Kenya’s french fry industry the next victim of global logistic disruptions

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Published Jan 7, 2022

KFC outlets around Kenya completely ran out of french fries the past week. Most well-known fast-food brands only entered Kenya in the last decade, and many of these restaurants rely on imports of frozen french fries. Imports of frozen processed potatoes have increased nearly ten-fold over the past ten years. After strong demand over the holiday season and imports being delayed by more than a month, Kenyan restaurants of the franchise completely ran out of supply. This caused a stir under social media users, calling on KFC to source its potatoes locally, and on Kenyans to boycott KFC until they do so. While Kenya is a major potato producer, with an average crop of 1.7 million MT, most potatoes are produced by small-scale farmers. KFC might have a hard time sourcing potatoes of consistent quality that meet the requirements of the fast-food industry.

The fast-food industry and french fry imports

Some of the world’s most well-known fast-food brands have only recently started penetrating the Kenyan market. There aren’t any Mcdonald's restaurants in Kenya, although there are plans to open the first one soon in Nairobi. Burger King has 5 outlets and a few Subway outlets have opened. KFC entered the Kenyan market in 2011 and has since opened more than 22 outlets.

As most of these international fast-food restaurants entered the market, there has been a clear increase in french fry imports. Imports of frozen processed potatoes, mostly french fries (HS Code 200410 Potatoes, prepared or preserved otherwise than by vinegar or acetic acid, frozen) increased in unison with these restaurants. In 2011, imports were a mere 166 MT in this category but surged to a peak of 1,666 MT in 2019. Imports dropped back down in 2020 as the global pandemic forced restaurants to close and thus decreased demand.

Most french fries are imported from Europe, coming from Netherlands and Belgium. Egypt is another supplier of frozen processed potatoes to Kenya. Egypt and South Africa are the only two countries that have developed potato processing capabilities in Africa.

Source: ITC Trade Map

Domestic potato production

Kenya’s potato production averaged 1.7 million MT for the 5 years ending 2020, and it is the second most important food crop (after maize). Kenya grows an estimated 62 varieties of potatoes and has been raising quality standards and production practices. However, there are still concerns about consistency and quality. The french fry industry requires potatoes of uniform quality, color, and size due to customer preferences. While Kenya produces large quantities and a variety of potatoes, few are produced specifically for the fast-food industry. Kenya also lacks the processing capacity to turn these potatoes into uniform french fries. According to the Inter-American Development Bank, 90% of the potato crop is produced by small-scale farmers, which means sourcing large quantities of homogeneous potatoes is a challenge.

Source: FAOSTAT

Logistic bottlenecks

Most fast-food restaurants are in popular areas where property prices are high. If these restaurants need to assign more space to storage capacity, it has major financial implications. Thus, the majority of these restaurants prefer keeping as little inventory as possible and relying on timely delivery of their products instead. However, this system where products arrive “just in time” has shown some cracks worldwide. The global Covid-19 pandemic was the catalyst in exposing the fragility of the global logistic industry. Congested harbors, shipping delays, exorbitant costs of containers, are only some of the issues experienced by the logistics industry.

These bottlenecks have caused a few unhappy fast-food customers recently. In October, some KFC restaurants in Japan were hit by a shortage, and in December Mcdonald's in Japan had to ration their customers’ serving size to stretch out their remaining french fry inventory. In August in South Korea, fast-food giant, Lotteria, swapped french fries for cheese sticks in some restaurants as supply dried up.

Kenya was the next victim of these logistic bottlenecks. Kenya’s shortage comes after a shipment of french fries was delayed for more than a month and after strong demand over the holiday period left inventories tight. KFC offered customers alternative side dishes instead of french fries. According to KFC’s regional manager, a shipment of french fries is due this week, which will resolve the matter.

Source: Twitter

Uproar under Kenyans

The shortage of french fries caused a social media uproar under Kenyans. Many of them were unhappy that KFC Kenya does not source its french fries from local farmers. #BoycottKFC was trending on Twitter with many users calling on Kenyans to rather support local restaurants that sell locally sourced produce.

While there is some justification for the unhappiness, KFC Kenya will be left in a tough spot. Sourcing potatoes that meet the requirements of the fast-food industry and securing a constant supply of consistent quality potatoes will not be an easy task. There is also the matter of processing potatoes into frozen french fries. Although it is a fairly simple process, Kenya lacks the facilities to process local potatoes on a large scale.

According to a public statement by KFC on Tuesday (January 4th), a project to source potatoes from local farmers, that meet the stringent quality standards of the industry, has been launched. KFC already sources many of their ingredients, most importantly chicken, from local farmers.