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beverages industry nigeria

The Beverages Industry in Nigeria 2023

Charles Chinya | Nigeria | 18 December 2023

The Beverages Industry in Nigeria 2016

Carole Veitch | Nigeria | 22 July 2016

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Report Coverage

This report focuses on Nigeria’s beverage industry, which includes the manufacture, wholesale and retail of alcoholic and non-alcoholic beverages. It includes information on production and consumption, major players and their brands, key trends and issues, corporate actions and influencing factors such as input costs and illegal brewing and trade. There are profiles of 36 companies including local operations of major international companies such as Cadbury, Seven-Up Bottling, Guinness Nigeria and Nigerian Bottling Company, wholesalers such as Wigmore trading, local producers such as Stellar Beverages and Nigeria Distilleries, retailers such as Ace Supermarkets and online players including Party Drinks (Drinks.ng)

Introduction

• Nigeria’s beverage industry is dominated by a few big companies that are controlled by multinational companies either as subsidiaries or through shareholding.
• Competition in the beverages sector is high among the major operators.
• The informal market is characterised by a sizeable number of microbrewers, back yard distillers, and informal and semi-informal traders.
• Demand for beverages is being driven by the growing population, rising middle class and rapid urbanisation.
• The continuous depreciation of the local currency, shortage of foreign currency, high cost of raw materials and inflation continue to present operational challenges to the industry.

Trends

• Alcoholic beverages growth is being fuelled by the fast rate of urbanisation, and a large and growing young population.
• Brewers are focusing on pricing to drive revenues.
• Increasing adoption of alternative technologies to reduce energy consumption and emission.
• Increasing demand for premium brands.
• Middle class are becoming more brand conscious and interested in new premium products.
• New product launches, marketing activities and improvement in distribution.
• Price reduction and volume increase per bottle strategy being used by new entrants to penetrate the market.
• Rising health awareness among consumers is driving growth for fruit juices and bottled water.
• The increase in ecommerce platforms.

Opportunities

• Expansion of production capacity investment is ongoing.
• Investment in green energy to cut energy costs.
• Large and growing population.
• Multinational market leaders well represented through local subsidiaries.
• Raw materials farming such as maize and sorghum.
• Rising demand for premium products such as spirits and wines.
• Rising urbanisation and growing middle class.
• The Nigerian beverage industry is well established compared to other local industries.

Challenges

•  Multiple taxes.
•  Power shortages and outages.
• A volatile local currency.
• Bureaucracy and corruption.
• Delays in distribution because of poor roads.
• High distribution costs.
• High energy and fuel costs
• High inflation rate.
• High raw material costs.
• Insecurity situation particularly in the north of the country.
• Lack of skilled technicians.
• Poor infrastructure (roads, transport).
• Shortage of foreign exchange.

Outlook

• Nigeria’s budget deficit, which is expected to be funded by local borrowing, has the potential to limit funds available to businesses for investment purposes.
• The removal of the fuel subsidy has depressed consumer purchasing power, and spending on alcohol, as energy, food, transport and import costs rise.
• General consumption demand growth of less than 3% is expected in 2024, similar to 2023.
• The beverage industry is managing operational costs and focusing on product innovation to cater for different market segments.
• Continuous investments in green energy will reduce energy costs and production disruptions when the national grid is down.

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The Beverages Industry in Nigeria 2023

Full Report

R 20 000.00(ZAR) estimated $1046.67 (USD)*

Industry Landscape

R 14 000.00(ZAR) estimated $ 732.67 (USD)*

Historical Reports

The Beverages Industry in Nigeria 2016-07-22

R 1 900.00(ZAR) estimated $99.43 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. COUNTRY INFORMATION 1
3. DESCRIPTION OF THE INDUSTRY 3
3.1. Industry Value Chain 5
3.2. Geographic Position 6
3.3. Size of the Industry 8
4. LOCAL 10
4.1. State of the Industry 10
4.2. Key Issues 14
4.3. Notable Players 14
4.4. Trade 18
4.5. Corporate Actions 19
4.6. Regulations 20
4.7. Enterprise Development and Social Development 21
5. AFRICA 23
6. INTERNATIONAL 29
7. INFLUENCING FACTORS 32
7.1. Unforeseen Events 32
7.2. Economic Environment 33
7.3. Labour 34
7.4. Environmental Issues 34
7.5. Technology, R&D, Innovation 35
7.6. Government Support 37
7.7. Input Costs 37
7.8. Cyclicality 37
7.9. Illegal Brewing and Trade 38
7.10. Health and Safety Concerns 38
8. COMPETITIVE ENVIRONMENT 39
8.1. Competition 39
8.2. Ownership Structure of the Industry 39
8.3. Barriers to Entry 40
9. INDUSTRY SUMMARY 41
10. OUTLOOK 42
11. INDUSTRY ASSOCIATIONS 42
12. REFERENCES 42
12.1. Publications 42
12.2. Websites 43
APPENDIX 1 – 44
Summary of Notable Players 44
COMPANY PROFILES 47
Ace Supermarket Nigeria Ltd 47
Addide Ltd 49
Artee Industries Ltd 52
Brian Munro Ltd 54
C.H.I. Ltd 56
Cadbury Nigeria PLC 58
Champion Breweries PLC 60
Eastern Distelleries and Food Industries Ltd 62
EDLP Nigeria Ltd 64
Ekulo International Ltd 66
Euro Global Foods and Distilleries Ltd 68
Everyday Group of Company Ltd 70
FoodCo Nigeria Ltd 72
Golden Guinea Breweries PLC 75
Grand Oak Ltd 77
Guinness Nigeria PLC 79
Intercontinental Distillers Ltd 82
International Breweries PLC 86
Mardi Mari Investment Ltd 89
Multipro Consumer Products Ltd 91
Nestle Nigeria PLC 93
Nigeria Distilleries Ltd 96
Nigerian Bottling Company Ltd 97
Nigerian Breweries PLC 99
Party Drinks Ltd 103
Pernod Ricard Nigeria Ltd 105
Pharma-Deko PLC 107
Prince Ebeano Ltd 110
Retail Supermarkets Nigeria Ltd 112
Seven-Up Bottling Company Ltd 115
Stellar Beverages Ltd 117
Sundry Markets Ltd 119
Tiger Foods Ltd 122
UAC Foods Ltd 124
Westlog Nigeria Ltd 126
Wigmore Trading Ltd 128
Zanzibar Nigeria Ltd 130

Report Coverage

The Manufacture, Wholesale and Retail of Beverages in Nigeria investigates the local beverages market, recent developments and factors influencing the success of the formal industry. The report profiles 37 companies, including market leader in the soft drinks sector, Nigerian Bottling Company Ltd (NBCL), the sole franchise bottler of the Coca-Cola Company in Nigeria, and new entrant into the market, Ajeast Nigeria Ltd, a subsidiary of the Peruvian multinational AJE Group, which produces the BIG Cola brand. Also profiled are Drinks.ng, Nigeria’s largest online beverages wholesaler, and local retailer the Artee Group, which operates Park n Shop and the Spar franchise.

Introduction

This report focuses on the beverages industry in Nigeria, Africa’s largest economy and most populous nation, widely viewed as one of the most attractive consumer markets in the world. During the past decade, the country’s multi-billion dollar beverages industry has experienced strong sales growth, as upwardly mobile Nigerian consumers migrate from traditional drinks to mainstream and premium brands. However, despite its attractive demographics, the West African powerhouse currently finds itself in the midst of economic and security turmoil that threatens to derail its national development agenda.

Strengths

• Multinational market leaders are represented in the country through their local subsidiaries.
• Nigeria is one of Africa’s largest beverages markets.
• The expansion of installed capacity is ongoing.
• The industry has upstream and downstream linkages to numerous industries and provides several million job opportunities across the value chain.
• The Nigerian beverages industry is well-established compared to most other local industries.

Weaknesses

• Businesses are negatively affected by institutionalised bureaucratic inefficiencies and wide-spread corruption, particularly at the country’s ports.
• Foreign currency restrictions result in payment delays to foreign suppliers.
• Operating costs are high, largely due to the country’s erratic power supply and poor transport network.
• Sales growth of mainstream brands is constrained by cheap home brews, as well as by beverages that enter the market illegally.
• The industry is reliant on imported inputs.
• The regulatory regime is restrictive.
• There is a shortage of modern retail space.
• There is a shortage of skilled labour.

Opportunities

•  The development of wholesale, retail and distribution networks in underserved areas.
• As Africa’s largest economy and the most populous nation on the continent, Nigeria offers a rapidly expanding consumer market.
• Expansion of the packaged water segment.
• Export of locally manufactured beverages to other regional markets.
• Growth in demand for premium spirits and wine, notably red wine, from the upwardly mobile middle class.
• Rising urbanisation continues to support growing consumerism.
• The country’s rising middle class is becoming increasingly brand-aware.
• The migration of consumers from home brews and other traditional drinks to low cost mainstream brands.

Threats

• An increase in extortion, smuggling and bootlegging activities.
• Further devaluation of the Nigerian naira.
• The escalation of geo-political tensions.
• The escalation of sectarian violence and further destabilisation of the country.
• The negative impact of Brexit, in the form of stock market volatility, as well as lower levels of trade, investment and development assistance.
• The weakening of both domestic and global financial markets and a sustained decline in commodity prices, notably the downward pressure on crude oil.

Outlook

With economic growth decelerating to levels last seen in the previous millennium, its oil production decimated by Niger Delta militants, the naira in free-fall and the ever-present threat of Islamic State’s West Africa Province, Nigeria finds itself at a critical juncture. Adding to the climate of instability and uncertainty is the fall-out from the Brexit crisis. Despite President Buhari’s bold plans to stimulate the Nigerian economy through increased expenditure, many commentators remain unconvinced that the West African nation will rebound in the near future. With Nigerian consumers facing further erosion of their disposable incomes, many stakeholders predict that with the exception of packaged water, sales growth of mainstream beverages will slow in the short to medium-term. Nigeria’s brewers also find themselves on the cusp of disruption, as they contemplate the potential implications of the AB InBev-SABMiller merger.

Read More..
The Beverages Industry in Nigeria 2016

Full Report

R 1 900.00(ZAR) estimated $99.43 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 69.60 (USD)*

Historical Reports

The Beverages Industry in Nigeria 2023-12-18

R 20 000.00(ZAR) estimated $1046.67 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 3
2.2. Geographic Position 5
3. SIZE OF THE INDUSTRY 7
4. STATE OF THE INDUSTRY 12
4.1. Local 12
4.1.1. Corporate Actions 15
4.1.2. Regulations 17
4.1.3. Enterprise Development and Social Economic Development 19
4.2. Continental 19
4.3. International 23
5. INFLUENCING FACTORS 26
5.1. Economic Environment 26
5.2. Government Interventions 28
5.3. Socio-Political and Socio-Economic Environment 28
5.4. Socio-Cultural Environment 30
5.5. Rising Input Costs 31
5.6. Technology, Research and Development (R&D) and Innovation 31
5.7. Environmental Concerns 32
5.8. Labour 33
5.9. Cyclicality 34
5.10. Branding, Advertising and Marketing 35
5.11. Informal and Illegal Trade 35
5.12. Health and Safety Concerns 36
6. COMPETITION 36
6.1. Barriers to Entry 37
7. SWOT ANALYSIS 38
8. OUTLOOK 39
9. INDUSTRY ASSOCIATIONS 40
10. REFERENCES 41
10.1. Publications 41
10.2. Websites 42
APPENDIX 1 30
Import Tariffs 30
COMPANY PROFILES 32
Artee Industries Ltd 32
Ashmina Ltd 34
Brian Munro Ltd 35
Champion Breweries Plc 36
CHI Ltd 38
CWAY Food and Beverages Co. Ltd 40
Dansa Foods Ltd 41
Deebee Company Ltd 43
Drinks.ng 45
Ekulo International Ltd 46
Giant Beverages Ltd 47
Golden Guinea Breweries Plc 48
Grand Oak Ltd 49
Guinness Nigeria Plc 51
Intafact Beverages Ltd 54
Intercontinental Distillers Ltd 56
International Breweries Plc 60
Jacobs Wines Ltd 63
Massmart Holdings Ltd 65
Nestle Nigeria Plc 71
Nigeria Distilleries Ltd 74
The Nigerian Bottling Company Ltd 76
Nigerian Breweries Plc 78
Pabod Breweries Ltd 82
PayMente Ltd 83
Pernod Ricard SA 85
Pharma-Deko Plc 91
Ragolis Waters Nigeria Ltd 94
Seven-Up Bottling Company Plc 95
Shoprite Holdings Ltd 97
SONA Breweries Plc 103
Spring Waters Nigeria Ltd 104
Supreme Distilleries Ltd 105
UAC Foods Ltd 106
Warm Spring Waters Nigeria Ltd 108
Westlog Nigeria Ltd 110