EAC & The Horn

Diageo’s East Africa sales surge 9% on Senator uptake

Alcohol giant Diageo’s East Africa sales experienced a 9 percent growth in the six months ending December 31, propelled by the rising popularity of East Africa Breweries Ltd’s (EABL) low-end beer, Senator Keg.

EABL, in collaboration with the Government of Kenya, introduced Senator Keg in 2004 as a high-quality, safe alternative to combat the consumption of illicit brews.

Crafted using locally grown sorghum and raw materials from farmers, Senator Keg has emerged as a powerful force in the market, contributing significantly to Diageo’s success.

Diageo further attributes the sales surge not only to Senator Keg’s success but also to strategic pricing adjustments across its brand portfolio.

Higher consumption of gin, rum, scotch, and Ready-to-Drink (RTD) offerings, notably Smirnoff Ice, played a pivotal role in driving sales across East African markets, including Kenya, Tanzania, Uganda, and South Sudan.

Read also: EABL brews up a 16% surge in sales despite tough economy

Forex challenges

While the overall net sales in Africa declined by 12 percent, Diageo faced challenges from foreign exchange woes, particularly due to the steady weakening of the Nigerian naira and Kenyan shilling. However, this setback was partially offset by organic growth.

In Nigeria, Diageo’s net sales witnessed a 20 percent surge, driven by a robust price/mix strategy supported by price increases across all product categories.

The Africa Regional Markets also showed strong growth of 11 percent, fueled by Malta Guinness and Guinness beer price increases, compensating for a decline in spirits, notably Johnnie Walker.

Conversely, South Africa faced a net sales decline of 15 percent, primarily influenced by a 21 percent drop in volume. This downturn was attributed to decreased consumption of premium spirits, including Johnnie Walker Black Label and Smirnoff 1818.

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