Rising costs of living have redefined consumer behaviour across multiple markets in Kenya and East Africa, and manufacturing businesses are beginning to feel the heat. Tetra Pak, a leading packaging business, has seen this first-hand as its clients struggle to sustain demand while consumer purchasing power drops drastically in the face of inflation.
Tetra Pak East Africa managing director Jonathan Kinisu spoke to the Business Daily on how much inflation has impacted its packaging business and the opportunities for growth amid challenges.
How is inflation currently affecting consumption of packaged food and beverage products in Kenya?
Consumers are becoming significantly more price-sensitive. If you go to the supermarket today, a packet of juice that was previously cheaper is now substantially more expensive. The first reaction for many households is to adjust consumption.
If you used to buy two packets, you probably move to one. In some cases, consumers shift to cheaper alternatives, and in more extreme cases, they stop buying the product altogether. That is already happening in the market.
That creates pressure on manufacturers to keep products affordable while still maintaining convenience and quality. At the same time, urbanisation means packaged food and dairy products remain important because consumers no longer produce many of these things themselves.
Has that meant les business for Tetra Pak?
Fortunately no. At Tetra Pak, over 70 percent of our business comes from milk processors. As you know, milk in Kenya is not excisable and not VAT-able. Consumption of milk also tends to be rather inelastic because you know, we have a tea drinking culture as a country.
So we continue to support our customers through equipment and packaging to be able to keep their products in the market. But the question is, at what cost?
Over time, consumers will begin to look for cheaper alternatives and that’s a challenge our manufacturers will have to deal with. So, we will also have to start thinking about how to make our products available to customers at more affordable rates.
Beyond inflation, what other pressures are affecting this market?
There are multiple pressures. Taxes and changes in the cost structure of products have an impact, as does the broader cost of living. When prices rise over time, consumers adjust their behaviour gradually but consistently. We are seeing this reflected in supermarket purchasing patterns, where households are increasingly rationalising what they buy.
Let me take you back briefly. The company often references the old ‘Maziwa ya Nyayo’ school feeding programme. Does that history still matter in today’s context?
That programme was extremely impactful, not just for us as a company but for the country. If you look at what the school feeding programme achieved in the 1970s and 1980s, the effects are still visible today.
First, it improved school attendance and educational performance. I firmly believe many of the captains of industry we see today were beneficiaries of that programme.
Second, look at what it did for dairy consumption. Kenya today has among the highest per capita dairy consumption levels on the continent. We are at roughly 120 litres per person per year, and that culture was accelerated by the school feeding programme, alongside the tea-drinking culture left by the British.
Third, it strengthened the dairy industry itself. It supported the cooperative movement and created stable demand for milk.
Those children who consumed milk then are now adult consumers of dairy products. For us, participation in a programme of that scale remains one of the most impactful things in the company’s history.
Is Tetra Pak currently involved in any efforts linked to school feeding programmes?
We have definitely expressed interest in supporting school feeding initiatives again. Globally, school feeding programmes are something we participate in extensively. In 2025 alone, around the world, roughly 68 million children received portions of school feeding in Tetra Pak packaging.
Locally, however, the context is different because the programme is now decentralised. We no longer have one national school feeding platform. Different counties are running their own independent programmes.
We have seen programmes in places like Makueni, Kiambu and Uasin Gishu. We have also had discussions with other counties and stakeholders.
But the efforts are fragmented. It would be far more effective if there was a coordinated national framework.
The company has also recently backed use of recyclable carton in affordable housing, how viable is that?
Yes, you can build low-cost housing structures using ecoboards developed from recycled beverage cartons. The products are waterproof, termite-resistant and fire-resistant.
In more advanced markets such as South Africa, recycled cartons are already being used to produce roofing sheets similar to mabati. The polymer and aluminium components can also be separated and turned into plastic products such as crates and chairs.
The materials are already available commercially. If somebody wanted to build a small house using ecoboards, it is possible. The challenge at the moment is scale. We need more waste collection so that enough ecoboards can be produced consistently.
Tetra Pak’s recycling rate in Kenya is still relatively low, around 10 percent. Why is that?
Recycling is a journey. No market recycles 100 percent of post-consumer waste.
The biggest issue is the economics of waste. Waste pickers need incentives. If collecting plastic earns more money than collecting carton waste, naturally they will prioritise plastic.
There are also costs involved in transportation, aggregation and cleaning. Recyclers do not want dirty waste.