1. KENYA’S MUSHROOM INDUSTRY
BUSINESS INVESTMENT OPPORTUNITIES

2. 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.

3. 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.

4. Findings: Overview
Kenya has an estimated demand of between 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.

5. 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.

6. 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

7. 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

8. 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.

9. Businesses Partnerships
Olive Mushrooms Ltd.
Establishing a modern lab to produce spawn
Processing mushroom and access to European markets

10. END