{"id":689,"date":"2014-03-10T17:03:29","date_gmt":"2014-03-10T17:03:29","guid":{"rendered":"http:\/\/oilnewskenya.com\/?p=689"},"modified":"2015-09-09T11:17:45","modified_gmt":"2015-09-09T11:17:45","slug":"nestle-expects-major-growth-in-kenya-when-oil-starts-flowing","status":"publish","type":"post","link":"https:\/\/www.oilnewskenya.com\/index.php\/nestle-expects-major-growth-in-kenya-when-oil-starts-flowing\/","title":{"rendered":"Nestl\u00e9 expects \u2018major growth\u2019 in Kenya when oil starts flowing"},"content":{"rendered":"

Story by HowWeMadeitinAfrica<\/a><\/p>\n

Swiss food and beverage multinational Nestl\u00e9 is expecting \u201cmajor growth\u201d in the Kenyan market in five years when recent discoveries of oil begin to flow.<\/p>\n

Nestl\u00e9 Kenya Managing Director Svetlana Obruchkova says the purchasing power of consumers in the East African country is set to rise and push the sales of branded goods.<\/span><\/p>\n

\u201cThere are affluent people and the middle class is growing but it is still not growing at the extent we would like. We strongly believe that this growth will come when the\u00a0oil and gas\u00a0is developed and a wider part of the population will get better incomes. The potential is really great\u2026 and we expect major growth to come in the next five years.\u201d<\/p>\n

Obruchkova told\u00a0How we made it in Africa<\/em>\u00a0that Nestl\u00e9\u2019s business in\u00a0Kenya\u00a0has grown steadily in the last 47 years, \u201cdriven by the increasing income of the population\u201d.<\/p>\n

\u201cOne of the key signs that the middle class is growing is the number of shopping malls and modern trade outlets which are present here. For the majority of\u00a0fast moving consumer goods\u00a0companies the share of modern trade in the total share of our business is over 40%, so it is very big.\u201d<\/p>\n

In the last two years Nestl\u00e9 has invested US$25m in revamping its factory in Kenya which supplies Kenya, Uganda,\u00a0Tanzania,\u00a0Rwanda,\u00a0Burundi<\/a>, eastern\u00a0Democratic Republic of Congo,\u00a0Malawi\u00a0and\u00a0Zambia. The Kenyan plant also exports the Milo brand, beloved among the African diaspora, to a UK distributor which then supplies to retail chains.<\/p>\n

\u201cThe Milo which we produce here is the original recipe originally invented in Australia over 40 years ago. It has a very rich and nice taste and for many people it is nostalgic. There is a big African diaspora in the UK and in Europe. [They]\u2026 are very well integrated [but] they still look for some of the things that bring back their memories, feelings and experiences they had in their home country.\u201d<\/p>\n

She explains that while Milo produced in Asia is available in the European market it has a different recipe which has evolved over the years.<\/p>\n

Nestl\u00e9\u2019s best performing brands in Kenya include Nescaf\u00e9 and Milo, as well as food flavouring Maggi.<\/p>\n

Growing Nestl\u00e9\u2019s coffee and cereal brands<\/strong><\/p>\n

While Kenya\u2019s coffee consumption has grown steadily in recent years, Obruchkova believes \u201cwe could do much better\u201d, adding that Kenya and\u00a0Uganda\u00a0still maintain a tea drinking culture and view coffee as a \u201ccurrency\u201d because of its export to the west.<\/p>\n

\u201cFor us to grow the coffee [industry] in Kenya we need to grow local consumption. We do a lot of sampling and the target audience is the youth.\u201d<\/p>\n

Through its My Own Business (MYOWBU) model initially developed in West Africa, Nestl\u00e9 is using entrepreneurial young people to supply its drinks in high density markets.<\/p>\n

The firm is seeking to recruit 500 youths in Kenya by 2016 to promote the Nescaf\u00e9\u00a0coffee brand in busy public areas such as open markets, stadiums and bus stops.<\/p>\n

\u201cIt is really providing an opportunity for people to get an income and it gets our brands to places it wouldn\u2019t reach and at the right occasion. We want to reach more youth with this because for them there is no investment, just their commitment\u201d as Nestl\u00e9 provides free Nescaf\u00e9\u00a0kits.<\/p>\n

Obruchkova says the company is also seeking to grow its presence in the breakfast cereals markets which is \u201cgrowing very fast\u201d. The production of its cereal brands has been challenging in Kenya because of difficulties in accessing high quality maize, a key raw material.<\/p>\n

\u201cIt is our priority\u2026 [but] we want to ensure sustainable supply of raw materials. The struggle was for two or three months we could not produce because we couldn\u2019t find [quality maize],\u201d she says. \u201cThis category is growing very fast. I have seen this in my home country (Ukraine). It is a consumption habit with the growth of the population\u2019s purchasing power, improved knowledge, access to information and also people being busy\u2026 people go for more convenient products.\u201d<\/p>\n

Addressing the challenges<\/strong><\/p>\n

Nestl\u00e9 sources raw materials such as wheat, sugar, salt, spices and packaging locally. To solve quality shortfalls, Nestl\u00e9 has a farmer development programme through which it trains and assists 26,000 coffee farmers and 6,000 dairy farmers in rural Kenya.<\/p>\n

Other difficulties Nestl\u00e9 faces in Kenya include frequent power outages and logistical challenges.<\/p>\n

\u201cWe have a generator that we can run [when power goes off] but there is a certain process in cereal production when if there is a power outage the machine blocks and a lot of material is lost. We are discussing how to overcome that and [we may have] to even run that machine on a generator full time because we cannot face the fluctuations.\u201d<\/p>\n

Despite the challenges, Obruchkova says, Nestl\u00e9 is optimistic that difficulties\u00a0manufacturing\u00a0companies currently face are likely to be overcome in coming years.<\/p>\n

\u201cThe reason why we are here is because of our long-term commitment. We know the growth is coming and we know we have to be here when the growth hits in five years. We know it will be driven by oil and other natural resource discoveries. Look at\u00a0Angola, the country is in total blossom and the buying power of the consumer has grown.\u201d<\/p>\n

Advice to other manufacturers<\/strong><\/p>\n

She advises other manufacturing companies expanding in Africa to learn the market and its unique culture.<\/p>\n

\u201cYou need to see how you can master excellence here, adapt to the culture, to the [power] outages and everything and then grow.\u201d<\/p>\n

She reckons that technological innovation is likely to revolutionise modern trade in Africa and galvanise economic growth.<\/p>\n

Companies, she says, will need to adopt a new way of thinking.<\/p>\n

\u201cThe way we think and look into the future should be different,\u201d she says, adding that companies ought to conduct research that will advise product development and marketing strategies that appeal to the evolving tastes and preferences of the youth.<\/p>\n","protected":false},"excerpt":{"rendered":"

Story by HowWeMadeitinAfrica Swiss food and beverage multinational Nestl\u00e9 is expecting \u201cmajor growth\u201d in the Kenyan market in five years when recent discoveries of oil begin to flow. Nestl\u00e9 Kenya … Read More<\/a><\/p>\n","protected":false},"author":2,"featured_media":690,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[6],"tags":[63,70,160,175,486,538,1252,1481,1491,1572,1719,1720,2182,2571],"class_list":["post-689","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-by-others","tag-africa","tag-africa-oil","tag-angola","tag-arabica","tag-coffee","tag-crude-oil","tag-kenya","tag-maggi","tag-managing-director-svetlana-obruchkova","tag-milo","tag-nescafe","tag-nestle","tag-robusta","tag-tullow-oil","entry"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/03\/coffee.jpg?fit=259%2C194&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p5JWkQ-b7","jetpack-related-posts":[{"id":2334,"url":"https:\/\/www.oilnewskenya.com\/index.php\/panalpina-opens-new-office-in-nairobi-to-serve-east-african-region\/","url_meta":{"origin":689,"position":0},"title":"Panalpina opens new office in Nairobi to serve East African region","author":"Samuel Kamau Mbote","date":"January 19, 2015","format":false,"excerpt":"[twitter-follow screen_name='oilnewskenya'] International freight forwarding and logistics company, Panalpina, has opened a new office in Nairobi Kenya. The company says the new office will support Panalpina\u2019s growth strategy for the region and will leverage on opportunities for growth exist predominantly in the energy and infrastructure sectors. According to Panalpina\u2019s country\u2026","rel":"","context":"In "Top News"","block_context":{"text":"Top News","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/top-news\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2015\/01\/panalpina-747-8_pfs_et_cropped.jpg?fit=1200%2C797&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2015\/01\/panalpina-747-8_pfs_et_cropped.jpg?fit=1200%2C797&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2015\/01\/panalpina-747-8_pfs_et_cropped.jpg?fit=1200%2C797&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2015\/01\/panalpina-747-8_pfs_et_cropped.jpg?fit=1200%2C797&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2015\/01\/panalpina-747-8_pfs_et_cropped.jpg?fit=1200%2C797&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":5688,"url":"https:\/\/www.oilnewskenya.com\/index.php\/cargostore-to-open-dnv-offshore-operations-in-africa\/","url_meta":{"origin":689,"position":1},"title":"Cargostore to open DNV offshore operations in Africa","author":"","date":"February 16, 2017","format":false,"excerpt":"Global shipping container provider,\u00a0Cargostore Worldwide Trading Ltd\u00a0is to develop its DNV offshore operations on the African continent with Kenya a likely base for operations. Although no location has been decided Cargostore managing director Justin Farrington Smith says East Africa is cited as a likely base of operations for its DNV\u2026","rel":"","context":"In "Top News"","block_context":{"text":"Top News","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/top-news\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2017\/02\/cargostore.jpg?fit=800%2C500&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2017\/02\/cargostore.jpg?fit=800%2C500&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2017\/02\/cargostore.jpg?fit=800%2C500&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2017\/02\/cargostore.jpg?fit=800%2C500&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":5923,"url":"https:\/\/www.oilnewskenya.com\/index.php\/kpc-signs-shs-1-7-billion-for-kisumu-oil-jetty-project\/","url_meta":{"origin":689,"position":2},"title":"KPC Signs Shs 1.7 billion for Kisumu Oil Jetty Project","author":"","date":"May 2, 2017","format":false,"excerpt":"Kenya Pipeline Company (KPC) has today signed a Kshs 1.7 billion agreement for the construction of the Kisumu oil jetty. KPC has awarded the contract to Southern Engineering Company (SECO), a 60-year old Kenyan engineering company, specializing in a range of land & marine, civil, mechanical and structural engineering, containerized\u2026","rel":"","context":"In "Top News"","block_context":{"text":"Top News","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/top-news\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2017\/05\/KPC.jpg?fit=550%2C277&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2017\/05\/KPC.jpg?fit=550%2C277&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2017\/05\/KPC.jpg?fit=550%2C277&ssl=1&resize=525%2C300 1.5x"},"classes":[]},{"id":5436,"url":"https:\/\/www.oilnewskenya.com\/index.php\/speaapg-africa-energy-and-technology-conference-aetc-set-for-nairobi-next-week\/","url_meta":{"origin":689,"position":3},"title":"SPE\/AAPG Africa Energy and Technology Conference (AETC) set for Nairobi Next Week","author":"","date":"November 28, 2016","format":false,"excerpt":"At next week\u2019s SPE\/AAPG Africa Energy and Technology Conference (AETC), representatives of IOCs, NOCs, governments, academia, technology and service providers will come together to explore the challenges faced and solutions to ensure these hydrocarbons reach the market in a manner that is expedient, safe and environmentally sustainable - while creating\u2026","rel":"","context":"In "Events"","block_context":{"text":"Events","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/events\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2016\/11\/16afrc-sponsorship.jpg?fit=200%2C283&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1671,"url":"https:\/\/www.oilnewskenya.com\/index.php\/kenya-looks-into-establishing-oil-and-gas-industrial-parks\/","url_meta":{"origin":689,"position":4},"title":"Kenya looks into establishing oil and gas industrial parks","author":"Samuel Kamau Mbote","date":"August 26, 2014","format":false,"excerpt":"[twitter-follow screen_name='oilnewskenya'] As East Africa potential to become a major global oil and gas producer continues to attract international investors Kenya is already looking into establishing Oil and Gas Industrial Parks and Support Bases. According to a presentation by the National oil corporation\u2019s managing director Sumayya Athmani during the stakeholder\u2026","rel":"","context":"In "Top News"","block_context":{"text":"Top News","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/top-news\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/08\/mombasa.png?fit=645%2C367&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/08\/mombasa.png?fit=645%2C367&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/08\/mombasa.png?fit=645%2C367&ssl=1&resize=525%2C300 1.5x"},"classes":[]},{"id":1524,"url":"https:\/\/www.oilnewskenya.com\/index.php\/african-oil-energy-sector-fuelling-global-investor-growth-dhl\/","url_meta":{"origin":689,"position":5},"title":"African oil & energy sector fuelling global investor growth – DHL","author":"Samuel Kamau Mbote","date":"July 30, 2014","format":false,"excerpt":"[twitter-follow screen_name='oilnewskenya'] While Oil and Gas activity in West Africa is nothing new, it is the activity in East Africa which is creating a stir amongst exploration companies and of course, their suppliers. This is according to Steve Harley, President, DHL Energy Sector who says that while Angola and Nigeria\u2026","rel":"","context":"In "Top News"","block_context":{"text":"Top News","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/top-news\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/06\/ophir-and-bg-group-extend-deepsea-metro-i-contract-in-tanzania-and-kenya.jpg?fit=729%2C510&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/06\/ophir-and-bg-group-extend-deepsea-metro-i-contract-in-tanzania-and-kenya.jpg?fit=729%2C510&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/06\/ophir-and-bg-group-extend-deepsea-metro-i-contract-in-tanzania-and-kenya.jpg?fit=729%2C510&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/06\/ophir-and-bg-group-extend-deepsea-metro-i-contract-in-tanzania-and-kenya.jpg?fit=729%2C510&ssl=1&resize=700%2C400 2x"},"classes":[]}],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/689","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/comments?post=689"}],"version-history":[{"count":1,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/689\/revisions"}],"predecessor-version":[{"id":3775,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/689\/revisions\/3775"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/media\/690"}],"wp:attachment":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/media?parent=689"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/categories?post=689"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/tags?post=689"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}