When you get a hankering in Kenya for something cool,
caffeinated and carbonated there are a lot of choices. However, many of the smaller
companies have to charge a little more than the big ones do. But one company is trying to beat
the big manufacturers by charging less, hoping it can hold onto a small slice
of the market. Voice of America English to Africa Service’s Sara Nics in
Nairobi was at the company’s factory, and spoke to the owner.
In his Softa Sodas office two floors above the bottling room, there is a rainbow on Peter Kuguru’s desk. Ten bottles of juice and soda lined up along a shelf, arranged by color. He says, “We’ve got cola, we’ve got Softa orange, bitter lemon, lemonade, pineapple, other small-small items like strawberry.”
Kuguru got into the soft drink and juice business in 1998,
just as multinational drink companies were coming into full force in the Kenyan
A food technologist by training, Kuguru has tried his hand at catering, baking, potato chip manufacturing, and beer brewing before settling on sodas. He says it went pretty well for a few years, “When we were in brewing, we established a network in the country. We knew the market. We got wisdom so we were able to reach all corners of this country. So we were strong in the beginning. We did it as a surprise. It was unexpected for the multinationals.”
At that point, he says, Kuguru Food Complex was producing at almost full capacity, close to 240 thousand bottles of juice and soda per day.
They were advertising on billboards, television, radio and in newspapers. In particular, the company focused on vernacular radio stations, which broadcast in the many languages of Kenya’s regional communities. Softa sodas and juices were selling all across the country. But he says it didn’t take long for larger international producers to recognize the threat of the domestic upstart:
“In the beginning when we started doing vernacular, they were very effective for us, very powerful. But now the multinationals now moved in and they started advertising on the same radios we were using. They followed us. In fact, we come up with initiatives and then they follow to what we are doing… and outdo us.”
Other, more ruthless competition followed. Some of their
distributors stopped selling Softa products. Retailers did as well. Crates full
of bottles were smashed, forcing the company to invest in new stock. Kuguru says
he suspects that some of this misfortune came at the request of his
Kuguru says he no longer tries to sell his Softa products all over Kenya. He focuses on Central and Rift Valley provinces. And, although his profit margin is miniscule, he tries to make sure he is selling his juice and soda at a lower price than his large competitors.
In a country where most people earn less than a dollar a day, a few pennies’ difference in price is keeping Softa in business, so far. He says, “We maintain a lower price all the time than the multinationals. In fact, the multinationals now reduced their price to try and disadvantage us on that factor. Then we reduced further. We are now producing almost on charity to survive. To maintain the market, we are keeping our prices very low. “
But Kuguru is an optimist. He says rising global food prices
will help Softa compete. He thinks the higher cost for sugar and dyes that go
into soda and juice will force big companies to charge consumers more. Once
that happens, Kuguru says Softa will raise its prices enough to keep the
Despite the challenges Kuguru says he has one belief that keeps him in the business:
“Right now, in Kenya, if you look at the general manufacturing market, it is all owned by non-indigenous manufacturers. They step their foot on two boats. They repatriate their earnings. There is no guarantee that those guys will have patriotism in this country, whereas we stay here thick and thin.”
The post-election violence that spread across Kenya early this year is still fresh in people’s minds. Kuguru says he thinks more unrest may cause many international manufacturers to leave the country. He is sticking with his business out of a belief that Kenya’s domestic manufacturing sector needs to grow into a stable foundation for the national economy.