“Start Small & Scale Up Strategically.”

KifFlé Yohannes Abebe CEO, Co-Founder & Board Member at Komari Beverage Bottler of Arada (Ethiopia’s FIrst hard seltzer drink)

Kifflé Yohannes Abebe, cofounder and CEO at Komari Beverages, brings over sixteen years of global experience in engineering, project management, and plant operations from the US, Japan, and the UK, including almost ten years in Ethiopia. Kiffle Yohannes, with his strong background in lean manufacturing from Toyota and DIAGEO, is dedicated to implementing data-driven processes and world-class production systems at Komari. He previously worked for renowned brands such as Guinness Draft. His passion for problem-solving and team collaboration drives the company’s mission to create high-quality, locally-produced beverages that resonate with young Ethiopian consumers. In an exclusive interview with EBR’s Eden Teshome, Kifflé shares insights into his journey and the future of Komari.

What was the key insight or market opportunity that led you to cofound Komari Beverages?

The key insight behind Komari Beverages was recognizing a growing demand among young Ethiopian consumers for high-quality, locally produced alcoholic beverages that reflect their tastes and culture. The market was traditionally dominated by a few large players, leaving a gap for products that blend traditional flavours with modern, globally inspired options. We identified this opportunity through two years of extensive market research, engaging thousands of consumers to understand their preferences. This indicated a significant chance to introduce lighter, premium beverages that resonate with local tastes while meeting international standards.

Given Ethiopia’s low per capita alcohol consumption compared to other African countries, what made you confident that there was sufficient demand to justify your USD 29 million investment?

Our confidence in the investment was based on several key factors. Despite Ethiopia’s low per capita alcohol consumption compared to other African countries, our extensive research identified a significant gap in the market that existing beverages, like beer, needed to be more fulfilling. We found that Ethiopian consumers were becoming more adventurous, seeking innovative and refreshing products. We could capture and expand the market by fostering strong brand loyalty and building an effective distribution network.

Can you share the challenges you faced, and how you overcame them?

Establishing Komari was an exciting yet challenging journey. We started as a small group with a vision to transform the Ethiopian beverage market by addressing unmet consumer needs. Extensive research confirmed the demand for our unique offering. One of our major challenges was navigating the complexities of starting a business in Ethiopia, including regulatory hurdles, securing financing and finding suitable land. The COVID-19 pandemic introduced further difficulties in the form of supply chain disruptions, followed by the war in the north. We managed to navigate the challenges without shutting down our plant. Thorough planning was crucial to overcoming these obstacles. We were prepared for worst-case scenarios by establishing backup systems for electricity and logistics. Building strong local relationships and understanding Ethiopian business culture also helped us remain resilient. Looking back, I take pride in our growth. In just a few years, we’ve evolved from an idea to a company competing with global giants, directly and indirectly employing nearly 400 people. Every challenge has only made us stronger.

How did you approach the challenge of building brand awareness and getting consumers to try a new beverage product, especially after TV and radio advertising for Alcohol was banned?

The ban on TV and radio advertising pushed us to be more creative in marketing. We focused on grassroots initiatives such as in-outlet promotions, tasting events, and leveraging social media to reach our target market. Word-of-mouth marketing became crucial, as Ethiopian culture highly values personal recommendations. Additionally, we collaborated with local influencers and community leaders to authentically advocate for our brand.

How much have you localized your product development, marketing, and distribution to cater to Ethiopian consumer preferences?

Localization is central to Komari’s [business strategy]. Our product development began with extensive consumer research to identify flavours, ingredients, and packaging. We prioritize sourcing local ingredients to give our products a distinct Ethiopian character. Our marketing campaigns celebrate Ethiopian culture, traditions, and values. For example, our logo features a rooster, symbolizing freshness and new beginnings, which are familiar to many Ethiopians. We incorporate local languages, imagery, and cultural references to ensure our campaigns are meaningful and relatable to our audience.

How has Ethiopia’s political and economic volatility impacted your business operations and growth plans over the past few years? What steps have you taken to mitigate these challenges?

Political and economic volatility in Ethiopia has posed challenges for our business, including forex shortages, currency fluctuations, supply chain disruptions, and security concerns. To mitigate these risks, we prioritized sourcing locally to reduce our reliance on foreign currency. We implemented thorough supply chain planning to ensure smooth operations and diversify our supplier base. Additionally, we improved our financial planning and risk management strategies while building strong relationships with local communities and stakeholders.We maintain a flexible growth strategy to adapt quickly to the ever changing circumstances.

Can you share some details about Komari’s distribution network and how you ensure the product’s availability across the country?

We’ve established a robust distribution network covering urban and rural areas to ensure our products are accessible nationwide. We partner with reliable local distributors who understand the Ethiopian market and its logistical challenges. To enhance product availability, we’ve invested in supply chain infrastructure, including warehousing and transportation, to maintain a steady flow of our beverages. Additionally, we use data-driven insights to optimize distribution routes and inventory management, ensuring our products are always within customers’ reach.

As an investor, what have been the key factors that have enabled you to navigate Ethiopia’s business landscape successfully?

Navigating Ethiopia’s business landscape requires a deep understanding of the local market, strong relationships, a commitment to long-term growth, and resilience. Key factors in our success include adapting to changing economic and political conditions, building solid partnerships with local stakeholders, and persevering through tough times. We prioritize financial prudence to manage risks while seizing growth opportunities. Our commitment to social responsibility has helped us build goodwill and trust, which is essential to sustain our success.

What lessons have you learned from your experience in the Ethiopian beverage industry that you’ve applied to Komari’s operations?

One key lesson I’ve learned is always to be prepared for anything, especially in Ethiopia’s dynamic market. My experience with Toyota and DIAGEO, [the parent company of Meta Abo Breweries until Castel Group (BGI Ethiopia), acquired it two years ago]; Ethiopia taught me the importance of planning for worst-case scenarios, which shapes our operations at Komari. We ensure resilience by having multiple contingency plans; for example, we rely on the national electric grid but also have backup generators.

Building solid relationships with local stakeholders and engaging with surrounding communities are crucial strategies. What works in other countries only sometimes applies here, so we prioritize having people on the ground who understand local nuances and market demands. Ultimately, success in Ethiopia requires constant adaptation, preparedness, resilience, and respect for local conditions.

Can you share some of Komari’s key performance indicators and growth targets for the next 3-5 years?

Komari has set ambitious growth targets for the next 3-5 years. Remarkably, we were only an idea just seven years ago, and three and a half years ago, we became operational. By diligently following our growth plans, we’ve achieved our current success.

We aim to expand market share, increase distribution reach, and innovate our product offerings. We closely monitor key performance indicators, including sales growth, market penetration, customer satisfaction, and employee engagement. We are also committed to operational efficiency and sustainability, aiming to solidify Komari’s position in the Ethiopian beverage industry.

Given Ethiopia’s large youth population, how are you tailoring your brand and marketing to appeal to younger consumers?

Ethiopia’s youth population is a crucial demographic for us, and we’re tailoring our brand and marketing to resonate with their values and lifestyles. Young consumers seek high-quality products that reflect their identity and aspirations. We leverage digital platforms and social media to engage authentically and reach this audience. Our marketing campaigns are vibrant, innovative, and culturally relevant, tapping into trends that matter to Ethiopian youth. We also invest in experiences such as events, influencer collaborations, and community initiatives. By staying attuned to the youth market, we ensure that Komari remains a brand young Ethiopians are proud to support.

As CEO, what has been your most significant source of pride or satisfaction in building Komari Beverages from the ground up?

Witnessing a group of young, ambitious individuals transform a simple idea into a company that competes with global giants in the local market is a gratifyingsource of pride. In just three and a half years, we’ve become a serious competitor in a dynamic landscape, demonstrating what can be achieved through belief and hard work.

I’m also proud of our impact; by employing around 400 people directly and indirectly, we’re positively affecting the lives of their families and households, along with our distributors and suppliers. It’s exciting to see our product embraced by Ethiopian consumers, knowing we’ve created something that resonates with our people.

What advice would you give aspiring entrepreneurs looking to enter the beverage industry in Ethiopia or similar markets?

Start small and scale up strategically. When we launched Komari, we focused on building a solid foundation through extensive market research to identify a genuine gap.

Choosing the right partners—investors, distributors, and experts is critical. Look for those who share your vision and understand the local challenges. Their support can be invaluable.

Be patient and prepared for challenges, especially in complex markets like Ethiopia. Regulatory hurdles and supply chain issues are also common, so have backup plans.

Above all, stay resilient. The beverage industry is competitive, but focusing on long-term goals can help you create something impactful and lasting. EBR

13th Year  October 2024  No. 134