INDUSTRY PROFILE

SPREADS INDUSTRY MARKET ANALYSISJAM

An analysis of the modern trade data trends, analysis and industry growth between 2015 and 2016 December 2016

By: Peter Mwangi,Market Analyst

KENYA – ECONOMIC AND SOCIAL DEVELOPMENT OVERVIEW

• Kenya’s economy grew at an average of 3.8% during the past decade – well below its potential which is estimated to be about 6%, due to severe drought, election-related huddles and occasional acts of terrorism which threatened to slow down the economy between 2007 and 2014. In 2015, real GDP however expanded by 6.0%, driven by a pickup in infrastructure spending and strong consumer demand.

• Kenya is in the midst of a prolonged population boom that is expected to continue for some time. Total population was 46.7 million in 2015, an increase of 15.5 million over the figure in 2000. The median age in 2015 was just 18.9 years. The country’s potential workforce (those between 15 and 64 years) is growing even faster than population. Each year, an estimated 500,000 enter the labour market but the economy creates a much smaller number of salaried jobs. Unemployment was a shocking 34.7% in 2015. Youth unemployment accounted for around two-thirds of the jobless.

• The Kenyan economy continued to grow, backed by increasing foreign investment and stable political leadership, as well as a growing focus on the development of youth entrepreneurship. Backed by a strong GDP forecast of 6.5% for 2015, as well as inflation remaining at a single-digit level of 5%, retailing grew in 2015. The rise of the middle class with high disposable incomes, as well as the improved infrastructure, which lowered transport costs for businesses, were key in promoting retail growth. Another key factor was the growing property boom, allowing retailers to take up prime locations near residential areas for customer convenience, as well as the devolution of services to rural areas, encouraging the footprint expansion of retail outlets nationwide.

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Kenya Demographic, Socio-Economic Overview

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Products Overview - JAM

• Jam is one of Kenya’s most popular spreads in house holds today.Leading Brand• Zesta continues to enjoy the largest market share among the leading brands in the Kenyan market with over 70% market share. Since entering the Kenyan Market, Zesta has continued to

enjoyed loyalty among jam consumers.Market Growth• The increasing health benefits in Kenya of these products which are perceived to be natural and organic products, and subsequently the rising demand for them, has continued to fuel the

growth for jam products in Kenya as well as globally. The demand and supply disparities in Kenya has encouraged jam products imports in Kenya Overview of Jam Flavors in KenyaIn Kenya the Kenya market, Jams are usually made from the following fruits; plums, apples, pineapples, guavas, strawberries, raspberries, mulberries and mangoes.On the other hand, marmalades can be made from the following citrus fruits; limes, lemons, oranges and grapefruit. Usage and ConsumptionJams are normally used as bread or toast spreads and dessert sweeteners.

SPREADS – JAM MARKET SHARE ANALYSIS

The Jam segment presents one of the fastest growing FMCG brands in Kenya today. The segments consist of three major competing brands [namely Zesta, Pep Jam and Kenylon] and other jam mass brands [such as Ken, Rhodes, Vitrac, Natures, Stute, Robertson, Kol and Fragata among others.

\INDUSTRY ANALYSIS

Zesta – This is a mass jam product manufactured and distributed by Trufoods Industries Ltd. The brand comes in various variants/flavours which include: Strawberry, Orange, Pineapple, Red Plum, Mixed Berry and Apricot

Pep – Manufactured and distributed by Premier Food Industries Ltd, Pep is marketed in various flavours which include: Pineapple, Orange, Mixed Fruit, Apricot and Red Plum

Kenylon – Kenylon is one of Trufoods Industries Ltd pioneer brands that represents 7% jam market value share. Kenylon is also popularly marketed in various flavours which include: Orange, Strawberry, Mixed Fruit and Red Plum

Jam Market Share – 2015/2016

According to 2015/2016 Modern Trade Data Analysis, Zesta Jam brands continues to be the market leader with over 70% market share. The market value share remained relatively stable while Pep Jam ranked second with an average market value of between 15% and 17%. In the year 2016, other non leading brands tend to marginally increase in market value share. The brands include Vitrac, Stute, Kol, Fragata and Rhodes among others.

OTHERS

KEN

KENYLON

PEP

ZESTA

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

3.88%

2.53%

4.88%

17.22%

71.49%

OTHERS

KEN

KENYLON

PEP

ZESTA

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%

3.33%

3.40%

5.29%

12.84%

75.50%

Source: Databridge Research Limited from company research, market scans and modern trade data analysis. All rights reserved.

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SPREADS – JAM VARIANTS ANALYSISINDUSTRY PROFILE –INDUSTRY ANALYSIS

Jam Variants Split Share Analysis – 2015/2016

There is a variety of jam flavors in Kenya and recent developments in the jam manufacturing firms in Kenya has seen introduction of real fruit jam besides the natural flavored jams in the Kenyan market. The variety in terms of jam varieties in Kenya encompasses natural flavored real fruit.

Others

Rasberry

Apricot

Pineapple

Strawberry

Orange

Red Plum

Mixed Fruit

0.00%5.00%10.00%15.00%20.00%25.00%

3.60%

2.16%

5.29%

7.69%

17.07%

18.75%

22.36%

23.08%

Others

Rasberry

Apricot

Pineapple

Strawberry

Orange

Red Plum

Mixed Fruit

0.00% 5.00% 10.00% 15.00% 20.00% 25.00%

4.15%

1.23%

4.77%

6.46%

18.00%

18.46%

23.69%

23.38%

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SPREADS –ANALYSIS OF STOCK KEEPING UNITS (SKU’SINDUSTRY PROFILE –INDUSTRY ANALYSIS

Jam Variants Split Share Analysis – 2015/2016

There is a variety of jam flavors in Kenya and recent developments in the jam manufacturing firms in Kenya has seen introduction of real fruit jam besides the natural flavored jams in the Kenyan market. The variety in terms of jam varieties in Kenya encompasses natural flavored real fruit.

Others

340GM

450GM

250GM

300GM

1000GM

500GM

0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00%

24.15%

5.69%

6.15%

8.46%

8.62%

14.00%

32.92%

22.59%

5.53%

5.77%

8.65%

8.65%

14.18%

34.62%

2016

2015

The 500gm pack size remains the most popular size among jam products in the Kenyan market. The consumption rate of 500GM jam size remained stable between 201 and 2016 although there was a slight increments in 2016.

The popularity of 500gm pack size can be attributed to price-disposable income match among most middle income population segment.

The 1000gm pack is also popular among jam consumers with consumption rate of approximately 15%. The consumption rate remained stable in the trading years 2015/2015.

Other popular pack sizes include 300gm, 250gm, 450gm and 340gm.

Local National Brand Owners (NBOs) continue to maintain their standard packs sizes (100/150gm, 200gm, 225/250gm, 300gm, 400gm, 500gm and 1000gm), which commands the market against foreign brand which sell in other pack sizes as well.

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INDUSTRY PROFILE –INDUSTRY ANALYSIS

SPREADS – SUMMARY OF MARKET SHARE ANALYSIS 2015JAM MARKET SHARE ANALYSIS 2015 REPORT

Brand SKU Variants Sum Qnty Sum Vol KGS % Qnty Contrib

% Vol Contrib

             

STUTE430gm

Orange, Strawberry 12 5160 0.02% 0.02%

ROBERTSON340gm

Black Currant, Rasberry, Orange 29 9860 0.04% 0.03%

FRAGATA350gm, 375gm

Orange, Rasberry, Strawberry, Pieapple 62 21700 0.09% 0.07%

NATURES450 gm Mixed berry, Lemon, Grape, Strawberry, Rasberry,

Orange, Pineapple, Rasberry 216 95450 0.33% 0.32%

RHODES380gm, 450gm, 900gm

Apricot, Strawberry, Mixed Berry, Orange 185 125330 0.28% 0.42%

VITRAC290gm, 320gm Apricot, Fig, Guava, Strawberry, Mango, Orange,

Red Grape, Red Plum 487 151490 0.74% 0.51%

KOL400gm, 500gm, 1000gm

Mixed Berry, Red Plum, Orange, Strawberry 395 225500 0.60% 0.76%

DANA250gm, 500gm

Red Plum 540 228750 0.82% 0.77%

GARDEN340gm, 720gm Apricot, Fruit Mix, Mixed Berry, Orange, Pineapple,

Rasberry, Red Plum, Strawberry 597 294610 0.91% 0.99%

KEN500gm

Mixed Berry, Red Plum 1510 755000 2.30% 2.53%

KENYLON250gm, 500gm

Mixed Berry, Red Plum, Orange, Strawberry 3745 1454630 5.70% 4.88%

PEP150gm, 250gm, 300gm, 400gm,500gm, 1000gm

Apricot, Mixed Berry, Orange, Pineapple, Red Plum, Strawberry 12465 5134400 18.97% 17.22%

ZESTA100gm, 200gm, 225gm,300gm, 500gm, 1000gm

Strawberry, Apricot, Red Plum, Mixed Fruit, Mixed Berry, Orange, Pineapple 45470 21318200 69.19% 71.49%

TOTAL    65,713.00 29,820,080.00 100.00% 100.00%

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INDUSTRY PROFILE –INDUSTRY ANALYSIS

SPREADS – SUMMARY OF MARKET SHARE ANALYSIS 2016JAM MARKET SHARE ANALYSIS 2016 REPORT

Brand SKU Variants Sum Qnty Sum Vol KGS % Qnty Contrib

% Vol Contrib

             

FRAGATA350gm, 375gm

Orange, Rasberry, Strawberry, Pieapple 11 3850 0.01% 0.01%

ROBERTSON340gm

Black Currant, Rasberry, Orange 18 6660 0.02% 0.02%

HALWANI400gm

Strawberry 26 10400 0.03% 0.02%

CHABAA430gm

Blueberry, Mixedberry, Pineapple, Strawberry 31 13330 0.03% 0.03%

STUTE 430gm

Orange, Strawberry 54 23220 0.06% 0.06%

RHODES 380gm, 450gm, 900gm

Apricot, Strawberry, Mixed Berry, Orange 196 100660 0.21% 0.24%

VITRAC 290gm, 320gm Apricot, Fig, Guava, Strawberry, Mango, Orange,

Red Grape, Red Plum 318 100980 0.34% 0.24%

NATURES 450 gm Mixed berry, Lemon, Grape, Strawberry, Rasberry,

Orange, Pineapple, Rasberry 274 122350 0.30% 0.29%

KOL 400gm, 500gm, 1000gm

Mixed Berry, Red Plum, Orange, Strawberry 473 282400 0.51% 0.68%

DANA250gm, 500gm

Red Plum 953 352250 1.03% 0.84%

GARDEN340gm, 720gm Apricot, Fruit Mix, Mixed Berry, Orange, Pineapple,

Rasberry, Red Plum, Strawberry 884 373140 0.95% 0.89%

KEN500gm

Mixed Berry, Red Plum 2544 1272000 2.75% 3.04%

KENYLON 250gm, 500gm Mixed Berry, Red Plum, Orange, Strawberry 5685 2211000 6.14% 5.29%

PEP 150gm, 250gm, 300gm, 400gm,500gm, 1000gm

Apricot, Mixed Berry, Orange, Pineapple, Red Plum, Strawberry 13857 5362850 14.96% 12.84%

ZESTA100gm, 200gm, 225gm,300gm, 500gm, 1000gm

Strawberry, Apricot, Red Plum, Mixed Fruit, Mixed Berry, Orange, Pineapple 67315 31539400 72.66% 75.50%

TOTAL     92,639.00 41,774,490.00 100.00%

100.00%

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ANNUAL BRAND MARKET GROWTH (2015/16)

SPREADS – JAM MARKET VALUE ANALYSIS

OTHERS

KEN

KENYLON

PEP

ZESTA

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

3.88%

2.53%

4.88%

17.22%

71.49%

3.33%

3.40%

5.29%

12.84%

75.50%

2016

2015

BRAND GROWTH ANALYSIS 2015/2016

Among the leading jam brand owners, Zesta continues to command the largest market share. According to analysis of modern trade data 2015/2016, ZESTA continues to gain popularity among consumers with a CAGR of approximately of 4%.

PEP Jam is ranked second with a market share of 12% in 2016, a decline of approximately 5% in 2015. Variation and low brand awareness were sited as key factors that contributed to PEP market share declined. However, there has been ongoing promotion around the brand to increase the awareness level which in turn could see the brand market share increase in the forecast period.

KENYLON Jam brand is ranked third with a market share of approximately 5%. Brand loyalty among some segment of consumers ensured brand stability between the trading period 2015/16. Investment on brand awareness such as promotions, print and electronic media Ads would boost its market share in the forecast period.

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