION IV. BEST PRODUCT PROSPECTS

### Products with good sales potential

+-----------------+-----------------+-----------------+-----------------+
| Fruit           | Breakfast       | Mixed           | Powdered        |
| preparations    | Cereals         | seasonings,     | beverages       |
|                 |                 | spices and      |                 |
| Fruit juice and | Including       | Condiments      | including fruit |
| soft drinks     | oatmeal         |                 | juice (A)       |
|                 |                 | (AAA)           |                 |
| (AAAA)          | (AAA)           |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Frozen poultry  | Baking mixes    | Skimmed and     | Snack foods     |
| and fish        | including       | whole milk      | (cookies,       |
| products        | baking powder,  | (liquid and     | biscuits)       |
|                 | yeast and       | powdered)       |                 |
| (AAAA)          | Flavorings      |                 | \(A\)           |
|                 |                 | (AAA)           |                 |
|                 | (AAA)           |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Tomato puree    | Non-alcoholic   | Pasta products  | Margarine,      |
| and tomato      | beverages (Tea, |                 | butter and      |
| puree           | Coffee, fruit   | (AA)            | cheese          |
| concentrate     | drinks          |                 |                 |
|                 |                 |                 | \(A\)           |
| (AAAA)          | (AAA)           |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Bottled         | Wines           | Confectionery   | Canned fruit    |
| Vegetable       | (including      | products        | and vegetables  |
| cooking oil     | Sparkling       | (candies, gums, |                 |
|                 | wines) and      | dessert         | \(A\)           |
| (AAAA)          | Beers both      | products)       |                 |
|                 | alcoholic and   |                 |                 |
|                 | non alcoholic   | (AA)            |                 |
|                 |                 |                 |                 |
|                 | (AAA)           |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Canned fish     | Packaged rice   | Alcoholic       | Canned meat     |
| especially      |                 | beverages       |                 |
| mackerel        | (AAA)           | including       | \(A\)           |
|                 |                 | spirits,        |                 |
| (AAAA)          |                 | liquor,         |                 |
|                 |                 |                 |                 |
|                 |                 | (AA)            |                 |
+-----------------+-----------------+-----------------+-----------------+
| Baby foods,     | Mayonnaise,     | Health foods    | Ice cream,      |
| including       | salad dressing, |                 | yoghurt         |
| infant formula, | tomato ketchup, | \(A\)           | concentrates    |
| cereal baby     | sauces          |                 |                 |
| foods           |                 |                 | \(A\)           |
|                 | (AAA)           |                 |                 |
| (AAAA)          |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+

**Footnotes**

AAAA\-\-\-\-\-\-\-\-\-\-\--Highest sales potential
AA\-\-\-\-\-\-\-\-\-\-\-\-\-\--high sales potential

AAA\-\-\-\-\-\-\-\-\-\-\-\-\--Higher sales potential
A\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--sales potential

B. Products not present in significant quantities but which have good
sales potential:

-   Ice cream, snack foods, soups and HRI products.

-   Perishable foods, processed and packaged for longer shelf life
    without refrigeration.

C. Products not present because they face significant barriers:

-   There are relatively few barriers to imports for food products into
    Ghana.

# SECTION V. POST CONTACT INFORMATION

Ali A. Abdi

Agricultural Attache

Office of Agricultural Affairs

US Consulate General

2 Walter Carrington Crescent

Victoria Island, Lagos, Nigeria

Tel: (234) 1 261-3926, 775-0830

Fax: (234) 1 262-9835

Email: <aglagos@usda.gov>

Website: [www.fas.usda.gov](http://www.fas.usda.gov/)

Levin Flake

Assistant Agricultural Attache

Office of Agricultural Affairs

US Consulate General

2 Walter Carrington Crescent

Victoria Island, Lagos, Nigeria

Tel: (234) 1 261-3926, 775-0830

Fax: (234) 1 262-9835

Email: <aglagos@usda.gov>

Website: [www.fas.usda.gov](http://www.fas.usda.gov/)

Elmasoeur Zipporah Ashitey

Agricultural Specialist

Office of Agricultural Affairs

Embassy of the United States of America

No 20, fourth Circular Rd, Cantonments

Accra, Ghana

Telephone: 233-21-741421

Fax: 233-21-741478

Email: <agaccra@usda.gov>; <Elmasoeur.Ashitey@usda.gov>

Website: [www.fas.usda.gov](http://www.fas.usda.gov/)