Concentrates in Kenya

PROSPECTS

Reduced-sugar ranges expected to be preferred

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 global health concerns among consumers who are aware of the potential health problems that could result from high intakes of such drinks.

Excise on concentrates is deferred temporarily by Kenya Revenue Authority

In October 2017, Kenya Revenue Authority (KRA) gave public notice that with immediate effect from November 2017 concentrates manufactured or imported into Kenya would bear excise tax of KES1.50 per stamp.

Powder concentrates could make an entrance to cater for the lower-income group

Powder concentrates despite not being popular with consumers, especially younger people, is 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 expected to grow extremely marginally if at all.

COMPETITIVE LANDSCAPE

Local competition expected to gain momentum

Heightened competition has led to an increased variety of products as well as better affordability, as concentrates have become accessible for both the middle- and the lower-income class. The introduction of variants in all pack sizes, which are widely retailed through kiosks and other channels, especially in residential estates, has promoted purchases among consumers.

Consumers are preferring RTD concentrates

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.

Local brands expected to maintain leadership

Local firms maintain the leadership in the concentrates category, due to the long-term presence of their brands as well as more affordable pricing compared with international brands. Also, local brands actively engage with their customers on their 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.

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