According to a report by a market research group, Global Data, Africa is the fastest growing region for beer consumption. Nigeria, however, leads the pack of 10 biggest beer drinking countries on the continent. Beer brands make up just 16 percent of alcohol consumption in the country, while other drinks (spirits and locally brewed drinks) make up 84 percent.
Until recently, the race for the biggest beer market share in the country was a two-horse race between Heineken N.V., owners of Nigerian Breweries Plc and Diageo, owners of Guinness Nigeria.
The narrative seems to have changed with the recent introduction of new products such as Budweiser, dubbed as the king of beers, from the stables of AB InBev, the parent company of International Breweries, into the Nigerian market. The battle now seems to be among three international players, which many have termed as the “Triangular Beer War”.
This article seeks to examine how major players in the beer business are handling the stiff competition and get a feel of consumers’ pulse about the new beer product, Budweiser.
The race for expansion and market share
The year 2011 ushered in a disruption in the beer market with the arrival of SABMiller, which was then the world’s second-largest brewer, into the country, and its acquisition of majority shares in International Breweries Plc, makers of Trophy Beer, located in Ilesa, Osun-State.
However, in 2017, AB InBev acquired 72.17% of SABMiller’s shares in International Breweries Plc, in a series of transactions which resulted in AB InBev acquiring controlling interests in the company.
After the acquisition, a merger arrangement was later consummated with International Breweries Plc and two other local brewers: Intafact Beverages Limited, makers of Hero beer which is popular in the South-Eastern part of Nigeria, located in Onitsha Anambra State, and Pabod Breweries Limited, makers of Grand Lager, located in Port-Harcourt. All are now controlled by AB InBev.
In a swift response to AB InBev’s entry into the Nigerian market, Nigerian Breweries Plc also acquired breweries across the country. The company recently introduced the Tiger Beer brand into the Nigerian market.
The company acquired a controlling interest in Sona Group in January 2011 and also merged with Consolidated Breweries Plc, thereby adding its three breweries in Ijebu-Ode, Awo-Omama, and Makurdi to the Nigerian Breweries.
The last but not least in the triangular war, Guinness Nigeria Plc, acquired the rights to distribute McDowell’s, a mainstream spirits brand of United Spirits Limited in Nigeria. It also recently introduced the Orijin brand into the Nigerian market apart from its Guinness stout brand.
Budweiser in the market mix
The recent introduction of American lager, Budweiser, into the Nigerian market is seen as another masterstroke from AB InBev to take on Heineken’s Star, Heineken itself, and Guinness Foreign Extra Stout.
Heineken Nigerian Breweries and Diageo Guinness are far from being mere pushovers in the beer market. They are still the market leaders, with AB InBev having less than 20% of the market share.
With several decades of market knowledge, access to huge cash stockpile (debt raising or reserves) and stronger trade leverage; the new beer brand, Budweiser will be in the ring with two formidable fighters who know the Nigerian terrain quite well.
On the media side of things, Budweiser picked up the exclusive broadcast sponsorship rights for the FIFA World Cup Russia 2018 with DSTV, Nigeria’s largest pay-TV platform. The move is a strategy to put the new beer, Budweiser, right in the face of Nigerians and also leverage on the popularity of the game in the country.
Nigeria Breweries have responded in kind with their own massive media blitz! Just as Budweiser was introduced in the country they also launched the Stellar brand to compete directly with Budweiser.
Guinness doubled down on their popular Orijin drink launching it in new per bottles.
What consumers think about the new Budweiser beer
In a product review by Nairametrics, consumers expressed divergent opinions on the taste and the acceptability of the new brand in the Nigerian market.
According to a respondent, Darlington Oleru, the beer is yet to get local acceptance from consumers. This, he noted, will come with time.
I don't know the % Alcoholic content but it is good. The after taste is mild and you don't need to chew gum to take it out.
— Pascal (@paskael) July 13, 2018
The taste is great, well refined but it still pretty light for the price in the Nigerian market. It doesn't feel like a 5% alcoholic beer after a few bottles. In summary, boys no dey high on top am🤨
— AYAJ (@ay_aj99) July 13, 2018
Way too light. They might have to make it stronger to maintain this buzz gotten from the world cup adverts…
— Dere Imilar (@DereImilar) July 12, 2018
https://twitter.com/Oise_A/status/1017345513266601984
Another respondent who spoke with Nairametrics revealed that he took the beer once during the world cup matches as a promo drink, but noted that there is nothing extraordinary about it.
According to him:
“It is just there. I expected that with the amount they must have pushed into promotion, they would have done something different. Nothing moves the market like a new concept.”
However, most of the respondents noted that the beer is too light and urged the brewers of the beer to make it stronger to maintain the buzz gotten from the world cup adverts.
The verdict
Without question, the billion dollar beer market in Nigeria is facing challenges from the changing taste of Nigerians, however, it is only likely to grow as billions in ad revenue spend refocus the interest of Nigerians.
The emergence of a triangular beer war in the country is good for consumers, as they now have various brands to select from with prices expected to remain stable if not lower.
The three big operators are on their toes to ensure that they maintain, if not improve their market share, voice, and visibility on store shelves.
Whether AB Inbev’s huge bet with Budweiser’s introduction into the Nigerian market would succeed is hard to predict.
However, one thing is sure, Nigeria Breweries and Guinness are not sitting by and watching. They are fighting back and have the financial resources ad experience to defend market share, even if it means that they all lose and consumers win.