Spirits - Kenya

The Spirits market in Kenya has been experiencing significant growth in recent years, driven by changing consumer preferences and favorable macroeconomic factors.

Customer preferences: Kenyan consumers have shown a growing interest in premium and high-quality spirits, reflecting a shift towards more sophisticated tastes. This trend can be attributed to the increasing disposable income and urbanization in the country, which has led to a rise in middle-class consumers with higher purchasing power. Consumers are willing to pay a premium for spirits that offer unique flavors, craftsmanship, and brand reputation.

Trends in the market: One of the key trends in the Spirits market in Kenya is the rising popularity of locally produced spirits. Kenyan consumers are increasingly embracing locally made spirits, as they offer a sense of pride and support for domestic industries. This trend has been further fueled by the government's efforts to promote local manufacturing and reduce the dependence on imported products. As a result, local distilleries have been able to gain market share and compete with international brands. Another notable trend is the growing demand for flavored spirits, such as fruit-infused vodkas and flavored rums. These products appeal to younger consumers who are looking for more adventurous and unique drinking experiences. The introduction of innovative flavors and packaging has helped to attract a wider consumer base and drive sales in the market.

Local special circumstances: Kenya has a vibrant nightlife culture, with a growing number of bars, clubs, and restaurants catering to a diverse range of consumers. This has created a strong demand for spirits, as they are often the preferred choice for socializing and entertainment. The availability of a wide variety of spirits, including both local and international brands, has contributed to the growth of the market. Furthermore, Kenya has a strong tourism industry, with millions of visitors coming to the country each year. Tourists often seek out local spirits as a way to experience the local culture and traditions. The tourism sector has therefore played a significant role in driving the demand for spirits in Kenya.

Underlying macroeconomic factors: The strong economic growth in Kenya has had a positive impact on the Spirits market. The country has experienced a steady increase in GDP per capita, which has resulted in higher disposable incomes and improved living standards. This has created a growing middle class with more purchasing power, leading to increased consumption of spirits. Additionally, urbanization has played a role in the development of the Spirits market in Kenya. As more people move to cities, there is a greater demand for convenience and a wider range of products. This has led to the establishment of more retail outlets, bars, and restaurants, providing greater accessibility to spirits for consumers. In conclusion, the Spirits market in Kenya is experiencing growth due to changing consumer preferences, including a demand for premium and locally produced spirits, as well as flavored options. The country's vibrant nightlife culture, strong tourism industry, and favorable macroeconomic factors such as economic growth and urbanization have also contributed to the market's development.

Data coverage:
The data encompasses B2C enterprises. The at-home market covers retail sales via super- and hypermarkets, eCommerce, convenience stores, or similar sales channels. The out-of-home data encompasses all sales to hotels, restaurants, catering, cafés, bars, and similar hospitality service establishments. Combined numbers encompass both the at-home market and the out-of-home market. Both the at-home and the out-of-home market are valued at retail selling prices including all sales and consumption taxes.

Modeling approach:
Market sizes are determined through a Top-Down approach, building on specific predefined factors for each market segment. As a basis for evaluating markets, we use resources from the Statista platform as well as in-house market research, national statistical offices, international institutions, trade associations, companies, the trade press, and the experience of our analysts. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending (e.g. consumer spending on alcoholic beverages, consumer spending at Hotels, Restaurants etc.), and price level index. This data helps us estimate the market size for each country individually.

Forecasts:
In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing is well suited for forecasting the Alcoholic Drinks market with a projected steady growth. The main drivers are GDP per capita and consumer spending per capita.

Additional notes:
The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level.