Alcoholic drinks remained dynamic in Nigeria over the review period, and has strong growth prospects despite the weak economic conditions affecting sales since the 2016 recession. The key drivers of growth have been the fast rate of urbanisation and the increase in formal employment, alongside a strong increase in the young adult population.
Although in 2018 the economy recorded a return to growth, following the recession of 2016, consumers’ purchasing power remained quite depressed, as economic growth did not translate into increased employment (particularly in the formal sector). The still weak local currency also meant that the prices of most products remained quite high, although price growth stabilised.
The GBOs Heineken NV (largely through Nigerian Breweries) and Diageo Plc (through Guinness Nigeria) continued to dominate alcoholic drinks in 2018, through their ownership of key beer brands, and also spirits brands in the case of Guinness Nigeria and its parent company Diageo. However, GBO Anheuser-Busch InBev has strongly intensified the competition, with the company’s Hero Lager and Trophy brands seeing very strong growth in share at the expense of the mid-priced brands of Nigerian Breweries and Guinness Nigeria, which are both also focusing on their own economy lager brands to regain the lost volume share.
Drinking is widely considered part of regular social activity in Nigeria; therefore, on-trade outlets dominate beer, which is the largest category within alcoholic drinks. However, the bulk of sales of spirits and wine is sold through off-trade outlets such as drinks specialists and independent grocery retailers, since these products are mostly consumed at home or during parties and other social gatherings.
Alcoholic drinks is expected to see strong total volume growth over the forecast period, as the various categories recover from the relatively weak performances seen since 2016, caused by economic recession, the depreciation of the local currency and weak consumer purchasing power. The economy is expected to recover over the forecast period, although not as fast as previously forecast, due to the fall in global oil prices, which reduced government expenditure.
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This industry report originates from Passport, our Alcoholic Drinks market research database.