KENYA – Hennessy, the world’s largest maker of cognac, has started distributing its products in Kenya to tap Africa’s second-largest luxury-goods market.
The company, a unit of Paris-based LVMH, began distributing its products in the Kenyan capital in May and plans to use the city as a hub for regional distribution, CEO Bernard Peillon said in an interview in Nairobi.
A bottle of Hennessy cognac retails for as much as 117,000 shillings ($1,127) in the city’s shops, the company said.
“Kenya is a boost market, the next emerging market frontier for us,” Peillon said. The company is targeting “double-digit” sales growth, he said, without specifying targets.
Kenya was Africa’s second-largest market for luxury goods in 2016, with revenue of about $500m, up 25% from a year earlier, according to a report by New World Wealth, a Johannesburg-based research group.
The country ranked behind South Africa’s $2.3bn market and ahead of Nigeria, it said.
Brands like Hennessy are expanding their reach on the continent to tap into growing numbers of middle-class and rich people.
Kenya, where luxury brands including Bentley, Porsche and Rolex are already available, has 9 400 dollar millionaires, the fourth-highest number behind South Africa, Egypt and Nigeria, according to the New World Wealth report.
About 7 500 new millionaires will emerge over the next decade in the East African nation, the third-fastest pace on the continent after Ethiopia and Mauritius, according to the 2017 Wealth Report compiled by London-based Knight Frank.
Hennessy sells cognac in 140 countries, including South Africa and in Nigeria. While the continent is experiencing double-digit revenue growth, it accounts for less than 10% of the global market, Peillon said.
“Our role is to figure out what might happen in the world, to have a vision of what could become of Kenya, and we are positive,” Peillon said. “I am here in Kenya, so it is a clear sign of commitment and of interest.”
July 26, 2017: Fin24