Upstart Kenyan Firm Makes Hard Run at Soft-Drink Giant

A new home-brewed soda has entered Kenya’s soft-drink market and is trying to give the multinational giant Coca-Cola a run for its money.

Softa, a carbonated beverage touted as having “a distinct yet classic taste that customers find brisk, refreshing and irresistible,” was launched in August. It boasts the slogan: “Freedom to Choose.”

Although Coca-Cola still dominates the carbonated-drink industry of this East African nation--and most other countries across the continent--business analysts say there is a definite niche for the less-expensive Softa to fill.

They also say that Softa manufacturer Kuguru Food Complex Ltd.’s gumption in taking on an industry powerhouse might serve as an inspiration to other local entrepreneurs. KFCL is the first indigenous Kenyan company to make carbonated soft drinks.

“Softa is a pioneer,” said David Kuguru, operations director at KFCL. “Kenya can feel proud that it is able to compete with an international firm.”

Kenyan government officials said they viewed KFCL’s investment in Softa as a sign of confidence in the country’s economy.

Mike Mbuvi, Softa’s marketing manager, maintains that Softa already has captured 4% of Kenya’s soft-drink market and is determined to take as much as 50%. Coca-Cola claims to command at least 97% of that market.

“I don’t think we could say that Softa is not really a threat to Coke,” said Ochieng Oloo, editor of Market Intelligence, a monthly business publication that monitors market trends. “If they could take even 2% [of the market], that would be of some benefit to them. There is a market for cheap products.”

Many laborers and low-income earners survive on half a loaf of bread and a soft drink for lunch, Oloo said. At about 20 cents a bottle--compared to Coke at 25 cents--Softa has been a hit in Nairobi’s impoverished neighborhoods, he said. It comes in five different flavors: orange, bitter lemon, cola, club soda and lemonade.

However, James Ohayo, a Nairobi-based marketing consultant, said Softa’s attempt to challenge Coke was “suicidal” because Coke’s widespread availability, marketing resources and advertising make it almost untouchable.

Ohayo doubted that Softa could have a noticeable impact in the sofa-drink market because of its still-limited reach and seemingly amateur promotional strategy. “Competition is only worthwhile if it’s not just competition for competition’s sake,” Ohayo said, adding that at this stage, Softa was “more of an irritant to Coke” than a significant rival.

But KFCL officials maintain that their giant competitor is nervous enough to try to put them out of business. KFCL has publicly accused Coca-Cola employees of buying its bottles in bulk and smashing them, defacing Softa advertising and pulling down its supermarket display boards. KFCL has advised distributors to report if used bottles are not returned.

Kuguru said the company has filed numerous police reports in Nairobi after destruction of its property; written to the Finance Ministry urging the government to introduce a firm protection policy that would safeguard local industrialists against what it calls unfair trade practices of multinationals; and complained about Coca-Cola’s domination of the market to the country’s Commission of Monopolies.

Officials at Coca-Cola Northern Africa denied any involvement in criminal activities targeting Softa.

“We don’t engage in those sorts of tactics,” said Maina Kariuki, the region’s director of external publicity, noting that Coke views all nonalcoholic beverages, including tea and even water, as rivals.

Many Kenyans shoppers said they consumed whatever they can easily lay their hands on.

“I drink Coke because it is what I’ve been drinking since I was young,” said Kisto Meheso, a 30-year-old office messenger, his shopping trolley at a local supermarket loaded with Coca Cola, Fanta and Sprite. “Softa is not easily available in smaller shops, while Coke is sold in every kiosk.”

But Jane Wangari, a thirtysomething businesswoman, said the new drink had tantalized her taste buds: “When I first tasted Softa drinks, I liked the orange one but not the black one,” she said. “Ever since, I’ve switched from Fanta to orange Softa.”