Safaricom has partnered with Diageo’s Kenya Breweries Limited (KBL) to connect its beer refrigerators to the internet. The fridges contain sensors that leverage the internet of things (IoT) and can transmit data on usage patterns and temperature levels.
KBL is a subsidiary of East African Breweries Ltd (EABL), the Nairobi headquartered beer and spirits group that is majority owned by Diageo. Its partnership with Safaricom has seen 2,000 fridges, which are provided free to distributors and retailers, already connected to the internet. In FY2019 Safaricom adding an additional 732 4G sites in Kenya, up 50% year on year. The company now has 63% coverage in Kenya and is aiming to cover every town by the end of 2020.
KBL/EABL distributors can now tell where their fridges are located, if they’re in use or not (i.e. on or off), what temperature they are set at and how many times the door of the fridge is opened. KBL hopes it will improve cost efficiencies, cut delays and limit wastage.
This headline partnership is being used to showcase Safaricom’s IoT capabilities with a view to rolling out more IoT solutions in other industry sectors.
The prospect of greater use of IoT for retail across Africa is a tantalising prospect. Access to electricity is rising, albeit the quality and consistency of provision is still poor in most Subsaharan African countries. Modern grocery retail in most countries is still below 10%, meaning a long tail of retail outlets. These outlets are time and cost intensive to service. When traffic levels were lighter, it was possible for one sales rep to drive the delivery vehicle and take the orders. That is much harder in the many cities where car ownership has risen and kerbside parking spaces are in high demand. It necessitates a second person in the truck, while the driver stays with the vehicle – adding cost and complexity. Out of stocks is a big issue, even in formal retail. IoT offers a means to mitigate the issue.
A second issue is insights. Distributors, in our experience, are poor at insights, preferring to focus on the mechanics of distribution rather than the flow of information back to head office. The prospect of smart refrigerators (which will tend to be used for higher value, more perishable goods), also means better insight on usage patterns, conversion (fridge opens:sales), retailer compliance and more.
IoT in this application won’t work for all product categories. Beer and soft drinks are great candidates for IoT because they are fast moving and realistically distributors can enforce a policy of only their products being stored in the fridge. To that end, conversion rates also help identify where the retailer is not complying with product exclusivity rules – because fridges with non-compliant products in them will likely see a different ratio of opens to sales (of the product that is supposed to be in the fridge exclusively. For dairy products or chocolate, for example, which typically not retailed along with other, competing brands, IoT data may be less useful unless the retailer supplies sales data across all the brands.
