South African farmers are missing out on billions of rands in revenue by overlooking the informal township economy, according to renowned author and entrepreneur GG Alcock, who addressed delegates at our recent African Farming Agri-Development Imbizo.
By Maile Matsimela, digital editor at African Farming
Speaking on “Kasinomics: The hidden opportunities behind the informal kasi market”, Alcock painted a picture of an economy worth between R1 trillion and R2.3 trillion annually, driven by more than 50 000 fast-food outlets, 44 500 taverns and thousands of spaza shops, all requiring consistent supplies of fresh produce, meat and processed foods.
A R3 Billion Goat Market Gap
Perhaps the most striking example Alcock shared was the goat sector, which he described as a massive untapped opportunity for small-scale farmers.
“The goat sector is worth about R3 billion a year, and 82% of the goat herd is owned by small black farmers,” Alcock told the farming audience. “But we still import about 300 000 goats a year worth about R500 million because we can’t supply our own demand.”
This supply-demand mismatch represents exactly the kind of opportunity that small-scale farmers could exploit, he argued, particularly given their existing expertise and cultural connection to goat farming.
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Volume Hidden in Plain Sight
Alcock challenged farmers’ perceptions about the scale of township commerce by sharing real examples of micro-enterprises processing massive volumes. He described visiting a small quarter-chicken outlet in Orlando, where the daily operation was staggering.
“This guy hand-peels 85 bags of potatoes every single day and produces 2 400 portions,” Alcock revealed. “One tiny outlet, but the volumes are enormous.”
Similarly, he highlighted local bakeries operating from residential properties but supplying entire networks. “Abraham bakes 12 000 loaves a day from an RDP house,” he said, while another baker, Sam, “started with 1 200 loaves and now operates two bakeries” serving spaza shop networks.
The Fresh Produce Revolution
The Johannesburg fresh produce market, Alcock noted, shows the sheer scale of informal trade that farmers could tap into.
“The Joburg fresh produce market turns over about R9 billion a year with about 20 000 traders, and about 60% of that turnover comes from informal traders,” he explained.
These informal traders, operating from the early morning hours, redistribute fresh produce throughout township networks – a system that farmers could integrate with directly, rather than trying to break into formal retail chains.
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Digital Transformation in Townships
Contrary to assumptions about cash-only informal markets, Alcock revealed a rapid digital transformation taking place in township commerce that creates new opportunities for suppliers.
“There are about 70 000 point-of-sale [POS] devices in spazas and taverns generating about R2 billion a month in turnover,” he said. “Card usage in these outlets rose to about 42% of transactions in 2023.”
This shift towards digital payments, he argued, makes it easier and safer for farmers to conduct business with township outlets while reducing the risks associated with cash transactions.
Strategy Over Scale
Rather than encouraging farmers to compete with large agribusiness, Alcock advocated for a different approach focused on understanding and serving local markets.
“Don’t try to get into Pick n Pay first,” he advised. “Build relationships with spaza owners, quarter outlets and local redistributors. Find ‘the guy who owns the trolleys’ – the local distributor serving multiple outlets.”
He emphasised the importance of packaging products appropriately for township consumption: Small portions, affordable price points and convenient formats that align with street food culture rather than suburban family shopping patterns.
Cultural Intelligence as Business Strategy
Alcock stressed that success in township markets requires more than just competitive pricing – it demands cultural understanding and relationship building.
“Visit markets personally, learn local preferences and co-create products with traders,” he urged farmers. “Respect the culture and understand that relationships drive repeat business.”
He pointed to the success of the cheese slice market as an example of what’s possible when companies deliberately target township outlets. By focusing on quarter-chicken shops and street food vendors, companies built what is now a R3 billion annual business, capturing 75% of South Africa’s R4 billion cheese slice market.
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Technology as an Enabler
Modern farmers, Alcock suggested, should embrace simple technologies that township businesses already use.
“Use WhatsApp for orders and work with outlets that have POS devices,” he recommended. “This reduces cash-handling risks and builds trust while making business operations more efficient.”
The question, as he put it to the farming delegates, isn’t whether the market exists but whether farmers are ready to approach it with the respect, understanding and strategic thinking it deserves.
Also read:
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