COMPANY PROFILE 254 BREWING

254 Brewing Co: Bold enough to launch a beer business at the height of a pandemic

By Paul Ongeto

The covid-19 period was not a good time to be in the beer business in Africa, much less start one. Governments across the continent shut down bars, restaurants and virtually any entertainment joint to help keep check the spread of the pandemic. These measures were good for public health but spelt doom for the alcoholic beverage industry. Beer took the worst hit as over 70% of its sales came from on-premises trading.

As big beer manufacturers were announcing that they were putting on hold any investments across many parts of Africa and the World, somewhere in a small town in Kenya, a new craft brewing company was being set up by two expatriates who had seen potential in Kenya’s nascent craft beer market. How do you thrive amid a pandemic? That was the question we had in the mind when we had the opportunity to interview Eoin Flinn, the bold entrepreneur behind 254 Brewing Company, Kenya’s newest craft beer company.

A PASSION FOR MANUFACTURING Eoin Flinn, an Irish national who fell in love with Kenya, has always had a passion for manufacturing. Before settling in Kenya, Eoin had a stint in China where he saw firsthand, the impact of manufacturing on the country’s middle class. Coming to Africa, he noticed a problem: unlike China where manufacturing was thriving, in many African economies, we shipped out raw materials and then brought back finished products, often at an expensive price.

He wanted to be part of the solution, and after a stint in manufacturing of cooking stoves (Jikokoa), Eoin’s love for beer got the better of him and he decided to venture into craft brewing. When the idea struck on his mind, he thought that craft brewing was a good business to venture in. Very few craft beer existed, and the market seemed like it was ripe for something different from the mass-produced beer that was similar in taste, lacking in character, and rich in marketing and branding.

On paper, it seemed like good business, a few craft beers such as Sierra, Sirville and Brew Bistro had already set up and seemed to be thriving. What could possibly stop him from conquering this largely untapped market? His experience on the ground, however, proved so daunting that he admitted that he may never have bothered venturing into Kenya’s alcoholic beverage industry if he had known the challenges ahead of him.

THE CHALLENGES OF SETTING UP “It's difficult to make good beer,” admits Flinn. One would need to procure state-of-the-art equipment, have employees with the right skill set, and procure high quality ingredients – often from overseas, he reveals.

He informs us that the team at the brewery noted that if 254 Brewing was going to make a name for itself in the budding craft beer industry, then it had to get everything right from the start. To guarantee high quality beers, the company

KEY NUMBERS

40,000

NUMBER OF LITRES THAT 254 BREWING HAS CAPACITY TO PRODUCE IN A MONTH

managed to recruit a world-class master brewer from the US with over 20 years’ experience in making craft beer. It also got to bring in premium malt from Germany and high-quality hops from the United States, Germany, and Canada. A KSH. 100 million (about US$ 1 million) brewery was also set up in the beautiful slopes of Kikuyu town, which is about 20 kilometers Northwest of Kenya’s capital, Nairobi. With

all the ingredients of making good brew already figured out, Flinn set out to get regulatory approval for his new company and this is where the rubber really got to meet the road.

He quickly found out that in Kenya, for one to make commercial beer, you need an excise sticker. An excise sticker is a sticker by Kenya’s tax authority, Kenya Revenue Authority (KRA), that is put on bottles of every beer that is produced and bottled, regardless of whether it’s sold or not. It shows you are licensed to sell alcohol and have paid the necessary taxes.

Flinn admits that he had projected that the entire compliance process would take at most six months, but it ended up taking much longer. The first step to become compliant was to get his sample product approved by the Kenya Bureau of Standards (KEBS). Once KEBS gave the okay, the next step was to get a manufacturing license from the Kiambu County Government, which he did. With the manufacturing license at hand, 254 Brewing could finally be allowed to apply for an exercise duty license from KRA.

He discloses that it took 254 Brewing 2 years to finally get all the approvals in place. After a long, tedious, and probably stressful journey, 254 (which was conceived in 2018) finally opened its doors in 2020, right in the middle of the pandemic. Amid a dark cloud punctuated by a raging pandemic, Flinn and his team set out to create some of Kenya’s most refined craft beers.

MAKING UNIQUE PREMIUM CRAFT BEERS

Every beer in the world is comprised of barley, water, and hops. How then do you create a premium craft beer that is unique from every other offering that is available in the market?

Flinn reveals that the secret to unique beers lies in the use of diverse types of these same ingredients and combining them in different strengths. For instance, 254 Brewing has been able to produce over 100 different beers from base ingredients comprised of 20 different malts and 30 different types of hops.

Out of the 100 beers that 254 Brewing has created, seven have become especially popular among drinkers; the company has therefore adopted them as its flagship beers. Of these, two lager beer brands Karibrew and Ni How make it to the list of the brewer’s most loved brands.

The lagers are joined on the list by two India Pale Ales (IPAs): Golden Rump (the lighter version) and Sand Trap (the heavier and most popular version). Others on the list are Sambrubru - for those who are new to drinking beer - and Amboseli - an amber ale with balanced character. Cliffhanger, meant for stout lovers completes 254 Brewing’s top 7 list. In addition to the seven standard beers that you are likely to get at the brewery, 254 Brewing also spices up its portfolio every now and then with seasonal beer offerings.

Flinn says that every month, two new seasonal beers are put on the shelves, making sure there is always something new for the adventurous drinker. Flinn is proud that all the company’s beer brands are unpasteurized and unfiltered, and they therefore must be kept cold during the entire value chain – which is a challenge for the company as it seeks to grow its footprint.

SURVIVING THE PANDEMIC

254 Brewing entered the business market amid a pandemic, so how did it manage to stay afloat. Flinn explains that in a normal business environment, craft beer companies only set up front bars or tap rooms at the front of their breweries and serve consumers directly from the source.

These requires no investment in bottling lines or brand labeling. He, however, realized early on into the business that this model was not going to work with Covid-19 restrictions discouraging people from visiting bars.

To stay afloat, 254 embraced a hybrid approach to craft beer production: serving from the tap room while at the same time bottling for take away. The company aggressively pursued an out-ofbar drinking experience leveraging both e-commerce and partnership with other retailers such as Carrefour and Naivas and other e-commerce sites to bring its

Flinn believes that the highly unpredictable business that we are in today requires entrepreneurs to build a resilient business, one that survive different scenarios that could be coming our way in future. It may not be a pandemic, or locust invasion, but it is going to be something that has capacity to cripple businesses that have not put resiliency into their operations. believes that there is a lot of botanicals in Kenya, which they could experiment with in the long run. “As a craft beer company starting off with IPAs

FLINN BELIEVES THAT THE HIGHLY UNPREDICTABLE BUSINESS THAT WE ARE IN TODAY REQUIRES ENTREPRENEURS TO BUILD A RESILIENT BUSINESS, ONE THAT SURVIVE DIFFERENT SCENARIOS THAT COULD BE COMING OUR WAY IN FUTURE.

PRIORITIES FOR THE FUTURE

Having been in the market for a little more than a year now, he believes that 254 Brewing is well on course to revolutionize the craft beer experience in Kenya. As the beer maker looks into the future, Flinn reveals that the team’s major priority will be to utilize the brewer’s installed capacity, which is 40,000 liters per month, from the current 10,000 liters.

The next priority is to develop a sustainable and resilient supply chain for key raw materials. As earlier noted, 254 brewing currently imports its malt and hops from United States, Germany and Canada. Relying on international markets still exposes the company to a lot of supply chain risks and the company wants in the next 2 years to be able to source its materials locally. By bringing the raw materials supply chain into Kenya, the firm also hopes to improve its cost structure and probably lower the cost of its beer.

In the future, Flinn also hopes that the craft beer maker will get better at experimenting with locally sourced traditional yeasts instead of just using Belgium or American yeast. Flinn also and lagers, we believe as time goes on, we can actually make products here in Kenya that blows people’s minds away in America and Europe.”

Flinn confesses that he likes making delicious beer and says he would like to have more of the 254 Brewing tap rooms in other similar towns in Kenya. He is certainly confident that he does not look forward to making pasteurized beer. Entering Kenya’s mass beer market is therefore out of question, at least for as long as he is at the helm of the brewery. The idea is to bring people fresh beer right from the tap and that is what he plans to continue doing.

He adds that he is excited that there is an abundance of new and potential entrants into the craft alcohol industry in Kenya, including gin, rum and other spirits brands. “There is no limitation to the growth and potential of the craft industry in Kenya. There will be good craft spirits in Kenya in the near term: the biggest hindrance at the moment is that it takes a long time to get licenced, with some potential entrants giving up along the way before they get to the end of the process.” FBA