Afia juice maker launches Sh2bn instant coffee plant
Kevian Kenya founder, Kimani Rugendo, says Thika-based plant started producing 250 tonnes of the products per day in June, targeting the local and regional markets. Photo/FILE
What you need to know:
Thika-based plant started producing 250 tonnes of the products per day last month, targeting the local and regional markets.
The coffee is available in four flavours, including lemon malt, plain malt and energy malt.
The fresh investment has been funded from Kevian’s internal cash flow, bucking the trend where the firm previously relied on external financing from development finance institutions.
Kevian Kenya, the maker of Afia and Pick N Peel juice brands, has expanded its product portfolio with a new Sh2 billion investment that has seen it offer its own brands of ready-to-drink coffee and tomato juice.
The firm’s founder, Mr Kimani Rugendo, said the Thika-based plant started producing 250 tonnes of the products per day last month, targeting the local and regional markets.
The coffee drink and tomato juice are available in 300 millilitre bottles, with the products already retailing at major stores. The coffee is available in four flavours, including lemon malt, plain malt and energy malt.
The fresh investment has been funded from Kevian’s internal cash flow, bucking the trend where the firm previously relied on external financing from development finance institutions.
“We are producing the new products in large scale having entered into a supply partnership with 3,000 farmers’ groups across the country,” Mr Rugendo said in a telephone interview.
“We are seeking growth through new brands to strengthen our market presence in the region.”
Mr Rugendo added that the diversification has been informed by opportunities in market segments that have been untapped by existing players.
Kevian will be competing against established players in the beverage market, including Nestle which sells ground coffee.
Nestle in 2010 moved into the ready-to-drink model, offering low-priced sachets of blended coffee, milk and sugar that can be used to make an instant drink just by adding hot water.
Kevian and Nestle’s strategies are aimed at taking coffee consumption to the mass market where tea is more popular. Coffee has been largely limited to middle and upper income households.
Kevian’s tomato juice production is seen as driven by increased demand from health-conscious consumers, with tomatoes being rich in vitamins A and C.
The company’s expansion signals increased demand for beverages, juice, and other packaged drinks, a demand that is attracting new players such as Bidco that is set to invest Sh1.7 billion to produce soft drinks and water.
Data from the Kenya National Bureau of Statistics show 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.
Coca-Cola’s local bottlers are the biggest producers of carbonated soft drinks, followed by competitors PepsiCo, and Kuguru Foods.
Entry of new players and expansion by existing firms signal increased competition in a market where rivals are seeking a presence in multiple categories including water, juice, and soft drinks.
For Kevian, the move to produce coffee drinks and tomato juice marks its latest expansion in a bid to diversify from its mainstay Afia and Pick N Peel juice brands.
The company recently started producing non-alcoholic malt drinks, setting the stage for a market share war against Coca-Cola and East African Breweries (EABL) that have similar products. EABL makes the Alvaro brand, while Coca-Cola has Novida.
Kevian is offering eight non-alcoholic malt drinks including Plain Malt, Energy Malt, Lemon Malt and Orange Malt that are being sold in Uganda, Tanzania, Ethiopia, Sudan and Zambia.
