Analysis of the Soft Drinks Industry in Uganda: Beyond the Soda Revolution (Pepsi, Cocacola, Riham, Britania)

By Philippa Nantamu & Ian Ortega

Audio Summary:

1. An Overview of the Industry and Market Dynamics

• Significant Growth

The Soft Drinks Industry in Uganda is experiencing significant growth, driven by market dynamics, consumer behaviours and emerging trends. The soft drinks market in Uganda is projected to grow by 11.52% from 2025 to 2029, reaching a market volume of approximately USD 214.70k in 2029 (Statista, 2024).

• Volume-Driven Market 

In 2024, the industry experienced strong retail volume growth, aided by rapid population growth (current Ugandan population is 45.9 million), urbanisation, and economic stability, even as inflation remained high, the prices of these beverages remained relatively stable, with consumers being extremely price sensitive when it comes to consuming non-alcoholic beverages, forcing players to hold off on raising their prices or risk losing out on volume sales (Euromonitor, 2024). The industry thus remains volume-driven and a space for cost-leadership strategies even as the players combat with the major macros of interest rates (current Central Bank Rate, CBR is 9.75%) and the foreign exchange fluctuations (the shilling continues to face off with stronger foreign currencies). 

• Key Challenges

Overall, the soft drinks industry is on the watchout for the below challenges:

• Health concerns over the adverse effects of sugar especially given the industry targets children. As a result, shifts from sugar to sweeteners.
• Environmental and sustainability concerns over the high water usage and the plastic impact. Most of these beverages are now mainly traded in plastic bottles in Uganda.
• Economic constraints and high operating costs impacting purchasing power especially in rural areas and profitability for investors. 
• Unregulated products which are increasing competition with established award-winning brands.
• Taxation Policy: Issues around Government’s taxation policy around excise duty on the soft drinks and overall effect on consumption volumes.

2. Key Aspects of Soft Drinks Industry

The industry relies heavily on several key infrastructure for its operations:

• The Utilities Plants such as CO2 Plant needed for carbonation of sodas, the Boilers for the production of steam, the Refrigeration Plant for the chilling, water treatment and waste treatment plants
• Investment in Cold Rooms/Warehousing
• Syrup Room for the storage of the Soda Syrups and concentrates
• Cap and Preform production facility
• Filling room and filling lines
• The Marketing, Sales and Distribution Infrastructure

3. Competitive Landscape

In Uganda, the Soft Drinks industry is dominated by a few major players; international players Coca-Cola and PepsiCo (often plagued by unfavourable foreign exchange) as well as local players such as Riham and Britania. 

Coca-Cola Beverages Uganda (CCBU)

• Operated by Century Bottling Company, which is a franchise of Coca-Cola.
• Offers products such as Coca-Cola, Fanta, Sprite, Minute Maid, and Dasani water.
• Has struggled with some innovations such as Fuze Tea (an attempt to introduce Ugandans to iced tea). Does CCBU struggle with commercializing Innovations?
• In 2022, a survey showed that 62% of respondents preferred these products due to the significant brand presence in the country(statista).
• Recently invested in a bigger PET plant capacity (Line 7), the most modernized PET line in Africa
• Has also invested in a plastic recycling facility thus championing in a sustainability Agenda
• Advantages from the pairings with the fast food industry such as KFC combos

Crown Beverages Limited (CBL)

• Bottlers of PepsiCo products in Uganda.
• Key brands include Pepsi, Mountain Dew, Mirinda, 7Up, Evervess, and Nirvana and Aquafina water. Has Sting as their Energy drink.
• Has been a major competitor to Coca-Cola in the Ugandan market. In the same 2022 survey, 33% of the respondents preferred PepsiCo products(statista).
• Moved faster than Coca cola in the PET investments
• Has outsmarted Coca Cola on better management of its distributors and a better understanding of the local nuances
• Founded on 29th March 1950 as Lake Victoria Bottling Company. On 28th February 1993, Government of Uganda divested its ownership in the company. Ownership shifted to Amos Nzeyi, Engineer Dan Kigozi (Late) – Maggie Kigozi. 
• Mirinda Fruity is their star product, accounting for most of the sales. Mountain Dew and Pepsi are the next in the cash cow lines.

Harris International Limited

• Known for the Riham brand.
• Offers products like Riham Cola, Riham Still Water, Riham Energy Drink, and Riham Juice, Oner Juice.
• Has gained a strong presence due to affordable pricing and diverse product offerings. Thus broke the duopoly of Coca Cola and Crown Beverages. Mamuda Beverages in Kano, Nigeria did the  same to Coca Cola in Nigeria by producing Pop Cola.
• Has built leverage around experienced leadership by hiring from ex-Diageo (Rosemary Nakuya, Eunice Waweru)
• Senior Leadership and Management here comprises mainly of Lebanese

A Brief History on the Riham’s Disruptive Entry

In 2013, Harris International launched a disruptive soda brand – Riham Cola. It was launched in a plastic PET bottle borrowing some of the features of Coca Cola bottled by CCBU. CCBU would rush to court seeking to place a permanent injunction on Riham Cola over what it termed as trademark infringement. Upon learning this, Riham Cola proceeded to make slight adjustments to its labels to shift from any obvious features in relation to Coca Cola. The commercial court recommended mediation for both parties and the dispute was settled, with both parties choosing not to pursue the case any further. 

Coca Cola then chose to take the battle to the market front choosing to engage in direct Price Wars with the other players. In December 2013, coca-cola reduced the prices for most of its products by almost 50%, in response to Riham that had set their prices slightly below coca cola’s. The cheapest coca -cola went for Ugx. 800.  Riham, Pepsi and other players had to follow suit by reducing further the cost for their drinks.

However, in choosing to engage in price wars, Coca Cola had committed the mistake of incumbency, playing on the terms of a new player. Pepsi and Coca Cola soon realized these mistakes and took back price upwards thus leaving the value-soda segment to Riham Cola. 

Riham Cola was not done, it set out to introduce new sodas such as Lavita as an attack on CCBU’s Novida. It would then later also launch Oner Juice further solidifying its brand base. 

CCBU then had a massive innovation response with the Coca Cola Ka-Mini. The Ka-Mini exerted instant blows on Riham Cola and almost wiped it out of the industry. And then for some reason, Coca Cola Ka-Mini became scarce. One couldn’t understand whether Coca Cola had deliberately held off Ka-Mini, but it was out of stock. And during this time, Riham Cola re-energized and the rest is now history. It was a lesson that with a new entrant on the market, differentiation is usually the best strategy for the incumbents and not an outright price war. 

Britania Allied Industries

• Known for its fruit juice brands such as Splash and Yo! Juice. 
• Specializes in non-carbonated beverages and has a strong foothold in the juice market. Splash fruit juices are one of the most recognised and consumed non-carbonated products in Uganda.
• The company is part of House of Dawda, a diversified group involved in manufacturing and distribution that has enabled their products to be widely accessible across Uganda.
• In 2008, Britania invested heavily in distribution centers in Kampala to bring products closer to consumers.

4. Popular Product Categories 

• Carbonated Soft Drinks(CSDs): Coca-Cola and Pepsi dominate in this category. Riham is significantly gaining market share because of their unique flavouring offerings and competitive prices. 
• Bottled Water: High demand due to safe water needs (Rwenzori from Coca-Cola, Nivana from Pepsi, Ice, Albertine).
• Juices: Growing preference for other ready to drink beverages, such as Minute Maid and locally produced juices.
• Energy Drinks: Brands like Red Bull, Rock Boom and Monster are popular among younger consumers and informal workers.
• Non-Carbonated Drinks: Increasing demand for iced teas and flavored waters.
• Growing demand for carbonated water (tonic water, and sparkling water)
• Isotonic Drinks/Sports Drinks as more people take on athletic lifestyles seeking recoveries through a supply of electrolytes, this is a category within which to innovate (watch OSHEE brand)

5. Marketing Strategies

Over the years, the industry has witnessed various approaches to maintain competitiveness in reaching consumers and growing their market share in the country.

Price: Previously the carbonated drinks companies used to engage in price wars by lowering market prices in a means to attract consumers from the competition. With the expansion into similar size pack options (300ml, 330ml, 500ml) at similar retail prices per SKU, consumers have been able to choose whichever option they desire without a limit to price. 

In the peak shopping seasons (holidays such as Valentines, Easter, Eid, Independence Day, Christmas) and back to school periods, products are often discounted in stores to drive sales using “Buy One Get One”, Bundle Packs, etc.  

The push into PET packaging and smaller pack sizes has driven affordability and trial to the different consumers regardless of their socioeconomic income status. 

Promotions: Crown Beverage’s “Twangula”, Coca-Cola’s “Under the Crown” promotions are some of the mass engagement promotions that have run countrywide whereby consumers are given the opportunity to win instant prizes from purchases made of the products increasing sales in the short run and driving brand engagement in the long run. 

Sponsorships & Events: Partnerships with musicians, sports (Copa Coca-Cola football tournament), entertainment talent shows (Riham’s Yolesa Ekitone) 

Health & Lifestyle Positioning: Due to the growing health concerns, companies have introduced low-sugar and diet versions (e.g., Coca-Cola Zero Sugar). 

Marketing of fruit-based and vitamin-infused drinks like Splash, Minute Maid, Riham’s Oner Apple Drink highlighting the ratio of freshness of the ingredients. Recycling campaigns and community clean-up drive

Digital Marketing: The aforementioned four beverage companies are heavily driving their presence on the different social media platforms. When compared to other neighboring African countries’ social media accounts in the same industry, we realise there is a huge disconnect and massive confusion in the ways these companies are approaching the digital marketing aspect in Uganda. Be it on TikTok, Instagram, the way they are sharing content does clearly engage with the consumers. 

For example, the Coca-Cola instagram account is mainly filled with corporate content instead of focusing on their main product “Coca-Cola” and the lifestyle of the target consumer, something the Kenya and South African Coca-Cola accounts are doing well in. 

Riham social media content is saturated with their various brands but still has no synergy across the different platforms.

Britania has an easier message and content to follow on social media, focusing on their main product “Splash” and pushing their promotions through product pack bundling, discounts and holiday offers. Even though it does not highlight the lifestyle or consumption occasions for the products, the fact that it seems to push a focused similar message throughout shows an ideal digital marketing strategy in Uganda. It is no surprise that up to now, Britania products are still sought out and purchased often more than any other companies during back-to-school shopping periods. 

We made an assessment of the current brand activity online, and there’s a missing link. All the soft drinks brands seem disconnected from their target consumers. When you look at the Instagram pages, the brands are speaking at their consumers, instead of having a lovely playful conversation with them. Instagram and TikTok are the Gen.Z locations, they are meant to show the soul of the brand, that spirit form of the brand. 

Part of the confusion could be coming from the conflicting worlds of brand managers and corporate communications managers. It calls for an integrated and synthesized communication approach. For example, why should Coca Cola post an advert for distributors on Instagram? Why should it be so formal and tight on instagram? Then there’s Britannia that comes off as shouting, doing too much. Pepsi tries on Instagram and on TikTok, but still, you can say, the brands are drowning, they are lost, they don’t know how to show up in the places where it matters most – Instagram and TikTok.

6. Key growth drivers

• The country’s young rising demographics are expected to continue driving population increases in the coming years. A half of Uganda’s population is under the age of 18 as per the 2024 National Population Census.
• Rising disposable income which will improve affordability especially with the regulated branded products. 
• Consumer tastes and preferences (behavior) changes highlight the increased consumption of the majority of these products, such as the ‘on-the-go’ trend for soda, bottled water, juices, energy drinks, etc. 
• Rapid urbanization: Uganda’s urban centres are expanding outwards with residential areas now forming their own ecosystems filled with supermarkets, retail shops, convenience stores. There’s also the apartmentalization trend as more and more young Ugandans shift into apartments, this, coupled with the hot climate drives consumption for soft drinks. 
• Digitization: Business is moving onto the app and there’s a growing stream of marketplace apps seeking to solve the last-mile. Companies such as Coca Cola have now innovated with the CCBA app for order placements. With the young demographics preferring digitally-oriented brands, players must think heavily around re-positioning their operations to be fully-digital in order to reach and serve this audience.
• Functional Beveraging: Consumers are becoming more health-conscious, and are looking for more than quenching thirst out of their drinks. This means a growth in Isotonics. At O.G, we see this is going to be one of the major growth drivers in Uganda’s soft drinks industry. The fastest player to move into this category and own it will take the market share. The Ugandan market is thirsty for a ‘BodyArmor’ equivalent. On the other hand, several manufacturing firms have invested in Carbon Dioxide Generation Plants and thus have an excess of CO2. This creates an opportunity for the sparkling water category.  Crown Beverages could potentially utilize its network with Pepsico to launch Sodastream in the Ugandan market.  
• The Young and Increasingly Sober (YIS) – More young people are jumping on the zero-alcohol trend aka the Sobriety train. All these are seeking alternatives from the Soft Drinks industry. Thus, it’s the need for an in-between the soft-drinks and the hard-drinks. And that essentially speaks to the tonics opportunity. “I want to be drinking something that is not a soda, and is not alcohol” is not a common phrase. Will the soft drinks player step up and innovate for this new Ugandan?
• Cooler Management: This is an issue that perturbs many soft drinks players in Uganda. From issues around tracking the location of the coolers to the cooler adherence issues. However, regulations around fair-trade practices are coming up to challenge the cooler adherence. That’s to say, it’s now considered anti-competitive practice to mandate that a Coca Cola cooler should only carry Coca Cola products.

7. Cost Drivers in the Soft Drinks Industry

• Refined White Sugar Cost: Most players still import the white refined sugar that’s used in the industry. 
• Carbon Dioxide Costs: Most of the players in the Soft Drinks industry in Uganda have not invested in CO2 plants. Unlike the beer industry where the fermentation process produces CO2 for recovery, it’s not the case for soft drinks. Thus, companies such as Coca Cola source CO2 from SCOUL in Lugazi or Kakira. This CO2 cost continues to be a large cost-driver. 
• Distribution Costs: Coupled with the marketing and logistics, distribution both on a mental and physical level is another cost-driver for the soft drinks industry in Uganda. There’s still a need to innovate around the traditional models of distribution.

8. Future Trends and Opportunities

The future of the Soft Drinks Industry in Uganda is going to be defined by the ‘Beyond-Hydration’ trend. Consumers are not just looking to hydrate, but to hydrate right, to hydrate better, to hydrate in a way that defines their identity. It’s hydration that brings about better nutrition, better gut health, better body functionality, more energy, faster recovery. All these concerns are registering high on the Ugandan consumer. It’s also coinciding with the growing demand for functional waters thus a need for soft drinks players to rethink their product portfolios.

Whereas the soft drinks industry in Uganda is growing due to the emerging local players, Uganda imports and exports have significantly declined from 2023 to 2024(indexbox.io).

• Emerging shifts in taste: As the Gen-Z mature into a permanently consuming audience, we see  potential shifts from just soda to things such as sparkling water, mocktails and tonics. Soon, the new consuming segments will prefer a Perrier to a Coca Cola. Will the soda-oriented companies shift in time to address these trends? For example, Wavah Water needs to have a heavy branding approach to conquering the sparkling water segment. It seems to be lacking on distribution, but also on the pricing. Although pricing should match up to the Premium segment, one shouldn’t also price themselves out of the market, something that Wavah water is doing. 

• Experimentation with flavour trends: Coca cola and coffee. What is the size of such category trends? There’s an emerging pre-mix opportunity. (Ginger Lemon, Orange Squeeze, Strawberry Vanilla, Cherry Vanilla) —Oli Pop sodas
• The Threat from the Home Opportunity as younger consumers start to make their own soft drinks at home. Sodastream allows one to make their sparkling water at home
• The Zero-sugar opportunity cannot stop. The high sugar content is still a big concern for many consumers with links to lifestyle diseases as a result of overconsumption of these soft-drinks. Soft-drinks players must make bold moves in the coming years and take a stand.
• The Glass Renaissance: CCBU is moving fast onto this growing trend as consumers yearn for that taste of soda in a glass bottle. Coca Cola understands that this was its forte, they were the strong players in the glass stream. With the advent of plastics (and Pepsi investing ahead of CCBU in the Plastics capacity), CCBU lost market share. But now, CCBU is determined to cause a renaissance of this glass market, it is strong on the return-logistics. However, the catch here is how to incentivise the distributors, depots and retailers to shift back to glass. It’s not easy to manage returnable glass once one has enjoyed the benefits of PET plastic distribution. This is a new battle-line that CCBU should pursue with conviction and ultimately win over the Gen.Zs who are passionate about convicted brands. This will also give CCBU an edge over Crown Beverages that has shifted the majority of its capacity to PET plastic bottles.  This glass renaissance should also be good music to the ears of glass manufacturers such as Kioo and Consol glass. 
• Key watch out is the decline in the Population growth rate in Uganda. Average household size reduced from 4.7 in 2014 to 4.2 persons in 2024. 
• The Radio Opportunity: Despite all the air around the growth of social media, only 2.3 percent of the Ugandan population uses Social Media as the source of information. Majority (38.3 percent) use Radio as their main source of information followed by Word of Mouth and Phone Calls. This presents an opportunity for Soft Drinks players to go strong on radio and have their marketing budgets reflect this. 
• Transformation of Distribution: Uganda’s distribution for soft drinks is ripe for disruption. It has remained stagnant for years, depending on the same models of distribution. The trophy belongs to the players that are going to innovate faster around this model, first to have a proper model that encourages the return of glass or responsible disposal of the plastics, and finally a real-time model that updates the demand changes to enable instantaneous shifts in supply. 
• The Bulk Opportunity: This has already happened with the water where families now buy 20 litre bottles for their home dispensers. Is this a possibility in the Soft drinks industry especially during events, functions, large gatherings? 
• The Mergers and Acquisition Run: Since incumbents do not have the muscle to keep up with new entrants, it’s inevitable that the soft drinks industry in Uganda will also be re-shaped by potential acquisitions. On the Global scene, PepsiCo acquired Sodastream, Bubly and Core Water. On the other-hand, Coca Cola acquired Fairlife (a dairy-based drink), and BodyArmor (a sports-drink), will CCBU bring these innovations to Uganda? Will Crown Beverages bring Sodastream to Uganda? It’s also a growing possibility that companies such as Uganda Breweries, Kakira and Nile Breweries could consider entry into the soft drinks market. In the future, anything is possible. What will Uganda Breweries do with all its excess carbon dioxide and water plant capacity? It can launch a Sparkling water segment, it can experiment with its Ready-To-Serve Plant that’s having idle capacity. 
• Sustainability Regulation: Although not yet strong in Uganda but in the next 5 years, there’s a potential convergence towards an Extended Producer Responsibility for Soft drinks manufacturers. These potential regulations will redefine the soft drinks landscape. CCBU and Crown Beverages will have to demonstrate how they are reducing plastic content across their supply chain and how they are increasing usage of Recycled Plastic Content. These players must navigate potentialities of greenwashing thus more need for transparent sustainability reporting. 
• The Snack Opportunity: Harris International is already heavy on this trend. CCBU and Crown Beverages may not escape this trend. In future, the soft drinks will have to be complemented with a snack portfolio. As someone enjoys their Coca Cola, they want to layer it down with some potato crisps. 
• Cost-Productivity: Soft Drinks players will end up settling their competition of who gets to drive out costs faster and better. Thus, we see an increased push for light-weighting especially in the PET segment. Although this also has pitfalls such as reduced bottle and cap integrity. Process-wise, we see drives for energy recovery, a shift to solarization and reduced main-grid dependency. 
• Accessibility/Affordability versus Premiurization: When the soft drinks players can become more efficient in their processes, we see some of these gains being shifted to the consumers thus presenting more accessible and affordable options. However, this will also have to be balanced by the need for premiurisation. We are speaking of segments of consumers that seek something more from their soft drink. They seek nutrition, they seek identity, they seek wellness. Soft drinks players in Uganda will have to innovate for these segments.

Conclusion

The Ugandan soft drinks industry is dynamic and poised for further growth, but it is also navigating several challenges and evolving consumer preferences. Companies that innovate, adapt to changing trends, and address consumer health and environmental concerns will be best positioned for success. There is a great opportunity for players who can connect with consumers meaningfully on social media, leverage radio effectively, and implement efficient distribution models. The move towards functional beverages and low/no sugar options, plus opportunities in the growing YIS trend, are all key areas for consideration. The industry is primed for significant shifts in the coming years.