This week, ‘CNN Marketplace Africa’ examines Kenya’s lucrative beer market, including a look at the only Kenyan-owned large-scale brewery which is trying to make its mark in an industry often dominated by European-backed businesses.
Host Eleni Giokos reports from Keroche Breweries, the home of Summit Beer, in Nairobi where she meets CEO, Tabitha Karanja. Since founding Keroche Breweries with her husband 20 years ago, Karanja has seen the popularity of alcohol in Kenya rise, with 22.8 percent of men and 9.8 percent of women drinking according to the World Health Organisation.
Karanja explains to Giokos how Keroche Breweries identified an opening in the alcohol market, which allowed the company to expand: “The gap mostly was concentrated in the lower market. So we came up with a ready to drink vodka, and then we have our beers now.”
‘Marketplace Africa’ learns that Keroche Breweries expanded its production levels from 10 million litres of beer a year to 110 million litres to meet Kenya’s increased demand. However, despite this, Keroche Breweries only controls two percent of the nation’s beer market with East African Breweries Limited, part of the multinational a*******c beverage company Diageo, holding a 71 percent market share.
Best known for its Tusker brand of beer, East African Breweries Ltd has been in the country for 94 years and its success led to the withdrawal of the company’s main rival Sab Miller in the late 1990’s.
Andrew Cowan, CEO of East Africa Breweries Ltd, explains to Giokos how the company approaches new competitors: “All this competition just means you’ve got to be better at giving consumers what they desire than the competition. And therefore, it means focus on who matters the most, which is the consumer.”
For Keroche Breweries, Karanja tells ‘Marketplace Africa’ that she isn’t intimidated by East Africa Breweries’ market share: “When we compete now fairly into the market, I’ll have no fear. I’ll be able to penetrate the market with the quality of my product.”
As the Kenyan alcohol market continues to expand, the programme hears how even more international breweries are setting their sights on East Africa. This includes United Dutch Breweries from the Netherlands, which has found success in selling Atlas, a beer with a higher alcohol content, to Kenya.
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Giokos meets Daniel Munene, a distributor for the brewer, who outlines their base: “The place I’m selling the most is in Nairobi, and this Kenya area… You target those people who want to drink responsibly, who do not have a lot of money in the pocket.”
To understand how East Africa Breweries Ltd will expand further, attract new consumers and fend off competitors in Kenya, Giokos sits down with CEO Andrew Cowan for ‘CNN Marketplace Africa’s Face Time interview.
Cowan begins the interview by outlining how the company plans to ensure their market share: “We need to continue to keep the brand modern, relevant to all consumers… So continuing to reinvent Tusker and keep it relevant to Kenyans and East African households is really, really important to us.”
We’ve got strong brands
Giokos asks Cowan how the brewer positions itself as the dominant player in the Kenyan market and the influence of Diageo’s resources to East Africa Breweries Ltd.’s capacity.
Cowan explains to ‘Marketplace Africa’: “I think the reason we’re so big is because we’ve got brands like Tusker, brands like Johnnie Walker whisky, brands like Senator, the consumers want to buy. Our obsession is to provide consumers with drinks they want at prices they can afford… Our business is very, very well invested. We spend $50 million this year alone on increased capacity because our business is growing, and more and more consumers are buying more and more of our products.”
Cowan also outlines to Giokos what is unique about the Kenyan market: “I think the Kenyan consumers are really dynamic… Mobile savvy, digitally savvy, highly aspirational, very contemporary, very, very ambitious. And therefore, we’ve got to provide new products, innovative ideas for them to enjoy.”
Looking ahead to how the Kenyan market will evolve in the future, Giokos asks Cowan to outline some potential trends to look out for in the future.
Cowan explains: “There’s actually a really exciting trend going on in Kenya, which I think typifies my point about millennials and more demanding Kenyan consumers… So our spirits businesses are in significant double digit growth at the moment, and that’s the trend we expect to see continue for the next few years.”
‘CNN Marketplace Africa’ airs Friday 24 February at 1815 EAT on CNN International.