A revolution of the sort is imminent in Nigeria’s alcoholic beverage industry. It is the arrival of Budweiser beer into the Nigerian market.
For many people, it is still a surprise and there are doubts here and there on whether this globally-acclaimed beer brand would really and truly join the ranks of brands to slug it out in Africa’s largest market.
However, for Heineken’s Nigerian Breweries and Diageo’s Guinness Nigeria, the threat is fundamental to their revenue and future profitability.
AB InBev is doubling down on the market at a trying time for Nigerian Breweries and Guinness. A concatenation of recessionary hangover and its attendant consequences have negatively impacted consumer taste and volumes. Sales are down, revenue is shrinking as well. With the latest increase in excise duties on alcoholic beverages, rough times are here for brewers.
Well, this is 2018 and the reality has dawned on of Nigeria’s largest brewers that it is no longer business as usual.
Budweiser’s journey into Nigeria started in 2016 when AB InBev and SAB Miller, combined their businesses in the largest merger ever for a $100 billion deal to become the largest beer maker in the world. To stage its entry into Nigeria, the latter bought more stake in International Breweries Plc raising its equity to 75.1 percent.
AB InBev has since taken the bull by the horn to take major strategic re-organization of its business. Another leg of its strategy is the ramping up of its scale to key into the Western market where alcoholic beverages are bereft of social-cultural encumbrances. All other things being equal, AB InBev would open it’s $250 million breweries in Sagamu, South West Nigeria this mid-year.
The launch of Budweiser, its flagship brand is yet another of its supposed masterstroke to take on Heineken’s Star (and or Heineken), Heineken itself and Guinness Foreign Extra Stout.
It should be noted that Heineken’s Nigerian Breweries cum Diageo’s Guinness are far from being mere pushovers. They are still the market leaders with AB InBev having less than 20% of the market volume. With several decades of market knowledge, access to huge cash stockpile (debt raising or reserves) and stronger trade leverage; Budweiser will be in the ring with two formidable fighters who know its Achilles heels.
On the media side of things, AB InBev has since picked up the exclusive broadcast sponsorship for the FIFA World Cup Russia 2018 with DSTV, Nigeria’s largest pay-TV platform. A marketing analyst said the move is a strategy to push out Nigerian Breweries with its coterie of flagship brands and Guinness to the fringes of other broadcast platforms.
Whether AB Inbev’s huge bet with Budweiser would succeed is hard to predict.
One thing is sure, the marketing and media industry is bound to see more activities, more demand to innovate in order to gain more share of throats for these clients.