With every Rwandan drinking at least 7.5 litres of alcohol annually, a second player in the alcohol industry is to start next year, a step expected to open up the market further to competition and give consumers more options to choose from.
The new brewery—Brasserie des Mille Collines (BMC)—will have a capacity to produce about 1.5 million litres of malt beer annually.
The new player comes in at a time when Rwanda’s alcohol industry has been conservatively dominated by Rwanda Breweries and soft drink manufacturers (BRALIRWA), which has restricted consumers to only one local brand—Primus for 50 years of its existence.
Francis Gatare, director general of Rwanda Investment and Export Promotion Agency (Riepa) says Rwandans need a new player in the market because there are many imported beverages which means there is a demand for choice.
“When you have lots of imports on the shelves, and people are buying them, it’s telling you something,” he said. “For me, what I see is an opportunity for an investor to set up in the country instead of continuing to import these products.
By reading the market, I say we need a second, we need a third brewery and the market is ready.”
Gatare is right. With limited choice to choose the upper market is consuming foreign brands including Amstel, Mutzing, Heineken and Guinness distributed and manufactured by Bralirwa.
The Riepa boss believes in choice. He said customers are motivated by having alternatives with lower prices and attracted to different brands for a number of reasons.
“Human behaviour, affluence, exposure to different brands by traveling—then you get some kind of loyalty,” he said. “It’s people responding to all the different market stimuli that make them try other brands, it’s purely market.”
Information from Rwanda Revenue Authority indicates that because Rwandans are craving for variety, people at border areas in Rwanda consume beer and spirits from neighbouring countries. And some of the beers especially, from Uganda, are smuggled into the country.
The news about a second player in the beer industry is sending shockwaves among managers of Bralirwa, a Heineken company controlling more than 95 per cent of the beer market in the country.
Door Platenga, the managing director says, “A new brewery with new brands will definitely shake up the market a bit. And consumers will be curious what the new brands are all about. It is uncertain how it will affect our brands. It’s up to the consumers to decide that.”
Now she is asking for a level playing field in a liberalised beer industry her company has monopolized.
Platenga however is confident her brands are competitive. “Primus has made a fantastic image improvement. Bralirwa’s latest research figures show that it’s a true national pride of Rwanda,” she says.
The research describes Mutzig as “a runaway success over the past 15 years.” Amstel, Guinness and Heineken are famous allover the world and do well in Rwanda.
“I have the full confidence our brands will be strong enough to keep the loyal consumers we have built over time, but again let the consumer decide,” Platenga says.
The Rwanda soda and beer consumption market is growing. The production of both soft drinks and beers has steadily increased, with January to July this year registering the highest production.
According to statistics from Bralirwa the consumption of both soda and beers has increased from 107 million litres to 120 million litres as of July this year—7.8 millions litres of which were alcohol.
“Our volumes are up with 24 per cent increase compared to the volumes of 2007,” Platenga said.
She attributes the increasing of consumption of her products to the growing economy. According to Platenga, people have more money to spend compared to last year. Data from the central bank shows that the GDP is growing at 6.5 per cent.
She said 60 per cent of her products have market in up country stations. To position the company as a leading beer and soda supplier, management of Bralirwa has invested $65 million (Frw38.2 billion) over several years to upgrade the factory.
The fermenting and bottling capacity in Gisenyi have been upgraded with a capacity to produce 30,000 bottles per hour instead of 20,000 bottles.
“These investments should be able to increase our production with more than 30 per cent. The five new fermentation tanks are now ready so we will see the benefits of that mid August and the bottling line is already running with good line efficiency,” Platenga said.