Kenya Breweries Limited revises grain demand on re-surging alcohol sales

KENYA – Kenya Breweries Limited (KBL), subsidiary of the East African Breweries Limited (EABL) has revised its demand for grains used in the production of alcoholic beverages on the back of rebound in sales.

The move follows the reopening of bars, pubs and restaurants after the government eased restrictions meant to curb the spread of Covid-19, which has since boosted demand for drinks.

The beer maker said in a statement that it has increased demand for sorghum and barley to 20,000 tonnes each, which is almost double the volumes projected during the lockdown.

Earlier in August, EABL had moved to trim its grain purchases by 71 per cent in response to muted alcoholic drinks demand to a mere 22,000 tonnes.

“The easing of COVID -19 restrictions such as the reopening of on-trade outlets (bars, pubs and restaurants) by the government has paved way for the revision of Kenya Breweries Limited’s grain demand,” said EABL’s group corporate relations director Eric Kiniti.

Reaffirming its commitment to locally sourced raw materials for brewing, KBL has urged its registered farmers up their output and called on new ones to bid for its contract farming programme.

The program is spearheaded by the East African Maltings Limited (EAML) and offers farmers a ready market and pre-agreed prices for their produce.

The company is similarly encouraging persons with disabilities to join the be part of the initiative as it seeks to address diversity and inclusion.

It kicked off the project for inclusion of farmers with disabilities in Homabay County, western Kenya in partnership with Sightsavers in March this year.

So far, 39 farmers with disabilities who have a total of 76.5 acres planting white sorghum for use in the production of Senator Keg beer have been enlisted.

“The easing of COVID -19 restrictions such as the reopening of on-trade outlets (bars, pubs and restaurants) by the government has paved way for the revision of Kenya Breweries Limited’s grain demand.”

EABL’s group Corporate Relations Director – Eric Kiniti

Under its local sourcing programme, EABL is currently working with over 47,000 farmers across Kenya, whom it paid over Sh2 billion last year.

Kiniti further revealed that despite the challenges faced, the company honoured all the contracts and payments for the financial year 2019/2020, purchasing approximately 45,000 tons of barley and 32,000 tons of sorghum.

The COVID-19 led disruptions dented EABL’s earnings to the end of June 2020 as its profit slumped by 39% to Ksh.7 billion (US$64.9m) on the back of depressed sales.

Its net sales dropped by 9% to ksh. 74.9 billion (US$695.25m) despite a 10% first half growth, which has been wiped out by a corresponding 29% decline in the second half period.

EABL is betting on the recovery of physical drinking joints to see a rebound in its own growth and has since set aside Ksh.500 million (US$4.5m) to support the recovery of on-trade outlets in Kenya, Uganda and Tanzania.

“Going forward, our market teams have put in place robust plans to help us emerge stronger from this crisis once the measures are eased across our markets.

“We will continue to execute with discipline and invest prudently to ensure we are strongly positioned for a recovery in consumer demand,” EABL Managing Director Andrew Cowan said in July.

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