2013 not a great year for alcoholic drinks in Nigeria
The alcoholic drinks market is slowly recovering from a very bad year in 2012, which saw beer (the dominant category) volume sales growth drop strongly compared to the preceding five years. Even wine (a very fast growth category) and spirits saw sales drop, although RTDs and non/low alcohol beer posted strong growth during the year. 2013 thus saw growth improvement, though not to the level seen over the review period, as the market remains quite challenging due to high inflation which limits consumer spending power, whilst production costs remain quite high pushing prices up, therefore having a negative impact on volume sales.
Lager consumers move to economy lagers during the year
Partly because of price considerations, the market saw a strong shift to economy brands in 2013. Such brands are generally regional, i.e. sold only in certain regions and not nationally. The big players have all concentrated efforts within this category. Heineken NV’s subsidiary companies own 33 Export and Goldberg, leading brands in this category, whilst Diageo Plc (Guinness Nigeria) has taken on a south-west brand called Dubic. Most interesting is SABMiller Plc’s acquisition of the major South-West brand, Trophy, which is highly reputable in this region with a population over 40 million people The brand now has a small but growing presence in Lagos, and it has high potential to grab market share in this, the biggest beer market in Nigeria. In fact, it is SABMiller’s entry to the market that has pushed the major players to channel resources into competing at the low-end since the company is focusing its own resources in this category.
SABMiller Plc toughens the competition
Although the big two – Heineken NV (largely through Nigerian Breweries Plc among other subsidiaries in Nigeria) and Diageo Plc (through Guinness Nigeria Plc) – continue to dominate the market, through their ownership of key beer brands (and spirits brands in the case of Guinness Nigeria Plc), SAB Miller Plc was the best gainer in share in 2013, with a strong increase, due to its introduction of Hero Lager and expansion of the Trophy brand.
On-trade channels lead sales but off-trade is doing well in modern channels
In Nigeria, people drink mainly in groups, mostly with friends and associates, as a social activity. Hence, on-trade accounts for the bulk of retail beer sales in the country even as beer remains the largest category of alcoholic drinks consumption. Spirits and wine are sold mostly in supermarkets, grocery retailers and open markets, as such, alcoholic drinks are mostly consumed at home and at social events as a means of entertaining guest. Modern retail outlets, such as supermarkets and hypermarkets, are however, encouraging growth of sales through the off-trade as their prices for beer are generally cheaper (due to bulk buying) and they also have a wider range of spirits and wine than elsewhere.
Strong growth expected over the forecast period
Despite the relatively poor performance in 2012 and 2013, it is expected that the alcoholic drinks market will see a strong growth rate over the forecast period. As the population within the drinking age bracket increases, and the economy is expected to perform well, helping to grow disposable income, it is expected that demand for alcoholic drinks will also increase. Furthermore, activities of market players such as advertising, new products and other promotional activities will also create an expanding market. The market will also benefit from national elections in 2015, as demand generally soars during such periods.
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The Alcoholic Drinks in Nigeria market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Production, imports by origin, exports by destination
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the market size of Alcoholic Drinks in Nigeria?
- What are the major brands in Nigeria?
- Have there been any alcoholic drinks legislative changes over the past 12 months?
- How is the alcoholic drinks industry affected by the recession?
- What is consumed more; beer, wine or spirits?
- What have been the key trends seen in new product developments?
- Do alcoholic drinks consumers want value for money or added value?
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This industry report originates from Passport, our Alcoholic Drinks market research database.