Investors are turning their attention to Nigeria’s booming $6.2 billion non-alcoholic drinks market, as the country’s demographics and changing consumer preferences create an attractive investment opportunity. Affluent populations in Nigeria, similar to those in developed countries, are shifting towards non-alcoholic beverages like wine, spirits, or abstention, making this market segment increasingly lucrative.

“We are expecting more investments for non-alcoholic beer in Nigeria due to rising demands by a younger generation of average income earners who are seeking healthier style,” Jan Biering, head of research for German-based Beer and Beverage Production, told BusinessDay during the recent African Brewing Conference in Douala, Cameroon.

Despite Nigeria ranking among the top five countries globally in terms of non-alcoholic beer sales volume, investors believe that the market remains underserved. Alexander John, a beer investor with German-based Ziemann Holvrieka GmbH, sees the country’s booming population and future labour pool as untapped opportunities beyond the scope of AB InBev, Diageo, and Heineken.

Non-alcoholic beer, brewed with the same ingredients as regular beer but with little to no alcohol content, typically contains less than 0.5 percent alcohol by volume. As health consciousness rises, more people seek healthier alternatives to alcoholic beverages, fueling the growth of the non-alcoholic beer market.

According to a report by Grand View Research, Nigeria’s non-alcoholic beer market was valued at $1.99 billion in 2014 and is projected to reach $6.20 billion by 2023, with a compound annual growth rate of 10.42 percent from 2019 to 2024. The increasing awareness of health risks associated with alcohol consumption and the growing popularity of sports and fitness contribute to the market’s expansion.

However, experts caution that for new investments to yield favorable returns, Nigeria must address challenges such as rising operating expenses, foreign exchange losses, and increasing interest rates.

Experts believe that the potential for substantial returns and the opportunity to serve an under-tapped market make Nigeria an appealing destination for businesses looking to venture into the non-alcoholic beverage industry. Nevertheless, addressing operational and financial challenges will be crucial for investors to fully leverage the market’s potential and achieve long-term success.