ProjectFast-moving consumer goods and inclusive business in Tunisia

Project context

Food and beverages, along with products for as personal care, household cleansing material, are part of the so-called fast-moving consumer goods (FMCG) market. As a sector characterized by low margins and high volumes, the majority of FMCG products only requires a low spending power.
The sector plays an important role in the Tunisian economy: Despite limited purchasing power of Tunisia’s 6 million low-income customers, their FMCG market segment is considerable, with Tunisians spending on average 36 percent of their income on food alone. The FMCG industry has many touch points with low-income groups: the food industry often sources from smallholder farmers, distribution relies on micro-entrepreneurs that sell products in rural areas, and some companies design their products to specifically address the needs of low-income groups.

Project objective

Endeva's research presents a baseline assessment and value chain analysis of the fast-moving consumer goods sector for low-income groups in Tunisia with a focus on edible goods. It aims to understand where and how low-income groups are integrated into the companies’ value chains and how inclusive business models are shaped. The report thus will offer a starting point for the further development of inclusive business models within the FMCG sector in Tunisia.

Project results

In Tunisia, the concept of inclusive business is not yet known as such. While especially the concept of social entrepreneurship has seen a momentum as an instrument to tackle large development gaps, the ecosystem to support these kind of activities is still at a nascent stage. Although FMCG products are widely affordable and available, the level of inclusion of low-income groups into the supply chain of FMCG companies is mostly limited to sourcing from smallholder farmers. On the demand side, FMCG companies that aim to continue doing well have a culture that promotes using customer insights to create the next generation of products: this also calls for a better inclusion of the large low-income group as customers.

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