American multinational–Mars Wrigley is banking on its last-mile programme to continue growing business in Kenya mainly with increasing reach across informal retail markets.
The company, which in 2019 unveiled a new Sh7 billion chewing gum manufacturing plant in Athi River has since 2013 actively partnered with local entrepreneurs in urban slums and rural areas in Kenya to extend its reach to consumers in these markets.
Through the programme dubbed “Maua”, the American multinational has recruited more than 1,000 entrepreneurs who have contributed positively to sales while transforming their own lives, management notes.
The programme involves two levels of entrepreneurs with the first one being the “stock point,” who acts as a wholesaler within an area.
They stock Mars Wrigley products and sell them to smaller retailers in their area.
The second type of entrepreneur is an “uplifter” who buys from the stock point and resells to kiosks or final consumers. Most uplifters make use of motorbikes and bicycles to move around easily.
Although the opportunity in Kenya’s informal markets is immense, factors such as infrastructure gaps, language and cultural barriers make it difficult to connect with customers and consumers, notes Frank Chadinha, General Manager Sub-Saharan Africa, Mars Wrigley.
Research indicates that the informal markets comprise as much as 70-80 per cent of Kenya’s retail market.
“Establishing a presence in these markets through the Maua programme has had a huge impact on our overall business by giving us access to millions of consumers who we could not otherwise reach,” Chadinha said.
The modern factory launched by the then Industry, Trade and Cooperatives cs Peter Munya, now agriculture Cabinet Secretary doubled the capacity of the producers of chewing gums such as P.K., Big G and Juicy Fruit, meaning supply and product availability has improved.
“ We also leverage on green production technologies that have improved efficiencies and reduced our impact on the planet. This is important to us as a business not just in Kenya but around the world,” Chadinha said.
Informal markets such as slums present immense business opportunities for players in the fast-moving consumer goods industry due to the fast circulation of money and population density.
However, while the opportunities are plenty, big and established companies looking to penetrate these markets often face last-mile distribution challenges.
“This makes it necessary to partner with local entrepreneurs, something Mars Wrigley has done for close to a decade now with much success across Nairobi and other markets in the country,” said Chadinha.
The firm is keen to expand its last-mile programme and tap opportunities in the informal markets in the post-Covid era as the manufacturing sector start to pick with the scaling down measures to contain the spread of the virus, mainly removal of the night curfew which has seen the economy re-open.
Private sector activity was higher in October as output growth strengthened for the first time in five months and new business continued to grow, Stanbic Bank’s monthly Purchasing Managers’ Index (PMI) indicates.
It posted its highest reading in October at 51.4 points compared to 50.4 points in September.
PMI is a weighted average of new orders, output, employment, suppliers’ delivery times, and stocks of purchases.
Readings above 50 signal an improvement in business conditions on the previous month, while readings below 50 shows deterioration.
