Carbonates Continue To Look Attractive

Tanzania's carbonated soft drinks sector has grown strongly over the past few years, driven by consumers' rising incomes and increasing investment into the segment. Also contributing to growth is the fact that soft drinks appeal to lower-income consumers , as carbonates are often cheaper than bottled water, and prices of core carbonates rarely rise at the rate of inflation. Tracking forecast pan-regional disposable income appreciation, demand for low-cost carbonated soft drinks and bottled water is expected to grow considerably over the coming years.

Room For Growth In Tanzania
South Africa & Tanzania - Carbonated Drinks Sales Per Capita (litres)

While Tanzania was once dominated by PepsiCo 's core brands, The Coca-Cola Company came back strongly in the mid-1990s under the South African company Coca-Cola SABCO , which invested heavily in resuscitating Coca-Cola and usurping Pepsi's long-held dominance. According to BMI 's figures, carbonated soft drinks volume sales grew at a compound annual rate of 8.2% between 2007 and 2012 as the Tanzanian economy grew strongly and there was significant investment in the industry. We expect growth to remain strong to the end of our forecast period in 2017, and expect a compound annual growth rate of 6.3%.

Companies' ability to distribute effectively across Sub-Saharan Africa is hugely important to their success. Organised retail is spread thinly, and most people do their shopping at kiosks. Therefore, the dynamics of getting products to the market are significantly different than in other regions. This is especially true outside the big cities. Coca-Cola has arguably mastered distribution across Sub-Saharan Africa, providing kiosks with fridges and individual vendors with coolers and bicycles in order to get their products into the hands of consumers.

This article is tagged to:
Sector: Food & Drink
Geography: Tanzania