Malt drink giants take battle for consumers to Uganda

Monday April 19 2010

The Alvaro drink. Photo/ANTHONY KAMAU

The Alvaro drink. Photo/ANTHONY KAMAU 

By SCOLA KAMAU

After a bruising battle for the Kenyan market spanning close to two years, the makers of the malt soft drinks Alvaro and Novida have taken their rivalry to Uganda.

East African Breweries launched the Alvaro drink in Uganda over a year ago, while Coca Cola followed this January with its Novida brand, at a lower price.

Analysts see the unveiling of Novida in Uganda as Coca Cola’s attempt to fight Uganda Breweries Ltd (EABL’s arm in the country) in the soft drinks market.

But Coca Cola East Africa franchise marketing manager, Eric Achola said the company’s decision to venture into the production of malt soft drinks was market research oriented and not to counter the competition.

He said the unveiling of the Novida brand in both the Kenyan and Ugandan markets was part of the company’s global strategic move to meet ever-changing consumer demands, tastes and preferences.

Market gap

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“We identified a gap in the market that showed consumers are constantly looking for new flavours in non-alcoholic malt beverages. The Novida brand will fill this gap,” said Mr Achola.

He added that Uganda is a key market for the company’s brands in East and Central Africa hence the interest there.

“We believe our investment in the country is prudent, and will yield positive returns,” said Mr Achola.

He added that EABL’s presence in the market was not a threat but served a significant purpose in building the Coca Cola brand.

“Competition is important because it keeps you alert and sets the best brands apart. It allows consumers to enjoy both quality and value,” said Mr Achola.

He said the company was seeking ways to build its growing market in Kenya.

“Already we are deploying significant marketing resources to grow our consumer volumes,” he said.

On the other hand, EABL’s director of corporate affairs Ken Kariuki termed the perceived rivalry as an illusion.

“Alvaro is an adult premium non-alcoholic malt drink, the first in this category in the Ugandan market. It is not surprising that it generated a lot of excitement,” Mr Kariuki said.

“Our primary allegiance remains to our consumers. We do not react to competitor trends or actions. We therefore have no plans of ‘competing’ with Coca Cola.”

Mr Kariuki said the Alvaro brand offered consumers the unique option of a high quality malt drink — a market the company was looking to grow.

In April 2008 EABL introduced Alvaro into Kenya and barely three months later, Coca Cola launched Novida.

Soon after, Alvaro passed the test of time when rising public debate over its legitimacy as a non-alcoholic drink moved to the floor of parliament.

This new development affected the sales of the new drink.

The market had known EABL to manufacture alcoholic drinks and therefore did not readily embrace its latest entrant. The competitor’s entry would add to its woes.

However, EABL progressively shed off these challenges to consolidate its market share.

“We have launched Alvaro in Ghana. We shall continue to launch our products where we feel the consumer need is apparent,” said Mr Kariuki.

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