Soft drink giants brace for war as Pepsi commissions Sh2.5b plant

By Macharia Kamau

The battle for the local soft drinks market is expected to go a notch higher with the company marketing PepsiCo products in Kenya readying itself for the unveiling of a Sh2.5 billion bottling plant in Nairobi.

Seven-Up Bottling Company (SBC) Kenya, which imports and distributes PepsiCo soft drinks, said the plant in Nairobi’s Ruaraka area is being commissioned.

It will manufacture and distribute the different range of products from the new plant, which is expected to significantly lower the cost of operations and probably see a decline in consumer prices.

Authorised

The company currently imports the different Pepsi brands that include Pepsi Cola, Mirinda, Evervess, 7UP and Mountain Dew in plastic bottles.

 The firm’s country general manager, Butch Moldenhauer, said the plant will now enable it market products in returnable glass bottles.

The development is expected to put pressure on Coca-Cola, which is the dominant non-alcoholic beverage maker, with its range of sodas including Coke, Sprite and Fanta being among the most popular.

 The two firms are fierce rivals in many markets around the world, a scenario expected to be replicated in Kenya.

“We are commissioning our new $30 million bottling plant in Ruaraka.  We will start manufacturing and distributing the full range of PepsiCo Inc and Seven Up international trademark soft drinks. SBC will continue to import cans and will also make these available,” Moldenhauer said.

SBC also warned importers of products by PepsiCo, saying it is the only firm authorised to import and distribute these brands.

The Pepsi and Coca Cola in the 1980s engaged in market share wars, even using allegedly borderline illegal methods. Pepsi yielded and closed shop, but is back and seems to be spoiling for war.

Coca Cola has been readying for increased competition in the recent past. The company last year announced a Sh5 billion investment over a three year period beginning April last year.

The money is expected to go into upping capacity of production capacity, launch of new products and marketing activities, as it moves towards of competition as well as entrench itself in the juice market where the firm is still relatively new.

The recent major investments include a new juice manufacturing plant in Mombasa operated by Coast Bottlers that is expected to increase capacity of its Coca Cola Juices Kenya, an arm charged with production of Minute Maid juices.

 It is also working with fruit producing farmers to ensure available of produce for its juice manufacturing arm.