Though alcohol demand in Kenya is low, there is need to create awareness on all consumer segments so as to increase market size
According to Kasi Insight’s Consumer Sentiment Index (CSI), the Kenyan consumer discretionary spending was not impacted much with inflation. In May the index dropped by three points but recovered in June. As such, it is expected that the prevalent inflation did not affect spending on alcohol.
Our retail demand index measures consumer demand for retail category and provides insights on how consumer habits impacted demand for various categories. The index ranges from + 0.25 to -0.25. An index level close to 0.25 means demand is high as more consumers are looking to purchase while an index level close to -0.25 means demand is low. This measure is an effective tool for demand planning.
Wine and Beer dominate the Kenyan alcohol industry
Though low, demand for alcoholic beverages in Kenya has remained constant all through 2021 to 2022. As much as the industry recorded a drop in demand of their products, the consequences were not dire.
Regardless of the decrease in demand for all alcoholic beverages, demand for wine was the highest over the period 2021-2022 followed by beer which was a close competitor for the brand. In July 2021, the demand for wine was the highest at 0.06, followed by that of beer at 0.053 then whisky and tequila at 0.052. Towards the holiday season of 2021, demand for alcoholic beverages increased a little with the highest being wine at 0.067 followed by beer at 0.066. These were closely followed by vodka and whisky at 0.062.
In early 2022 the demand for alcoholic beverages slightly decreased as the country recovered from the holiday season. The first effect of inflation was being felt, this was attributed to the Russian-Ukraine early in the year. In mid-2022, inflation had shot up and consumers reduced their discretionary spending. This can be seen with the drop in demand of various alcoholic beverages. Regardless, the demand for vodka was the highest at 0.035 followed by champagne and wine at 0.032.
Millennials and Baby Boomers driving demand for both wine and beer
Across consumer segments driving demand for both wine and beer, Millennials and Baby Boomers are leading. Baby Boomers are leading in demand for beer at 0.063 with millennials following at 0.058. On the other hand, beer demand is led by Millennials at 0.059 followed by Baby Boomers at 0.054.
Interestingly, though Gen Zers and Gen Xers are lagging in the two categories, demand for beer surpasses that of wine.
To tap into the Gen Z and Gen X segment, brands should look into their advertising channels
Though alcohol demand in Kenya is low, there is need to create awareness on all consumer segments so as to increase market size. When it comes to channels where they can get information from, Baby Boomers and Gen Xers prefer magazine ads while Millennials and Gen Zers prefer social media posts and TikTok. Alcohol brands should look into this channels if they need to expand their market.
The alcohol sector being one of the items considered as ‘discretionary’ should look out for market trends. With the constantly increasing rate of inflation and changing consumer behavior, it is paramount for these brands to keep up with the trends and monitor the shifts in the market.
Our data intelligence platform can provide more insights to help your business make informed decisions in Kenya and elsewhere in Africa.
Contact our team today to explore how our consumer intelligence can empower your decision-making process. Win with confidence with Kasi insights https://www.kasiinsight.com/thehub
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