E-Malt.com News article: Africa: Russia's ‘Baltika’ beer is expanding to Africa market targeting Kenya next month

Russian beer brand, Baltika, will hit the Kenyan market next month, targeting high-end consumers including tourists, Business Daily Africa said on June 24th.

Baltika Breweries, a huge, former state-owned brewer, is facing a saturated market at home and has embarked on an aggressive expansion strategy designed to give it a foothold around the world.

It has recently entered Cote d’Ivoire and the Congo and now wants to expand to East Africa. Its first shipment to Kenya will arrive in Mombasa next week, with distribution to other Comesa members Ethiopia, Sudan and Uganda on the cards.

Unlike Diageo products and other local beer brands, Baltika No7 is positioned as ‘super premium’, aiming for value sales rather than large volumes. The beer will sell at $1.50 (about Sh96) in retail and $2.30 (Sh148) in hotels, restaurants and bars.

“It doesn’t appear to be targeting the mass market who wouldn’t be able to afford it. Instead it is aimed at inbound tourists and a small percentage of well-off locals,” said Spiros Malandrakis, analyst for Africa and the Middle East at Euromonitor.

Despite its niche positioning, Soslan Kulchiev, regional manager for export sales at Baltika, told Business Daily that the firm intended to become one of the leading exporters to Africa.

“We are really interested in the African market. Despite the fact that average beer consumption is not very impressive in East Africa, we see a great potential in the region. The tourism boom and economic upturn prove that we are on the right path.”

Baltika already exports to 50 countries and is trying to leverage Russia’s reputation as a long-standing consumer and producer of beer. The label’s Soviet-style lettering is also thought to appeal to East Europeans and consumers in the former Soviet republics who are nostalgic, though analysts are unsure how successful the brand will be in other markets.

In Kenya, it could prove popular with growing numbers of Russian tourists and even the Chinese, says Mr Malandrakis, though much depends on recovery of the tourism sector and future advertising of the relatively unknown brand.

“They have a very aggressive expansion strategy but in Africa they are really testing the ground, he said.”

Now majority-owned by Danish brewer Carlsberg, Baltika saw export sales increase by 32 per cent last year, partly thanks to its owner’s strong distribution network.

The firm wants to sell about 300,000 litres in Africa this year. “We feel interest in our product and intend to increase sales volume and to broaden the geography of sales,” said Mr Kulchiev. “In the medium-term, we want to become one of the leading exporters into Africa.”

Baltika will be distributed in Nairobi and Mombasa by Golden Crown South Sudan.


25 June, 2008