How to Start a Profitable Cereals Business in Kenya [2024 Guide]

From rural farms to bustling urban markets, the demand for cereals in Kenya has never been stronger. As the nation’s appetite for staple grains like beans, rice, maize, green grams, and peas continues to grow, so does the opportunity for aspiring entrepreneurs to tap into the lucrative world of cereals.

So, if you’ve ever dreamt of starting your own profitable venture in this thriving industry, keep reading.

In this comprehensive guide, we unveil the secrets to launching a successful cereals business in Kenya, empowering you to sow the seeds of prosperity and reap bountiful rewards.

Let’s start with some basics.

What is a Cereals Business in Kenya?

If you ever Googled how to start a cereals business in Kenya, you probably stumbled on some results you were not looking for.

When we talk about the cereals business, we are referring to the selling of different types of grains. These include;

• Rice
• Beans
• Maize
• Sorghum
• Wheat
• Millet
• Barley
• Groundnuts
• Green grams (ndengu)
• Oats and so on

You can either choose to focus on just one cereal or have a diverse stock of different types. Also, keep in mind that some types of cereals may not sell well in some areas.

For instance, if you are in the village, selling Barley will probably be a slow business.

We will show you the exact steps to start a popular and highly profitable cereals business in Kenya.

Before that, here is a question you are probably asking yourself right now;

Is a Cereals Business in Kenya Profitable?

Absolutely! A cereals business in Kenya can be very profitable if you have the right strategy. With a population of over 50 million people, Kenya boasts a strong and growing demand for staple grains like beans, rice, maize, green grams, and peas. These cereals form the foundation of the nation’s diet, making them a necessity for households, restaurants, and food processing industries alike.

Moreover, Kenya’s agricultural landscape is rich and diverse, providing ample opportunities for local farmers to cultivate high-quality cereals. By establishing a cereals business, you can bridge the gap between the abundant supply and the ever-increasing demand, positioning yourself as a vital link in the food supply chain.

Furthermore, the cereals market in Kenya is characterized by consistent consumption throughout the year, ensuring a steady customer base. Whether it’s the staple ugali with beans or a hearty plate of rice and peas, Kenyans rely on cereals for their daily sustenance. This sustained demand creates a favorable environment for entrepreneurs looking to enter the industry.

On top of that, Kenya’s position as a regional hub for trade opens doors to export opportunities. So, if you can meet stringent quality standards and establish strong partnerships, you can tap into international markets to further boost your profitability.

However, like any business, success in the cereals industry requires careful planning, market research, efficient supply chain management, and a strong understanding of customer preferences. So, if you are thinking of starting a cereals business in Kenya, you need to leverage these factors in order to navigate the challenges and seize the abundant profit potential that awaits in the cereals business in Kenya.

Steps to Starting A Cereals Business in Kenya

Great!

Now that you know what you will be dealing with, here are some steps to follow when starting your cereal business in Kenya.

Step 1: Get the Required Capital

This should be the first step in any kind of business but is particularly crucial when starting a cereal business.

To start a cereal business in Kenya, you need to be able to purchase cereals in bulk and transport them with ease. If you are looking at selling in different areas, then you will also need a good vehicle for transportation.

The amount you need will depend on a number of factors.

• Variety of cereals: If you are looking at just one cereal, then the amount will probably be small. But if your business plan involves selling different types of cereals, then you will need considerable investment to get started.
• Type of Cereal: Some cereals are obviously more expensive than others. For instance, beans in Kenya is usually more expensive than maize while millet is more expensive than beans.
• Location: If you are selling in an area with a lot of customers you will need more stock than when selling in a local area. Location will also affect such things as rent, licenses and transportation costs.

If you are just starting out, you should have at least Ksh. 20,000 for stock ( not including overheads such as rent, staff, transportation etc).

This will allow you to get a good start and get a good amount of stock.

We are assuming you already have the capital in place but if you don’t, here are some tips on how to get the money:

• Get a bank loan: Banks are always looking for clients who want to expand their business. So, this is a good option if your cereal business is already doing well.
• Borrow from friends and family: If you don’t mind the endless calls and social gatherings then borrowing from friends and family can help get things started but it can also be risky. Make sure you clearly establish what you will pay for and what services you will offer in return.
• Sell personal belongings: If you have many unnecessary items and things that can be sold to raise capital, then this is an option to consider. Make sure you get the best price though!
• Dig into your savings: this is always the first option especially if you can’t take a loan or borrow from family members and friends.

If you plan on borrowing or taking a loan, make sure to pay it back in time to avoid jeopardizing your business.

We have a very thorough guide on how to pay off debt fast. Make sure to check it out.

Step 2: Research the Cereals Market in Your Area

After you have the money, it is time to research the cereals market in your area.

Do this by;

• Talking to local farmers: Find out if they are growing any cereal and how much they sell for.
• Check online prices: Prices of different types of cereal vary depending on where you are selling them. Make sure you gather this information before you start selling.
• Look out for discounts: There can be many local suppliers so there is no need to buy in bulk from one supplier, always look for discounts or deals if available.
• Study your competition: Check out your competition and note what they are doing that you can copy and what you can improve on. Pay attention to stock variety, pricing, and marketing strategies.
• Target market: Identify what most people in your area are into or what people you want to target are most interested in.
• Location: While doing research don’t forget to find a strategic location to set up the business in your area
• Rent: Make sure you find a location that is affordable and conducive for your cereal business.

Step 3: Find a Good Location for Your Business

Location, location, location!

You should consider the location of your cereal business carefully. Basic things you need to factor in are;

• Accessibility: make sure it is easy for people to get in and out of your shop which means that parking space needs to be available near the shop where you will set up.
• Proximity to residential areas: make sure you are in a place where people live; the closer the customers are to your business the better.
• Proximity to schools and other businesses: You want people from these places to be able to access your shop too. So, placing it strategically near these institutions is crucial.
• Visibility: Your main aim is to sell cereal. So, you need to have a signboard that is visible from a distance so that people can see it and walk in.
• Ambiance: There should be proper seats for customers to rest or stand while they are buying their cereal. You don’t want them leaving early just because the ambience isn’t good enough, do you?
• Size of the shop: The size should be enough for you to carry your cereal varieties and any other products that go along with the cereal like milk, sugar, etc. It also needs to be spacious enough to accommodate customers accordingly.

Step 4: Register Your Business

Now that you have found a good location and secured funding, it is time to register with the necessary authorities.

The first thing you will need to do is get a business permit. This is relatively easy.

All you have to do is head down to the local municipal offices and fill out a form for your business permit.

Upon submitting the completed forms, you will have to wait for about two weeks before it gets approved.

Once it does, they will hand over your business permit which means that now you are able to legally operate your business.

The second thing you need to do is get a Taxpayer Identification Number from KRA. Since you are starting a business, you will need to register for VAT and income tax.

Be sure to check with the local authorities regarding how to do this as each county has its own set of rules and regulations regarding it.

The legal permits you will need for the cereals business in Kenya will vary. But generally, ensure that you have the following:

• County council business permit
• A health certificate from a public health office since you are selling food items
• Fire safety certificate
• KRA certificate

Step 5: Get the Necessary Equipment

There is a set of tools and equipment you will need when selling cereals. These tools will help you with packing and also make sure that customers get their cereal in the best condition.

Here is a list of equipment you will need:

• Tables: You will need working tables for putting cereals on display as well as for holding your tools.
• Shelves: You will need shelves to organize your cereal boxes neatly so that customers know exactly what they are looking for when they come in.
• Fixtures and fittings: These are necessary to make sure you have the right ambience at your store. Some good examples are take-away stands, dustbins, etc.
• Tape: Get packing tape which you will need to seal cereal boxes after packaging them.
• Scales: You will need digital scales to weigh out the cereal packages for customers. They are an essential part of the business.
• Freezer: This is necessary for storing milk and any other products that go with the cereals. It will keep them fresh.

Step 6: Set Up Your Shop

Once you have bought your basic equipment, it is time to set up the shop.

It is a good idea to start small and then expand as you go along according to how much money you make from your cereal business.

Here are some tips on how to brand and set up your cereals shop;

Display

Put up a signboard that will stand out and be visible from a distance. You can put it in an area where a lot of people pass through.

Include any flashy designs you have on your cereal boxes here.

Make sure the colour scheme is according to how your brand looks so that customers know exactly where they need to go when they are looking for their cereal.

Don’t forget to also paint your shop! If it is light, clean and spacious, people will be tempted to come in.

Shelves

Set up the shelves properly so that they are easy to reach.

This will help customers see your products faster and also know where to find specific cereal brands they want.

Display the cereals by type so that customers can easily identify what they are looking for.

Shelves should be big enough for each product box to fit on them.

Packaging

Make sure the cereal boxes are easy to open so that customers can access their cereal easily without breaking anything.

Include your logo and the name of the breakfast cereal you sell on each box for brand recognition.

Secure your shop

Put up a lock on your door and keep the key safe. This will discourage opportunists and criminals from breaking into your shop and stealing equipment or stock.

Don’t leave any open windows for this same reason.

Brand yourself

Make sure that you include all your branding information on your business permit, no matter how small you think it is.

This is to ensure that you are easily identifiable and people can find you wherever you set up your business.

Step 5: Find a Good Supplier

One of the most common questions people ask when starting this business is about where to buy cereals in wholesale in Kenya.

There are many cereals suppliers in Kenya and your job will be to find one that aligns with your business goals.

Some of the questions that will help you decide on a supplier are;

• How much does their cereal cost? You can do some research to find out the average price so that you don’t overpay.
• Do they provide discounts for bulk buying? This is the best option if you want to save some money.
• What kind of transportation do they provide? You will need to know how far your supplier is from your shop in order to determine this.

Other qualities of a good supplier include:

• Honesty
• They respond to your requests quickly.
• Brings your products consistently.
• Good packaging that doesn’t damage the cereal box contents inside.
• Easy to communicate with

Keep in mind that you can either buy the cereals directly from the farmers or a wholesaler such as the Kenya cereals board. You can also import your cereals if you get a good supplier from outside the country.

Step 6: Decide on Your Pricing

You should sell your cereals at a price that is close to what your competitors are selling.

In order to determine this, check out their pricing information from their website or ask the supplier if they don’t have it available online.

To add more value to your brand, you can offer certain deals and discounts for specific cereals or buy more than one kilo at a discount.

You should also consider the price of transportation and include that into your pricing policy so that it is profitable for everybody.

When deciding on pricing, keep in mind such things as:

• Purchase price: This is the cost of getting your cereal from a supplier. Your selling price should be higher.
• Distance: The further away you are from a supplier, the more it will cost for transportation, so you might need to charge a little more.
• Market value: Set a price that is comparable to what others are charging. You can directly ask your competitors how they charge for the different types of cereals to figure out what your price should be.
• Quality: The better the quality of the cereals you sell, the more money people will pay for your product.
• Season/Supply and Demand: If there are a lot of cereals in the market, people might not pay top dollar for yours. So, you might have to reduce your prices and increase when the demand increases.

Step 7: Hire Employees if Necessary

It is possible to start a cereals business in Kenya on your own but you might need some help if you are too busy or if the business is too big for one person.

You can hire employees for specific tasks such as transporting the cereals, packing, operating the cash register, or making deliveries to customers’ homes or offices.

For this, make sure that you share all the information about the business including your contact details with them.

Alternatively, you can hire people to work on short-term contracts during busy periods if you don’t want to spend too much money on hiring permanent workers.

In a nutshell, great employees should be:

• Honest
• Hard-working
• Good communicators
• Capable of working independently
• Punctual
• Good salespeople
• Friendly with customers

Step 8: Market Your Business

In order to have a successful business, you need to market your product and make people want to buy it.

You can find out what customers want by surveying or asking them directly. It is also a good idea to know what type of cereals they like and how much money they are willing to spend on different types.

If you don’t get enough customers on your own, there are other things you can do, such as:

• Create an active Facebook page
• Take attractive pics and post them on Instagram
• Advertise in the local newspaper, radio, or TV
• Create a website to attract organic customers. On your website, you can talk about cereal-related topics like the benefits of cereals and how to cook different types.

You can also attract more customers by:

• Offering discounts from time to time
• Offering attractive deals
• Sharing more info on social media
• Asking customers to share your products on their social media accounts
• Organizing your own cooking competitions, seminars, and talks about cereals
• Creating a mobile app that people can use to order your product
• Giving customers an incentive to shop with you more often, e.g. give loyalty cards that allow them to earn points for every purchase they make with you and redeem these later on for discounts on their subsequent purchases.

Step 9: Start Selling!

Well done! You have successfully made it to this stage. Now, you can do the fun part, which is selling your product to your customers.

Make sure that you have enough stock to meet the demand. If necessary, you can store cereals for a few months before selling them as long as you take good care of them and keep them in a dark and cool place.

Remember that your business is not going to be a success right away. It might even take a few days before you see your first customer.

But, rest assured that most businesses go through this initial slow period, and with the help of effective marketing strategies; they end up becoming successful.

So, the key is to be patient and keep working on your marketing efforts until you see results.

Once you get the hang of it, you can start expanding to other types of cereal products that are more specific or unique than your competitors offer.

Cereals Business Plan in Kenya: Do You Need One?

If you already know what business you want to set up and how you will market your product, then there is no need for a cereals business plan.

However, if this is your first time starting a business, it is highly recommended that you write a plan.

Writing a plan will act as an important reference guide if anything goes wrong in the future.

It will also help you focus on critical areas of your business so that you can adequately address these aspects and work on them to make your business more profitable.

You might also need a business plan to take a bank loan or get financial help from an angel investor.

Otherwise, instead of a full-blown business plan, we recommend a simple guide or strategy to help you along the way.

Here are some things you should include in your cereals business plan:

• Your vision
• Your mission
• The products you offer and their prices
• How will you promote your product so that people know about it?
• Detailed research on the cereals market i.e., how extensive is the market? Who are your competitors? What can you do better than them to attract more customers?
• The additional services you will offer your customers and how you will provide these services. For example, will you give food recipes that people can use to create different dishes using cereals as an ingredient? Or maybe tips on the health benefits of cereal products and how they affect the body?
• The target audience for whom you are creating your product
• The overall cost of starting a business, setting up a production line, and market efforts. You can use an online calculator to estimate this depending on how you plan on carrying out your business (e.g. if you are planning on renting or buying warehouse space).

Remember that a business plan is a flexible document, and it doesn’t have to be perfect the first time you write it.

You can always rewrite and edit your business plan when you face unexpected business issues in the future.

The Bottom Line

Undoubtedly, a cereals business in Kenya holds tremendous potential for success. By following the steps outlined in this guide, you can lay a solid foundation for your venture and navigate the intricacies of the market.

Remember to conduct thorough market research, establish reliable supplier networks, adopt efficient storage and transportation practices, and leverage technology to maximize your profits. With dedication, perseverance, and a keen eye for opportunities, you can transform your passion for cereals into a thriving and lucrative business. So, roll up your sleeves, embrace the challenge, and let your cereals business journey begin!