• Saturday, March 02, 2024
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Nigeria’s beer industry: Growth, market share and value


Industry reports indicate that the beer industry recorded a marked decline in growth as in the third quarter of 2013, as pressure on household incomes and heightened security concerns affected consumption patterns.

The revolution taking place in the Nigerian beer market is however hitting real hard on premium brands and if the trend continues, the brands may have to shrink in size and stature, forcing everyone to play at the low end. To prevent this slide, the brands have embarked on series of innovative marketing activities.

Even as Western beer consumption has slowed down due to the global downturn, Nigeria has the second largest beer market in Africa, after South Africa. And with the largest population in Africa, a growing middle class and a large number of drinking-age consumers, the brewing multinationals are jockeying for positions in a market that shows plenty of room for expansion.

The beer market in Nigeria grew in value by 21.8% in 2009, making it worth USD2.7 billion. And since Nigerians consume just 10 litres of beer per head of population, the market has plenty of room for expansion. Analysts projected an average annual growth of 23.45% between 2011 and 2014. Because alcoholic beverage consumption is a social activity in Nigeria, so 80% of the country’s alcohol sales are on-trade. Beer is the most popular alcoholic drink in the country, making up about 96% of all alcohol sales.

The three big operators in Nigeria’s beer sector, which are among the biggest global operators in the sector are on their wits end to ensure that they maintain, if not improve on, their market share. Nigerian Breweries Plc, Guinness Nigeria Plc and SAB Miller are making sure that they supply enough of their various brands. Apparently, Beer is a very big business in Nigeria, and it is growing all the time. It is said to have been expanding at 10 per cent per annum for some time now. The average per capita beer consumption is still only 10 litres a year, a sixth of the rate in South Africa, meaning the potential for growth remains huge, especially given that Nigeria has a population of about 170m people. The brand-conscious middle class is swelling, and it is this demography that the three big global operators are targeting with aspirational drinks such as Heineken, available in magnum-size bottles in Nigeria, and Guinness, which sells in greater quantities in the West African country than anywhere else, including Ireland. The less affluent Nigerians, who have limited disposable income, also represent a potentially lucrative market because of their numbers, and are the target market for the cheaper brands of beer.

The competition between these three giants is intense and highly exciting especially to market watchers. The sixty or more years old NB parades  strong brands of beer and other drinks namely, Star, Gulder, Heineken, Maltina, Amstel Malta, Fayroux, Climax, Goldberg, Malta Gold and Life. Last year, the company unveiled a new look Star, thereby deepening its market penetration strategy. It also reintroduced Life larger beer to Onitsha as a response for the SAB Miller incursion in the South-East geopolitical zone. The company is not leaving any stone unturned in its bid to maintain market leadership.

SAB Miller is reputed to be the second largest beer manufacturing company in the world. Its brewing and beverage operations in Africa cover 15 countries with a further 21 covered through a strategic alliance with the Castel group. It is reported                 that in most of those countries SAB Miller is the number one brewer by market share. It bottles soft drinks for The Coca-Cola Company in 20 of its African markets (in alliance with Castel in 14 of those markets).

The company explained that in Nigeria, lager volumes grew significantly, both as reported and organically, due to the additional capacity provided by the commissioning of the green-field brewery in Onitsha in August 2012, the successful launch of Hero lager and the continued growth of the Trophy lager brand.

SAB Miller key ‘local’ brands include 2M, Chibuku, Chibuku Super, Club Premium Lager, Club Pilsener, Eagle, Hero, Impala, Kilimanjaro, Laurentina, Lion Lager, Maluti, Manica, Mosi, Nile Special, Rwenzori, Safari, Sibebe, St Louis, Trophy, Voltic, White Bull.

Guinness is certainly not playing a second fiddle. It is equally working very hard to keep the premier brands ahead of competition. The company explains that its global priority brands are its primary growth drivers across its markets and are the main focus for its business. The brands, it states, have broad consumer appeal across geographies, and although each of them has a rich heritage, they all continue to innovate and expand to meet new and emerging consumer trends. It states: ‘We manage and invest in these brands on a global basis so you will see consistent marketing from country to country. The company’s eight global priority brands include Smirnoff, Johnnie Walker, Guinness, Baileys, J&B, ‘the number three Scotch Whisky in the world (5.2 million 9 litre cases)’; Captain Morgan and Tanqueray, . Guinness Nigeria Plc which belongs to the Diageo family supplies the following other products in Nigeria: Foreign Extra Stout, Harp Lager,

Satzenbrau Pilsner Lager, Gordon’s Spark, Malta Guinness, Guinness Extra Smooth and Armstrong

However, one wonders how beer consumers will continue to meet their tastes in areas where sale and consumption of alcohol are prohibited?

Beyond any factor that threatens growth in the beer industry, it is apparent that the beer market in Nigeria is a vibrant one that offers value and much excitement to consumers.

By:  Edozie Samuel