Concentrates in Kenya

PROSPECTS

Health trend is set to dilute sales growth

Manufacturers are increasingly being required to innovate their products to ensure they contain lower sugar content as well as provide nutritional information. This is amid rising health concerns among consumers globally who are aware of the potential health problems, such as diabetes, that could result from high intakes of such drinks.

Production costs rise as government rolls out new digital tax stamps

Although the average unit price of liquid concentrates per litre is the lowest in soft drinks, it has been rising strongly and this is unlikely to change following the roll-out of a new soft drinks excise tax in Kenya. In 2019, the Kenya Revenue Authority (KRA) announced the implementation of the Excisable Goods Management System (EGMS) on bottled water, juices, carbonates, energy drinks and other non-alcoholic drinks including concentrates.

Not much trace of powder concentrates yet

Powder concentrates, despite not being popular with consumers, especially younger people, is a category expected to see some market receptiveness due to its cheap price point. However, because most product offerings in powder concentrates contain ingredients that are perceived as unhealthy, including artificial flavours, colours and sweeteners, this category is only predicted to grow extremely marginally if at all.

COMPETITIVE LANDSCAPE

Sales are concentrated among domestic players

Local firms maintain the leadership in the liquid concentrates category, due to the long-term presence of their brands as well as more affordable pricing compared with international brands. Also, local players actively engage with their customers on their brands’ social media pages, inviting them to modern retailing outlets such as Sarit Centre, Two Rivers and Garden City for discounts and a chance to win prizes.

Active advertising set to keep consumers interested

While there is a decline in demand for sugary products among health-conscious Kenyans, liquid concentrates is expected to continue growing over the forecast period, with manufacturers targeting school-age children with “back-to-school” discounts and giveaways. Companies are also carrying out in-store promotions as well as running adverts to cultivate high awareness of liquid concentrates.

Convenience and affordability to remain big advantages

Consumers are increasingly preferring fruit concentrates over fresh fruit due to the former’s longer shelf life and easier storage. Fruit concentrates are also economical for schoolchildren and mass functions where the unit cost works out cheaper.

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