Kakuzi Turns to Local Tea Sales to Cushion Against Export Risks

Listed agribusiness firm Kakuzi Plc has introduced a new loose-leaf tea brand for the local market in a bid to reduce its reliance on volatile export markets and stabilize earnings.

The firm has rolled out Kakuzi Pure Black Tea, now available in 250-gram and 500-gram packs, as part of a wider diversification strategy aimed at growing domestic sales.

Speaking during the product launch, Kakuzi Managing Director Chris Flowers said the move reflects the company’s long-term plan to develop value-added products for Kenyan consumers while reducing exposure to international market shocks.

“This is the first time in our history that we are delivering a quality tea brand for the local market, sourced from our Kaboswa Tea Estate in Nandi County,” Flowers said. adding “By packaging locally processed and blended tea leaves for local sale, we are working to mitigate export-only risks at a time when global tea trade fortunes are declining.”

Kakuzi has traditionally depended on exports of avocados and macadamia nuts, but shifting market conditions, currency volatility, and logistical disruptions have pushed the firm to rethink its strategy.

In the year ended December 2024, the company reported a loss of Sh130.4 million, compared to a profit of Sh455.6 million the previous year. The downturn was largely attributed to the strengthening of the Kenyan shilling against the US dollar, which squeezed export revenues.

In 2023, the shilling had weakened to about Sh160 to the dollar, a factor that had boosted export earnings. But the reversal of the currency trend, coupled with rising costs, hit margins in 2024.

Kakuzi was also affected by shipping disruptions caused by the Red Sea route closure, which delayed deliveries and led to quality losses for perishable exports such as avocados.

Flowers said domestic sales are now beginning to make a positive contribution to the company’s balance sheet, complementing its core export business.

“Our growth and diversification plan is anchored in promoting locally produced, high-quality, value-added products that meet export-grade standards,” he said.

Beyond tea, Kakuzi has in recent years expanded its local product range to include ready-to-eat macadamia nuts, cold-pressed macadamia oil, and blueberries, signalling a strategic shift toward the domestic consumer market as a buffer against global trade uncertainties.