Kenyan craft brewer African Originals targets East Africa expansion

When Alexandra Chappate, CEO and founder of Kenya-based craft beverage producer African Originals, started working in Africa’s drinks industry in 2015, she was struck by the huge unmet demand for premium locally produced brands.

At the time, she was the head of marketing for Pernod Ricard in West Africa, overseeing global brands like Jameson, Absolut Vodka and Chivas Regal.

“Working for premium brands like Jameson helped me understand that there is an appetite for premium brands in Africa. That said, all these premium brands didn’t have local stories, while local options were very mass market and low-end,” she tells African Business.

“So you have this gap between these really expensive imported products, and these low-end local products that didn’t really build on the story of the local traditions or modern African culture.”

Understanding the market

Chappate says that when she moved to Kenya eight years ago, she saw a similar dynamic at play and decided to seize the opportunity with both hands and launch African Originals. The company produces craft ciders, spirits, tonics, and iced tea under brands including Kenyan Originals, African Originals, and 5.8 Spirits.

“There was an opportunity to create quality, craft products for the Kenyan consumer that celebrated modern Kenyan identity and sat in the sweet spot in terms of cost. So price-wise, we’re not completely like the imported guys, but we’re also not super low-end,” she says during a tour of the company’s 28,000 square-foot production facility in Nairobi’s Baba Dogo industrial zone.

Another key differentiator, she adds, is the company’s decision to manage all its marketing activations in-house in a bid to foster a better understanding of its core target market – young, middle-class Kenyans who are eager to see their identity reflected in the products they consume.

“We do a lot of activations and sampling but we do not use an external agency to do that. It’s all in-house, which means we have some 200 young brand ambassadors working with us. It helps us stay connected with the youth, given our products target the 25-35 year-old demographic,” she notes.

Regional expansion

The business reported that its gross sales were $3m in 2022, $7m in 2023, and $10m in 2024.

“Last year we delivered over 60% revenue growth, though most years we’ve doubled (the company’s topline),” she says.

She says that sustaining this momentum and scaling the business is the main strategic priority. The company is targeting upwards of $12m in revenue by the end of 2025. To achieve this growth, it has partnered with external distributors to expand its reach across Kenya.

“Until July last year we managed 100% of our distribution in-house. Now we have started working with some distributors, so about 70% of our volume is direct while 30% is through partners. Our aim is to achieve a 60-40 split,” she says. “Over a three year horizon” the company hopes to grow its reach in Kenya from sales in 5000 outlets to 20,000 outlets.

The push for scale also involves venturing into new markets like Uganda, Chappate reveals.

“We launched in Uganda in February and have already had reorders…we believe that it’s a really interesting market from a taste profile and palette perspective. There’s also a real party culture there, particularly in Kampala,” she notes.

“We’ve started our regional expansion with Uganda, but we are interested in the wider Sub Saharan Africa market, and particularly East Africa because we feel like that’s where our hub is,” she adds.

Last year, African Originals secured $2m in funding to support its ambitions to expand the business in Kenya and beyond. The funding round was led by Phoenix Beverages, a Mauritius-based brewer. Since its inception, the company has raised roughly $10m.

“I’ve done 11 fund raises in eight years, but we do have one lead investor, Phoenix Beverages. They are the largest beverage company in Mauritius and they have come in as a strategic investor to help us scale, particularly on the manufacturing side. They bring a lot of technical expertise on that side of things,” she says.

“Funding in this market is incredibly difficult for what I’m doing. We are a manufacturing company that is a startup. We’re also in the alcohol space, so we can’t touch any impact funding despite working a lot with smallholder farmers using real fruit in every single product that we produce.”

Competition from giants

With demand for craft beverages surging across Kenya and the wider region, Chappatte believes the company is well placed to maintain its upward momentum. She is, however, not blind to the risks posed by increased competition.

In recent years, large incumbents like East African Breweries Limited (EABL), as well as smaller startups, have launched their own range of craft beverages. Many of these brands compete within the same price range as African Originals’ brands and target the same consumers.

Chappatte, who previously held senior marketing roles at Nestle in Ghana and AB InBev in the UK, believes African Originals’ long-term success in Kenya hinges on capturing the imagination of urban youth.

“The focus has to be on winning the hearts and minds of young Kenyans – the movers, the shakers, the cool kids – who represent modern Kenyan identity,” she says.