PepsiCo sheds light on the Ethiopian snack market

PepsiCo took a stake in the Ethiopian chips company in 2020,​joining Senselet’s Dutch founder, Veris Investments, as a major shareholder. Veris established Senselet in 2015 with a mission to help develop the potato value chain in Ethiopia.

The company’s processing site, located outside the country’s capital, Addis Ababa, was built in 2017 and commercial production began later the same year. Today, Sun Chips are sold in around 10,000 retailers – mostly souks (small shops) – across Ethiopia, available in Original Salt, Habesha (regional spices), Tomato and Paprika flavors in three sizes of packaging.

Greater impact

PepsiCo’s $40 million injection will fund the construction of an additional production line, as well as a brand new snack production line. It will create up to 500 “direct” jobs, but PepsiCo is backing “the indirect impact on the employment of farmers will be even greater.”

Ethiopia – officially the Federal Democratic Republic of Ethiopia – is a landlocked country in the Horn of Africa and home to 113.5 million people, making it the second most populous country in Africa after Nigeria .

Over the past 15 years, Ethiopia’s economy has been one of the fastest growing in the world (averaging 9.5% per year). However, the Russian-Ukrainian conflict has had a major impact on the country’s rising energy and food costs. Ethiopia is heavily dependent on both countries for wheat and fertilizer.

However, the country has a thriving agricultural sector, producing coffee, pulses (beans), oilseeds, cereals (second largest maize producer in Africa), sugar cane and potatoes.

Potato is an important cash crop, with great potential to improve the livelihoods of smallholder farmers, who represent 83% of the total population. Some of the potatoes end up in the snack segment, which – before the Russian-Ukrainian conflict – was expected to be worth $74.72 million by 2025, according to Statista.

Major contribution

“Currently, Ethiopia is very small for PepsiCo in total, but we aim to grow the business significantly over the next few years by contributing heavily to the country,”said Chris Wijnterp, general manager of PepsiCo’s food unit in Ethiopia.

“The snack market is currently very underdeveloped and PepsiCo only produces potato chips where we also see significant growth potential.”

The investment is aligned with the company’s pep+ strategy, “to help build a more sustainable food system in Ethiopia – one that can meet human needs and continue to drive global economic and social development, within the natural limits of the planet.”

PepsiCo Positive (pep+) is the company’s end-to-end strategic transformation that places sustainability and human capital at the center of how it will create value and growth by operating within planetary boundaries and inspiring a positive change for planet and people.

Senselet has established strong partnerships with local farmers and even runs a farmer training program to help them increase yields and incomes, build a more stable potato value chain and tackle insecurity. eating. Some of the partners who have contributed significantly to the success of Senselet include the Dutch government – ​​the Netherlands Enterprise Agency, the Ethiopian Agricultural Research Institute and Wageningen University and Research.

New categories of snacking

“This cash injection will allow us to increase our snack production capacity tenfold”,Wijnterp said.

“It also allows us to further leverage PepsiCo’s expertise to help accelerate Senselet’s growth in Ethiopia by strengthening its potato supply programs, as well as its manufacturing and marketing capabilities. “

The company plans to diversify into new snacking categories, but Wijnterp was not ready to “share any competitive information on new products.”

However, he said:During this growth, PepsiCo’s broader food portfolio will be considered, reaching into other crops such as corn, oats and wheat. »

Ethiopian Investment Commissioner Lelise Neme welcomed PepsiCo’s commitment, noting that it is “Testimony of the work done by the Ethiopian government to create an investment-friendly environment for foreign companies.

“Ethiopia’s investment reform process has also improved investment opportunities and widened the range of sectoral and economic activities open to foreign direct investment (FDI).

“We look forward to seeing PepsiCo grow in Ethiopia and the resulting benefits to our economy, our communities and our agricultural sector.”

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