There is no smoke without fire, goes the famous saying. Uganda Breweries Limited (UBL) the company that produces Ngule Lager, last week announced a special promotional offer for all customers in celebration of the Kabaka’s 24th coronation anniversary.
The promotional offer dubbed “Omutanda Agabudde” will see the Ngule beer sold at a special celebratory price of Ugx.1, 500 leading up to the coronation on 31st July.
However, market intelligence reports indicate behind the ‘promotional offer’ is falling sales for Ngule lager.
Reports indicate, the sales of ‘Kabaka’s beer’ has suffered heavily in recent past. This has made heads turn at UBL. Ngule is a Luganda word that means ‘crown’ or ‘reward’.
The beer was launched in January 2016. The beer is the official kingdom beer produced under a partnership between Uganda Breweries and the Buganda Kingdom. The partnership consists of a revenue sharing agreement that is beneficial to both entities.
“In celebration of His Majesty’s coronation anniversary, we announce a special promotional offer of Ugx. 1,500 on Ngule (Up from Ugx. 2000) as a reward to his loyal subjects. Our brands are made to be part of celebratory occasions and we would like to join the people of Buganda to commemorate the Kabaka’s coronation and celebrate this joyous occasion,” said Uganda Breweries Marketing Director, Juliana Kagwa.
Reports indicate, Ngule Beer has suffered at the hands of Nile Breweries Chibuku beer. This, sources say, has forced UBL management to reduce the price of Ngule lager from Ugx. 2000 to Ugx. 1500 under the disguise of commemorating the Kabaka’s coronation.
Ngule was initially sold at Ugx. 1500, before the price was increased to Ugx. 2,000. With the falling sales, UBL management had to find a ‘valid’ reason to reduce the price. Otherwise, price reduction has wider implications.
With the biting economy, it makes sense for the rural beer consumers to opt for Chibuku which is selling at Ugx. 1000 vs Ngule beer which goes for Ugx. 2,000. Ordinarily you get two for one bottle of Ngule lager.
At the same the time, Chibuku has cannibalized NBL’s Eager beer. Cannibalization is where one specie feeds on another specie. In marketing terms, cannibalization means one brand affecting the sales of another brand (s) from the same company.
By launching Ngule beer, UBL had somewhat managed to neutralize Nile Breweries’ Eagle beer which was growing so fast and widening the gap between the two beer companies. The UBL’s Senator was no match.
It is also true Uganda’s economy depends on weather. When the dry season sets in, people in villages [ who consumer much of the beer in Uganda] have no money to spend. They tend to look for cheaper choices-Chibuku has been the perfect choice. Analysts say, over time, it may become impossible for the consumers to change from Chibuku [ to Eagle or Ngule] even when the economy stabilizes.
Chibuku was launched a few years ago, mainly to serve the western Uganda. The success of Chibuku in western region prompted management to extend its reach in other parts of the country. And indeed, the consumers have embraced it. Little did they know; the beer would affect Eager Lager sales.
Now that Chibuku is killing Eager Lager, NBL may have no choice, but limit the fast-growing lager to western region. Meanwhile, Uganda Breweries management is smiling, otherwise, Chibuku has helped to reduce pressure [ from Eagle Lager] on Senator Lager.
However, NBL is not a loser in this game. Analysts say, sometimes it is better to disrupt yourself rather than allowing competition to disrupt you. – In this case NBL brands [ Chibuku and Eager Lager] are competing against each other- not so much loss.
More about the author: Moses Kaketo