Soft drinks production in Kenya totals 388,753 tonnes in 11-month period to November 2013, exceeding 2012 full-year output by 8.1%, statistics show; numbers include bottled water, exclude juices
March 10, 2014
– Soda and bottled water processors are set for huge gains this year after a surge in demand that has raised production of soft drinks to a record high.
Positive economic growth has put more cash into consumers' pockets, driving up consumption of sodas and bottled water both at home and in restaurants.
Latest data from the Kenya National Bureau of Statistics shows that production of soft drinks (which include bottled water and carbonated drinks but exclude juices) hit 388,753 metric tonnes in the 11 months to November, exceeding the 2012 full-year output by 8.1 per cent.
"We believe there was a lot more money involved in entrepreneurial opportunities especially in the informal economy which resulted in increased consumption," said Rocky Findley, the regional franchise manager of Coca-Cola's East Africa.
Coca-Cola is Kenya's biggest producer of carbonated drinks, with distant competitors being PepsiCo and Kuguru Foods. Coca-Cola also sells the Dasani bottled water brand.
"The shilling has also been stable against major currencies, especially the US dollar. This resulted in the sector benefiting from price stability even as disposable incomes increased," added Findley.
The production level is the highest recorded as per KNBS data, being about 120.8 per cent higher than the 176 metric tonnes of soft drinks produced in 2004 and about 28,000 metric tonnes more than the previous production peak in 2009.
Other than the dip in volumes of 2012, the only other low points in the soft drinks industry in recent years was in 2010. The industry has grown in tandem with the economic expansion of the past decade.
PepsiCo, which did not respond to Business Daily's queries, set up a production line in Nairobi two years ago to cut on distribution costs in a bid to catch up with market leader Coca Cola.
Kenya's Gross Domestic Product grew by 4.6 per cent in 2012, the same year that soda production dipped by three per cent.
The World Bank estimates that Kenya's Sh4.3 trillion economy expanded by about five per cent, projecting that this is set to improve to 5.1 per cent this year.The government is yet to release official growth figures for last year.
"The outlook for soft drinks is positive," said Euromonitor International, a US-based research firm, in its latest report on the industry.
"The growing population, and better economic prospects and rising disposable incomes will be the main drivers for growth."
PepsiCo begun producing brands like Pepsi-Cola, 7-Up, Mirinda Fruity at Mirinda Orange at its Sh2.4 billion factory at Ruaraka in December 2012.
The firm's re-entry into Kenya after a three-decade absence led to a price war with rival Coca-Cola.
(c) 2014 Nation Media Group. All Rights Reserved. Provided by Syndigate.info, an Albawaba.com company