Guinness is Diageo’s best selling beer in Africa. That hasn’t gone unnoticed. Guinness is planning on expanding its operations throughout Africa.
Sales at alcohol giant Diageo have doubled to £1.3 billion in the past five years, prompting the company to invest a further £230 million in expanding its capacity in Nigeria in 2011. The company has already spent £400m in its African business in recent years to lure the fast-growing consumer market with high class brands such as Johnnie Walker and Bell’s. Beer however remains the flagship product for Diageo and is the biggest seller across the 40 African nations in which the firm operates, making up 75 per cent of sales, in contrast to elsewhere in the world where spirits sell most. Irish tipple Guinness, which was first shipped to African shores in 1827, is the most popular of Diageo’s beverages in Africa. The Guinness brewery opened in Nigeria in 1936 was the company’s first outside of the UK and Ireland. Nick Blazquez, President of Diageo Africa, also identified whisky as a key area for growth, with the company currently shifting around 2.5 million cases of whisky a year. “South Africa is very significant for us, but actually growth in West Africa – Nigeria, Cameroon, Ghana – is even faster,” said Blazquez. “More consumers have got disposable income and we see this rapidly evolving middle class. I expect Scotch sales to accelerate in Africa.” Diaego’s African operations are the most automated in the group worldwide and Blazquez said using technology to market products was also a big factor in its success, with sales in the continent accounting for 13 percent of the group’s global sales. Diageo Africa employs 6,000 people, about a quarter of the group’s total workforce around the world. Blazquez said that as one of the fastest emerging markets in the world, Africa often presents difficulties but added that the group overcomes them. “In any emerging market there are challenges. Africa has additional challenges around infrastructure – water, power, road transport. But there are ways round it. It costs you more – it costs more to brew a pint of Guinness in Nigeria than it does in Ireland. But it doesn’t stifle us.”
The African beer market is poised for growth. Consolidation and modernization of the supply change needs to take place. With a vide variety of beers country to country, choice isn’t limited to one particular brand. This works in the consumers favor. What doesn’t is the standardized beer bottle sizes, which consumers, in this case, drinkers must pay a deposit on the bottle on top of the beer price when buying beer. None the less, the beer market is growing alongside the expanding consumer base.