Africa’s beer market is said to be worth $13billion – one which Diageo is clearly tapping into given that most of its 5 percent growth on the continent for the year ending June is thanks to beer sales, says the company’s Africa President, John O’Keeffe.
Africa is the most exciting growth region in the world, and is forecast to be the fastest growing total beverage alcohol region over the next five years. Despite recent economic headwinds on the continent which have slowed growth in many other sectors on the continent, research group Plato Logic recently put beer volume growth in Africa at 4.5 percent this year – compared to 1.4 percent globally.
Beer is the key foundation in this region and Diageo’s strength in Africa is the scale of our beer business and our unique route to market approach. Historically our beer business has centred on premium beer, led by our flagship brand Guinness, but in recent years we have seen consumers migrate to value beers in a number of countries. Satzenbrau in Nigeria and Senator in Kenya have played a considerable role in moving consumers at the lower end of the income spectrum away from illicit and dangerous alcohol into safe and affordable alternatives.
Senator is a uniquely Kenyan brand which resonates strongly with consumers, and has seen phenomenal growth. Last month we announced the single biggest investment we have made in recent years with a $144 million (Kenya Shillings 15 billion) new brewery to be completed in Kisumu, Western Kenya. Once complete, this brewery will meet the growing demand for Senator – boosting production by 1 million hectolitres annually. We are set on growing our business within the Great Lakes region and Kisumu, which is strategically placed, provides us with a solid platform to access these fast-growing markets with an affordable beer option.
This investment is not only good news for lovers of Senator beer, but it has also spurred significant benefits in the economy, underscoring our long-term sustainability strategy across the continent. We believe we can not only brew and build brands for the African consumer but create sustainable infrastructure and a value chain around it. The project will create approximately 1000 direct jobs whilst also building out our farming supply chain – this brewery will significantly increase our purchasing from local sorghum farmers – 15,000 of whom will be contracted for this project in Nyanza and surrounding areas. The guaranteed market for the crop will generate a significant financial impact, enabling farmers to afford basic goods, services and schooling. With an official unemployment rate of 40% in Kenya, our aim is for our operations to contribute to the wealth and wellbeing of Kenyans across our value chain. We have seen that only by creating supply chains that are economically, socially and environmentally sustainable can we continue to make and market the products our consumers know and love.
We pride ourselves on meeting consumer needs, and we have focused on delivering compelling beer offerings to consumers at affordable price points wherever they are on the continent. Beyond Satzenbrau and Senator, we have also launched new value beers: Ngule in Uganda, endorsed by the King of Uganda, which already has over 3% share of the beer category and Azmera in Ethiopia, a lager made from the finest locally grown ingredients which was taken from concept to market in just 8 weeks. Innovation has been a cornerstone of our business and we will continue to transform the beer space on the continent to meet and shape our African consumers’ tastes.
John O’Keeffe – Africa President for Diageo