Nigeria has experienced a remarkable surge in soft drink sales, with a staggering 58.1% increase in just one year, despite a significant price hike. This revelation comes from a recent report titled “Soft Drinks Industry in Nigeria Sees Boost to Sales” by Euromonitor International, a reputable market research company based in London. According to the report, the value of soft drink sales through off-trade channels reached $33.2 billion in 2022, the highest in at least eight years, compared to $21 billion in 2021.

Off-trade channels encompass various retail outlets, including supermarkets, convenience stores, mini markets, hypermarkets, kiosks, and wines and spirits shops. The report highlighted that the rise in soft drink unit prices in 2022 was closely aligned with double-digit inflation rates within the country. This increase was primarily attributed to the depreciation of the local currency, which made it challenging and costly to import raw materials and machinery parts. Consequently, overall input costs surged, leading to a substantial price hike.

However, despite these circumstances, the Nigerian market witnessed numerous new soft drink launches throughout 2021 and 2022. The report suggests that Nigerian consumers are willing to allocate a portion of their disposable income to soft drinks, considering them an integral part of their lifestyle.

Ibrahim Ahmed, a representative of Coca-Cola Nigeria, attributed the sales growth to the emergence of new and more affordable brands that have flooded the market. He stated, “Most of the bigger brands had a marginal drop in their sales.” The implementation of a sugar tax in June forced manufacturers to adopt coping strategies, including price increases, in order to remain competitive. For instance, the price of a 50cl PET drink of popular brands like Coke, Pepsi, Sprite, and Fanta surged by 33.3%, from N150 to N200. Similarly, the price of a 33cl Malt, previously costing N200, rose to N250.

In contrast, cheaper brands like Rite Food’s Bigi Cola offer a more budget-friendly option, with their 60cl bottles priced between N100 and N150. Coca-Cola’s 35cl drinks are also sold at N100. Data from the Nigerian Bureau of Statistics (NBS) revealed that in 2019, households spent N551.2 billion on non-alcoholic drinks, N205.5 billion on sugar, sweets, and confectionery, and N150.3 billion on alcoholic beverages.

Christopher Day, a research analyst at Euromonitor International, anticipates that despite weaker economic growth and rising global inflation, soft drinks will continue to witness substantial retail volume and value growth in Nigeria. He believes that Nigeria’s young and expanding population will drive the increased consumption of soft drinks, alongside significant marketing investments from local and international players. Day also predicts that manufacturers will focus their research and development efforts on reducing the sugar and caffeine content in soft drinks, as rising health consciousness prompts product development in this field. Additionally, he expects e-commerce to gain traction as a growing distribution channel in Nigeria.

Euromonitor’s report suggests that manufacturers will need to continue adapting to economic obstacles by formulating creative strategies to sustain growth in the soft drink sector. This includes focusing on reducing sugar and caffeine content to meet rising health consciousness among consumers.

The surge in soft drink sales comes against the backdrop of Nigeria’s youthful and expanding population, which serves as a driving force for the consumption of these beverages.