Afia juice maker takes on Coke with new malt drinksThursday June 19 2014
Fruit juice maker Kevian Kenya has started production of non-alcoholic malt drinks, stepping onto the turf of Coca-Cola and East African Breweries, which have similar products.
The processor known mostly for the ‘Afia’ and ‘Pick N Peel’ fruit juice brands has invested an estimated Sh3 billion to upgrade its Thika and Nairobi plants, which are producing eight variants of the non-alcoholic malt drinks.
Kevian Kenya Limited founder Kimani Rugendo said in an interview that he secured funds from German financier DEG, which is among institutions that have bankrolled previous investments by the company.
“The product is less than a month old in the market. We are producing 36,000 litres per hour,” said Mr Rugendo.
The eight non-alcoholic malt drinks include Plain Malt, Energy Malt, Lemon Malt and Orange Malt.
Kevian Kenya also produces the Mt Kenyan bottled water brand.
The expansion has seen about 1,000 people employed directly and indirectly, according to Mr Rugendo who hinted at even bigger expansion plans.
“We are seeking more growth and diversification in line with what we currently offer in the market. The soft drinks segment is a very wide area with a lot of opportunities if you narrow the preference on what the consumer wants including the quality,” he said.
The malt drinks are also being sold in neighbouring Uganda, Tanzania, Ethiopia, Sudan and in Zambia.
Mr Rugendo founded Kevian Kenya in 1992 after quitting politics. His first product was bottled drinking water – Mt Kenya.
The company mainly targeted Mombasa tourist hotels as its main market with limited supply of the product to a few restaurants and supermarkets in Nairobi.
At the time, mineral water was not yet popular with consumers in the city. In 1999, the company started the fruit juice company.
The former politician’s business empire is following a path carved by Coca Cola and beer maker EABL, who were the first to produce non-alcoholic malt drinks locally.
EABL makes the Alvaro brand, while Coca-Cola has Novida. Coca-Cola is the biggest producer of carbonated soft drinks, followed by competitors PepsiCo, and Kuguru Foods.
READ: Battle for non-alcoholic malt drinks takes shape
Last month, Thika-based consumer goods manufacturer Bidco announced that it will be venturing into the soft drinks market in the next two years.
Bidco has already secured a Sh1.7 billion loan for the beverage plant from local banks.
Coca-Cola is a global soft drinks giant known for its products that include Minute Maid and bottled water, Dasani.
The bottled water segment also has seasoned players such as Keringet, which is owned by international brewer SABMiller through its local subsidiary, Crown Beverages.
Coca-Cola and its local shareholders have in the past three years made significant investments in the business, a pointer to the confidence they have in the market.
Data from the Kenya National Bureau of Statistics shows that production of soft drinks, including bottled water and carbonated drinks but excluding juices, hit 388,753 metric tonnes in the 11 months to November last year. This exceeded the 2012 full-year output by 8.1 per cent.
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