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Kenya's EABL increases investment to tap rising demand for spirits

Kenya's EABL increases investment to tap rising demand for spirits

Kenya

Kenya’s East African Breweries Limited (EABL) is upping its investment in the spirits market as consumers taste for whisky, vodka, gin, rum and liqueurs soars.

The company is investing 1.4 billion shillings (approximately $13.88 million) to boost production and manufacture some of the fastest selling drinks like Captain Morgan.

EABL has also installed a 20,000 bottles-per-hour production line at its plant on the outskirts of Nairobi.

Spirits sales in Kenya posted a 20 percent growth in 2017 making the east African nation the fastest growing market in the world for Diageo, the British firm which controls EABL.

“The share of serve for spirits is going to grow, possibly equal that of beer if the whole category in totality will grow. So we are intending to be at the forefront of that transition in terms of share of repertoire by the consumers to include spirits in their beer repertoire,” said EABL’s Sales Director, Andrew Kilonzo.

Often known for their beer consumption, Kenyans now prefer premium spirits like the luxury King Geroge V which retails at 600 US dollars a bottle, accounting for 80 percent of sales at upmarket bars like Kiza Lounge.

“Kenya was known before being a beer country. Slowly slowly we have seen a migration into the whisky side, the youth now has started consuming more whisky than the beer,” said Kiza Lounge owner, Ali Oumarou.

But the popularity of spirits in the east African nation comes with some challenges, like unscrupulous businessmen who try to outwit the system by importing contraband whisky and vodka.

As a result, bar owners have to scan all labels on bottles, with a phone application created by the Kenya Revenue Authority (KRA), to filter out contraband at the point of purchase, a move bar owners like Oumarou are happy with.

“The only one thing that I am so grateful about is the hard work that government are doing, especially KRA have come out with a new labelling system to help (detect) the contraband,” Oumarou said.

Industry analysts say the migration to high-end spirit brands is partly driven by rapid economic expansion rates in Africa, which have left some consumers especially in the middle class, richer and in need of a way to show their newly-acquired status.

According to the IWSR Global Trend Report spirits volume in Kenya posted a compounded annual growth of 14.22 percent between 2012 and 2016.

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