Low-cost options for refreshing the masses in the smaller economies of Africa.

With rising input costs and depreciating local currencies in most countries of Africa, the need for low-cost options in Carbonated Soft Drinks cannot be over emphasized.

?While the Big 2 (Coke and Pepsi) are also struggling to improve margins, the local brands need to come out of this difficult situation in an intelligent manner.

?In spite of PET being politically unfashionable, in the short-term PET bottles are lot less expensive than cans,

?Whilst cans do have snob value in most countries of Africa, it is the PET bottles which is going to help to quench the thirst of the masses and in fact in some cases, fill tummies and kill hunger.

?The time has come for local / regional brands to be developed by young African entrepreneurs.

?The name of the game is to minimize capital expenditure by searching for reliable manufacturers of Carbonated Soft Drinks in China and India.

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We all do know that the Big 2 (Krones and Sidel) have best in class machinery. But they also come at “almost unaffordable prices” especially for the smaller economies of Africa.

?Due diligence is a mandatory exercise whilst searching for “value for money” suppliers of plant and machinery from China and India.

?Reliable engineers are available in the Indian sub-continent who can not only install and commission such machines but also run them on a sustained basis.

?The trick is to use word of mouth to hunt for such veterans in the field of production and maintenance.

?Coming to the suppliers of concentrates, the same is equally true.

?Entrepreneurs in the smaller economies of Africa need to search for suppliers of concentrates who are okay to not work with super normal margins.

?And such suppliers are indeed available in China and India.

?Just that we are all lazy and first talk to the biggest players since their names are so well known.

?For those who do not even have enough capital for purchasing plant and machinery, there is always the option of getting their product bottled at a co-packer.

?In fact, it is a win win situation for both parties.

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The entrepreneur who has burnt his fingers by investing in over capacity and the entrepreneur who does not have enough capital to buy a plant at this stage.

?All over the world, 3P is the rage now.

Cheers!

Disclaimer: All views expressed in this article by the author are entirely personal and do not reflect the views of any of his employers, previous and present.