Heineken Ethiopia – Brewing for the Future
When Heineken entered Ethiopia’s beverage sector it made a huge impact on the market, but an even bigger impact on local communities.
Heineken joined the Ethiopian beer market in 2011, through the acquisition of two government-owned breweries operating in Ethiopia. Since then, the brand has been operating across three locations, one in the east Harar Region, and the second in Bedele, in the west of Ethiopia, and the third at Addis Ababa, the capital city of Ethiopia. In 2015 Heineken inaugurated its latest state-of-the-art brewery and since then it has continued to expand and invest in the country.
“We have a strong portfolio in Ethiopia. On top of the Heineken brand, which we locally produce, we also have exclusive Ethiopian products,” explains Mekdes Sahlemariam, Legal and CA Director for Heineken Ethiopia. “We have a large portfolio of brands including premium products, mainstream products, and economy brands. So that makes us unique in Ethiopia.”
Since Heineken joined the Ethiopian market, its volumes have been increasing year-on-year and the company is very happy with the growth it has experienced, but the market also offers unique challenges.
“Since 2019 the government has introduced a dark market,” Sahlemariam tells us. “That means no TV, radio or billboard advertisements. It had an impact on our volume and the predictability of loads. The excise tax loan also had an impact on our portfolio due to a 300% adjustment which had an impact in 2020 at the same time as the first case of coronavirus was reported in Ethiopia. So, we’ve been measuring the impacts of these issues on the whole industry.”
She also points to challenges caused by materials shortages in Ethiopia.
“We’ve been very import-dependent in terms of packaging materials, so that creates delays for production,” Sahlemariam points out.
In response, Heineken Ethiopia has learned to adapt, creating new practices and solutions to navigate the challenges of the market.
“Since 2019 we had to learn to be agile in the sense that we had to create opportunities for ourselves. Internet penetration is very low here but we had to move into social media,” Sahlemariam says. “That’s slowly catching. We also drove in-bar activations, created more awareness around our products and our corporate social responsibility. These are the platforms we use to talk about our products and give back to the community.”
For Heineken Ethiopia CSR is not just about public relations, it is about how it invests in and supports the country it has made its home.
“We are more than a business because we really value the impact we make on our communities,” Sahlemariam tells us. “We’ve been recognised by the government as a platinum taxpayer for the last three years. Heineken is the second highest taxpayer in Ethiopia.”
Heineken’s investment in Ethiopia goes beyond simply paying its taxes, however.
“One of the biggest projects we have launched since 2013 is a project called ‘Create’. It’s a local sourcing project for barley, a commonly imported ingredient in our beer,” Sahlemariam says. “Through ‘Create’ we work directly with 50,000 farmers to grow our Heineken barley varieties and their yields are much higher now.”
Barley yields among farms in the project have increased from 2.4 tons per hectare to 5.1 tons per hectare. The project allows farmers to improve their livelihoods, send their children to school, build warehouses and move from being smallholders to aggregators while allowing Heineken Ethiopia to source its barley locally.
“This project has also attracted others to come into Ethiopia and invest because of the business opportunities created by it,” Sahlemariam says proudly. “We will keep doing this for an additional three years. It is one of the projects we are most proud of, something that is making a great impact in the lives of our farmers.”
At the same time, Heineken Ethiopia has been providing shelter products. 20% of Ethiopia’s population live in slum areas, so the need is urgent.
“We grow with the area and the community so we need to invest in sustainable projects and give back to our communities,” Sahlemariam says. “We use the word ‘Darash’, which means a person who will be there in a time of need and support the community. So far that project has helped 53 households, building houses for community members. We intend to continue this next year as a continuous project, in partnership with the Heineken Africa Foundation.”
Heineken Ethiopia has also been instrumental in Ethiopia’s response to Covid-19.
“Depending on the needs of the government we provide immediate support in terms of Covid responses,” explains Sahlemariam. “We used an additional 350,000 euros to fund a lot of projects to protect our community from Covid.”
Meanwhile, on the environmental side of things Heineken Ethiopia puts water back into the ground for every bottle of beer it produces, planting trees and replenishing water sources.
“We’re very much focused on ensuring we have the right wastewater treatments,” Sahlemariam assures us.
This is all carried by Heineken’s dedicated and well-trained staff.
“In terms of how we recruit employees, the best programme we have is when fresh graduates are graduating from universities we go on a roadshow or tour of different universities and bring them into our business through our management training programmes,” Sahlemariam says. “Working with the education system and matching it with the needs of the company is always a challenge but we have a lot of training available within Heineken, so we have onboarding training for people joining the company.”
It is not hard to see the huge positive impact Heineken Ethiopia has already had on the country, but talking to Sahlemariam it is clear she sees big things in the future of the company.
“Our ambition is currently our market share the second market share in Ethiopia, and our ambition is to be the leader in terms of volume value and impact we make on our communities,” she says. “Everything we do is towards that goal, in terms of creating excitement for our consumers and creating that balance of business and community impact.”