Carbonated drinks posted no growth for two years - official
Posted Thursday, December 12 2013 at 02:00
KAMPALA- Slow economic recovery from the 2011 economic challenges and price increases have restrained growth in the carbonated beverages, an industry player has said.
Justifying Century Bottling Company’s recent price cuts, Mr Norton Kingwill, the firm’s managing director, told the Daily Monitor in an email that the growth of carbonated beverages has been flat over the last two years, necessitating price cuts to boost consumption.
The company cut the retail price for its 350ml plastic bottled soda from Shs1,200 to Shs1,000, barely three weeks after it had reduced the price for the same bottle from Shs1,500.
It also cut its 300ml glass bottled soda price from Shs1,000 to Shs800.
Apart from prices, subdued growth in the carbonated soft drink industry could also be attributed to a new paradigm in the market where healthier drinks like bottled water and juices are gaining popularity among the population.
Although it had been noted that stiff competition is forcing players to reduce prices to appeal to consumers, Mr Kingwill ruled out competition in the recent price cuts, saying the move was meant to drive up the per capita consumption of sodas in Uganda, which currently stands at about 30 per cent, the lowest in the region.
Increase in per capita consumption
“With the affordability matrix, our consumers shall purchase more of our products hence we shall be able to up the per capita consumption to meet that of our neighbours in the EAC region,” he said.
Crown Beverages, the manufacturer of Pepsi products, also cut prices for 500ml and 1litre plastic bottled sodas from Shs1,800 to Shs1,500 and from Shs3,000 to Shs2,500, respectively.
The firm’s head of sales and marketing, Mr Innocent Tibayeita, also said the move sought to make Pepsi products more affordable to consumers.
Mr Tibayeita said: “The new prices are also meant to encourage new soda consumers to buy our products because the prices are friendlier, especially in these hard economic times.”
However, there is no doubt that competition also contributed to the latest developments in the market, following the entrance of three new players including Riham, Azam and Fizzy soda brands.