#17

EABL

East African Breweries Limited (EABL) holds the distinction of being one of the longest-running enterprises in Kenya and the wider East Africa region. Founded in 1922, the beverage maker has in the last century built an extensive network of breweries, distilleries, and distribution facilities across East Africa.

Headquartered in Kenya, where it operates through Kenya Breweries Limited, EABL has subsidiaries in Tanzania (Serengeti Breweries Limited) and Uganda (Uganda Breweries Limited). The company works with distribution partners to serve customers and consumers in South Sudan, Rwanda, Burundi, and the Democratic Republic of Congo. Collectively, EABL manages a rich portfolio of more than 40 brands that range from beer, spirits, and adult non-alcoholic drinks. It produces its flagship brands in the region and sources some of the international brands it markets through British multinational alcoholic beverage company, Diageo, which is its majority shareholder.

Thanks to the scale of EABL’s operations, its dominant market share across key alcohol categories, and its long operating history in the region, the company has been able to build a resilient and profitable business. It has also been able to tap into world class talent and today boasts of having some of the most competent and seasoned executives in corporate Kenya serving in its leadership team. These include Dr. Martin Oduor, who serves as the Board Chairman, and Mrs. Jane Karuku, who serves as the Group Managing Director and CEO.

These factors have enabled EABL to forge ahead during economic downturns and unfavorable market cycles. This was evident at the height the Covid-19 pandemic when restaurants, bars, and clubs curtailed their operations and, in some cases, shut down indefinitely. This affected how and where consumers shopped for their favorite alcohol brands. EABL was able to mitigate the situation and adapt by turning to e-commerce distribution channels, including Party Central, its own e-commerce channel, to reach consumers.

EABL further responded to the pandemic by investing $5 million (Sh579 million) to directly support bars and restaurants negatively impacted by the lockdowns, curfews and sitting capacity guidelines. The company reports that over 5000 bartenders received training through the initiative.

Back to growth

After the pandemic-induced slowdown in 2020, EABL bounced back to growth in fiscal year 2021. This is despite a challenging and complex operating environment during the period. In addition to the continuing effects of the pandemic, 2021 was also characterized by cost inflation (which continues in 2022), weakening of the shilling (which led to higher costs of importing inputs), and an end to pandemic-era tax reliefs (which led to higher tax charges).

Despite this challenging macro environment, EABL grew its net sales in 2021 by 15 per cent year on year to Ksh86 billion compared with Ksh75 billion in 2020. Importantly, the company was in 2021 able to surpass its pre-pandemic 2019 net sales of Ksh83 billion. Kenya accounted for 66 per cent of net sales in 2021, compared with Uganda’s 19 per cent and Tanzania’s 15 per cent, according to the company’s Annual Report.

Profit before tax, however, remained flat in 2021 vs 2020 at Sh11 billion due to the macro challenges discussed, underlining the instrumental role the impressive revenue growth played in protecting shareholder value. 

The company is optimistic it will sustain this momentum and is investing heavily behind what it sees as key growth enablers. This includes streamlining distribution to ensure product availability, great customer and consumer experience, and cost effectiveness. The company will also step up its investments in digital channels, e-commerce, and relevant digital marketing. “We have invested in an in-house digital marketing agency to build and drive in-culture content and ensure that we are always staying connected with our consumers and the dynamic environment,” said Mrs. Karuku.

Sustainability strategy

EABL also has one of the most robust corporate sustainability programs in Kenya. It published its inaugural Sustainability Report in 2021, condensing its key sustainability achievements in 2020 and 2021. The report, prepared in line with Global Reporting Initiative standards, is a useful reading for executives and students interested in understanding best practices in corporate sustainability practice and reporting.

EABL has taken a systematic and holistic approach to sustainability by looking at how it creates value for every player in its stakeholder ecosystem, including farmers in sourcing communities, consumers in the marketplace, and the people it employs and partners with across its entire value chain. The company also dedicates resources to the preservation and care of the natural environment.

As an example, EABL provides over 60,000 barley and sorghum farmers across Kenya, Tanzania and Uganda with agricultural skills and resources to support sustainable farming practices and increase their income. This includes support such as free seeds, free extension services and pre-financing of inputs to help farmers achieve economically feasible yields per acre.

The company also recognizes the critical role that water plays in its production process and has committed to replenishing water in vulnerable communities as well as reusing and recycling water at its sites. In 2020 and 2021, more than 30,000 people in Kenya and Uganda benefited from EABL-sponsored programs aimed at improving water availability and access. This is in addition to its investments in renewable energy aimed at accelerating its journey to net zero.The company’s sites across Kenya, Uganda and Tanzania utilize an average of 82 per cent renewable energy, its Sustainability Report notes.

EABL has also been emphatic about helping consumers make informed choices about alcohol consumption.  “On occasions when consumers choose alcohol, we want them to drink better, not more,” notes the company. More than 13 million people across the region were reached through EABL’s positive drinking campaign in the past year. The company has also helped support the government’s fight against illicit brews.

EABL has also championed inclusion and diversity at the workplace. Its recruitment and selection process focuses on diversity hiring (50:50) irrespective of background, disability, religion, gender, or ethnicity. In partnership with Strathmore Business School, the company has run a ‘Women in Leadership’ programme since 2015 and has built the leadership capability of over 360 women in its business. In a recent Your Voice Survey, 93% of employees at EABL indicated they were engaged and feel that they can be themselves regardless of their diverse backgrounds. This has enabled the firm to continue attracting the best talent in the region and across the globe.