Foreign whiskey brands eye Nigeria’s $2.84bn alcohol market

As Nigerian elites develop increasing taste for alcoholic beverages, more foreign alcohol brands are eyeing the market valued at $2.84 billion, according to an International Wine and Spirit Research (IWSR) report.

Ashok Capoor, president, strategy, United Spirits Limited (USL), manufacturers of McDowell Scottish whiskey, a new entrant into the Nigerian market, says about 13 million cases of whiskey are sold in the Nigerian alcoholic beverages market, which is growing at 6 to 10 percent per annum.

The spirits market, comprising whiskey, brandy and vodka, was estimated at $2 billion in 2007 and has increased by 6 percent every year since 2007.

Although a large portion of the market share still goes to cheaper local producers, imported brands account for $500 million of the spirits market.

The premium spirits segment holds 5 to 10 percent of the total alcoholic beverages market, with a growth of 18 to 20 percent. Research indicates that premium spirits are on the rise with a steady retention and trial rate.

In addition, the growing purchasing power of upper class consumers and the aspirational spending habits of the growing middle class, whose premium drink has been beer and champagne, explain the increase in demand for more expensive foreign brands.

Capoor says McDowell’s No. 1 whisky franchise is ranked as the largest non-scotch offering in the world today and has created a historic landmark by clocking global retail sales worth $3.8 billion from nearly half a million cases sold in the year 2012-13. It is sold in 25 countries. 

According to him, McDowell’s No.1 whisky has already clocked nearly half a million cases of sales in a single year in Nigeria, making it the largest whisky brand in the country.

“Global expansion and the premium strategy have paid off significantly for this portfolio, especially in creating the largest whisky franchise. Consistency in quality, innovative packaging, value-packed innovations and strong sales push have triggered the brand to capture a disproportionate growth in the market,” says Capoor.

However, in the entire Nigerian alcoholic beverages market, Diageo has the largest market share of imported alcoholic beverages with its product line which includes Johnnie Walker, Smirnoff vodka and Bailey’s Irish Cream.  

Moet Hennessy, owned by popular French luxury brand Louis Vuitton, is in charge of premium cognac, with its Hennessy cognac labels. In 2013 alone, Hennessy launched one of its latest premium cognac, VSOP Nyx, the Glenmorangie Malt Scotch Whisky and its limited collectors’ edition bottle, Hennessy KYRIOS.

Industry analysts say the burgeoning Nigerian market has been the attraction for foreign labels which are flocking the country.

Reports show that Hennessy is trying its best to exploit the market as it has increased its global revenues from $24.23 billion in 2008 to $37.14 billion in 2012, while net profits increased from $3.27 billion to $4.52 billion.

Lere Awokoya, marketing manager, Moet Hennessy, Nigeria, agrees that the country is one of the fastest-growing markets for whiskey and champagne, as the Hennessy brand has experienced a 12-percent growth in the Nigerian market year-on-year since 2011.

“The figure is about right,” says Awokoya, responding to Hennessy’s champagne market share. “And we estimated about a 12-percent yearly increase in growth since 2011.

This just means to us that the relationship between Nigeria and our brands is becoming more meaningful; we are very aware of that and consequently, we are doing what we can to maintain this growing relationship and make it a lasting one.”

Oti Bazunu, a Jazz lover and cognac aficionado, says Nigeria is the next big place, hence people should be a part of it.

“I am happy foreign brands of whiskey and cognac are coming into Nigeria. They are coming with single malt brand of Scottish whiskey. It tells the world that this place called Nigeria is really opening up. People need to be a part of this and take advantage of the Nigerian market,” says Bazunu.

“However, I would like to see more variants of foreign brands like Delamain Cognac, Briane Munroe; they are good at sourcing for good whiskies and cognac should do more in bringing more foreign brands.”

August 8, 2014;

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