While the article links Kenyan beer to Senator Obama (the son of a Kenyan) now running as presidential candidate of the US, it is of more interest for information on selling alcoholic beverages to consumers at the bottom of the pyramid
(click image for full story online)
Consumers nicknaming Senator beer, brewed by East African Breweries Limited, Obama is a local thing and unlikely to have made any significant difference to sales. The brewers do not use it in their marketing, but say there has been some increase in sales in Obama’s father’s homeland, especially after Obama’s 2006 visit.
Of interest, though, is the origin of Senator beer and its place in the alcoholic beverage market of Kenya. What makes it different is that it is sold at 40 cents a glass compared to normal beers costing $1 to $3 a bottle. In a country where more than half the population earn less than a dollar a day its the only beer that is affordable to many.
It’s low price is achieved through saving the packaging costs by dispensing in bulk (1 000l a day in a bar) and by the fact that there is no excise tax on Senator beer.
The tax excise exemption is an attempt to address the dangers of illegal brews that are focussed on the poor consumer.
According to the article
A 2003 brewery study found that 55 percent of alcohol consumed in Kenya is homemade. Known as changaa or busaa, these spirits contain up to 40 percent alcohol and are often mixed with battery acid or formaldehyde to increase potency. At 25 cents a glass, these popular alternatives to more expensive beer are also known as “kill me quick.”
In 2000, 150 Kenyans died and hundreds were hospitalized from drinking a toxic brew in a slum near Nairobi, sparking calls for the government to crack down on the thousands of bootleg distilleries. Another 50 died in 2005, the latest statistics available. Many more have been blinded from these drinks.
A similar situation exists in South Africa and I suspect many Southern and East African countries.
In South Africa there seems to be less distillation but “fall over quickly” is popular! and adulteration is widespread. Before democracy in South Africa this was addressed by strict policing and possibly needs to be reevaluated now. With much of the homebrew being traditional beer based in South Africa, my personal suggestion would be to promote a homebrew quality ranking system and educate the user on alcohol usage.
In Kenya the brewers took the initiative
The brewery did away with bottles and packaging for Senator beer, using 13 gallon kegs. Each day, the company ships 8,500 kegs throughout the nation, and plans to expand output since it can’t keep up with demand.
Popularity is growing due to a heavy marketing campaign in the slums, where underground bars still sell homemade spirits.
The following points are probably important to sales at the Bottom of the Pyramid:
- replacing normal consumer packaging can significantly reduce cost
- there is normally a price where consumers will switch from the cheapest product for other benefits
- taxes can effect consumer consumption patterns