According to SBC Kenya Limited General Manager Butch Moldenhauer, the local subsidiary through which Pepsi has been importing its products in a move to test the Kenyan market. The response from the market has been positive, giving all indications that the products can do well ,although sales of soft drink has been sluggish due to domestic inflation and partly global recession.
Decreased purchasing power inevitably leads to a reduction in consumption forcing manufacturers to put the brakes on output levels as seen when volumes stood 361 million litres for the second year in a row.Prior to 2009, the volumes had made a 20 million litre leap to reach this mark.The soft drinks industry has more than doubled in less than 10 years with the total volume produced in 2004 being 176 million litres.Pepsi is, however, convinced that there is room for growth.
Pepsi has been importing its products such as Pepsi Cola, Pepsi Diet, Mirinda, Seven Up and Evervess soda water into Kenya since 2010 . Other countries that Pepsi has been operating in are Nigeria, South Africa, Egypt and it is also planning to set up two plants in Zambia to supply the neighboring countries market.
SAB miller invest too
At the same time of Pepsi's re-entry into Kenya market , SAB Miller ,the Johannesburg and London listed South African alcoholic beverage marker too has entered the Kenya market through acquisition of Crown foods limited that used to make Keringet bottled water.
SAB Miller quit the Kenyan market in 2002 after it lost the alcohol market to East Africa Breweries.Its flagship brand Castle brewing was decimated by Tusker.
Following the entry by SABMiller, PepsiCo and the continued presence of Coca Cola in Kenya,there is bound to be an intensify soft drink market wars similar to the one currently ongoing in the mobile phone sectors in which Safaricom ,Bharti Airtel ,Essar and France Orange have made call charges to significantly drop.
SABMiller has franchising deals with Coca-Cola allowing it to bottle and distribute their brands like Fanta, Sprite, Coke and the Minute Maid range of juices.The company also produces its own brands of Appletiser juices, sparkling mineral water, sport and energy drinks.
However in Kenya, the faceoff between Coca -Cola , Pepsi and SAB Miller is anxiously awaited for by the consumers and the unemployed citizens since SAB Miller has already indicated its plans to employ more than 400 staff of which 120 have already been employed as engineers, architects and technicians.
EAC Common Market
It can also be asserted that this two multinationals decision to set up plants in Kenya could be part of the long term plan to have tariff factories within the 5 East Africa Community member states to supply the wider regional market.