Home wines and spirits in Langata [Photo: Samson Wire] A new taste for gin has swept across Kenya. And in their war rooms, alcohol dealers are already high from the profits promised by the revolution. “Gin is exploding across East Africa,” said Andrew Cowan, outgoing chief executive of East African Breweries Ltd (EABL).
The brewer’s net sales for its spirits business have grown 10 per cent in the past six months, according to the company’s latest financial disclosures, lifted by demand for gin. With its beer business hurting, EABL is now set to direct resources to potent drinks where consumer behaviour has shifted. “There are some emerging segments that we are interested in driving really hard,” Mr Cowan said at a virtual briefing on Friday, referring to the preference for gin across the region.
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Cowan reveals that EABL’s current strategy is to accelerate the growth of its spirits business at the expense of the beer segment. He argues their beer business across East Africa is more entrenched. “The best way I can characterise our strategy is to grow beer fast and grow spirits faster and the reason is that the beer business is more developed in East Africa than the spirits part of our portfolio,” he said.
The coronavirus pandemic has badly hit the brewer’s bottom-line wiping out nearly half its net profits in the first six months of the year to December 31, 2020. Net sales for EABL, which is controlled by British alcohol giant Diageo, fell by three per cent. Bar closures and restrictions on movement to curb the spread of the virus have greatly reduced on-trade sales. This will see EABL increase marketing and innovation for its spirits business.
EABL recently introduced a new gin to its Chrome brand, which it said was targeting millennials. The company’s gin portfolio also has Gilbeys, Gordons and Tanqueray, all brands aiming for the low to high-end market. Cowan also said they would continue to heavily push spirits such as Kenya Cane, Uganda’s Waragi and popular international brands.
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He, however, declined to break down how much the spirits business contributes to EABL’s overall business. “We wouldn’t disclose our share of business by channel. We see that as competitively sensitive,” he said. With reduced operating hours for bars, beer […]