Top wines supplier brews healthy incomeMonday September 19 2016
While in university, Taj Bedi founded The Wine Company simply as a hobby. He was writing a dissertation on Diageo when his research gave him the idea to start a liquor distribution firm.
In his room at the University of Warwick, he came up with a plan and began his operations before his return to Kenya in 2013.
“I was fascinated by how alcohol consumption patterns can actually tell you how a country is evolving economically. I also thought there was a niche for certain products in Kenya that were prevalent elsewhere in the world,” said Taj.
He began by importing premium wines from a family friend in Spain. By the second year of operations, the company had grown its portfolio to represent brands including Laurent Perrier and several other European wines before expanding into spirits.
“We now represent the largest selling whisky brands in the qorld – Officers Choice, Old Monk Rum, Luxardo Liqueurs amongst several other spirit brands,” he said.
The young entrepreneur was initially expected to complete his university education and join the family business. He however saved up his allowance from school and opted to try a new venture.
“I wanted to create my own name by creating something from scratch. It was always important for me to prove to myself that I can start something on my own,” said Taj.
He was faced with the challenge of getting his business off the ground. His father fronted him the seed capital to kick-start the business. His initial plan was to open a bank account and get a loan to get stock and cater for operations, but as an inexperienced young man, he lacked a track record to procure the credit from the bank.
This is not the only challenge he has faced in the course of business. The logistics of importing his merchandise on time is sometimes an uphill task. “I find the current time for clearing shipments and getting the relevant inspections done a very time consuming and frustrating process. I fully support getting the requisite inspections done to ensure the products adhere to all local standards, but I think it should be slightly more structured and methodological to ensure a smooth and timely clearance,” added the entrepreneur.
The local alcohol market has been growing with companies including The Wine Company doubling revenue year on year. This has also raised interest in new investors who have also come into the market making it highly competitive.
The players are forced to be innovative and provide a wide variety of product to keep the consumer interested.
“The main challenge that we are currently facing is ever-increasing competition, especially in the mass-market spirits category. It is not just about selling our product; it’s about selling a lifestyle, an image, an association and an experience. It is not all about being the cheapest in the market, it is about providing a value for money (VFM) experience, giving a high quality product at an affordable price-point,” explained Taj.
Kenyans gulped a total of 12.7 million litres of spirits in 2014 thanks to increased uptake by the low-income and lower-middle income consumers, showed a study by Euromonitor.
Last year, in a single month, the company sold three containers of Officer’s Choice whiskey, targeting the mid-level income consumers. One container packs approximately 15,000 bottles. The firm sold an average of eight containers every month last year.
Scotch Whiskey Association’s (SWA) 2013 statistical report released in November showed that Scotch exports to Kenya stood at £3.37 million (Sh462 million), a 62 per cent increase from £2.08 million (Sh285 million) sold in 2012. The figure was expected to have doubled last year.
Most sales have been of blended whisky but there has been growth in the high-street single-malt whisky.
The growing lifestyle changes of Kenyans have been captured by the entry of new food and drink brands. This has served to boost the market for products considered premium, initially a preserve for the rich.
Even with a ready market, being a young entrepreneur is not an easy task, said Taj. “Now that we have been running for a few years and have a profitable business with staggering growth year-on-year, we are much more confident in obtaining the funding requirements for our regional and value-chain expansion. It’s much easier with the numbers behind you,” he said.
This cannot be said while starting up. Funding is one of the key challenges for startups. “As a young entrepreneur with no track record or tangible assets to offer as collateral, how does one get access to funding? You could have the best idea but you won’t be able to obtain financing for the same,” said Taj adding that the hurdle should be addressed.
This and a lowered cost of business would create a more conducive environment for local enterprise, reducing youth unemployment while growing the productivity of the country.