Nigeria Breweries Plc is outspending rival brands like Guinness and International Breweries in advertising and promotions. Data from the financial statements of the three largest brewers in Nigeria’s show total advertising spend topped N32 billion in 2018 as the beer wars intensify.

How much they have each spent

  • Nigeria’s Breweries Plc, the largest by market share spent about N17.5 billion in the first 9 months of 2018 up from N16.3 billion reported a year earlier. Nigeria Breweries sells over a dozen different alcoholic and non-alcoholic drinks but Heineken, Star, and Maltina remain its premium brands.
  • Guinness, the second largest brewery in the country spend about N8 billion in the first 9 months of 2018. Guinness financial year end is June 2018, so to derive its advertising spend, we adjusted for the portion spent this year alone from its Audited accounts ended June 2018 and first quarter this year ended September 2018.
  • Guinness Spent about N12 billion in advertising and promotions for the period ended June 2018 out of which N5.4 billion was spent in the first half of 2018 (using calendar year only). The company has spent about N2.5 billion in the three months ended September 2018 bringing total advertising spend this year to about N7.9 billion.
  • AB InBev backed International Breweries has spent about N6.6 billion in advertising and sales promotions up from N5.1 billion in a comparable period the year before. International Breweries classifies its advertising and promotion spend as marketing and promotion expenses.

Impact on Revenue of the companies

  • As much as advertising spend is expected to help promote brand integrity and positioning among consumers, every single naira spent is expectedly linked to top line revenues. For Nigeria Breweries, revenues for the first 9 months ended September 2018 was N254.9 billion compared to N270.2 billion the year before. Nigeria Breweries is spending about 6% of revenues on advertising and promotions.
  • For Guinness, Revenues for the first 9 months of the year (adjusted for reporting dates) was about N100 billion compared to N96.4 billion a year earlier. Guinness is spending about 8% of revenues on advertising.
  • International Breweries reported revenues of N83.3 billion for the period ended September 2018. Thus its advertising spend of about N6.6 billion is about 7.9% of revenues.
  • In total, the Brewers have spent about 7.3% of the total N438 billion generated revenues.

Why it matters

  • Competition in the brewery space has been fervent in the last few years as competition and change of taste chime into the revenues of Nigeria’s top brewers.
  • To protect market share, Nigeria’s top brewers have embarked on creative advertising and promotional activities.
  • The amount spent so far suggest there is still room for more as revenues growth continues to be flat.
  • The Brewers do not break down the advertising spend, so it is difficult to determine how much of their spending went to digital advertising, outdoor, print etc.

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