Fruit farmers gain as firms battle for juice market
Coca-Cola strategic marketing manager Carol Maajabu Mbaga speaks to journalists at the firm’s plant on Likoni Road in Nairobi yesterday. Coca -Cola plans to expand marketshare of its juice brands in Africa. Fredrick Onyango
The Kenyan fruit farmer is set to benefit from multinational firms seeking a bigger market in juice production.
The firms would also guarantee them higher and predictable prices.
Coca-Cola and Del Monte have unveiled multi-million shilling expansion plans that will see them hinge on local farmers for fruit supply. Local firms too, led by Kevian — makers of ‘Pick and Peel’ and Afia juice brands — have announced expansion plans.
As a result, these manufacturers are going heavy into contract farming to cut their reliance on fruit imports and match their growth plans. They are also planning to lease large tracts of land for plantation that would earn landowners annual incomes and create employment opportunities.
On Thursday, Coca Cola said it is scouting for farmers in the Rift Valley, eastern and central regions to feed its juice processing plant with fruits such as mango and passion in what looks set to boost Kenya’s fresh produce sector.
“We are targeting about 54,000 small-scale farmers in Kenya and Uganda to join our supply chain by 2014,” said Lionel Marumahoko, Coca-Cola’s general manager for Central East and West Africa. “Currently, more than 36 per cent of produce in farms do not get to the market. Our partnership seeks to increase this to about 50 per cent.”
Already, the beverage company says it has recruited 15,300 farmers in Kenya who have earned Sh150 million in the past one year, a 28 per cent increase in what it paid them in the previous year, after supplying about 7.3 tonnes of mango and passion fruits.
“Farmers should be in groups of about 40 people with an average of at least 30 trees,” said Felix Ofulue, sustainability manager of the project. “We provide training and even offer financing through Equity Bank under our fruit farming project known as Project Nurture.” The project is a $11.5 million (Sh924 million) fruit farming investment Coca-Cola is undertaking in partnership with the Bill and Melinda Gates Foundation. Del Monte is also active in contract farming, especially in mango production, but has invested heavily in plantation farming to overcome the challenge of side-selling, in which contract farmers sell to competitors.
Last week, the Thika-based juice maker signed an 18-year land lease for 1,000 hectares in Matungulu District to grow pineapples. The project expected to boost local farmers. 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 during the first cycle (3-4 years) of the expansion programme.
The corporate interest in manufacture of juice may also reduce wastage due to haphazard marketing and cut out middlemen who exploit farmers thus guaranteeing higher returns.
Coca-Cola is upgrading its Beverage Services Kenya subsidiary hoping to capture the health-conscious consumer. Kevian is offering farmers extension services to raise production in partnership with GTZ and Horticultural Crops Development Authority. The company is seeking a piece of the lucrative US and Europe juice market.
But it is Coca-Cola that is set to re-energise the fruits market given its scale and the fact that it has brought wealthy philanthropists on board. Its deep entry in the juice market, which it currently serves, using the Minute Maid brand, will result in a fierce battle for consumers at retail outlets of the ready-to-drink segment.
