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Kenya: Juice maker eyes U.S. market

Local fresh drinks manufacturer Kevian Kenya Ltd has launched an ambitious expansion to the United States and Europe to tap the world's biggest consumer markets. This follows its successful penetration in the five East African Community member countries. The Nairobi-based firm - which manufactures 'Pick and Peel' and Afia juice brands as well as the Mt Kenya bottled water - says its products have captured a "significant" share of the regional market. Kevian managing director Richard Kimani attributes this to a shift in consumer tastes in favour of fresh juices. "Our mission is to be the leading producer and marketer of branded fruit juices in the East African region," he said.

Currently, the regional juice market is worth $1.7 billion (Sh136 billion), with energy drinks making another $1 billion (Sh80 billion) and packaged water $992 million (Sh79 billion). In Kenya alone, the national juice market is estimated to be worth Sh7.2 billion. In the fresh drinks market, a huge demographic of people under 35 years make up 80 per cent of the East Africa's population. With a good number of players in the fresh juices market and competition so stiff, Mr Kimani says, Kevian is banking on quality as a competitive advantage. To ensure a constant supply of fresh fruits from farmers, the firm in partnership with GTZ, Horticultural Crops Development Authority (HCDA) and the Ministry of Agriculture, is offering farmers extension services to raise production.

"These projects have empowered farmers, making them to earn a decent living. This has boosted their morale, and on our part ensured that we have quality raw materials supplied without a hitch," he said. But even with the rosy outlook, Mr Kimani, whose firm was listed among the Top 100 companies in the country in the Business Daily and KPMG annually survey, sounded the alarm over rise in counterfeits in the market. "This has been the key challenge in the sector. The actors recycle used bottles, making it almost similar to ours in terms of physical appearance," he said. The government should also step up its war, he added. According to Dr Julius Maina Mathara of the Jomo Kenyatta University of Agriculture and Technology, Kenya's food and beverage processing industry comprises more than 1,232 businesses. Agro-processing is the largest manufacturing sub-sector, accounting for 13 per cent of the total output.

Dr Mathara says for the country to realise its full potential in fruits processing, the government must develop food business. "It must also come up with concrete plans on building infrastructural facilities like water, electricity, sewerage and sanitation, telecommunication facilities and roads," he said.
The entry of Kevian in international markets could impact positively on the firm's revenues as US food manufacturing industry is one of the largest sectors in the world, accounting for more than 10 per cent of all manufacturing shipments.

In addition, the processed food industry has experienced fairly steady growth over the last decade though it had a slight decline between 2005 and 2006. "Demand for processed food products tends to be less susceptible to fluctuating economic conditions than other industries in this market," says a recent report from HCDA. The horticultural body says in 2006, there were 28,000 establishments in food manufacturing. Multinationals have a big presence in the industry but account for only 36 per cent of all the jobs in the industry.


Publication date: 1/3/2011


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