Posts Tagged ‘charcoal’

Household energy consumption behavioural study in East Africa: Cooking (Part 2 of 3)

Scrap wood fueled three stone fire in sheltered corner

The following is extracted from a six month study during 2012 on household energy consumption behaviour in rural Kenya and Rwanda among the lower income demographic, that led to an understanding of some of barriers hampering the sales of client’s solar products in this market. This 2nd part will focus on fuel usage and consumption behaviours for cooking. Users sampled for this study were selected based on varying fuel consumption patterns, ranging from a single homestead to a rural hotel catering for more than 12 hours a day.

Fuel Usage Behaviour is Influenced Greatly by Location

Choice of fuel and decisions on quantity kept in stock for cooking is dependent on the location of the primary residence rather than income. Rural homesteads in Kenya have a separate outhouse for cooking and firewood is the preferred choice of fuel even in those regions where shambas are too small to support their own grove of trees.

Kilonzi’s wife dreams of upgrading to an LPG cookstove some day in the future

That is, while Kilonzi’s wife on a large shamba in Makueni might stack enough firewood for just two or three days, collected for free from her own backyard, Mama Grace the tea farmer with land constraints in Kisii will purchase an entire tree to last her for a month. Meanwhile, the more economically challenged on small shambas devote a week foraging far and wide for enough brushwood to last for two or three months before needing to take time away again from more pressing household duties.

Charcoal is also used on the homestead but only for certain tasks like making chapatis or for quickly brewing tea for visitors or in the morning rush before school or work. Even if the charcoal is made right on the shamba from a tree that needed felling, most of it is kept aside for sale and considered a source of cash money rather than consumed as fuel.

Residents who live away from their shambas, taking up rooms in town due to their work where cooking must be done in the same space as living and other activities, cannot use firewood. In fact, if renting, landlords clearly state that the use of firewood is banned, as a safety precaution. Thus, urban residents are forced to choose fuels that can be used in small, portable cooking stoves and charcoal ends up being the most common due to its relative cost as compared to kerosene. Those who do own a kerosene stove are in the minority and again, its use is only for very specific tasks that require speed such as making tea for visitors or in the morning.

Heavy Duty Charcoal Usage by Hotel

For those whose primary fuel for cooking is charcoal, the quantity purchased is dependant on cash in hand if their income is not from a salaried position and this ranges from a ‘deben’ which lasts for about 5 or 6 days and costs around 100 – 130 Kes to an entire sack which ranges from 500 to 750 Kes and can last as long as a month. Pricing for fuel is closely related to its proximity to the source, since transportation can be expensive and convenience is a service that comes with a premium. Kerosene which sells for 83 Kes a litre at the petrol station in town was found to be selling at a rate of 140Kes/litre at a small duka deep in the interior.

Part One: Introduction to Household Energy Consumption Behaviour Study in East Africa (2012)
Part Three: Lighting & Concluding Remarks

Is there a tipping point price for low income customer behavioural change?

lpg

Nairobi, Kenya Photo Credit: Niti Bhan

When the price of the LPG cylinders dropped significantly earlier this year, it was noticed that increasing numbers of urban lower income customers were purchasing the entry level size of 6kg – seen displayed along the top of the display unit above.

“A good number of my customers come from the slum,” said Kinuthia on Saturday. They are using cooking gas, but mainly the 6kg, which is why over 90 percent of what I am selling is the small cylinders.”

Kinuthia is among the cooking gas dealers in various suburbs in Nairobi who are experiencing booming business as demand for the commodity grows.

The trader noted that the slum residents started using cooking gas as the cost dropped following decline in fuel prices. Consumption of the clean energy in the East African nation is currently at a three-year high.

Previously, I’d written about the consumer decision making regarding choice of cooking fuel, driven as it was by cash flow and payment flexibility. That was based on household energy consumption behaviour, a study conducted in rural and peri-urban Kenya a couple of years ago. Along with the pricing, the choice of cooking fuel was also influenced by the household’s location – peri-urban (town) dwellers were required by landlords to forgo firewood and use only charcoal and kerosene, while those who lived on their homesteads tended to use firewood, and charcoal. These two choices are based on the relative time it took for each fuel to cook i.e. kerosene stoves are ready to use much faster than charcoal, and a charcoal stove is in turn faster than an open wood hearth.

Here, however, we’re seeing evidence of the aspirational leap (the brass ring syndrome) made by the lower income urban consumer as well as indication that some critical price barrier seems to have been breached for the entry level LPG cylinder. Cooks who would have used kerosene in the urban slums were shifting over to cleaner, safer LPG as soon as it became affordable, even in with the lumpsum required for the purchase. This is what makes me wonder if there’s some magic price point for sales to take off, and if so, is it a value processing based on the product category or a cash amount that is the trigger.

Based on all the prior work in this space, I’d hazard a guess that its very much the product itself, its status as a signifier of upward mobility, its value proposition and benefits, that work together to make it one of those things that are reached for when the price lowers enough to look accessible. I’ll keep an eye on what other products or services fall into this category but I’m doubtful that there’s any formulaic success model that just any old product aiming at the base of the pyramid could follow.