Kenya’s market for wines and spirits is booming, with a whopping revenue of about KSh 605 billion in 2023 and an expected yearly growth of around 6.28%. This presents an exciting opportunity for people looking to start businesses in this field.
The way people choose their drinks is changing. More Kenyans are picking wines and spirits because they think they’re cheaper compared to beer, which has become more expensive due to taxes. But, there are challenges too. Concerns about too much drinking and rules about selling alcohol online make things tricky.
In this article, we give you a general overview of the liquor business in Kenya.
Overview of the Alcoholic Drinks Market in Kenya
The alcoholic drinks market in Kenya has experienced substantial growth, reaching a revenue of approximately KSh 605 billion in 2023, reflecting a promising annual growth rate of 6.28% (CAGR 2023-2028). Comparatively, Kenya’s per-person revenue in this sector stands at around KSh 10,980, indicating significant potential for expansion. 1
Market Size and Growth Projections
- Market Size: The market is projected to reach a volume of about 185,100,000 liters by 2028, showcasing a growth rate of 3.5% in 2024, signifying an increasing demand for alcoholic beverages.
- Consumer Base: Approximately 15 million Kenyans consume alcohol regularly, with 12 million individuals drinking daily, spending an average of KSh 150 on each occasion.
Preference for Wines and Spirits
- Affordability Factor: The market dynamics indicate a preference for wines and spirits due to their perceived affordability compared to beer, which has faced price hikes due to SIN TAX implementation. 2
Consumption Trends and Patterns
- Growth in Consumption: Alcoholic drink consumption in Kenya is expected to rise to 40,000 metric tons by 2026, growing at an average rate of 1.2% annually. 3
- Ranking in Global Consumption: Kenya was ranked 41st globally in alcoholic beverage consumption in 2021, with 37,000 metric tons consumed.
Key Players and Market Dominance
- EABL Dominance: The East African Breweries Limited (EABL) is a significant player, reporting sales of KSh 109.7 billion worth of alcohol. The company sold approximately 68% of its products in Kenya. 4
Regional Consumption Patterns
- Urban vs Rural: Urban areas show higher alcoholic beverage consumption at 16.6%, compared to 11.4% in rural areas.
- Regional Variances: Rift Valley leads in the consumption of traditional brews, while Nairobi and Western regions top the charts in the consumption of chang’aa and mainstream brews, respectively.
Challenges and Regulatory Concerns
- Alcohol Abuse Concerns: Alcohol remains the most abused drug in Kenya, raising concerns for regulatory bodies like the National Authority for the Campaign Against Alcohol and Drug Abuse (NACADA). 5
- Online Alcohol Sales: Online sales have complicated efforts to control substance abuse, especially among the youth, as highlighted in reports by NACADA.
Market Share and Financial Insights
- EABL Financial Performance: EABL, operating in Kenya, Uganda, and Tanzania, generated revenue of $1 billion, with 68% ($700 million) coming from Kenya. Kenyan revenue growth outpaced Uganda and Tanzania, with a 30% increase in the past year.
The Bottom LINE
The wines and spirits market in Kenya shows robust growth potential, driven by a sizable consumer base, a preference for affordable options, and an increase in disposable income. However, concerns related to alcohol abuse and regulatory challenges highlight the need for responsible business practices and effective government policies within the industry.
References
- Statista, Alcoholic Drinks – Kenya
- Business Daily, KRA to collect extra Sh3bn from beer, juice, water taxes
- ReportLinker, Kenya Alcoholic Drink Industry Outlook 2022 – 2026
- QZ, Could elections have boosted alcohol spending in Kenya?
- Citizen Digital, Alcohol Is The Most Abused Drug In Kenya – NACADA
