Market Trends of Kenya Flexible Packaging Industry
Food and Beverage Sectors to Register Strong Growth
- Kenya stands as East Africa's economic powerhouse, boasting a robust financial sector and a well-established logistics network, solidifying its position as a regional hub. Despite the violence and political uncertainty hanging over parts of the region, the growing populations and rising incomes drive higher demand for primary food and feed grains, soybeans, cotton, and meats. However, in Kenya, growing demand and climate-constrained production potential have forced the region to rely increasingly on food imports, raising its trade profile.
- With rising urbanization, increased income, and the government's push for diversification in manufacturing and services, Kenya is increasingly importing more agricultural products and food. Kenya has an expanding modern food retail sector, food service sector, and food processing sector. In addition, an upsurge in Kenya's middle-class dining habits is fueling the expansion of fast-food joints, restaurants, and coffee shops, consequently boosting the need for adaptable packaging such as takeaway bags and pouches.
- Kenya is a progressing middle-income nation that acts as the financial, economic, and transport hub of East Africa. According to the USDA's (United States Department of Agriculture) data in 2023, Kenya has the largest and most rapidly expanding consumer market for high-value, consumer-oriented foods, driven primarily by its surging urban population. The World Bank reports that Kenya's urban populace is expanding at an impressive annual rate of 3.7%, significantly outpacing the global average of 1.9%. Due to this, the country's demand for plastic packaging source materials has been rising, and the industry has also become competitive.
- As part of their business expansion, manufacturers in the country are prioritizing the innovation of new flexible packaging solutions. For instance, Silafrica, a leading plastics packaging company in Kenya and East Africa, provides sustainable packaging solutions. Their clientele spans companies and SMEs in the food and beverage industry, the agricultural sector, and more. These solutions help curb wastage during storage and transit and extend the products' shelf life.
- Kenya's burgeoning domestic export value of food and beverage products is a significant driver of the industry's growth. Data from the Kenya National Bureau of Statistics and the Kenya Revenue Authority reveals that Kenya's food and beverage exports were valued at USD 278.42 million in January 2024, rising to USD 307.85 million by March 2024.
Understand The Key Trends Shaping This Market
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Bags and Pouches to Hold Largest Market Share
- Kenya heavily relies on imports to meet its domestic demand for flexible packaging. The country imports not only finished packaging products but also raw materials. Local converters in Kenya utilize materials like plastic to produce various flexible packaging items, including bags and pouches.
- Pouches are extensively used in sectors such as food and beverage, cosmetics, pharmaceuticals, baby food, and energy drinks in Kenya. This widespread usage, combined with a rising preference for convenient packaging, especially among small and medium enterprises, positions Kenya's packaging market for significant growth.
- The increasing appetite for ready-to-eat (RTE) foods and packaged beverages, along with the affordability and convenience of pouches, are primary drivers of this market expansion. The demand for re-closable stand-up pouches has notably surged, especially with the rising trend of on-the-go snacks. In addition, shifts in consumer lifestyles, evolving dietary preferences, and advancements in food technology have further strengthened this market trajectory.
- Numerous players are active in Kenya's pouch packaging landscape. For example, Flexipac Limited caters to the pharmaceutical, cosmetics, and food and beverage sectors, producing films and wraps in various sizes tailored to consumer needs. They also offer pouches and bags equipped with zippers and spouts for added convenience. Moreover, Kenya is witnessing a notable uptick in local production, bolstered by investments from Asian and European nations, driving up product demand.
- Kenya stands out as a significant exporter of plastic packaging products, contributing to the market's robust growth. Data from the International Trade Centre (ITC) highlights a rise in Kenya's export value of plastic packaging products, climbing from USD 52.20 million in 2021 to USD 62.25 million in 2023. The primary export destinations are Uganda and Tanzania.
