Hennessy sees Kenya as growth frontier as cognac sales start | Fin24
  • Data Market Inquiry

    MTN says it is prepared to defend itself before Competition Tribunal over report.

  • Claims of sabotage

    What we know so far about allegations of sabotage at an Eskom power station.

  • Dudu Myeni

    Court dismisses former SAA chiar's bid to have Outa withdraw from delinquency case.


Hennessy sees Kenya as growth frontier as cognac sales start

Jul 26 2017 09:45
Samuel Gebre, Bloomberg

Nairobi - 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, CEO 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.

Kenya was Africa’s second-largest market for luxury goods in 2016, with revenue of about $500m, up 25% from a year earlier, according to a report by New World Wealth, a Johannesburg-based research group.

The country ranked behind South Africa’s $2.3bn 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.

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.

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% 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.”

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter:

kenya  |  luxury  |  retail


Company Snapshot

Voting Booth

How concerned are you about ransomware attacks?

Previous results · Suggest a vote