Total sales of alcoholic beverages (beverages) in Africa’s biggest economy hit a six-year high in 2021 despite rising prices, according to a report by Euromonitor International.
The report, titled “Alcoholic beverages in 2021: Overview” by the London-based strategic market research firm, showed sales rose 32.6% to $6.1 billion in 2021 , up from $4.6 billion in 2020. And it’s expected to hit $6.7. billion in 2022.
In terms of volume, it also increased by 15% to 2.3 billion and is expected to reach 2.5 billion in 2022.
“This strong performance came despite relatively difficult economic conditions, with local consumers squeezed by mounting inflationary pressures, in part due to a decline in the foreign currency value of the naira,” the report said.
He added that in 2021, demand in commerce (bars, restaurants, hotels, nightclubs) rebounded strongly, although some restrictions related to the COVID-19 pandemic remained in place for much of the year. , while non-trade sales volume growth accelerated sharply.
“In particular, there were a lot more social gatherings, such as birthday parties and weddings over the course of the year.”
A breakdown of the total value of alcoholic beverages showed beer contributing the most with $3.5 billion, followed by spirits ($2.1 billion), wine ($442.6 million), cocktails ready-to-drink ($98 million) and cider/perry ($1 million). .
With an average beer consumption of 12.28 liters per year, Nigeria tops the top 10 of the largest alcohol drinking countries in Africa.
The reopening of the economy, especially nightclubs and event centers, has increased the consumption of alcoholic beverages, especially beer.
According to data from AsokoInsight Market, beer is the most widely consumed alcoholic beverage with a market share of 55%, followed by spirits (30%) and wine (15%).
Last year, alcoholic beverage manufacturers, especially in the beer segments (International Breweries, Nigerian Breweries and Guinness Nigeria), increased the prices of their products.
Manufacturers were forced to raise prices due to the introduction of a new excise tax regime, as well as the depreciation of the local currency, which made imported raw materials much more expensive, said Euromonitor International analysts.
“The average unit price of alcoholic beverages has increased by nearly 20% over the year,” they said.
For example, the wholesale price of a case of medium Guinness Stout increased to N4,260 in 2021 from N3,970 in 2019, while the retail price increased to N4,400 from N4,000.
Bolanle Ige, a marketer at Guinness Nigeria, told BusinessDay the price increase was necessitated by the cost of production.
According to the recent analysis of their financial report, Nigerian breweries’ sales improved by 51% to N437.3 billion in 2021 from N337.1 billion in 2020; Guinness sales increased 30% to N109.1 billion; and that of International Breweries increased by 29% to 206.8 billion naira.
“Nigerian Breweries’ extensive portfolio of recognized and popular brands across all categories and price segments has enabled it to continue to meet the needs of a consumer base whose purchasing power had further diminished due to COVID-19. “, says the report.
For Guinness, the report adds that its investment in advertising, particularly on television and social media, has helped to both stimulate and maintain local consumer interest. “The company’s much smaller rivals cannot hope to match Guinness Nigeria in terms of marketing.”
Apart from the price increase, liquor manufacturers have also expanded their taste segment by offering more flavors to attract consumers across the country.
For example, over a period of over a year, Nigerian breweries introduced flavored drinks such as Star Radler’s Berry and Citrus flavors, while Guinness Nigeria introduced Tigernut and Ginger flavors.
“By exploring new flavors, you are able to create a new one that the market loves, which leads consumers to demand more, which is good for their volumes,” said Ayorinde Akinloye, relationship analyst with investors at Seplat Energy Plc.