Last year the USD 100 billion mega-merger of the world’s two brewing bigwigs Anheuser–Busch InBev (AB InBev) and SABMiller deal clearly demonstrated the strength of the global beer industry. And that is what is being noticed in Ethiopia as well. Fetching close to half a billion dollars from privatization, the beer market in Ethiopia is predicted to grow faster than any over the coming years, according to industry analysts. The growth is driven by a rising middle class population, urbanization, and increased GDPs. In that regard, Ethiopian consumers now tasting products from multinationals – Heineken, Diageo and Bavaria, writes Samuel Getachew.
“This is where I meet friends and enjoy ‘Tela’, Berhanu Yohannes, a Bajaj driver told The Reporter as he enjoyed his fifth cup of the home brewed organic local Ethiopian beer, at a busy pub made out of cheap wood and mud. “This is where I can enjoy and unwind without much money to spend. I can drink as much as I want and not spend more than 30 birr”.
As brand name beer breweries are in a rush to beat the competition, stay afloat and be noticed in a crowded Ethiopian beer market, there is an open, untapped market for the once mighty home-brewed organic local beer made out of maize (or barely) as it is making a comeback and substituting a cheaper option than the cost of brand name beers.
Not far from the pub is a Kebele pub, in the heart of Ras Desta and is at almost full capacity. On the menu are cheap beers and a-slew-of-choices. Here, an average beer sells at eleven birr and the high-end beer, Heineken, slightly more and there is a heavy traffic. Habesha beer, with its golden color and strong after taste, seem to dominate the tables of the Kebele.
For 26-year old Thomas Kibru and friends, the price of the beer is a bargain. Then again, at Kebele, is everything seems to be a bargain. Their table is full of empty bottles (to help account to how many have been consumed) and more beer is on its way.
It iss just getting dark and there are few hours before closing time. “It is a Habesha territory here and it sells out rather quickly”, Thomas told The Reporter. “With these prices, I do not blame anyone from being a regular in this place and drink as much as possible before we are forced to vacate at 9:00 PM”.
At every table, with the exception of the few, it seems Habesha is the favorite.
Habesha, which is co-owned by Bavaria, a leading brewery of Holland has shown great stride in the midst of stiff competition. It has been running commercials featuring one of the leading artists of the moment, Betty G. on TV on high rotation. With a small but expanding market share, having only less than 10 percent market share, according to the company, it is available within a 650km radius of the capital.
At Habtegiorgis Bridge, the Meta House is a fixture and at full capacity almost all evening. Meta is the uniform favorite here, enjoyed by all segments of society.
It once was one of the overwhelming favorite beer brands of Ethiopians and it has now begun to reform itself to fit the new dynamic beer market. Bought from the state for USD 225 million in 2011 by Diageo, one of the leading producers of beer and liquor, it has invested heavily on the iconic beer. It has refurbished the famous bottle, updated the taste a little but its success seems to be limited.
In its expanding strategy worth USD 150 million, it introduced a short-lived beer, Zemen to the Ethiopian market with little success.
For Tadesse Tufa, Meta is a tradition he has taken from his father. Like his father, he has been drinking it for the last four decades. “While the taste has changed over time, the tradition of a Meta in my hand is special, takes me back to another era,” he told The Reporter. “It takes me back to my youth”.
As Ethiopia is opening its economy to foreign investors and help transform the local business landscape, there is no area that has been valued and given attention, from local and foreign investors, that the local Ethiopian beer market. Despite stiff competition for affordable high quality products, the Ethiopian beer market is now a booming industry, with ample choices and affordable prices.
This month, the Guinness brand, the Irish dry stout, made its belated encore debut to the Ethiopian beer market at Sheraton Addis courtesy of Diageo, one of the leading liquor producers in the world. This is the second time Guinness is being introduced to the local market, after BGI made an attempt a decade ago, with a high alcohol level of 7.5 percent, where the average alcohol level of beer in Ethiopia is around five percent. The new Guinness has alcohol level of 6.5 percent.
At Hilton Addis Ababa, where drinking a beer is a tradition at its ‘Happy Hour’, and prices are reduced by half in the early hours of the night, the competition is between the Heineken owned, Walia and BGI’s St. George.
Even at a fraction of its original cost, Hilton is an expensive arena for most. This is where businesspeople mingle, with the diaspora and the lobbyists. For a businessman like Tilahun, a cold St. George beer is what he looks forward to, after a busy work day. In fact, all his friends prefer, the St. George brand, for its taste and low alcohol.
Not far from him, it is easy to discover St. George beer, BGI’s signature brand is the favorite here. “Most of their (St. George’s) marketers come to drink, they study the market and are in a better position to understand the mood of our customers”, a manager at Hilton told The Reporter. “All the beers we sell here – St. George, Walia, Meta are top quality, it’s just the marketing mechanism that we are able to sell more (St. George) and not as much with (Meta)”.
Next up is Dashen, partly owned by a United Kingdom based company, Duet, which has launched a brand new beer in Balageru this week. This is after Heineken Breweries began to produce a made-in-Ethiopia signature product earlier this year. There is a new revolution of beer entrepreneurship in the country, most coming from international players, who are refurbishing century old products and also making way for the new.
The change began in earnest, when the BGI bought St. George from the state for 50 million euros and made St. George the premier beer of the country, with little competition, except from Meta Abo Brewery A decade-and-a-half later Meta was sold to Diageo for USD 225 million, outbidding Heineken.
That did not deter Heineken from entering the Ethiopian market buying the Bedele and Harar brands from the state monopoly and started its own, Walia, a noted Ethiopian beer in the market.
All these development has made the Ethiopian beer market an attractive recipient of a true multinational international competition for the average Ethiopian beer drinker.
Just after 7:00 PM, the capital’s Mexico square area is as busy as ever, with many commuting to home from work, young people filling the streets in search of clients for their cheap second hand products and the destitute, the invisible second class citizens, attempting to forge change, sympathy from anyone.
In such a busy and condensed area, this is where pickpockets strive and where arenas with cheap beers have plenty of customers. There is no place that is busier than the employees’ bar of St. George factory.
It is a gigantic bar and there are hundreds, if not thousands of customers, enjoying St. George at discount, along with factory workers. To the leading Ethiopian brewery, that produces Amber and Castle, along with St. George, it compromises 50 percent of the share of the Ethiopian market, according Isaias Adera BGI. Though sufficient data is not available, according to industry analysts, BGI Ethiopia, brewer of Saint George, leads the market with 38 percent share followed by Heineken Ethiopia, 30 percent, Diageo, 15 percent, and Dashen, with 13 percent. Habesha, Raya and the latest entrant Zebidar, which is unique for its rip cap, have less than 10 percent, each.
BGI has introduced new brands, including the premium beer Castle and the dark bitter beer, Amber. The Ethiopian beer consumer has ample choices and many are concentrated regionally. Dashen, the classic 4.8 percent light beer is the number selling beer in Gonder and is also a fixture in some parts of Addis, while Raya, while concentrated in the Tigray region, is about to launch an effort within the capital.
Perhaps by circumstances or choice, the average Ethiopian beer remains cheap and affordable for consumers. Currently Ethiopia’s total beer consumption stands at 12 million hectoliters of beer per year. This is as multinational companies venture in to the country, as the nation moves in to an industrialized nation territory, an ever emerging middle class with spending power, which is expected to grow in the years to come.
