Kakuzi returns to profit as Kenyan superfood exporter navigates geopolitical headwinds

• Agribusiness group rebounds from 2024 loss with Sh387.5 million after-tax earnings as it diversifies markets and products to counter Red Sea disruption.

Kakuzi Plc, the Nairobi Securities Exchange-listed superfoods grower and one of Africa’s largest exporters of avocados, macadamias and blueberries, has staged a sharp financial recovery, posting a Ksh387.5mn ($3 million) after-tax profit for the full year to December 2025.

The result marks a turnaround from the Ksh131.6mn ($1 million) loss recorded in 2024, underscoring the resilience of Kenya’s export-oriented agricultural sector even as global supply chains remain under pressure.

The company’s board has rewarded shareholders with a first and final dividend of Ksh16 per share, which is double the previous year’s payout, reflecting renewed confidence in the group’s strategic direction.

Total revenues for the period reached Ksh5.4 billion ($41.8 million), with pre-tax profits climbing to Ksh568 million ($4.4 million), a sharp improvement from the Ksh167 million ($1.3 million) pre-tax loss a year earlier.

The company said its flagship avocado operations, which account for the bulk of its export earnings, continue to face acute pressures from geopolitical instability, volatile shipping routes and intensifying competition in its core European market.

Red Sea disruption and the fragile logistics of fresh produce

For global merchants trading in perishable goods, the past two years have been a lesson in supply chain fragility. Kakuzi’s experience exemplifies the challenges facing emerging market exporters reliant on maritime routes that can be upended by geopolitical flashpoints.

The reopening of the Red Sea corridor in 2025 offered a reprieve after months of disruption caused by Houthi attacks on commercial shipping. But for Kakuzi, the instability left lasting scars.

Extended transit times and unpredictable shipping schedules during the crisis compromised fruit quality by the time consignments reached European ports, depressing prices and eroding margins.

“Logistical instability on the Red Sea route continues to cause fruit quality problems and lower prices,” said Chris Flowers, Kakuzi’s managing director. Even as the route reopened, the residual effects of disrupted cold chain integrity have made it harder to command premium pricing for the company’s flagship Hass avocados.

The company exported 525 containers of avocados in 2025, up from 446 the previous year, but achieved an average price of just €7.13 per carton, a figure that reflects softer European market conditions.

Those conditions were exacerbated by abundant supply from traditional competitors Peru, South Africa and Colombia, which flooded the European market with volumes that weighed on pricing across the board.

Kakuzi on product diversification as a defensive strategy

In response to these headwinds, Kakuzi is accelerating a twin-pronged strategy of product and market diversification aimed at reducing its reliance on volatile export channels and single-crop concentration.

On the markets front, the company is pursuing access to high-growth destinations including China and India. While both offer the prospect of shorter, more predictable shipping routes relative to Europe, Flowers cautioned that neither currently provides sufficient scale to replace the continent as Kakuzi’s primary market.

“These markets offer easier logistics, but the current market size does not offer an immediate substitute for Europe,” he said.

Domestically, however, the picture is more encouraging. Kakuzi reported a growing contribution from Kenyan sales, which exceeded Ksh50 million ($387,000) in 2025, driven by value-added products sold through its Kakuzi Farm Market.

The company now offers ready-to-eat macadamia nuts, cold-pressed macadamia oil, avocados, blueberries and, most recently, loose-leaf tea, a departure from its historically export-focused model.

“As a part of our corporate strategy of product diversification, we continue to focus on value addition wherever it makes commercial sense,” Flowers said. “The strategy is paying off, and while Kakuzi was export-oriented in the past, we can now confirm that we have a growing domestic market contribution to the bottom line.”

Blueberries and macadamias show promise

Beyond avocados, Kakuzi’s other superfood segments demonstrated meaningful recovery, bolstering the case for continued diversification.

The macadamia business posted a sharp rebound, with profits rising to Ksh365 million ($2.8 million) from Ksh69 million ($534,000) a year earlier. Flowers attributed the improvement to recovering global demand and improved pricing, though he noted that the sector must still expand consumer applications to sustain long-term growth.

“To maintain sustainable demand, the product needs to expand the opportunities for how consumers can experience quality macadamia kernels,” he said.

Meanwhile, Kakuzi’s nascent blueberry operation turned a corner, moving from a Ksh19 million ($147,000) loss in 2024 to a Ksh5 million ($38,700) profit in 2025. Production volumes nearly doubled, rising to 90 tonnes from 53 tonnes, offering early validation of the company’s bet on high-value berries.

Flowers described the segment as promising despite high establishment costs, noting that blueberries could become a significant contributor to the group’s diversification strategy in the years ahead.

Water security, sustainability as competitive moats

For an agricultural exporter operating in a region increasingly affected by climate variability, water security has emerged as a strategic leverage. Kakuzi has invested heavily in this area, adding a million cubic metres of rainwater storage capacity in the past year to bring its total to 13 million cubic metres.

The expansion, sourced from water catchment areas within the company’s farm in Murang’a County, enhances Kakuzi’s self-sufficiency and insulates it from the erratic rainfall patterns that have disrupted production for other Kenyan growers.

Flowers framed the investment as part of a broader commitment to sustainable agricultural practices that will underpin the company’s future competitiveness.

“These sustainability and business development initiatives demonstrate our commitment to integrating sustainable agricultural practices into our operations, which we believe will be fundamental to our future success,” he said.

Read also: Kenya’s Kakuzi six-month profit dips to $2.3M on lower tea and avocado global prices

Pest pressure and the limits of growth

Not all challenges facing Kakuzi are geopolitical or logistical. The company also faces mounting biological pressures that threaten its avocado operations. Pest and disease pressure intensified in 2025, even as the national area under avocado cultivation expanded. Export volumes were curtailed as a result, offsetting some of the gains from higher production.

“Pest pressure continues to intensify nationally as the area under avocado orchards increases,” Flowers said. “We, however, continue to work with the relevant partners to develop new techniques to proactively manage these emerging issues.”

For global merchants sourcing from East Africa, this represents an additional layer of supply risk beyond the familiar concerns of shipping delays and port congestion.

As Kenya’s avocado sector scales up to meet international demand, maintaining quality standards will require sustained investment in pest management and orchard-level interventions, areas where larger operators like Kakuzi have a structural advantage over smaller out-growers.

Outlook: cautious optimism amid uncertainty

Kakuzi’s 2025 results demonstrate that even as geopolitical tensions and logistical volatility reshape global agricultural trade, well-capitalised producers with diversified revenue streams can navigate the turbulence.

The company’s return to profitability, coupled with a doubled dividend, signals confidence among both management and the board that the strategic pivot towards value addition, market diversification and water security is yielding results.

Yet the outlook remains tempered by the structural vulnerabilities that the past two years have laid bare. European market concentration, shipping route fragility and intensifying competition from Latin American producers are unlikely to dissipate quickly.

For Kakuzi, the path forward will require continued investment in new markets, particularly in Asia, alongside a sustained push into higher-margin, value-added products that can command premium pricing regardless of shipping disruptions.

As Flowers noted, the company’s diversification efforts are already paying off, but they remain a work in progress. Whether they can fully insulate Kakuzi from the next geopolitical shock will determine whether this year’s profit marks the beginning of a sustained recovery or merely a temporary reprieve.

Read also: Kakuzi PLC slips into the red after Red Sea crisis, forex losses

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