Companies

Bluemoon maker merges with Jack Daniels distributor

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Premium whisky on display at the Crowne Plaza hotel’s Sikia restaurant in Nairobi. PHOTO | FILE

The manufacturer of Bluemoon vodka has announced plans to merge its operations with that of its sister company which holds distribution licences for international brands like Jack Daniels and Famous Grouse.

Africa Spirits, which locally distills and distributes Bluemoon, is set to integrate its business with Wines of The World (WoW), a distributorship company that deals in global wine, champagne, spirit and beer brands.

The two companies, which are owned by businessman Humphrey Kariuki, say the move is meant to enhance efficiency and help them penetrate regional markets.

Details of the plans are contained in letters that WoW has in the past week sent to its international suppliers as well as local retail chains and hotels.

“We have resolved to blend the unique strengths of both WoW and Africa Spirits under a single operational infrastructure and design a new brand strategy to ensure it is optimally positioned ,”a letter by Colas Nursinghas, WoW’s strategy director to Brown-Forman, the American producers of Jack Daniels, reads in part.

“The end result will be a harmonised operational, distribution and marketing entity that shall distribute a wide array of products.”

Other than its flagship Bluemoon brand, Africa Spirits also manufactures and distributes Legend Brandy, Furaha Gin and Furaha Brandy –all of them spirits targeting low-income earners.

WoW on the other hand holds the local distributor license for brands like Jack Daniels, Famous Grouse, Southern Comfort, Barcadi, Monster energy drink, Grey Goose Vodka among several others.

The two companies will after the merger be renamed to WoW! Beverages in an amalgamation process that could lead to job cuts.

The Kenyan liquor market is currently served by players such as local brewer East African Breweries Limited (EABL), Keroche Breweries and South Africa’s SABMiller.

Other smaller local competitors for alcohol consumers’ cash include Viva Global, London Distillers, Nairobi Vintners, United Distillers and Vintners (UDV) and Kenya Wine Agencies Limited (Kwal).

These companies either produce their products locally or enter into franchise contracts with their international marketers/owner to ship them to Kenya.

Unrelenting activity by these companies has led to increased competition characterised by rising marketing spend and new product launches.

In the past few months alone, two international beer brands Carlsberg and Budweiser made their debut locally, exemplifying the rush for young middle class consumers aged between 21 and 45.

“The review was undertaken with a focus on increasing our reach so as to best position ourselves for the emerging opportunities in the regional market,” said Mr Nursinghas.

EABL last year restructured its distribution channels in a bid to lift sales and profits, at a time when its sales grew by just four per cent growth in half year ended December.

Keroche Breweries, which this week commissioned an enhanced factory, is currently hiring 20 sales managers seeking to improve the national reach of its products.

WoW, which began operations in 1992, now seems keen on cashing in on the wide distribution network that its sister company Africa Spirits has forged in the low income category of consumers.