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Drinks

Hennessy Sees Kenya As Growth Frontier As Cognac Sales Start

By Steve Wynne-Jones
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Hennessy Sees Kenya As Growth Frontier As Cognac Sales Start

Hennessy, the world’s largest maker of cognac, has started distributing its products in Kenya to tap Africa’s second-largest luxury-goods market.

The company, a unit of Paris-based LVMH, began distributing its products in the Kenyan capital in May and plans to use the city as a hub for regional distribution, Chief Executive Officer Bernard Peillon said in an interview in Nairobi. A bottle of Hennessy cognac retails for as much as 117,000 shillings ($1,127) in the city’s shops, the company said.

“Kenya is a boost market, the next emerging market frontier for us,” Peillon said. The company is targeting “double-digit” sales growth, he said, without specifying targets.

Luxury Goods Market

Kenya was Africa’s second-largest market for luxury goods in 2016, with revenue of about $500 million, up 25 percent from a year earlier, according to a report by New World Wealth, a Johannesburg-based research group. The country ranked behind South Africa’s $2.3 billion market and ahead of Nigeria, it said. Brands like Hennessy are expanding their reach on the continent to tap into growing numbers of middle-class and rich people.

Kenya, where luxury brands including Bentley, Porsche and Rolex are already available, has 9,400 dollar millionaires, the fourth-highest number behind South Africa, Egypt and Nigeria, according to the New World Wealth report.

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About 7,500 new millionaires will emerge over the next decade in the East African nation, the third-fastest pace on the continent after Ethiopia and Mauritius, according to the 2017 Wealth Report compiled by London-based Knight Frank.

Global Reach

Hennessy sells cognac in 140 countries, including South Africa and in Nigeria. While the continent is experiencing double-digit revenue growth, it accounts for less than 10 percent of the global market, Peillon said.

“Our role is to figure out what might happen in the world, to have a vision of what could become of Kenya, and we are positive,” Peillon said. “I am here in Kenya, so it is a clear sign of commitment and of interest.”

News by Bloomberg, edited by ESM. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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