PepsiCo replaces Kenya chief in battle with Coke

Pepsi Light soda at a supermarket. PepsiCo has appointed Naushud Bhamgara to steer the Kenyan operation under SevenUp Bottling Company. FILE 

By Herbling David, hdavid@ke.nationmedia.com

In Summary

• Naushud Bhamgara takes the place of Moldenhauer who helped set up SBC Kenya.
• The management changes at SBC Kenya come at a period when rising demand reversed the drop in soda production witnessed in 2012.
• Coca-Cola linked the 2012 drop to consumer shift to fresh fruit juices and high inflation in the first half of 2012, which reduced disposable incomes.

Global soft drinks giant PepsiCo has replaced its Kenyan chief as it tries to win market share from rival Coca- Cola, which has dominated the Kenyan market for decades.

The firm, which is associated with Lebanese businessman Faysal El Khalil, has named Naushud Bhamgara to steer the Kenyan operation.

He replaced Butch Moldenhauer, who last January helped PepsiCo establish a Sh2.4 billion local production plant through Seven Up Bottling Company (SBC) Kenya Ltd, a franchise bottler and distributor of Pepsi products.

The executive shift comes as Coca-Cola used price cuts and multi-billion- shilling investments in its seven local franchises to defend and grow market share.

“I left SBC late last year. I am now with Chandaria Industries,” Mr Moldenhauer said without giving details.

Mr Bhamgara has been in SBC Nigeria for more than a decade.

Senior executives at the firm reckon that Mr El Khalil is not at ease with performance of the Seven-Up Bottling Company in Kenya, where he had hoped to steal market share from Coca- Cola.

SBC has operations in Nigeria, Tanzania and Ghana, with headquarters in Beirut, Lebanon. It serves PepsiCo products like Pepsi Light, Mirinda, Mountain Dew, 7 UP and Everess in the Kenyan market.

Mr Moldenhauer refused to divulge the position he is holding at Chandaria Industries, a family owned business that deals in paper products like tissues with its flagship product being Velvex and Toilex.

“I am not going to comment on that,” said Mr Moldenhauer.

PepsiCo made its re-entry into Kenya in late 2010 and has been relying on imports to serve the local market. But with importation being a costly affair, PepsiCo decided to set up base in Nairobi to produce its soft drink brands.

READ: Pepsi switches on Nairobi soft drinks production plant

The move ushered in a vicious battle for control of the market as PepsiCo sought to cut the dominance of Coca- Cola. PepsiCo, for instance, offered a larger product of 350ml bottle that is retailing at the same price as Coca-Cola’s 300ml bottle.

The management changes at SBC Kenya come at a period when rising demand reversed the drop in soda production witnessed in 2012.

Kenya National Bureau of Statistics (KNBS) data shows that production of soft drinks increased 20.1 per cent to 315,411 metric tonnes in the nine months to September.