EABL banks on e-commerce to withstand COVID-19 impact on sales


EABL banks on e-commerce to withstand COVID-19 impact on sales

In Summary

  • The restrictions which has seen the freezing of alcohol sales inside bars and restaurants pushed down the company’s earnings in the year to June by 39 percent to Ksh.7 billion as sales shrunk by 9 percent.
  • The company says it is now adopting to non-traditional means to reach customers including online sales with distribution now taking the form of boda-bodas and from services such as Jumia and Glovo.
  • In Kenya, the sale of bottled beer and keg marked the greatest decline at 23 and 13 percent respectively while mainstream spirits showed resilience to grow by 2 percent in the period.

The East African Breweries Limited (EABL) has put its faith on e-commerce to stay afloat amidst dwindling sales resulting from Covid-19 related restrictions.

The restrictions which has seen the freezing of alcohol sales inside bars and restaurants pushed down the company’s earnings in the year to June by 39 percent to Ksh.7 billion as sales shrunk by 9 percent.

The company says it is now adopting to non-traditional means to reach customers including online sales with distribution now taking the form of boda-bodas and from services such as Jumia and Glovo.

“There are certain things we can’t control, like whether bars are opened or closed or whether the situation gets any worse, but we can make sure that our brands are available to customers,” said EABL Managing Director Andrew Cowan.

The change in business tact has further forced the brewer to innovate by switching packaging from a majority bottled products to canned stocks in response to changing consumption partners among customers.

Further to online sales, EABL’s core business is now being undertaken largely by cash and cash outlets including supermarkets and wines & spirits.

The Covid-19 pandemic has further hit out at the company’s extended value chain which includes farmers, aggregators and distributors whose livelihoods are directly linked to regional alcoholic beverage sales.

EABL is expected to take a conservative stance on new spending to preserve cash as the pandemic continues to unfold on it core business.

“One has to revisit their investments and prioritize them accordingly if you are not immediately going to sell at the same level as before,” EABL Chief Finance Officer Risper Ohaga said.

EABL revenues in the year sunk to Ksh.74.9 billion from Ksh.82.5 with sales in Kenya which represent a majority 69 percent of the company’s footprint declining by 14 percent.

In Kenya, the sale of bottled beer and keg marked the greatest decline at 23 and 13 percent respectively while mainstream spirits showed resilience to grow by 2 percent in the period.

The company has subsequently switched to increased borrowings to fund operations as cash generation declines from the shock to sales.

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Story By Kepha Muiruri
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