Cola Wars return to Kenya

Miracle Cafe

Nairobi’s Business Daily reports that Coke is getting competition in Kenya:

Two international soft drinks manufacturing companies have set up local operations in a major shift tipped to shake up the industry currently in the tight grip of global giant Coca-Cola.

US multinational Pepsi Cola, and London based SABMiller are in the process of establishing a manufacturing presence in Nairobi even as market data points to a flattening market for soft drinks.

PepsiCo, which stopped bottling in Kenya under competitive pressure from Coca-Cola in the 1970s, is putting up a Sh2.4 billion plant off Thika and Baba Dogo roads while SABMiller has taken control of family owned Crown Foods, the bottlers of Keringet brand of drinking water.

PepsiCo has acquired 14 acres of land at Nairobi’s Ruaraka estate through SBC Kenya Ltd, a Franchise Bottler and Distributor of Pepsi products it bought in 2009, from where it will produce at least six of its brands.

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PepsiCo made a marketing re-entry into Kenya late last year relying on imports to serve the local market with its brands such as Pepsi Cola, Pepsi Diet, Mirinda, Evervess Soda Water and Seven Up. Importing the soft drinks is more expensive than having a local production unit.

“We have already recruited 120 Kenyans — engineers, architects and technicians — to handle the development phase. We expect to have about 300 employers on board once it is completed,” said Mr Moldenhauer.

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The soft drinks market is estimated at about 17 million litres annually and PepsiCo is upbeat that the sector has great potential for growth after shrugging off a heavy battering from the global economic crisis, high power costs and water rationing in most of 2009.