How former EABL staff built a beer distribution empire to rival Karume

If you consume any of East African Breweries products, chances are high are that your favourite tipple was delivered to your bar of choice courtesy of Peter Burugu.

The 68-year-old claims that Bia Tosha, his distributorship company of two decades, handles 12 out of every 100 cases of beer that leave EABL’s Ruaraka factory.

Bia Tosha employs 130 workers and owns a fleet of 30 heavy-duty trucks. Every year, these vehicles supply pubs and restaurants with as much as 2.4 million cases of beer and 20,000 cases of assorted spirits, a haul which last year returned revenues of Sh4.6 billion.

“When the opportunity to do this business presented itself, I thought I was not cut out for it. I am glad I pursued it despite my reservations,” Mr Burugu told Enterprise.

Mr Burugu was until April 1995 an employee of the brewer, rising from an accounts trainee to being in charge of its distribution and logistics department. His career spanned 27 years.

He exited the company through an early retirement plan with a hefty payoff and a tonne of knowledge that would later form the foundation of his distributorship empire.

At the time, the alcohol market in Kenya was experiencing the so-called “beer wars”, pitting his former employer against South African Breweries (SAB) of the Castle Lager brand.

Billionaire businessman Njenga Karume — now deceased — entered into a partnership with SAB, forcing EABL to terminate his contract as its main distributor in Kiambu, occasioning a bruising court battle.

EABL approached Mr Burugu and asked him to take over Mr Karume’s turf. He obliged and registered a new company, Bia Yetu, aptly named as a swipe at their foreign rival.

The entrepreneur received asset financing from a local bank to buy nine trucks while the brewer provided stock on credit for a year.

“For patriotic reasons, I decided to call the company Bia Yetu, meaning “our beer”,” Mr Burugu said while describing the late Karume as his friend.

“Our territory at the time covered the bigger part of Kiambu District expect for Limuru, Githunguri and Gatundu. We were also supplying Dandora and Kariobangi in Eastlands,” he said.

As fate would have it, EABL’s major distributor in the Nairobi West region folded and Mr Burugu bid for the job and secured it, heralding the formation of a new company Bia Tosha.

Requested to merge

The entrepreneur was in 2008 later requested to merge his two firms and release the Kiambu part to another player.

This consolidation saw the distributor’s market grow to include Industrial Area, South C, Upperhill, Hurlingham, Kiserian, Rongai, Juja and as far as Namanga.

After this, Mr Burugu started inculcating professional managerial systems into the business as the father of three prepared to step away from day-to-day running of Bia Tosha.

As 2011 came to an end, he decided to hand over the management baton to his offspring.

“I have a daughter and three sons but it’s my daughter who showed keen interest in running the family business. Today she is charge of Bia Tosha while the boys help me run my real estate firm,” he told the Business Daily.

Anne-Marie Burugu, 42, is now the managing director of Bia Tosha. She reckons the experience her father gained as an EABL insider has been aantageous to the business since he was able to avoid pitfalls that have been the undoing of their competitors.

Ms Burugu, who used to work as a spa manager, said she decided to join the family business in order to set it on a new growth trajectory.

“I saw a lot of opportunities for changing the business in terms of changing technology and changing the calibre of people who were working for the company,” she said during an interview at Bia Tosha’s Industrial Area headquarters.

Ms Burugu lists the Alcoholic Drinks Control (Amendment) Act, 2015 and increased competition from Heineken, Carlsberg, and Keroche Breweries as some of the business’ challenges over the years.

The younger generation, she says, is no longer as patriotic to traditional brands as the older one and they are ready to flirt with new offerings, she notes.

In March, Bia Tosha partnered with EABL to open Berries and Barrels, a high-end liquor store at Yaya Centre, as part of its diversification strategy.

The shop stock brands with retail price tags of Sh4,000 and above, including the John Walker and Sons Odyssey which costs approximately Sh160,000 a bottle.

As the interview neared its end, Mr Burugu jumped in with a question of his own: “Why haven’t you asked me what I do with all the money I make?”

It turns out that the beer vendor, in collaboration with friends and business associates, is building a Sh100 million secondary school for needy children in Kisaju, Kitengela.

The school called Mother of Mercy Education Centre is scheduled to open in January, with the first intake of 60 children already enrolled.

“When God blesses you, you are required to bless others as a show of gratitude. The school is a project I am doing for God,” said Mr Burugu.

Peter Kenneth, the former presidential candidate, will be the patron of the school, which expects to eventually cater to 360 children.

SOURCE: BUSINESS DAILY