March 3, 2023
Beer was the hardest hit alcoholic beverage category, dropping by 2 points in the Kasi retail demand index from 0.06 to 0.04 between February 2022 and November 2022.
Kasi Insight’s retail demand index measures consumer demand for retail categories and provides insights on how consumer habits impact demand for various categories. The index ranges from +0.25 to -0.25. An index level close to 0.25 means demand is high as more consumers are looking to purchase, while an index level close to -0.25 means demand is low.
The Kasi Demand Index for Alcoholic Beverages in Kenya in 2022 shows a decline in demand amongst all categories of alcoholic beverages from February 2022 to November 2022. Spirit demand dropped by 1.1 points, from 0.04 to 0.03, and wine demand dropped by 1 point, from 0.06 to 0.05, between February and November 2022. Beer demand, however, dropped by 2 points, from 0.06 to 0.03 between February and November 2022. Overall, demand dropped for all categories between February and June of 2022, but there was a slight uptake in demand again in November 2022 as the holiday season approached. Overall, the demand at the end of the year (November 2022) ended below the demand level at the beginning of the year. This was the case for most categories of alcoholic beverages as well as within most segments of the respondents. Were the demand shifts the same across the alcohol categories?
Beer was the hardest hit alcoholic beverage category, dropping by 2 points—from 0.06 to 0.04—between February 2022 and November 2022. The demand for beer started at 0.06 points in February 2022, followed by a drop (by -3 points) to 0.03 points in June 2022, and finally a slight rebound in demand towards the holiday season (by +1 points), making the demand 0.04 points in November 2022.
However, not all beer brands should be concerned by the drop in demand, as segmentation plays a critical role. While demand amongst low- and mid-earners was lower (at an average level of 0.05 and 0.07, respectively), demand amongst high-earners was healthy (at an average level of 0.25). In fact, demand amongst low-earners actually dropped 3 points from February (0.08) to December (0.05), while demand amongst high-earners rose 2 points from February (0.19) to December (0.21), reaching a high in the summer (+0.36).
One of the key benefits of the demand index is its ability to provide demographic data, allowing beer brands to identify which segments of the population are driving or decreasing the demand for certain products. This information can be used to tailor marketing messages to specific groups of consumers, such as lower or higher income earners, and increase the likelihood of success for marketing campaigns. The demand index can monitor changes in consumer preferences and adjust their product offerings accordingly.
While inflation has been a big driver of the drop in volume in 2022, the impact on alcoholic brands is not one size fits all.
For beer brands, the trend shown for lower and higher-earning respondents suggests that marketing campaigns targeting lower-income earners may be less effective in driving sales, as these consumers may be focused on essential purchases. Brands may need to adjust their marketing messages to appeal more strongly to higher-income earners, who are likely to be more receptive to advertising and more willing to spend money on non-essential items. However, it is important to note that this trend may not hold true in all markets or for all types of beer. Some brands may still have a strong appeal to lower-income earners, and it may still be necessary to develop marketing messages that resonate with this audience while still emphasizing the value proposition of the product.
A beer brand such as Tusker (manufactured by EABL) is likely to see a drop in demand for their products, even at an inexpensive price point, as lower-earning segments are focused on essential spending. However, craft beer brands that do not mass produce but instead sell their products for a possibly higher price point would likely see an increase in demand for their products or no change in 2023.
The Kasi Demand Index can be a valuable tool for brands looking to improve their marketing strategies and increase their revenue in 2023. By using the demand index to analyze past trends and forecast future consumer shopping habits, brands can make informed decisions about how to allocate their resources and develop targeted marketing campaigns that resonate with their desired audience.
Our data intelligence platform can help you gain an in-depth understanding of consumer trends in Africa over time.
Contact our team today to explore how our retail intelligence can empower your decision-making process. Win with confidence with Kasi insights https://www.kasiinsight.com/request-demo/
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