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Who’s winning the bitters brand battle in Nigeria’s bitter-sweet consumer market?

The market for bitters is gradually heating up in the Nigerian beverage market.

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Alcoholic bitters

The market for bitters is gradually heating up in the Nigerian beverage market. There has been an increase in the number of brands making entry into the bitters market, recently, and this is boosted by the rising change in the tastes of consumers, who believe that bitters contain body purifiers, anti-malaria components, and ingredients that strengthen the virility of men.

Bitters made its entry into the Nigerian market about 10 years ago, and since then it has gained acceptance among all classes of consumers in the country. It is no longer strange in Nigeria to see young men, even the smartly dressed ones, hurriedly buying bottles of bitters early in the morning before heading off for the day’s work. As of 2014, the bitters market was said to be worth about N32.2 billion and still growing.

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Bitters are flavoured extracts made from infusing herbs, seeds, bark, roots, flowers, and berries with alcohol.

On this week’s edition of product review, a weekly analysis where Nairametrics features products contending for leadership and prominence in Nigeria’s Red Ocean consumer market, we are looking at the various bitters brands and how they are competing for profitability and visibility in the market space.

Brands in the market

In the past, Swedish and German bitters were scarcely marketed in the country and because of the limited distribution line, there was not much awareness. Also, some consumers who would have possibly used the Swedish and German products believed that they were for the rich and perhaps, not affordable by the common man.

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However, in 2011, Kasapreko Company Limited of Ghana led the revolution of new players in the market with its Alomo Bitters brand, while Intercontinental Distillers Limited (IDL), another major player in the Nigerian beverages segment, joined much later with its Action Bitters.

The introduction of Alomo Bitters into the market space came with an aura of class, however, the entrance of another brand, Orijin Bitters from the stables of the giant breweries, Guinness, became the game changer. Noticing the acceptance of bitters, Nigerian Breweries also came out with Ace Roots.

Since the Kasapreko Alomo’s entrance into the market, brands like Erujeje, Black Wood, Bajinotu Poka, Kerewa, Koboko, Kogbebe, Dadubule, Baby Oku, Pasa, Goko Bitters, etc., have also emerged to command significant market presence, eroding the market shares of both the traditional brands and those of the established big players and multinationals in the Nigerian beverages market.

Other brands that continue to play on the fringes include Yem Kem Nigeria’s Yoyo cleanser Bitters and Ruzu Bitters among others.

Today, most beer parlors, lounges and roadside liquor spots are filled with all sorts of alcoholic bitters of various brands that are nothing but aphrodisiacs, while in highbrow restaurants and lounges, you can only get Orijin, Ace Roots and Alomo brands.

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The Alomo Brand battling against fake products

Interestingly, Alomo Bitters received immediate consumer acceptance among Nigerian consumers, away from malt and beer beverages which dominated the market then. When the product officially entered Nigeria, distributors also jumped at it, which created the visibility that helped the product boom.

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Between 2011 and 2012, Alomo bitters’ market share hovered around 80 percent of the bitters market. But its dominance in the market was soon weakened, as adulteration of the product became popular a situation, where registered and unregistered bitters products and fake Alomo brands entered the Nigerian market unfettered.

Orijin Bitters reshaped the market

Many consumers were taken aback when Guinness Nigeria Plc entered a market that most people would readily dismiss as boring for such a premium institution.

According to consumers, the critical driver in the sales of Orijin can be attributed to the positioning of the brand. Several consumers, who feel that Alomo Bitters and other brands are too common, have since taken flight to the new brand from Guinness, just to stand out from the crowd. Compared to others, Orijin is also premium priced — while some bitters can be gotten for as low as N100, Orijin Bitters, which is available as Orijin in 30cl and 75cl bottles, and Orijin Bitters, in 20cl and 75cl bottles, go for as much as N500 to N700 and N300 to N1,000 respectively — a major attraction for those who want to be different. With Orijin, classy men and women could drink their herbal bitters openly and fashionably.

Guinness, in reshaping the market, also discovered that consumers at the top of the marketing pyramid, who were major consumers of Alomo Bitters, may have not felt comfortable sharing the same space with every other Tom, Dick, and Harry in the market. They needed ‘class’. This they responded to by creating a brand to take this space and appeal to those who want to stand out from the ‘Alomo crowd’.

Another magic wand by Guinness was the introduction of a herbal blend that gives a better taste and feeling of bitters and at the same time makes for pleasurable drinking, thus eliminating the ‘ugly’ taste of Alomo Bitters which was seen as a turn off for many consumers.

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Here comes ACE

Few months after the introduction of Orijin into the market space, another brewer, Nigerian Breweries (NB) introduced its bitters brand, ACE, into the Nigerian market. ACE Roots was unveiled to the Nigerian market in February 2015 and comes with low sugar and a delightful flavour for health-conscious Nigerians.

What consumers are saying 

Findings by Nairametrics reveal that one unique proposition for most bitters brands is the belief that it increases libido for men. Majority of the consumers of these bitters no longer drink them for their purported medicinal value but the alleged fact that it can enhance men’s prowess in bed. Even the manufacturers are promoting the drinks for its aphrodisiac powers.

Mrs. Kafayat, a seller at Ikeja bus stop, noted that men who drink Herbal Bitters can never disappoint their women in bed.

At a bar in Ogba, Mrs. Ngozi said that men drink herbs for general body cleansing, though adding, “When your body is clean of all toxins, your body will perform well.”

Asking another seller at the popular African Shrine Ikeja, about which bitters sells most and why people buy them, she said: “Baby Oku, Alomo, Orijin, Opa Eyin, all of them sell well.” She added that ‘Scoogies’, which is prepared by sellers, is more popular when compared with other bitters.

The owner of another popular bar at Agege explained that, “…these drinks do a lot to people’s bodies, so it is the one their body can take they will buy. But some people like to flirt and some say it cures waist pain and it is for cleansing the system.”

Another consumer, who simply gave his name as Afis, a Road Transport Employers Association of Nigeria (RTEAN) member at Ogba bus-stop, said,

“Orijin, Alomo, and Ace Root cannot be found on the heads of hawkers any longer, we don’t have time to begin to look for where to buy them. It is only the rich who go to restaurants to have chilled Orijin, Ace Root or Alomo, we don’t. We are on the move. Ace Root is not in sachets. With N50 to N150, I can drink a sachet or small plastic bottle from other producers.”

Verdict

In a Twitter poll conducted by Nairametrics, Orijin Bitters got 46%, Alomo got 26% while Action Bitters got 16%.

The result clearly shows Orijin Bitters leading the battle in the bitters market. However, the proliferation of adulterated brands is eating deep into the profit of major manufacturers.

This is also reflected in the comments of some of our respondents who are not on Twitter. The ones who prefer ‘Scoogies’ and brands in sachets of N50 might not really care if they are consuming adulterated versions, as long as they are affordable and make them “perform well”.

Regulatory agencies such as NAFDAC and SON must double down on their efforts to rid the Nigerian consumer market of unlicensed herbal bitter drinks that may be injurious to unsuspecting members of the public. Also, the big brands could try and package some affordable products to truly gain market share from all classes.

Fikayo has a degree in computer science with economics from Obafemi Awolowo University. ITIL v3 in IT service management. An alumnus of Daystar Leadership Academy. Prior to joining Nairametrics had stinct in Project management, Telecommunications among others. Also training in Consulting and Investment banking from Edubridge Academy. He has very keen interest in Politics, Agri-business, private equity and global economics. He loves travelling and watching football. You can contact him via fikayo.owoeye@nairametrics.com

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Business News

Forex turnover drops by 28.3% as naira depreciates against the dollar at I&E window

Naira improved against the dollar by N1.35, closing at N386.33 to a dollar, as against the indicative rate of N387.68 to a dollar that it opened with.

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Forex turnover drops by 28.3% as naira depreciates against the dollar at I&E window

The naira has depreciated to N386.33 to a dollar at the Investors and Exporters (I&E) window, as the volatility of the foreign exchange market continues. The local currency was weakened by N0.83 against the dollar, when compared to the N385.50 to a dollar that it traded on Tuesday, June 2, 2020.

The exchange rate at the I&E window is different from the Central Bank of Nigeria’s published exchange rate, which currently stands at N360/$1. This is also different from the exchange rate at the parallel market, which is still stable at N445/$1, according to information on AbokiFX as of Wednesday, June 3, 2020.

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Available information from the daily trading at FMDQ (where FX is traded by importers and investors) shows that the naira improved against the dollar by N1.35, closing at N386.33 to a dollar, as against the indicative rate of N387.68 to a dollar that it opened with on Wednesday.

Further analysis of the information from the FMDQ shows that the turnover for the day declined by about 28.3% at $24.64 million. This is against the $34.35 million turnovers that was recorded the previous day.

(READ MORE:Naira appreciates at parallel market)

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The foreign exchange market seems to have stabilized at the parallel market, following the reduction in demand for dollars especially by currency speculators, and improved liquidity. The rebound of crude oil prices appears to have eased the concerns of investors over possible devaluation of the naira.

Having so much naira wealth does not guarantee you getting dollars, Forex turnover drops by 28.3% as naira depreciates against the dollar at I&E window

The gap between the CBN official rate and the parallel market rate, also known as the black market, has been greatly reduced as the naira appreciated to N445 to a dollar from N460 to a dollar last week, following CBN’s intervention.

READ ALSO: UPDATED: Nigeria’s inflation rate rises to 12.34% as COVID effects bite harder

According to data compiled by Bloomberg, the Naira spot market rate is overvalued by 10% when measured by its current real effective exchange rate relative to the 5-year average.

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Economy & Politics

Manufacturing PMI slide into recession territory

This is the first clear data-driven sign that Nigeria is in a recession.

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The much-awaited Purchasers Managers Index (PMI) was released on May 29th by the Central Bank of Nigeria. According to the latest data, Manufacturing PMI in the month of May stood at 42.4 index points, indicating contraction in the manufacturing sector for the first time after recording expansion for thirty-six consecutive months.

The figure compares to 51.1 and 49.2 index points in March 2020.

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The latest number now falls squarely within recession numbers and this is a clear sign that Nigeria is closer to recording a major contraction in the second quarter of the year.

Meanwhile, the nation’s PMI’s number hit a year low in April 2016 of 43.7, before plummeting further to 41.9 in June 2016. Nigeria subsequently fell into a recession by the end of the second quarter of 2016 and remained in recession throughout the course of the year.

The nation’s non-manufacturing PMI fell for a consecutive month to an all-time low of 25.3. The decline in manufacturing PMI was significant following thirty-six consecutive months of expansion, while the non-Manufacturing PMI contracted for the second consecutive month.

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A further look into the report shows that the manufacturing sector employment level index stood at 24.5 points in May, a decline compared to 47.1 points recorded in March and 56.4 points in February 2020.

This downturn is mostly attributed to the halt in economic activity as businesses in Nigeria result in layoffs and pay cuts in order to survive the effect of the lockdown.

READ ALSO: What I’ll do if I was CBN Governor – Experts

Also, all 14 subsectors of the manufacturing sector, reported lower raw material inventories, consequently contracting the inventories index to 37.4 points in May 2020. An effect of the supply chain bottleneck associated with the lockdown measures implemented in most countries of the world.

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Specifically, this figure translates the effect of lockdown procedures and trade restrictions implemented by Nigeria’s major trade partners in response to the COVID-19 pandemic. Note that Nigeria’s major trade partners; China, USA, Spain, and the Netherlands account for about 45% of the nation’s import.

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What you need to know:  PMI is a survey that is conducted by the Statistics Department of the Central Bank of Nigeria. The respondents are purchasing and supply executives of manufacturing and non-manufacturing organizations in all 36 states in Nigeria and the Federal Capital Territory (FCT).

In his reaction to the data, the Central Bank Governor, Godwin Emefiele, in the Monetary Policy Communique, highlighted how dire the situation.

READ MORE: Insufficient electricity, unfavourable economy are among challenges hindering companies –CBN

He said, “The contraction in the manufacturing and non-manufacturing PMIs was attributed to slower growth in production, new orders, employment level, raw materials, and input prices.

“The employment level index for the manufacturing and non-manufacturing PMIs also contracted further to 25.5 and 32.0 index points, respectively, in May 2020 compared with 47.1 and 47.3 index points in March 2020.

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“Generally, the purchasing managers’ activities in May 2020, were largely affected by the lockdown of the global economy to curtail the spread of the COVID-19 pandemic.”

The CBN thereafter reduced its monetary policy rate from 13.5% to 12.5% for the first time since March 2019.

READ ALSO: CBN projects macroeconomy confidence to rise by 118.3% in November

What this means: This survey is a bellwether for economic growth in Nigeria and helps the central bank gauge the mood of businesses in the economy.

PMI above 50 typically indicates a positive mood for the manufacturing and non-manufacturing sectors. Two major causes for concern in the data are the new orders and employment levels.

At 42.8 points, the new orders index declined after thirty-sixth consecutive months of growth, indicating declines in new orders in May 2020. Three subsectors reported growth, 2 remained unchanged while 9 recorded declines in the review month.

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Coronavirus

Covid-19 Update in Nigeria

On the 3rd of June 2020, 348 new confirmed cases and 1 death were recorded in Nigeria bringing the total confirmed cases recorded in the country to 11,166.

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COVID-19: FCMB reschedule operations

The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to rise as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 11,166 confirmed cases.

On the 3rd of June 2020, 348 new confirmed cases and 1 death were recorded in Nigeria.

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To date, 11166 cases have been confirmed, 3329 cases have been discharged and 315 deaths have been recorded in 35 states and the Federal Capital Territory having carried out 69,801 tests.

Covid-19 Case Updates- 3rd June 2020

  • Total Number of Cases – 11,166
  • Total Number Discharged – 3,329
  • Total Deaths – 315
  • Total Tests Carried out – 69,801

The 348 new cases are reported from 19 states- Lagos (163), FCT (76), Ebonyi (23), Rivers (21), Delta (8), Nasarawa (8), Niger (8), Enugu(6), Bauchi (5), Edo(5), Ekiti (5), Ondo (5), Gombe (5), Benue(4), Ogun (2), Osun (1), Plateau (1), Kogi (1), Anambra (1).

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

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The latest numbers bring Lagos state total confirmed cases to 5440, followed by Kano (970), Abuja at 763, Katsina (371), Edo (341), Oyo (317), Kaduna (297), Borno (296), Ogun (282), Jigawa (274), Rivers (269), Bauchi (246),  Gombe (169), Sokoto (115).

Kwara State has recorded 111 cases, Plateau (109), Delta (106), Nasarawa (88), Zamfara (76), Ebonyi (63), Yobe (52), Osun (47), Akwa Ibom (45), Adamawa (42), Niger (41), Imo (39), Kebbi and Ondo (33), Ekiti (25), Enugu (24), Bayelsa (21), Taraba (18), Abia (15), Benue (13), Anambra (12), while Kogi state has recorded only 3 cases.

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, President Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

 

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READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

Patricia
DateConfirmed caseNew casesTotal deathsNew deathsTotal recoveryActive casesCritical cases
June 3, 2020111663483151332975227
June 2, 20201081924131415323972667
June 1, 20201057841629912312271579
May 31, 20201016230728714300768687
May 30, 2020985555327312285667267
May 29, 202093023872612269763447
May 28, 202089151822595259260647
May 27, 202087333892545250159787
May 26, 2020834427624916238557107
May 25, 202080682292337231155247
May 24, 202078393132265226353607
May 23, 202075262652210217451317
May 22, 2020726124522110200750337
May 21, 2020701633921111190748987
May 20, 202066772842008184046377
May 19, 202064012261921173444757
May 18, 202061752161919164443407
May 17, 202059593881826159441837
May 16, 202056211761765147239737
May 15, 202054452881713132039544
May 14, 202051621931683118038154
May 13, 202049711841646107037374
May 12, 20204787146158695936704
May 11, 202046412421521090235894
May 10, 202043992481421777834794
May 9, 202041512391271174532784
May 8, 202039123861181067931154
May 7, 20203526381108460128184
May 6, 20203145195104553425071
May 5, 2020295014899548123704
May 4, 2020280224594641722912
May 3, 2020255817088240020702
May 2, 20202388220861735119522
May 1, 20202170238691035117512
April 30, 2020193220459731715562
April 29, 2020172819652730713692
April 28, 2020153219545425512322
April 27, 20201337644102559942
April 26, 20201273914152399942
April 25, 20201182873632229252
April 24, 202010951143312088552
April 23, 20209811083231977532
April 22, 2020873912931976482
April 21, 20207821172631975602
April 20, 2020665382311884662
April 19, 2020627862221704362
April 18, 2020541482021663562
April 17, 2020493511841593172
April 16, 2020442351311522772
April 15, 2020407341211282672
April 14, 202037330111992632
April 13, 202034320100912422
April 12, 20203235100852282
April 11, 202031813103702382
April 10, 20203051770582402
April 9, 20202881471512302
April 8, 20202742260442262
April 7, 20202541661442042
April 6, 2020238650351982
April 5, 20202321851331942
April 4, 2020214540251850
April 3, 20202092542251800
April 2, 20201841020201620
April 1, 2020174352091630
March 31, 202013982091280
March 30, 2020131202181210
March 29, 2020111221031070
March 28, 20208919103850
March 27, 2020705103660
March 26, 20206514102620
March 25, 2020517102480
March 24, 2020444102410
March 23, 20204010112370
March 22, 2020308002280
March 21, 20202210001210
March 20, 2020124001110
March 19, 20208000170
March 18, 20208500170
March 17, 20203100030
March 16, 20202000020
March 15, 20202000020
March 14, 20202000020
March 13, 20202000020
March 12, 20202000020
March 11, 20202000020
March 10, 20202000020
March 9, 20202100020
March 8, 20201000010
March 7, 20201000010
March 6, 20201000010
March 5, 20201000010
March 4, 20201000010
March 3, 20201000010
March 2, 20201000010
March 1, 20201000010
February 29, 20201000010
February 28, 20201100010

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