Report Coverage
The report on the Ethiopian beverages industry investigates the local beverages market, recent developments and factors influencing the success of the formal industry. The report profiles 16 companies including Moha, which with market share of approximately 52%, dominates Ethiopia’s multi-million dollar carbonated soft drinks market. Also profiled are BGI Ethiopia, the leading player in the beer brewing segment with annual production capacity of 3 million hectolitres and the country’s largest wine producer, Awash Winery Share Company.
Introduction
This report focuses on the beverages industry in Africa’s oldest independent nation, the Federal Democratic Republic of Ethiopia. With a population of over 102 million people, the country is the second most populous in Africa and represents a largely untapped consumer market. In recent years robust economic growth has largely been driven by the Ethiopian government’s progressive economic reforms that seek to transform the “African Lion” into the largest manufacturing hub on the continent by 2025. During the past five years foreign companies have made substantial investments in the Ethiopian beverages industry and several manufacturers have expanded their installed capacity in an effort to meet growing demand. However, despite Ethiopia’s substantial potential, doing business in the Horn of Africa nation is not without its challenges, not least of which is the recent outbreak of political violence, which prompted Prime Minister Hailemariam Desalegn’s administration to declare of a nationwide State of Emergency.
Strengths
• Over the past decade, the Ethiopian beverages industry has expanded exponentially to meet growing demand.
• Several leading multinational companies are represented in the market through local subsidiaries.
• The Ethiopian government offers various incentives to encourage investment in the country’s manufacturing sector.
• The industry has upstream and downstream linkages to numerous industries and provides several million job opportunities across the value chain.
Weaknesses
• Businesses are negatively affected by institutionalised bureaucratic inefficiencies and corruption.
• Foreign currency restrictions result in payment delays to foreign suppliers.
• Production costs are high, largely due to the frequent water and power interruptions, which impact on production, as well as the poor transport network, which drives up distribution costs.
• The industry relies heavily on imported inputs.
• There is a shortage of modern retail space.
• There is a shortage of skilled labour, notably professionals with technical expertise.
Opportunities
• All segments of the Ethiopian beverages industry offer significant export potential.
• Development of the local wine industry.
• Ethiopia is the second most populous country in Africa and offers a largely untapped consumer market.
• Rising urbanisation continues to support growing consumerism.
• The country’s rising middle-class is becoming increasingly brand-aware
• The migration of consumers from home brews and other traditional drinks to low-cost mainstream brands.
Threats
• An increase in extortion, smuggling and bootlegging activities.
• Climate change and adverse weather conditions, notably droughts and floods.
• Geopolitical conflict.
• The escalation of political violence and further destabilisation of the country.
• The weakening of both domestic and global financial markets and a sustained decline in commodity prices.
Outlook
With people migrating to Ethiopia’s urban centres in growing numbers, analysts predict that demand for both non-alcoholic and alcoholic beverages will increase exponentially. Although recent investments in installed capacity expansion in the sector allow for increased production, some stakeholders fear that output could be constrained by supply challenges linked to the ongoing political turmoil in the country. While many stakeholders in the agro-processing industry believe that the imposition of a national State of Emergency is the only viable solution to the current crisis, others have condemned the government’s response. Notwithstanding its favourable demographics, sound macroeconomic policies and more than a decade of robust growth, some analysts warn that Ethiopia’s ambitions of becoming the largest manufacturing hub in Africa by 2025 could be in jeopardy if the incumbent political administration fails to address the grievances of its nation.
The Beverages Industry in Ethiopia
2016
Full Report
R 1 900.00(ZAR) estimated $106.03 (USD)*
Industry Landscape
R 1 330.00(ZAR) estimated $ 74.22 (USD)*
Table of Contents
[ Close ]| PAGE | ||
|---|---|---|
| 1. | INTRODUCTION | 1 |
| 2. | DESCRIPTION OF THE INDUSTRY | 1 |
| 2.1. | Industry Value Chain | 4 |
| 2.2. | Geographic Position | 6 |
| 3. | SIZE OF THE INDUSTRY | 8 |
| 4. | STATE OF THE INDUSTRY | 10 |
| 4.1. | Local | 10 |
| 4.1.1. | Corporate Actions | 15 |
| 4.1.2. | Regulations | 17 |
| 4.1.3. | Enterprise Development and Socio- Economic Development | 19 |
| 4.2. | Continental | 19 |
| 4.3. | International | 22 |
| 5. | INFLUENCING FACTORS | 26 |
| 5.1. | Economic Environment | 26 |
| 5.2. | Government Interventions | 27 |
| 5.3. | Socio-Political and Socio-Economic Environment | 27 |
| 5.4. | Socio-Cultural Environment | 28 |
| 5.5. | Rising Input Costs | 29 |
| 5.6. | Technology, Research and Development (R&D) and Innovation | 29 |
| 5.7. | Environmental Concerns | 31 |
| 5.8. | Labour | 32 |
| 5.9. | Cyclicality | 33 |
| 5.10. | Branding, Advertising and Marketing | 33 |
| 5.11. | Informal and Illegal Trade | 34 |
| 5.12. | Health and Safety Concerns | 34 |
| 6. | COMPETITION | 34 |
| 6.1. | Barriers to Entry | 36 |
| 7. | SWOT ANALYSIS | 36 |
| 8. | OUTLOOK | 37 |
| 9. | INDUSTRY ASSOCIATIONS AND ORGANISATIONS | 38 |
| 10. | REFERENCES | 39 |
| 10.1. | Publications | 39 |
| 10.2. | Websites | 40 |
| COMPANY PROFILES | 42 | |
| AWASH WINERY SHARE COMPANY | 42 | |
| BALE ZAF ALCOHOL & LIQUORS FACTORY PLC | 44 | |
| BGI ETHIOPIA PLC | 45 | |
| COCA-COLA BEVERAGES AFRICA (PTY) LTD | 47 | |
| DASHEN BREWERY S.C. | 49 | |
| DESTA ALCOHOL AND LIQUORS FACTORY PLC | 51 | |
| ETHIOPIAN TRADING ENTERPRISE | 52 | |
| FANTU SUPERMARKET | 54 | |
| HABESHA BREWERIES S.C. | 56 | |
| HEINEKEN BREWERIES S.C. | 57 | |
| META ABO BREWERY S.C. | 59 | |
| MOHA SOFT DRINKS INDUSTRY S.C. | 60 | |
| NATIONAL ALCOHOL AND LIQUOR FACTORY | 62 | |
| NOVIS PLC | 64 | |
| ORIGIN INVESTMENT PLC | 66 | |
| YES BRANDS FOOD & BEVERAGES PLC | 67 |
