Supply Chain Risk and Performance of Food and Beverage Manufacturing Firms in Nairobi City County, Kenya
DOI:
https://doi.org/10.53819/81018102t5443Abstract
The food and beverage manufacturing sector serves as a vital engine for Kenya's industrial growth, contributing to the Gross Domestic Product (GDP) and national food security. However, this sector is increasingly vulnerable to complex supply chain risks that threaten its stability and long-term viability. This study investigates the relationship between supply chain risk and the performance of food and beverage manufacturing firms within Nairobi City, Kenya. The research is driven by the persistent challenges that local firms face, including unpredictable raw material availability, logistical infrastructure deficits, currency fluctuations affecting imports and the lack of real-time visibility across globalized supply networks. These disruptions often lead to increased operational costs, stockouts and reduced market share. The primary objective of this study is to assess the influence of four critical risk dimensions: supply risk, demand risk, operational risk and information risk, on the multi-dimensional performance of these firms. Furthermore, the study adopts a descriptive research design, which is appropriate for documenting the current risk landscape and firm responses in a systematic manner. The target population includes registered food and beverage manufacturing firms operating in Nairobi, chosen for its status as the country's industrial hub. A structured questionnaire, designed with Likert-type scales, was the primary data collection tool, targeting supply chain managers, procurement officers and operations directors. Data analysis was conducted using descriptive statistics, including frequencies, percentages, mean scores and standard deviations, facilitated by the Statistical Package for Social Sciences (SPSS) version 29. The findings revealed that logistics risks are the most severe disruptors (77.6%), primarily driven by infrastructure bottlenecks and high freight costs. Operational risks (73.4%) were impacted by power instability, while supplier risks (73.2%) stemmed from agricultural value chain disruptions and lead-time variances. Although information risks ranked lowest (71.4%), the lack of real-time visibility and advanced digital tools acted as a silent inhibitor of efficiency. The analysis of firm performance (64.8%) highlighted a significant disparity between market success and financial stability. The study concluded that firms are absorbing high costs of inventory and utility failures to protect service levels, which is financially unsustainable in the long term. Recommendations emphasize a change from reactive to structural resilience through localized sourcing, collaborative logistics, government energy subsidies and the adoption of Industry 4.0 technologies.
Keywords: Supply Chain Risk, Firm Performance, Food and Beverage Manufacturing, Nairobi City County, Kenya
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