Kenya Breweries Limited (KBL) plans to spend Sh1 billion setting up an additional line for local production of spirits on the back of growing consumer demand.
The firm says that demand for spirits has been growing faster than that of beer and the trend has been reinforced since the onset of Covid-19, justifying the need for an additional spirits line.
“Our spirits volumes have increased and it is an opportunity to raise production by having an additional line,” said KBL managing director John Musunga.
“Spirits will have an increased role to play in our overall business than they used to do a few years back.”
Many consumers are shifting to mainstream and premium spirit brands since they cost less than beers and also come in a wide range of tastes.
KBL said the rising demand is also driven by an increasing number of people entering the legal drinking age and opting to debut with spirits.
An additional spirits line will see KBL start local production of new international brands and also rev up volumes of those already being locally produced.
The Sh1 billion will be spent on purchasing the new line machinery and expanding the storage capacity at its sister company, UDV Kenya, to meet the rising market demand.
KBL in 2017 started local production of Captain Morgan Gold —both 250 millilitres (ml) and 750ml— through UDV Kenya distillery as opposed to importing the brand.
This has saved costs and also eliminated the logistics that come with imports as was recently the case with Suez Canal shut-down where among the products that delayed to reach Kenya were Johnnie Walker.
KBL is now also producing the Smirnoff Red Vodka and Gilbey’s. It also produces 250ml Mr Dowell’s but plans to extend this to 750ml.
The brewer has in the past years seen the growth in sales of its beers such as Guinness, Pilsner and Tusker lag those of spirits which continue posting double digit growth.
Mr Musunga said more consumers shifted to spirits during Covid-19 period on reduced visits to entertainment spots, restaurants and pubs where beer consumption is traditionally predominant.