FMCG News Insights from Infomineo - May

FMCG in Kenya

Kenya’s economy has evolved rapidly over the last 10 years and continues to be a key part of the African growth story. Rising household incomes, spurred by strong economic performance which averaged 5.5% in the last decade, drove total household consumption expenditure from just $11.5 billion in 2004 to $49.2 billion in 2015. With the economy expected to continue its impressive growth in the medium term, Kenya’s total household consumption expenditure could grow to an estimated $65 billion by the end of 2020, a CAGR of about 10%.

In 2016, a P&G survey showed that retail spending in Kenya grew to an estimated $17.6 billion, up from $15.6 billion in 2015. According to the report, an estimated 60% of household incomes is spent on food and beverages, and 30% of retail purchases are made in formal supermarkets and retail outlets. Just like in large African economies like Nigeria and South Africa, FMCG companies operating in Kenya are beginning to see increased benefits from changing consumer habits and rising disposable incomes.

For more information on Kenya, access our infographic.

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Coca-Cola Beverages South Africa sold 17.5% of its stake in Appletiser

The stake were sold to an investment holding company African pioneer Group. Coca-Cola also sold a 4% stake to one of its managers. The sale is part of a merger agreement stipulating that the company should sell 20% of Appletiser to a black economic empowerment holding.

Read More - Reuters

Cola-Cola Ghana wins Bottling and Beverage Manufacturing Company of the Year

Cola-Cola Bottling Company Ghana won two awards during the Ghana Manufacturing Awards ceremony in Accra, rewarding outstanding achievements from local and international companies. The company was awarded two titles for achieving a sustainable growth and becoming the first beverage company in Ghana as well as one of Africa’s leading Coca-Cola systems.

Read more – My Joy Online

Unilever Nigeria declared a N378 million dividend

The company held its annual general meeting in Lagos and declared dividend of N378 million after approval of shareholders. Revenues increased by 17.8% in 2016, while profit after tax increased significantly by 157%.

Read more – The Guardian

Heineken aims to invest $100 million in Mozambique

Heineken is planning to build a brewery 80 kilometers north of Maputo for an investment of $100 million. The company is pushing for a tax cut on alcoholic drinks stating that “it is a barrier to investment”. The government intends to submit a bill to revise the tax since it led to many producers to closing in Mozambique.

Read more – Club of Mozambique

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Shoprite donates N2 million to American University of Nigeria’s Feed & Read Program

The donation was made with goods valued at N2 million including perishable and non-perishable items. Shoprite’s donation is part of the company’s support of initiatives that benefit the community.

Read more – Business Day Online

Shoprite: 2nd edition of “Made in Nigeria”

The meet-up held in Shoprite store in Ikeja City Mall in Lagos gathered local manufacturers, start-ups and farmers. The aim of the event was to promote Nigerian products for export and strengthening the relationships between various stakeholders.

Read more – The Nation

South Africa retailer TFG buys Australian firm in bid for developed markets

South Africa's clothing and homeware retailer said it would buy menswear chain Retail Apparel Group (RAG), part of its bid to expand in developed markets. Deal gives TFG 400 stores in bid to expand beyond Africa. TFG, or The Foschni Group, said it would pay 302.5 million Australian dollars ($225.82 million), or seven times RAG's expected 2017 earnings before interest, tax, depreciation and amortisation (EBITDA). The price excludes debt.

Read more – Reuters

PepsiCo-Jordan partnership with Jordan Football Association

PepsiCo-Jordan Sponsors the Jordan Football Association’s various activities, as part of the partnership with the JFA. This sponsorship was part of the company’s corporate social responsibility efforts to encourage sportsmanship and healthy lifestyle.

Read more – Zawiya

Sugar producer Tongaat Hulett's profit helped by higher prices

South Africa's Tongaat Hulett reported a 45% rise in full-year earnings. Group operating profit increased 39.8 percent to 2.3 billion rand ($178 million) due to an improvement in sugar revenue and operating profit. Tongaat, which also produces starch, said sugar production totalled 1.06 million tonnes, up from 1.02 million tonnes in 2016 but held back by low cane yields due to poor growing conditions.

Read more - Reuters

Patchi breaks ground on chocolate factory in Dubai

The 122,000 square foot facility will be the largest chocolate distribution centre in the region. The facility is due to be completed at the end of 2018 and will include fully functional production zones, a training center for chocolate professionals, service areas and management offices. Patchi currently has more than 600 employees across 32 branches in the UAE and over 150 outlets in 23 countries around the world. Witnessing significant increase in demand, the UAE chocolate market is poised to grow at 8% annually by 2021.

Read more – Construction Week