Sweet Biscuits, Snack Bars and Fruit Snacks in Kenya

PROSPECTS

Affordability of plain biscuits set to support sales of sweet biscuits

Sales of sweet biscuits, snack bars and fruit snacks are accounted for almost entirely by sweet biscuits. The affordability of plain biscuits, the most popular type of sweet biscuits, is the main reason for high sales in the category and this is expected to remain the case throughout the forecast period.

Imposition of sweet tax expected to affect unit prices

Uganda, Tanzania and Kenya are all member states of the East Africa Community (EAC) and this means that, in principle, exports from Kenya to its two neighbouring trading partners should not attract import duty. However, towards the end of the review period, Uganda and Tanzania both imposed a 25% import levy on various Kenyan-manufactured packaged food items including sugar confectionery, with the stated reason for this move being the use of imported industrial sugar in the production of these goods.

New packaging and marketing initiatives underway

Following the complete ban on the use of plastic bags that was issued in Kenya in 2017, many packaged food brands are already making changes to their product packaging by shifting away from the use of cellophane wrappers and other forms of plastic packaging. Instead, paper-based packaging alternatives such as folding carton boxes are being used, often in appealing colours.

COMPETITIVE LANDSCAPE

The presence of local brands continues to expand

Local companies with domestic brands continue to lead sales in the dominant category of sweet biscuits and many of these companies are expanding their operations due to buoyant demand for their products. For instance, Kenafric Industries recently invested USD1 million in the development of a new biscuit manufacturing line at its Baba Dogo factory.

Brands to be vetted on what nutritional information they provide

During the review period, Mjengo Ltd was ordered by the Ministry of Health to cease advertising its NuVita Biscuits brand by reference to its positioning that its cookies form part of a balanced diet. At the same time, the Food, Drugs and Chemical Substance Act prohibited any form of misleading advertising for food products, and since the passing of this legislation, all sweet biscuits brands need to have their advertisements cleared by the Food, Drugs and Chemical Substance board.

Stiff competition among local players expected to intensify

Heightened competition among the players in sweet biscuits in recent years has led to increased variety of products on offer in the category as well as making many products more affordable and therefore within the reach of both middle-income and lower-income consumer groups. The introduction of sweet biscuits in small pack sizes through kiosks, roadside stalls and street vendors for as low as KES5 per pack of five biscuits has also made it easier for many consumers to purchase these products.

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