Informal food trade vital to traders' and consumers' livelihoods
Street barbequed sheep heads, walkie-talkies (BBQ chicken heads and feet) and intestines might not be to familiar to middle-class white South Africans but they are an important - largely underestimated - South African business. South Africa’s urban townships are home to thousands of such informal “foodservice” businesses - anything from a braai grid on the pavement, deep fried takeaways operating out of repurposed shipping containers, through to sit-down ‘restaurant’ shisanyama venues. Policymakers concerned with food and nutrition often look askance at these businesses: they are seen as survivalist and small-scale, with limited potential for employment generation. In addition, there are often concerns about hygiene and food safety. But these outlets meet needs that are not directly met by the formal economy and are instead geared to local consumer budgets and cultural preferences, and is suited to local circumstances.
Photo right: Street braai marketing geared to local consumer budgets
Usually deeply informal - cash based, unregulated and undocumented - township foodservices are at the consumption end of South Africa’s industrial food chain. The businesses are often owned and operated by women who live locally. Their microenterprises are highly independent and self-reliant, being directly responsible for buying their own stock and inputs, preparing food, and retailing. These businesses rely directly on links to the formal economy (formal sector wholesalers who in turn buy directly from commercial abattoirs, importers and farms), from where they get their main food inputs (meat, bread, potatoes, maize). However, inputs from the informal economy are also common, including informal suppliers of: cultural niche items such as live chickens (spent hens), vegetables, transport, electricity (access hire), water, real estate, labour, and occasional items such as condiments and firewood.
Many of the foods traded by informal foodservices have little value in formal markets. Unprocessed abattoir “fifth quarter” products (including visceral fat and organs, alimentary tract, feet and animal heads) make up much the goods traded. The informal economy thus plays an important role - using full ‘nose to tail’ animal products and thereby enhancing overall market efficiency.
Photo right: Braaied chicken feet cost as little as 50c each
Township informal food service enterprises commonly operate at peak trading times, e.g. when people travel to and from work. Women with dependent children can therefore adjust opening hours to suit other life responsibilities, accounting for their high participation in the sector. Reflecting this social dynamic, the commodity chains are usually short, and adding value to products is simple. Individual micro-enterprise profitability is often quite modest, with most making R100-R300 a day. But they are pragmatic economic activities in the otherwise limiting circumstances created by structural poverty. While it might not offer a large income, the business activity likely makes rational sense given the operator’s livelihood circumstances.
Township informal food enterprises are also suited to situational factors; most only trade at times of highest consumer demand and tend to close outside those times. Thursday evening through to Sunday afternoons are premium trading times, and busiest at month-end. Linked to the broader trading cycle, in a symbiotic relationship between informal foodservice and liquor traders, these enterprises rely considerably on each other to serve customer demands.
Informal food enterprises almost solely rely on local trading - serving neighbours and local residents who usually arrive on foot. These local geographic ties can limit market growth potential, and retail turnover is therefore largely a function of demand/customer traffic. Business or product differentiation between enterprises seems limited, with similar businesses sometimes operating literally side-by-side. Despite traders close proximity to one another, the business culture of informal foodservices actively works against overt competition. Usually, then, informal traders do not sell identical products to those traded by neighbours. Operators instead seem to work hard to maintain good relationships with their clientele by maintaining their own opening hours, giving regular customers bonus items on a purchase, or serving unique sauces/spices. Beyond such efforts, location, operating hours, low input costs, and operating without paying rent could all contribute to individual enterprise survival.
Photo right: Informal food services create a vital outlet for products not traded or needed in the formal economy
Judging by the number of food-related and informal food service micro-enterprises in townships, these residential localities seem to be quite an opportune business environment. Operating locally creates potential for individuals and their micro-enterprises to enter economic markets, because they are not prevented by lack of infrastructure (e.g. not having a food grade kitchen, or a cool room), legality issues (such as lack of permits, certificates), a lack of menu offerings or facilities. Indeed the benefits of informality include: an emphasis on cash trade by which traders can minimise start-up capital and avoid much of the bureaucracy of business registration, accounts and taxation.
Informal food services also play a vital role for consumers, providing affordable and tasty food that caters to a prominent, but little explored, township culture of eating on the street. In many cases buying and eating street food is more economically efficient for time-pressed customers, compared to home-prepared meals.
Informal food services should be viewed as grassroots economic self-reliance and entrepreneurship. Many of these enterprises are an important income stream for township women, who have life circumstances (such as dependent children or home responsibilities) that make it difficult to access formal employment. The businesses increase local food availability and can also feed families and neighbours, thereby enhancing social capital. Therefore, these enterprises should not be viewed through a business or capitalist lens, but instead as winning income and social capital for women, aligned with their life circumstances.
As informal foodservice micro-enterprises organically emerge to serve customer demand, such micro-enterprises should be accepted and even encouraged in non-traditional business locations – such as townships and suburban residential areas. In South African municipalities this would require more amenable town planning and, within reason, reconsidering current restrictive by-laws that impact on food preparation, trading activities and locations. Enhancing access to municipal utilities such as water, electricity and trading spaces would also go some way towards supporting operators in the sector.