Concentrates in Kenya

2021 DEVELOPMENTS

Pandemic has no more than a modest negative effect on demand

The pandemic has had a slight negative effect on the rate of growth in off-trade volume sales of concentrates, but they continued to expand in 2021. The negative effect of the economic shock of the pandemic was partly compensated for by the fact that local consumers were spending more time at home.

As local consumers become more health conscious, the perceived ‘artificiality’ of concentrates is becoming a drag on growth

Apart from the economic shock of the pandemic, heightened local interest in health and wellness among local consumers is also having a negative effect on demand for concentrates. Indeed, COVID-19 has served to deepen this trend by drawing consumer attention to the long-term risks associated with obesity.

Competitive landscape remains quite fragmented

Jetlak Foods Ltd’s Savannah remained the leading brand in concentrates during 2021, having overtaken Excel Chemicals Ltd’s Quencher earlier in the review period. However, concentrates remains quite fragmented, with very small brands (‘Others’) accounting for more than half of off-trade volume sales in 2021.

PROSPECTS AND OPPORTUNITIES

Health and wellness trend will continue to weigh on growth

The rate of growth in off-trade volume sales of concentrates will steadily slow over the course of the forecast period. The health and wellness trend is set to outlast the pandemic, and this will make local consumers more likely to favour such alternatives to concentrates as bottled water and juice.

Pandemic economic shock boosts open markets and hawkers at the expense of supermarkets

During the review period, other grocery retailers (mainly open markets and hawkers) overtook supermarkets to become the leading distribution channel for concentrates. The gap between the two has widened since the onset of the pandemic, which has served to make many local consumers – particularly those on low incomes – more price sensitive.

More brands will turn to social media influencers for marketing purposes

During the review period, manufacturers of concentrates increasingly utilised social media to promote their brands, with Peptang Kenya particularly notable in this regard. This trend is set to deepen during the forecast period, as smartphone ownership and internet use continue to grow in Kenya.