Herve Milhade, the CEO of BGI Ethiopia, believes he is steering the company toward a more consumer-centric focus. He emphasises that his goal is not to be a leader in paying taxes but to “become the leader in the heart” of consumers. His tenure began as Ethiopia emerged from a bloody and brutal civil war in the North, after the signing of the Pretoria Accord, marking a landmark for the company. Milhade’s appointment coincided with the reopening of BGI Ethiopia’s Raya Brewery in Machew, Tigray Regional State, which had been closed due to the civil war in the North.

Under its French parent company, Castel Group, a stalwart in the African brewery market, the company has seen expansive growth and strategic acquisitions. The Group, a pioneering foreign investor since acquiring St. George, Ethiopia’s oldest brewery, nearly three decades ago, has spent over one billion euros across seven production sites. Its local subsidiary, BGI Ethiopia, is not only one of the notable employers in the economy, with more than 5,000 workers, but also a major taxpayer, contributing billions of Birr annually. The company’s portfolio includes popular brands like Zebidar, Raya, and Meta. It also operates Castel Winery, with a vineyard in Zeway, which was acquired through privatisation in 2012. The winery produces 12,000hctl of wine annually under the Acacia and Rift Valley brands, which complements BGI’s extensive beverage operations.

The company expanded its footprint by acquiring Meta Abo Brewery from the British multinational beverage alcohol company Diageo, cementing its dominance in the beer market, although it has surrendered its market lead to its contender, Heineken Ethiopia. The beer market has been booming but also faced intensifying competition and a shifting regulatory reality. Under Milhade’s watch, BGI focuses on sustainability and reinforces its role as a key economic player. With Meta Abo under its belt, BGI’s production capacity is set to increase from 5.2 million hectoliters to 6.4 million hectoliters. As BGI Ethiopia continues to expand its operations and sharpen its strategies under Milhade’s leadership, the company is determined to reclaim its lead in production and win over the hearts of consumers across Ethiopia and beyond.

In an exclusive interview with Tizita Shewaferaw, our editor-in-chief, Milhade shared his insights on his vision for BGI.

Fortune: In the face of pent-up competition from foreign investments and emerging domestic players, how have you been strategising to reclaim your market lead once was BGI-Ethiopia's forte?

Herve Milhade: We have developed strong products that resonate with consumers. Investing in both production and distribution capacities has been paramount. We have strengthened our brand presence, invested in production tools locally, and optimised our distribution model for efficiency and competitiveness.

Q: Have you overcome constraints in scaling local sourcing? What impact do these programs have on the agricultural sector?

Sourcing raw materials locally, such as malt and maise, is not just our interest — it is also our competitors'. Ensuring the quality of local supplies is crucial, and we have formed strong relationships with our suppliers. However, we recognise the need to invest in and support them to match our production needs. While we are not directly involved in upstream agricultural development, I am open to working with government agencies to have a global outlook and drive positive change in this sector.

Q: What investments and infrastructure upgrades are in store to double production capacity by 2028?

Our ambition is to reclaim market leadership, which is anticipated to experience double-digit growth in the coming years. We aim to double our current production to about 10 million hectolitres. We are investing in our organisation — ensuring we have the right employees with the right skills and behaviour. Through our CSR projects, we plan to extend beyond community initiatives to prioritise the safety of our employees, raise their skills, and provide fair compensation and benefits. Another focus area is the full review of our distribution model. Our products need to be available to all consumers, which requires us to adjust our distribution methods.

The company is committed to investing between 60 million and 100 million euros annually to prepare for this anticipated growth. However, the exact cost of the entire project is difficult to determine at this stage.

Q: What adjustments have you made to your business strategies in response to the recent regulatory changes, such as the increase in excise taxes and restrictions on alcohol advertising?

The excise tax pushes us to localise our supplies. We have always put our energy into localising the brew and packaging. We have adapted our advertising strategies to comply with regulations while maintaining brand visibility.

Q: Would you say it has been a challenge?

Selling beer is always challenging. But the fact that advertising is banned on one medium will not change the whole market because the rules apply to the industry. Through the Ethiopian Brewers Association, we are engaging with the authorities to help us understand the rationale behind and cope with it.

Q: When undergoing a major distribution model change, can you be open about the legal disputes with some of your former agents who are affected? To what degree have the company's business operations and strategic plans been impacted?

We expanded our network to include more than 100 agents, up from 35. While most embraced this change, some chose not to align with our new direction. It is sad that they left the company after many years and joined the competition. But this is the game, and I accept it. I want to build the most efficient team to ensure that our consumers will find our product affordable and available across the country.

Q: What alternative marketing strategies have you adopted?

We have other ways to reach out to our consumers. We have focused on product quality. If someone loves the product, they are likely to return next time. We also have on-site activations to ensure visibility and engagement tailored to consumers, encompassing regional variations and demographics. Leveraging social media platforms allows us to interact directly with them and build brand affinity.

Q: Do you have any plans for geographic or market segment expansion? How do you balance these growth plans with customer satisfaction?

We are currently focused on consolidating our position in the draught beer market, where we are leading. Then, we will expand our offerings in the bottled beer segment, with plans to invest in packaging and production facilities. We aim to grow strategically while upholding our commitment to customer satisfaction. Over the following years, we will probably heavily invest in Meta, the site we recently acquired. It will become the largest within our organisation. We still have some space to increase production capacity in our sites. But eventually, we will have to start from scratch and build a new plant.

Q: Are there plans to introduce automation in your breweries?