The changing brewery market landscape in Nigeria

By Azeez Disu

The beer market in Africa is predicted to grow faster than any other region over the next five years, driven by a rising population, urbanization, and increased Gross Domestic Products (GDP).

According to United Nations, Nigeria is set to become the world’s third largest population by 2050.The country’s beer market is rated among the 10 fastest growing beer markets in the world, with market share of 1.9 percent, which is slightly close to the Indian beer market which stands at 3.2 percent and occupies the seventh place in the global ranking.

“Ninety percent of the African beer market is highly consolidated with four global companies; SABMiller, Heineken, Castel and Diageo, and the markets have been under effective monopolies’ Piyumika Jayasena, analyst at Canadean disclosed.

Before the entry of SABMiller into the Nigerian market, Nigerian Breweries and Guinness Nigeria were the two giants in the market. Since its entry, the two brands have had to tighten their belts, re-strategize, and launch series of campaigns to stay at the top.

Obviously, it is no longer a two horse race between Nigerian Breweries and Guinness. The competition is becoming intense every single day; consumers and beer enthusiasts are thrilled by series of campaigns aimed to attract their buying consciousness.

Concerts, sponsorship of traditional festivals, partnership with football associations, massive marketing campaigns in the mass media, among others are some of the ways Nigerian Breweries and Guinness Nigeria are using to deepen their consumer engagement.

Like other brands from Nigerian Breweries and Guinness Nigeria; SABMiller’s brands such as Hero Lager, Trophy Lager, Grand Lager, Trophy Lager, Castle Milk Stout, Castle Lager, Eagle, Redds and non-alcoholic malt beverages Grand Malt, Beta Malt and others have become a force to be reckoned with and they have found their ways into the heart of consumers.

Growing bigger
The brewery brands in Nigeria have become stronger with acquisitions and mergers. Same strategy has helped SABMiller to become one of the leading breweries in the world.

To gain entrance into the Nigerian market, SABMiller, South African brewing giant, bought Pabod Breweries, Port Harcourt, where it owns 57 percent; Voltic Nigeria Limited (Voltic produces table water), Lagos, owns 80 percent of the company, and also bought Standard Breweries in Ibadan, Oyo State. Recall that SABMiller first entered Nigeria in 2009 through an alliance with Castel.

Also, the company opened its first greenfield brewery in Onitsha, Anambra State in 2012. “Work began on the Onitsha site in 2011 following an investment of over US$100-million, making it the largest single investment in Anambra State for almost 20 years,” SABMiller said in a statement.

In response to SABMiller’s entry into the Nigerian market, Heineken N.V., Nigerian Breweries plc’s parent company acquired breweries across the country.

In October 2011, Nigerian Breweries acquired majority equity interests in Sona Systems Associates Business Management Limited, (Sona Systems) and Life Breweries Limited from Heineken N.V. This followed Heineken’s acquisition of controlling interests in five breweries in Nigeria from Sona Group in January 2011.Sona Systems’ two breweries in Ota and Kaduna, and Life Breweries in Onitsha have now become part of Nigerian Breweries Plc, together with the three brands: Goldberg lager, Malta Gold and Life Continental lager.

In 2014, Nigerian Breweries merged with Consolidated Brewerie Plc which added the three breweries in Ijebu-ode, Awo-Omama and Makurdi to the company. The additional brands include 33 Export Lager, Williams Dark Ale, Turbo King Stout, More Lager, Breezer, Hi-malt and Maltex.

Last year, Guinness Nigeria acquired the right to distribute McDowell’s, a mainstream spirits brand of United Spirits Limited in Nigeria. USL is an Indian mainstream spirits business which is also a subsidiary of Diageo Plc.

It also commissioned a local spirits line at its Benin brewery to produce brands like Smirnoff X1 intense chocolate vodka, Smirnoff Extra Smooth Vodka, Gordon’s Dry Gin, Moringa Citrus Blend, McDowell’s No. 1 Reserved Whisky, McDowell’s VSOP and Royal Challenge Finest Premium Whisky.

Similarly, early last year, Guinness Nigeria acquired the distribution rights to Diageo’s international spirits brands like Johnnie Walker, Baileys and Cîroc.

Nigerian Breweries and Guinness have not had their eye on sleep since the entry of SABMiller into Nigeria. They have constantly seeks for ways to be the number one.
Despite keen competition, Nigerian Breweries remains a market leader with an expanded and growing brand portfolios and enlarged SKU’s.

SABMiller is also a leading bottler of Coca-Cola in several African countries. The company earns 29 percent of its profits in Africa and declared a profit of $3.3 billion in 2014.
The merger with Anheuser-Busch InBev (AB InBev), the world’s largest beer producer is a milestone that has raised the company’s brand profile.

Analysts believe that with the merger, SABMiller may be poised to expand its operations across Nigeria, now Africa’s largest beer market, and challenge its much larger rivals for national market share.

Regional marketing
SABMiller brands are distributed across Nigeria and Africa markets through regional marketing approach. “We are a regional player,” said Simon Harvey, head of SABMiller’s Nigerian businesses.

More so, pricing has always been a strategy that the company has always used to penetrate the market it enters. Unknown to competitions it gains its presence into the consciousness of the consumers through affordability in price and availability of products.

Despite its late entry into the Nigerian brewery market its brands are becoming a household name that every consumer cherishes.

Brands have come to realize that every region has their preferred taste and needs; SABMiller is targeting the informal beer market in Africa which is worth up to $3 billion and its campaigns are tailored to every region.

In eastern Nigeria, dominated by Igbos, one of the three biggest ethnic groups in the country with population over 40 million, SABMiller’s Hero larger is popularly called “Oh Mpa” or “Oh Father”. The name given to the brand in memory of late Chukwuemka Odumegwu-Ojukwu, Biafran leader, tagged ‘the Hero of the Igbos’ for setting up an independent nation of Biafra in the 1960s.

The Hero Lager bottle bears the rising sun that appeared on the Biafran flag and that resonate with the Igbo people. However, SABmiller management disclosed that the brand ‘Hero’ was developed as a result of deep local consumer insight and positive association with the Igbo tribe and no historical or political motivation was behind the brand building.

“There is no historic or political motivation behind the brand and it is in no way designed to represent a political view” the company told Bloomberg.

More so, its Trophy beer is targeted at the southwest market and the company’s strategy is tailored to capture the Yoruba speaking people. Within a short period, the brand has now become the preferred brand in the region.

“Trophy Lager means so much to the consumers because of its distinctive taste and quality. It is regarded as the pride of the west, as such, to most consumers of the beer; it is seen as first among equals and remains the leading economy brand in the South West,” Andre Lubbe, Commercial Director, SABMiller Nigeria said.

The campaigns
SABMiller’s trophy is one of the brands that is making wave in the country. At bars and among beer lovers it is enjoying high consumer patronage as it has been relaunched and repackaged for a better appeal.

Trophy and its ‘Hononourable’ campaign have given Nigerian Breweries’ Goldberg a fight for its money. Goldberg in response to the competition launched ‘His Excellency’ campaign.

The introduction of Trophy 500ml disposable Can which was different from what competitors had in the market is one that is applauded by industry watchers.

The company is pushing its non-alcoholic malt beverages Grand Malt, Beta Malt with series of advertising campaigns with the sole aim of making it consumer’s choice.

In line with its regional strategy, the company, now with an advertising war chest, embarked on rigorous outdoor and online advertising campaign that reverberated across the region to promote its brands.


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