KENYA – Weetabix East Africa has announced KES 85 million (US$522 000) investment towards upgrading the manufacturing facility in Nairobi and pushing the brands in the market.
Dominic Kimani, CEO at Weetabix East Africa made the revelation on Wednesday January 24, in Nairobi, during the company’s expansion plan seeking to expand its local plant, brand and distribution.
According to the company, the investment is an inflation-beating strategy as wheat prices, the company’s key role material continues to ease on global markets.
Of the earmarked package, KES23 million (US$140,000) will go to the distribution channel, production process and consumer rewards, while KES62 million (US$ 380,000) has been set for upgrading the manufacturing capability and capacity, Kimani detailed.
Weetabix rides on easing wheat prices to drive growth
Weetabix says that with wheat prices declining, products consumption in the past six months has grown by about six per cent, whereas in terms of value, it has grown by about 12 per cent
The company attributes the business growth to the ease in Russia-Ukraine war tensions that caused supply constraints the better part of 2022 and last year
“Effects of the decline are well evident across the markets, as wheat products consumption rates have started picking up, although at a calculated spending mode,” said Dominic Kimani, CEO at Weetabix East Africa.
This as a result of the declined wheat prices trickling down to its end products’ price.
In detail, Kimani revealed that a tonne of wheat is now selling at between US$280-300 (KES45,000-49,000), which is a drop from the highs of about US$480 (KES77,975) a tonne during the peaks of the Russia-Ukraine war.
“Traditionally, the average price for a tonne of wheat was about US$250 (KES40,612).”
He however said the declining cereal prices is faced with yet another risk, the new Isreal – Palestinian war, saying the future of the consumption trends still hang in the balance as it is hard to tell what the war’s outcome will be like.
The war has so far affected the supply chain through the Kenya and the region is staring at a sharp increase in freight costs.
The attacks on vessels which began in mid-December, in response to Israel’s bombardment of Gaza, has seen shipping lines avoid the Red Sea and Suez Canal, a key route for ships to Mombasa and the East African coastline.
National consumer campaign kicks off, adds two cornflakes variants
As part of the inflation-beating strategy, the company has also officially kick-off of its national consumer campaign dubbed “Fyatuka na Weetabix”.
This involves a renewed focus on the “kadogo” 37g pack version of its flagship WEETABIX breakfast cereal brand and an addition of two cornflakes variants named Fruity Fiesta and Fruit Frenzy to its portfolio.
During the launch, Weetabix EA CEO Dominic Kimani pointed out that diversity was driving the need for a high degree of differentiation to meet a wide range of consumer tastes and preferences. Additionally, health consciousness was also growing, with consumers seeking natural, healthy and affordable products across the region.
Furthermore, emerging markets such as Kenya, Uganda and Tanzania are growing in importance to cereal makers as more residents in those countries move to cities and have less time and inclination to make the traditional breakfast.
The firm, he added, is focusing on the 37g ‘Kadogo’ pack size to deepen access to consumers who have also extended their scope of culinary preferences to take cereals outside the breakfast window
Mr. Kimani further explained that there was a need to evolve with the times and invest in production improvements to optimize output and still deliver the right product to consumers at an affordable price.
The “Fyatuka na Weetabix “campaign will run for 3 months giving consumers an opportunity to win airtime, shopping vouchers and monthly cash prizes.
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