Business Daily (Nairobi)
Wanjiru Waithaka
5 June 2008
It is a typical Friday night in a popular pub in Nairobi that is filled to capacity. Suddenly the lights dim and the sound of revving engines fill the air.
A split second later six motorcycles appear, driven by young muscled men. Trendily dressed dancers in hot pants and boots alight from each bike and begin to entertain the patrons accompanied by fireworks and acrobats as young men and women distribute cans of a new energy drink, Burn, from the Coca-Cola Company.
Fifteen minutes later the entire entourage leaves the venue accompanied by two Hummers - the vehicle associated with Kenya's rich and powerful.
These are the scenes that Coca-Cola's East and Central Africa division has been causing on the entertainment scene in Nairobi in upmarket spots such as Tamasha and Alfajiri as it promotes Burn, its new energy drink.
The company has signalled its intent to become the market leader in the energy drinks segment with a marketing budget that industry analysts estimate to be between Sh60-70 million to support the new brand for the next year.
Coca-Cola will be taking on established brands such as GlaxoSmithKline's Lucozade energy and numerous imported brands led by Redbull, Shark, and Bomba, which was launched last year.
Burn will be sold in 250ml slim line cans sporting an orange match flame against a black background.
It is a drink that targets the young-at-heart seeking non-alcoholic refreshment with energy boosting properties and is being marketed under the theme "24 hour intense burn" with its core market in the 20-35 years age set.
The brand has a recommended retail price of Sh100, which compares favourably with the main brands in the market which go for between Sh100 and Sh120 in major supermarkets.
In a departure from its traditional marketing style of flooding the media with advertising, Coca-Cola has chosen a more interactive marketing strategy of direct contact with consumers in order to get feedback on its product.
"Burn is unique and we are using unconventional tactics to promote it such as bar storms," says Janice Kemoli, strategic marketing manager for Coca-Cola East and Central Africa.
"We are dealing with consumers who are very sophisticated and need something exciting and unique to get their attention." There is no TV advertising for the new energy drink and the company is using radio including call-in sessions to get feedback from consumers.
In the last one week, the company has also done street promotions such as placing giant versions of the cans at roundabouts, sales people dishing out free cans to motorists and an interactive session with potential consumers at Rhino Charge, a charity motoring event held in Samburu last weekend.
Analysts say the focus on youth is because they are the highest consumers of energy drinks, which often have sport or celebrity branding. Although largely marketed as products to help boost energy levels after strenuous activity or a long day at work, most people use them to reduce hangover symptoms.
Mass market products
Ms Kemoli says energy drinks are mass market products that attract both rural and urban consumers across different social classes. Research from Euromonitor, however, shows that the beverage market is dominated by carbonated soft drinks which account for 60 per cent of volumes.
The next category with significant volumes is bottled water. Energy drinks, which are classified as functional drinks, only account for a small percentage of the beverage market.
"Energy drinks are still a niche market in Kenya and companies are focusing on the top end of the market, young upcoming professionals who are usually trendsetters.
The idea is to get this group aged 25-35 years to adopt the product and then demand trickles downwards," says Chris Githaiga, head of client service, Millward Brown East Africa, a marketing research firm.
Mr Githaiga says this group is more adventurous and exposed and more willing to try new things compared to older people. They also have disposable income and so can afford these products. "What we're seeing here is what has happened in other developed markets," he says.
This is Coca-Cola's first foray into energy drinks in Kenya. Burn was first introduced in the 2000 Olympics in Australia and is now sold in several countries in Europe, South America and Africa.
In Africa, the brand is in South Africa, Egypt, Morocco and Nigeria. Ms Kemoli says that the introduction of the brand is part of the company's on-going strategy of expanding its product portfolio beyond sparkling soft drinks, taking cognizance of the growing varied needs of its consumers.
Lucozade energy drink
But it is easy to see why the world's largest beverage company with 2007 profits of $5.98 billion (Sh388.7 billion) has jumped into the energy drink market in Kenya. Although volumes are small compared to carbonated soft drinks and bottled water, industry players say energy drinks are a fast growing segment of the beverage market.
"Functional drinks are driving growth in the beverage sector fuelled by increasingly health conscious consumers. This has boosted consumption of four product categories - sports drinks, fruit juices, energy drinks and milk based products," said Reka Rozsa, managing director of Infinite Quest Marketing Limited, the Kenyan franchisee of Bomba Energy, an Austrian company that manufactures a range of energy drinks under the Bomba brand name.
Bomba, which retails at Sh120, is mainly targeted at working professionals in the AB social class. It is sold in 54 countries with the international slogan 'excite your mind.'
Rather than pursue a mass market campaign, Bomba has been using a targeted marketing strategy using radio and magazines and sponsorship of events where professionals meet such as Marketers' Night.
"Energy drinks are a low advertising spend category driven by promotions and availability of the products at retail outlets. Majority of the business is conducted in supermarket and convenience stores," said Sachi Thomas, general manager, GSK consumer healthcare for Eastern Africa in an earlier interview.
Ms Rozsa estimates that the energy drinks market in Kenya is worth three billion shillings. Analysts are, however, not agreed on which products are classified as energy drinks.
Some say that only those products which contain caffeine which stimulates the central nervous system and thus accelerates the heartbeat, and taurine, an amino acid found in the human body which has a detoxicating effect fit the bill.
Others say that an energy drink is determined by consumers not the ingredients and as long as people buy a product to get energy then it fits into the category. "Consumers determine which brands play in this sector. From our research consumers tell us that they take different products to fulfil different needs. A drink can be taken for refreshment or to boost energy.
Need for energy
Burns was designed specifically to target the need for energy," says Ms Kemoli adding that the Coca-Cola Company seeks to be a leader and trendsetter in the fast growing energy drinks market. "Our competitive edge is the Coca-Cola brand which stands for quality and a proven heritage. We have also rolled out an exciting marketing campaign to bring much need vibrancy and excitement into this category," she says.
The stage is therefore set for a heated battle for control of the segment reflecting the fast changing scenario in the larger beverage market where companies have to adapt fast just to stay in the game.
Bomba energy drink
Currently the major companies are diversifying into new areas in the quest for growth. Softa Bottling Company has the Angelweiss range of juices and bottled water. Crown Foods Limited which produces Keringet mineral water is planning to get into soft drinks and Keroche, which until last year was making fortified wines, has gone into beer production. East African Breweries Limited (EABL) recently launched Alvaro, a malt-based non-alcoholic drink, its second foray into this category after launching Malta Guinness in 2004.
The Coca-Cola Company also diversified into bottled water with Dasani in 2004 and later juices with Minute Maid and Appletizer.
The extent to which beverage companies are willing to support their entry into new markets is illustrated by the amount of money poured into these brands. EABL spent over Sh200 million to launch and test market Alvaro in Nairobi and Mombasa. The Coca-Cola Company is reputed to have spent Sh100 million in just a few months when it was launching Dasani into the Kenyan market.
The company swamped the market with advertising for the brand which overtook established brands like Kilimanjaro to become one of the top three bottled water brands in the market. The current estimated marketing spend on Burn - over Sh60 million - therefore fits industry standards for breaking a new product into the beverage market says analysts.
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