Government Crackdown Fuels Growth of Kenya’s alcoholic Beverages Market

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Africa Spirits Limited (ASL), a Kenyan brewer based in the East African nation’s Thika area, has disclosed that enhanced enforcement action by the government against illicit and contraband alcoholic drinks has opened up a vast market for local manufacturers.

It is estimated that the alcohol industry contributes over Ksh100 billion (about $1 billion) in taxes to the exchequer, with previous government reports indicating that illicit trade controlled half of the market.

According to ASL Brand Portfolio Manager, Ascah Ogara, local consumers have embraced locally manufactured products and are increasingly demanding for flavored brands.

As part of the firm’s plans to meet market demands, ASL, the manufacturers of BlueMoon Vodka, have launched a new Coconut flavoured Bluemoon Vodka variant to meet the evolving taste preferences.

This brings the number of flavours under the popular Bluemoon vodka brand to four, including Hot Ginger, Crisp Apple and Juicy Mango flavours.

“The launch of BlueMoon Coconut flavor is part of a market strategy to meet the evolving consumer needs,” said Ogara, adding that, “As part of our research and development programme, we have invested heavily in the development of flavoured BlueMoon variants.”

The alcoholic drinks manufacturer was the first local company to roll out new non-refillable closures for its product in 2014, a technology that ensures that bottles cannot be refilled after sale.

Established in 2004, ASL offers alcoholic beverages across the consumer value chain. Besides Bluemoon Vodka, ASL’s other brands include Legend Brandy, Glen Rock Whisky, Furaha Vodka, Furaha Brandy, Gipsy King Gin among others.

The company’s latest move comes at a time when Kenya’s economic growth in the last year was slow, characterised by a difficult trading environment in Kenya, caused by the two general elections. According to one of the latest reports by research group, Euromonitor International, this led to moderate total volume growth for alcoholic drinks.

Going forward, Euromonitor has disclosed that extensive capex projects are underway. This means that local players are expanding the capability of their breweries to cater for the growth in demand, due to rising disposable incomes and changing tastes and preferences.

Expansion is expected to favour socioeconomic growth through job opportunities once operational lines are running and roads are upgraded for raw materials transportation.

“Growth in alcoholic drinks is expected to remain healthy over the forecast period in both volume terms and value terms at constant 2017 prices,” the group’s researchers said.

This will be due to the continued modernisation of retailing, with more hypermarkets and shopping centres expected to open across the country, thereby stocking more alcoholic drinks.

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