After three decades of dominance– Kasapreko remains a juggernaut
It is estimated that about 75 percent of businesses in Ghana fail within the first three years, while those that survive the first three years do not go beyond 10 years. However, over the years, one company that has been able to brace the challenges and gone beyond the 10 years’ threshold is the Kasapreko Company Limited.
From a garage in a quiet neighborhood at Nungua in Ghana’s capital to a world class automated manufacturing firm located off the Spintex road, Kasapreko has journeyed through the years to become one of the leading beverage producers in Ghana and Africa. The company, which was founded three decades ago with just five workers, has now grown to become the number one alcoholic drink producer in the country, directly employing over 1000 people.
Kasapreko’s vision differed from that of other alcoholic drink manufacturers in the country as it identified the increasing sophistication in the consumer; consistency in product taste, quality and packaging, which meant the consumer was spending more on foreign imports and aspired for quality products. This was the mass niche that Kasapreko set out to serve, ensuring that it produced quality drinks at affordable prices for the ordinary Ghanaian. The company rapidly ascended to the leadership position within the Gin market with its “Kasapreko London Dry Gin”, which became the Gin of choice for consumers.
Today, the company boasts of a wide range of products which includes, Alomo Bitters which is the flagship of the company, Alomo Silver, Alomo Gold, Kalahari Bitters, and Opeimu Bitters. The company is also dominant in the whisky market with its K20 whisky, as well as the Gin market with its Kasapreko Gin, K20 Gin, Barman Ginger Gin and Barman Herbal Gin. The company has also ventured into the liquor, brandy and wine sector with its Carnival Strawberry, Kasapreko Brandy, and Kasapreko Alomo Root Wine respectively. Not too distant past, the company entered the water business with its Awake Water and quiet recently, the company also added nonalcoholic beverages to its wide range of products including the royal drinks, the hi5 Choco malt, the superstar multifruit and the Puma soft drink and now the introduction of energy drink into the market with Storm Energy Drink.
As Kasapreko Company Limited marks its 30 years of existence,The Vaultz Magazine caught up with the Founder and Chairman of the Kasapreko Group, Dr. Kwabena Adjei and the Managing Director of the Kasapreko Company Limited, Mr. Richard Adjei to look at how the journey has been so far and the way forward.
The journey so far
In its 30 and counting years of existence, the Kasapreko company has had its own successes and some few challenges. The Managing Director of the company, Mr. Richard Adjei submits in his narration that
“over the past 30years, we’ve been able to bring out a very big brand in Ghana that we are very proud of. Kasapreko that started in a house about 30 years ago is now at least one of the biggest beverage companies in Ghana; if you talk about at least top three, top four beverage companies, Kasapreko is certainly one of them.”
In terms of the local front category, the company is one of the strongest producers of beverages, one which all Ghanaians are proud of. After 30 years of introducing the Kasapreko Gin, it’s still the market leader in the gin market, with Alomo Bitters still the number one bitters in the country after it was first produced 21 years ago. The company now has Awake water which is part of the top four water brands in the country, and the Storm energy, which has so far taken the energy drink by storm to occupy the number two position.
Kasapreko has done quite amazing in terms of its products that it’s put on the Ghanaian market, and also boasts of being the biggest exporter for alcoholic beverages in Ghana. The Kasapreko brand is currently present in Nigeria, Togo, Ivory Coast, Burkina Faso, South Africa, US and some countries in Europe.
“So, I’ll say that the founder, with his philosophy and vision, has really pushed the company to where it is today and going by the slogan of ‘a step beyond excellence’, I believe it has pushed the company to a very high standard,” - Mr. Richard Adjei
As the only local beverage company with an ISO certificate, this has helped open lots of opportunities for the company as it currently sells some of its products in some of the major airlines, hotels, and some of the high-end restaurants around the world.
History of the company
Over 30 years back, Dr. Kwabena Adjei never envisioned that Kasapreko would grow to become such a super brand. At a time when everybody was going into the production of alcoholic beverages, Dr. Adjei also decided to try his luck, although it wasn’t his intention to grow it into such an empire. He saw the production of alcoholic beverage more as a hobby than a business until he returned home one day to find out 25 cartons of his beverage had been sold.
“That day has been a very memorable day in my life and that’s how it started. But, it’s been through creativity that we’ve been able to move it from 25 cartons to now millions of cartons a day,” he disclosed.
He further averred,
“business people are like vultures. We always look at where the money is. So, if everybody is doing alcoholic beverage in Ghana at the time, we all tried our luck. It wasn’t my intention to grow the empire as it is. It started small. I was doing everything in bits and pieces until I saw there was potential in the industry. I then abandoned all other things and focused on what I thought had the prospects. That was how I entered into the manufacturing space.”
With a strong urge to provide customers with quality products through innovation, Dr. Adjei engaged a few friends to find out how Kasapreko could stand out from other beverage producers around that time. He narrated that
“when I entered the industry at the time, about 90 percent of us were putting our products in ‘Key Soap Boxes’ and then we were also all using one flavour called ‘Ducworth’. I began to question the processes of the industry regarding why we were all using one flavour and packaging in ‘Key Soap Boxes’ which apparently wasn’t hygienic for consumption.“So, I tried to turn the situation around. I engaged some few friends, made my own boxes, went to Germany, made my own customized bottles then the thing started growing. After a while I made some few researches and travelled to London to acquire some few things to be added to my flavour (Ducworth) to give it a new sensation and made it a bit distinctive. That was how people started buying Kasapreko’s gin,” Dr. Adjei revealed.
Standardizing the products through Research
Having experienced the rural life and realized how his forefathers chop roots of trees into bottles and added the local spirit ‘akpeteshie’ and consumed it over and over again, Dr. Adjei got a cue from it which set him out into the production of bitters. To be able to produce the drinks without harming the consumers, the founder approached the Centre for Scientific Research into Plant Medicine to explain his idea to them. Initially, he said the idea was declined, but he persisted until he succeeded.
“This is how we started the research process. I funded them to provide me with the right formulation to make the Alomo Bitters. From sources, I still remain the only beverage industry to have conducted such a feat in the whole of the country till date,” he proudly noted.
Continuous investments and innovations
While many Ghanaian businesses tend to relax at the sight of success, Dr. Kwabena Adjei did not let his successes get into his head as he continued to innovate and invest in technology. It is that zeal to continuously innovate which led the company to commission a US$2.6 million state of art machine which is capable of blending all sections of drinks at the press of a button.
Dr. Adjei considers innovation and continuous investment in technology as being the bedrock of the brand, something he said keeps them ahead of competitors.
“The future of this company considers the hygienic nature of its products very paramount. To avoid any human interaction with the processes, the company commissioned about US$2.6million machine which blends all sections of the drinks at the press of the button.
Initial challenges faced by the company
It has not been all rosy through as the 30 years of the company has experienced some challenges. Dr. Adjei highlighted some of the challenges the company had gone through in its 30 years’ journey.
“There have been a lot of ups and downs in the business since we started. We encountered two pertinent challenges along the way which were: accessing funds and market penetration. I didn’t start with any huge capital. In trying to access a loan, I went to about three banks and they all turned me down.“Then I attended a course organized by EMPRETEC, a United Nations programme established by the United Nations Conference on Trade and Development to promote the creation of sustainable, innovative, and internationally competitive small- and medium-sized enterprises. There I met Hon. Alan Kyerematen, who was also a resource person at the event. After the course I explained my situation, and then he advised me that as a small business entity, I shouldn’t go to the foreign banks to secure a loan because they won’t grant it to me. He then advised I go to a local bank and that I did. That’s how I accessed the loan. I used my house as collateral. So accessing funds is a one core challenge I encountered which was then followed by market penetration. I remember going out with some samples to some retailers and my products were rejected. That led me to strategize on how to penetrate the market. And today here we are,” he recounted.
What Kasapreko did differently
When asked about what Kasapreko did differently to succeed, he said
“Kasapreko Company Ltd. is currently exporting a lot of its products not only to West African countries but to South Africa, the United States, Europe, and other places in Southern America. In the West African zone we export to Nigeria, Togo, Burkina Faso, Ivory Coast and these are our strongest markets. What have we done differently? The question begs asking. It is all about quality. One thing we don’t compromise is the quality of our product. We ensure it’s always better than what is on the market and meets the global standard. In order to compete with products in developed countries such as the UK or U.S, the quality will need to match-up to the quality of the manufacturers in such countries and as such we make sure our quality is always top notched. One of our policies has always been “a step beyond excellence” and that’s what we’ve been doing since inception … So quality has been very key to our success on the global stage,”
On how other Ghanaian entrepreneurs could also get their products move beyond the shores of the country, he said they must first visit the countries they intend to do business, study their laws and policies. Afterwards, he said they need to register the product in that country and skew their marketing strategy to suit the country’s terrain.
“The quality of the product also plays a key role in the quest to penetrate that country. The quality should be made to meet the global standard. If all these requirements are met, then the products are ready for the export market. Industrialists should also recognize that countries have their unique needs; so they should be willing to tailor their products to suit the needs of that country,” he cautioned.
Touching on whether there were some specific products and services that thrived outside the shores of this country, he said every single product that is manufactured in this country is worth exporting so far as the quality is of the global standard. He said an industrialist could even consider smaller countries where industrialization is at the barest minimum and almost everything seems to be imported for use. With such countries, he said a Ghanaian industrialist could decide to tailor his manufacturing strategy in Ghana to meet that kind of market.
Being the first Ghanaian business tycoon to have been inducted into the Ernst & Young Entrepreneurs Hall, Dr. Adjei said he was very humbled to receive such an award and be inducted into the Ernst & Young Entrepreneurs Hall of Fame.
“I was elated when I got to Monaco and I saw my name on the screens on the streets and my name being mentioned alongside a Ghanaian music being played to the hearing of the whole world. Such an achievement is very humbling. It propels one to do more especially coming from such a humble beginning. Though I like awards, the best award I can give to myself and recommend for every Ghanaian is the award of ‘Success’,” he stated.
He said he was very proud of himself because he didn’t inherit any money from anyone.
Currently, Dr. Adjei has handed over the companies’ operations to his children including Mr. Richard Adjei to manage the affairs of his various companies. He said
“… I’ve trained and equipped my children to be able to take over and they are currently in charge of the various firms. This I believe will soon be a national celebration for business owners in the country as they shall see successful transition from first generation to second generation as practiced in developed countries.”
No excuses in business
Dr. Adjei advised young entrepreneurs that there were no excuses in business, stating that
“business is like driving a car. When driving, you constantly look forward but you look at the rear mirrors to guide you. So with your passion going forward, at times you have to pause and look around and assess if what you’re doing is right before you continue going. I have a philosophy that when I set my mind on doing something I do it but that does not mean that if I’m falling into a ditch, I have to go on. Wisdom demands I take calculated risk and not all risks and that’s what I do. I dreamt and then gave my dream legs.”
He also indicated that every businessman need to have ideals which would constantly guide him/her along the way.
“Mine includes perseverance, focus and flair for success.”
He believes these were the top three skills and values needed by any entrepreneur to be successful.
“But to be a successful entrepreneur one needs to be financially literate as well. Every successful entrepreneur should know how to grow money, trim fat costs in their business, and know how to plug holes where there are leakages. They should also understand their business models other than that, they’ll be making money and it’ll be going away,” he advised.
Ghana’s Industrial sector
Sharing his thoughts on Ghana’s industrial sector, he said the industrial sector globally had been on the rise with millions of jobs being created in fast growing economies like China, Malaysia, Philippines, Mexico and other emerging economies.
“But over the past few years, Ghana’s Gross Domestic Product (GDP) has grown steadily but the industrial sector has played and continues to play a minimal role. To add to that the manufacturing segment has been experiencing a continuous decline and as such contributes negatively to the economy. The services sector has been the backbone of the economy and that’s quite pitiful because in every economy it’s the manufacturing sector that stimulates the needed growth. We just hope there’ll be new policies that the government will put in place to enhance the activities of the sector.”
He said the one major cause of this situation was sometimes the difficulty in running a factory, which was a major component of any manufacturing company. He said another cause was the inability to put up such huge investments.
“It’s difficult to get the necessary support from the government and that gives the service industry the edge because it’s easy to operate i.e. buy and sell. “The banks on the other hand also contribute to the situation. Rather than support the industries, they choose to support the services sector or trade because they feel it’s less risky. All these, I suppose, are causing the declining state of the industrial sector, most especially the manufacturing. Moreover, some policies, especially increment in taxes on raw materials for operations and excessive taxes on sales, do not also favour a lot of the manufacturing companies and as such affect their operations,” - Dr. Adjei
Need for Ghana to industrialize
Dr. Adjei emphasized that no country in the world had developed without industrialization. He emphasized
“whether it is the USA, China, European countries or Latin America countries, none of them have seen sustained progress only on the back of imports, services or agriculture. Industry is crucial in creating jobs, goods and services. “This country is blessed with numerous resources. We should be able to turn these resources into finished goods by manufacturing our own products. By doing this we limit the amount of imports that come into the country. A lot of benefits are accrued such as checking the foreign currency imbalance, creating more jobs and above all more skills are generated over time,” he said.
Starting the journey to industrialization, the successful business mogul stated that the two biggest impediments to rapid economic growth in Ghana were lack of funds and adequate skills. Therefore, to successfully launch into an industrialized nation, he said the government needs to set aside huge funds to be made available to companies that were willing to manufacture some of the basic products imported.
“If funding is made available at a cheaper rate as compared to that of commercial banks, it will certainly encourage investors to take the risk in manufacturing.“The government can also grant some tax breaks or reduce taxes for the manufacturing companies or put high taxes on imported products that can be produced in the country to deter importers. If the government makes such policies towards importation into the country a bit stricter it will certainly help industrialize the nation. Also more businessmen should be encouraged to take more risks instead of just going into trades or the service industry,” he advised.
He said there were already some good policies in place, but enforcing them was the problem.
“Government should find a way of tracking imitators and deal with them adequately as they tend to destroy the quality of good products and harm genuine investors by churning out inferior products at lesser prices. The Food and Drugs Authority (FDA) should be able to do more in such areas to enforce such policies and it should be able to help the manufacturing companies wither out the bad ones. Putting in place policies, government shouldn’t only focus on the manufacturing sector but needs to even go deeper into the education sector because if manufacturing companies are not getting the right human resources, investors may not even be encouraged to invest,” he noted.
Origin of the brand name ‘Kasapreko’
Commenting on what informed the decision to settle on
‘Kasapreko’ as the name of the company, The Managing Director, Mr. Richard Adjei revealed that Kasapreko basically means ‘speak at once’. He said the company was named after “the chief of Wassa Amenfi at the time. He was called Nana Kasapreko. That’s where my father is from and he named the company after him. Basically, the meaning is a person who ‘speaks at once’ or ‘speaks with authority’ and he wanted Kasapreko to just be like one touch; once you come up with a product and the quality is good, taste is good and price is good; so more or less straight to the point. So, that’s why the name Kasapreko,” he disclosed.
Significant Achievements– from a spirit company to a total beverage company
Unarguably, Kasapreko Company Ltd. can pride itself on so many successes it has chalked over the last 30 years. The Managing Director in his narration submitted that
“for a Ghanaian company to operate in the past 30years, it shows that we have quite a large base of loyal consumers. So, I’ll say that we are a loved brand; one of the brands in Ghana that consumers do remember and do purchase our products. We are very proud to have lasted for 30 years and having the loyalty of our consumers.Some of the successes that we’ve been able to chalk, earlier as I said, we are the number one exporter of alcoholic beverages in Ghana; we have been able to commercialize the bitters industry– we are the first to launch bitters on a commercial basis; there are a couple of awards that we’ve also won,” he made known.
The company was also adjudged the largest tax payer for an indigenous company in Ghana for the past two years, with their flagship brand ‘Alomo bitters’ winning several awards.
“We have also been able to build a new factory under the 1D1F in Kumasi. So, these are some of successes I can say that we’ve chalked. Over the past years, we’ve been able to transition from a spirit company to a total beverage company; now we are doing soft drinks and water. We are also the registered franchise owners for distilled brands which includes Savannah, Hunters, Amarula and Nederburg in Ghana and even Savannah and Hunters, we are the franchise owners for their West African market other than Nigeria. So, we are proud of some of these achievements,” - Mr. Adjei
The new product front– Wine and beer
Considering the company’s insatiable quest for innovation and satisfying its diverse consumers, the company has risen to the occasion by venturing into the beer market to meet the growing need of consumers by producing its own beer called the “freedom beer”.
To add to its wide range of products, the company is now
“the franchise owners of distilled brands which includes Nederburg sweet wine and Amarula in Ghana and currently producing Savannah Cider and Hunter’s Cider in-house,” Mr. Adjei averred.
Channels of distribution and market positioning
Every company’s chain of businesses or intermediaries through which its product or service passes until it reaches the final buyer or end consumer is very significant to the company’s success. As such, at Kasapreko, products are “distributed through distributors to wholesalers to retailers and (or) consumers,” reveals the M.D. The company also distributes to some of the supermarkets such as Shoprite, Game, Palace, Melcom, Max Mart. Another channel is also the hotels and the petrol forecourts; fuel stations including Goil, Shell and Total.
The company also considers solidifying its position on the market as such Mr. Adjei asserted that quality was very key.
“Making sure your products are affordable is also key and also making sure you’re innovative. As a company, every year or very six months, we try to come up with products that the consumers will like and enjoy. So, innovation is key in making sure you are coming up with innovative products; that’s the way to stay on top and making the market more exciting,” he added.
Impact of Covid on business
It has become a constant sing-along now where most folks punctuate their sentences with the catchphrase of COVID-19 in all its negative connotations as they allude its impact to their plans, businesses and visions. While others are defiantly resisting its toll on their businesses, others have succumbed to the virus’ whims. The current state of fragility of economic development and progress has the pandemic’s paw print on most entrepreneurial ventures.
The corona virus pandemic has affected the global economy and businesses across the world and Kasapreko Company Ltd is no exception. The managing director revealed that the pandemic has resulted in a slow-down in sales.
“Sales were low because there was no one out there, especially no hawking and now that there’s no funeral, the bars are closed, schools have closed; consumption of drinks have generally gone down,” he lamented. This, he said has led to the reduction in the volumes of drinks produced by the company.
He also disclosed that the company’s exports have also been affected due to the closing of borders.
So, I think COVID-19 has affected us in a way and some of us, we have some obligation to make. We have bought some machines that we still have some amount to pay on a monthly basis and even though we are not producing, we still have to pay and that has brought a strain on our cash flow.”
He said the company was, however, confident that things will get better when the borders finally open and business return to usual.
In the midst of the pandemic, the company however, also identified an opportunity. With hand sanitizers being in demand all over the world, the company ventured into the production of sanitizers at a period when the product was very difficult to lay hands on in the Ghanaian market.
“We launched our sanitizers and it’s doing quite well on the market. That’s one good thing that has happened,” in the midst of the pandemic according to Mr. Adjei.
Effects of COVID-19 on the manufacturing sector
Undoubtedly, the pandemic has affected every sector of the economy as a whole including the manufacturing sector. Mr. Adjei analyzing the impact on the sector said
“as a whole, it has affected the manufacturing industry on a large scale. For some of us, with the borders closed, there are some equipment that needs to come in which haven’t been able to.“The global supply in general have been affected largely. So, now when you buy goods some people are not getting shipment, and those that are getting shipment; formerly two weeks are now taking eight weeks, prices of supplies have gone up, especially for us, on alcohol and other stuffs that we import into the country have gone up drastically. So, the global supplies in general have been affected and certainly it will affect manufacturers over here,” he explained.
The ‘new normal’– Innovating in the amidst of COVID-19
Kasapreko, among few global firms, innovated their operations in the midst COVID-19. Considering the outbreak of the pandemic, many manufacturing firms took hold of the opportunities available to produce various products required for the fight against the coronavirus.
Kasapreko, notwithstanding, joined the race by repositioning its operations to meet the ‘new normal’ the pandemic presents by producing hand sanitizers. Also, considering this same new normal, the company now undertakes “more online marketing and doing more telemarketing and will also soon introduce a healthier fruit juice unto the market. We have seen that over the past few months, our ‘Juice one’, which contain some vitamins has gone up in sales a lot. So, we intend to come up with more products that boost the immune system within the market space. That’s our general plans in terms of the near future,” The MD hinted.
“So, for us, one; we want to drive more products that boosts the immune system; two, we want to continue to sell our sanitizers to help in terms of hygiene– normal hygiene needs within the country and also to drive more online sales. So, if you have to stay in the house, if you are no more going out, you buy more things on the internet through the phone or phone app; that’s the direction as a company,” he added.
Mr. Adjei also noted that the company was currently in talks with its bankers and suppliers to give them more leeway in the wake of the pandemic.
Flaws exposed by the pandemic in the manufacturing sector
The Kasapreko Managing Director pointed out that the pandemic has exposed how dependent Ghanaian companies are on imported materials for production. “… as manufacturers we need to look more inland on how we get our raw materials; there have to be more companies that are in Ghana that produces some of these raw materials.
“For us, as an example, there’s nowhere to get resin in Ghana for our bottles. So in manufacturing, we need to domestically produce the needed raw materials. Especially, in my sector, we are looking at bottles, we are looking at alcohol itself, we are looking at resin– which we use for plastic bottles. These are some main areas and we need to look at sugar– more sugars are imported into Ghana even though we have the Komenda sugar factory; it’s not able to produce the volume that the company needs. So, these are some things that have affected us for the past two months,” he expatiated.
Technology disruption has become the new norm in the global business landscape. Companies are constantly inclining their operations with the latest technological advancement in their industry. Kasapreko, moreover acknowledging the import of technology is also leveraging technology to boost its business operations. Expounding the company’s technology leverage, the MD stated “for us, …, we are using SAP which is an enterprise resource which is managing our end to end plants– from manufacturing to production and to delivery.
“So, we are using SAP. We also have a lot of automated machinery; if you come to our plants, you’ll not see people filling the bottles with their hands, and it’s all automated. For our blending, we have a totally automated blending facility and then bottling facility. So, everything is automated and running at a very high speed.
“In terms of sales, we are now trying to merge the distributors and retailers to our online system; that’s if you have a bar, or shop and you need one of our products, you just go on our app and you select the product that you need and it’ll reflect in our system, we check it and deliver to you within the next 48 hours. So these are some areas we are trying to use technology,” he revealed.
Key challenges bedeviling the company’s operations
Doing business in Ghana comes with its own challenges and these are some of the concerns confronting business players. Kasapreko, like any other company, experiences various forms of challenges. Highlighting some of the challenges the company experiences, the managing director noted that its major challenge was the instability of the Ghanaian currency. This he said “for a lot of our importation, we are paying in foreign currencies; let’s say US dollars. But with our currency, every year it’s depreciating and our production keeps going high, whiles a lot of our clients are not able to bear the total cost. So, currency fluctuation is the main issue that we have as a company, because we are not able to get a lot of our raw materials in Ghana.
“You import something today, the dollar is five cedis so your cost is five cedis, but you import the same thing within a few months i.e. three or four months your cost is now five cedis fifty pesewas. And every time your margins are being reduced and these are some of the issues,” he lamented.
Another challenge he bemoaned was the cost of funding.
“Over the last few years, the government has done well to reduce the cost of funding and we hope that it will be reduced more in order to keep businesses going for us here in Ghana. There are a lot of other countries outside Ghana that the cost of funding is 3% to 4% but here we are still looking at a double digit 15%, 16% and even some above 20%,” he cried out.
What the future holds
After 30 years of being in business, Mr. Adjei, said the main aim of the company was to become the biggest beverage company in Ghana.
“We want to be ahead of other locals, that’s our main goal. Future, for us we are looking to enter the beer market. As I said, we’ve just launched our beer, which is called freedom beer so we are looking to compete in the beer space in the next five years.“There are basically only two beer brands in Ghana, so we hope that in the next five years we will become the biggest share player within the beer space. We also look forward to become the number one produced water and soft drinks in the next five years taking on the bigger performing companies and bigger water companies as well. We are already the number one in spirit drinks and we plan to maintain the leadership position as well as bring up new products within the market,” he assured.
Appreciation to staff and consumers
The Managing Director expressed his appreciation to the staff of the company and consumers of the various products for the continuous support accorded them. He said “I will just say thank you to our consumers mainly. They are the backbone of the company; without them, we wouldn’t be here. So, we thank them for trusting in us, consuming our products. Then, they should certainly be expecting much from us.
“To our employees as well, we would also like to say thank you. They’ve also been very helpful to grow the company to date, especially the employees that have been with us for over 25years, they’ve been very loyal from the beginning.“To readers, keep reading about Kasapreko and looking forward to some of our new brands. I hope that every Ghanaian is able to buy a product from Kasapreko in the future,” Mr. Richard Adjei concluded.