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Nigeria Food and Drink Report Q4 2009Published by: Business Monitor International Published: Oct. 7, 2009 - 36 Pages Table of Contents
AbstractThe enigmatic Nigerian market remains a source of great promise for its leading brewers. A depressinglypoor regulatory environment notwithstanding, Nigeria’s beer industry is rapidly emerging as thecontinent’s most promising. As Western beer-drinkers continue to tighten their belts, forcing a stutteringin beer volumes, Nigeria’s industry is assuming greater importance to its multinational cast as discussedin BMI’s recently published Nigeria Food & Drink Report for Q409.The reprieve currently provided by Nigeria was laid out by the Q209 (through to June 30) performance ofHeineken’s Nigerian Breweries unit. Accounting for about 65% of formal beer volumes in the 160mnstrong country, Nigerian Breweries reported a 37% year-on-year (y-o-y) increase in second quarter netincome to NGN16.85bn (US$113.7mn). Heineken has invested over US$500mn in Nigeria over the pastfive years and with a brewing capacity of about 10mn hectolitres, Nigerian Breweries makes up morethan half of Dutch giants beer producing capacity for the entire Middle East and Africa region. Throughto 2013, its Nigerian unit is best placed among Nigeria’s leading brewers to capitalise on BMI’s forecastthat beer volume sales will increase by 35.8% and reach NGN582.5bn. Trailing in second place with about 25% of the volume market is the Diageo subsidiary GuinnessNigeria. Nigeria has overtaken Ireland to become Guinness’ second largest market behind the UK. Suchhas been the prowess of the brewer’s marketing campaign that most Nigerians consider Guinness to be aNigerian rather than Irish brand. Bearing in mind that per capita consumption of formal beer currentlystands at a measly 10 litres per annum (BMI estimate), Guinness Nigeria has only scratched the surfaceof Nigeria’s potential. Eyeing the country’s underdeveloped low-cost segment, Anglo-South African behemoth SABMillerthrew its hat into the ring earlier this quarter. Although its acquisition of the 30,000 hectolitre capacityPabod Breweries is unlikely to alarm either Nigerian Breweries or Guinness Nigeria, significant capacityupgrades and a focus on producing beer using locally sourced inputs (this could bring down the cost ofproducing lagers by 30-40%) could plausibly smoothen access to Nigeria’s vast informal beer industry,which has hitherto thrived as most consumers have been unable to trade up to the mainstream andpremium brands brewed by the market leaders. Get Full Details About This Report >> |
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