The Thika-based beverage giant says the investment — which would be spread over three years — would boost its fruit plantation, production capacity and marketing in an effort to get a larger foothold of the regional market.
Coca-Cola, a soft drink manufacturer, recently kicked off a multi-billion shilling expansion plan through the upgrade of its Beverage Services Kenya subsidiary hoping to capture the health-conscious juice consumers in East Africa, a market that Del Monte has dominated over the years. (Read: Juice plant adds fizz to Coca-Cola expansion plans)
The increased activity in Kenya’s juice market would not only result in a vicious war at retail outlets of the ready-to-drink juice market segment but offer fruit farmers a steady market for their produce.
Fresh Delmonte vice-president Linda Conway said the new investment would help grow and defend the juice maker’s market share in the regions as well as boost its product range.
“Our aim is to continue strengthening Del Monte’s position is sub-Saharan Africa through product innovation,” said Ms Conway, adding that the multinational would use Kenya as its launch pad for Indian Ocean islands as well as west, east and southern Africa markets.
The firm has signed an 18-year land lease for 1,000 hectares in Matungulu District to grow pineapples to boost supply of raw materials. The firm, which has a 13,500-acre plantation in Thika it has operated for the past 60 years, expects to harvest 70,000 tonnes of pineapples in the first cycle (3-4 years) of the expansion plan.
Coca-Cola is employing the same model to attack the eastern Africa market by contracting farmers in the Rift Valley, eastern and central regions to supply its juice processing plant with fruits, especially mangoes and passions. Its deep entry in the juice market, which it currently serves, through the Minute Maid brand, will spark fresh realignment in the juice market.
Market estimates puts Minute Maid’s stake in Kenya’s juice market at about 11 per cent with Del Monte controlling a significant share. Kenya’s growing middle-class provides a ready market for juice as it increasingly seeks alternative to carbonated soft drinks, in which Coca-Cola enjoys a near monopoly.
But its grip on the soda market is coming under renewed attack with the return of its global rival Pepsi Cola and the global beverage giant is diversifying its regional business with a focus on the juice market.
