Uganda’s top soda companies cut advertising expenditure by 75% in April – June

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UGANDA – As the food & beverage sector globally continues to combat new daily challenges brought by the COVID-19 pandemic, Uganda’s soft beverage players incurred massive losses in the three months to June, leading to the companies cut their advertising expenditure by 75%.

This was revealed in a report by Ipsos, a leader in market research, indicating that Uganda’s top three soda companies i.e. Coca-Cola, PepsiCo and Harris International, dropped advertising spending to Ush2.9b at the end of June from Ush11.5b at the end of March.

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The sector was impacted by the COVID-19 restrictions which disrupted the on-trade market i.e. restaurants, hotels, eateries, events, institutions etc.

However, according to the New Vision reports, the industry has started to recover with the easing of the lockdown and could make a full recovery during the December festive season.

Paddy Muramiirah, the Pepsi Uganda chief executive officer, explained that just as revenues went down, costs also shot up due to expenses incurred in adhering to Standard Operation Procedures (SOPs), such as social distancing, dormitories for staff quarantined at work, sanitation facilities to provide water, soap and sanitisers, awareness campaigns with communication materials, as well as traffic control for visitors and movements on site.

“My advice is that the use of masks, washing and sanitizing of hands should be made compulsory, but all areas of business should be opened while continuing with sensitization. This way, we shall protect both the people and the economy.”

Pepsi Uganda Chief Executive Officer – Paddy Muramiirah

He pointed out that although the pandemic is still around, majority of the people now know what to do following the established SOPs.

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“My advice is that the use of masks, washing and sanitising of hands should be made compulsory, but all areas of business should be opened while continuing with sensitisation. This way, we shall protect both the people and the economy,” Muramiirah said.

The beverage industry in Uganda is one of the most vibrant in Eastern Africa, with a mix of local and international brands sitting side by side in the many outlets that give Uganda’s urban and rural areas the famed fun and entertainment hot spots in the region.

The country’s soda per capita consumption is at 13 litres which is lower in comparison to Kenya having a 58 litres of soda per person per year.

According to data from the Ministry of Trade, Industry and Co-operatives, the water and carbonated beverages sector had grown to US$40m (Ush149b) in 2018, from less than US$100,000 (Ush373m) in 1986.

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