International Beer Giants Head to Nigeria

While the American craft beer scene is certainly a hot item on the international market, it is far from the only one out there. Many different nations are playing an increasingly important role for major producers. Witness the new emphasis being placed on Mexican and the Caribbean by Heineken. However, there are other areas of importance, too – Nigeria is one such country. What makes Nigeria such an attractive place for beer companies? What’s happening in this market?

First, Nigeria has been home to some major brewers – Guinness is one of the most important players in the region. Add to that Nigerian Breweries Plc and Pabod Breweries, and you have a relatively robust industry. SABMiller has now joined the fray. The South African company has made major inroads into Nigeria, and the market has reacted quite strongly. What brought SABMiller all the way to Nigeria? It’s the market, combined with falling global sales.

The American craft beer scene has been instrumental in reducing sales for companies like SABMiller both here at home and abroad. As other nations start moving more towards craft brewing (the UK is developing as a major center here), those big players are really feeling the pinch where it hurts most – in their wallets. This leaves those companies only a few paths from which to choose. They can opt to gobble up craft breweries and use them to their advantage (which is being done), or they can opt to explore new markets. Nigeria is just such a market for most of the world’s major brewers. In fact, it might just be one of the potentially richest markets found in quite some time.

Nigeria has long been marked by low-quality homebrews. Even with the presence of Guinness and other companies, there simply has not been a wide availability of high-end beer for residents to enjoy. SABMiller will help to change that and in the process, they hope to change their own fortunes as well. While the company is certainly not in any danger of going under, they do need to watch that increasingly ragged bottom line and it’s hoped that this market will give them some stability.

In response to SABMiller’s move, Heineken has also made inroads into the Nigerian market by purchasing up smaller subsidiaries with an established presence in the country. Heineken might be able to give SABMiller a run for its money, or it might turn out that Nigeria can support both companies quite easily.

 

Posted on April 12, 2011 .