Coca-Cola Dominant, Growth Ahead Too
We see strong growth ahead for Kenya's carbonated soft drinks industry, which forms part of our wider positive fundamental view on consumer spending. To 2016, we are forecasting carbonates drinks volumes to grow at a CAGR of 8.1%. The landscape is almost entirely dominated by Coca-Cola brands, which distinguishes Kenya somewhat from two of its East African Community (EAC) neighbours Tanzania and Uganda, where PepsiCo franchisees are putting up a firmer challenge. After a long absence, Pepsi did re-enter Kenya in 2011.
More recently, three Coca-Cola franchise bottlers have merged to create Almasi Beverages with the aim to create a more efficient operating framework. Ultimately it is hoped that greater scale will allow the entity to respond more effectively to higher operating costs over the past few years. Currently the largest Coca-Cola franchise bottler is Nairobi Bottlers Limited, which is owned by South Africa-based Coca Cola SABCO.
Distribution systems are hugely important across East Africa. Accessing your consumer base can be a major challenge, but the likes of Coca-Cola have led the way in that regard for many years. Getting products directly to the market is the name of the game, which has provided a lot of scope for innovation. Coca-Cola provides kiosks with fridges and individual vendors with coolers and bicycles, which is hugely relevant to its success.
|Kenya & Tanzania Carbonated Soft Drinks Sales By Volume (mn litres) - Historic & Forecast - 2007-2016|