Brewery Sector Update: Brewing in Tough Times

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The brewery sector performance has remained pressured despite a robust population advantage estimated at over 200 million people.

Our analysis of the Brewery sector reveals that industry revenue grew by a CAGR of 5.1% between 2017 and 2019 to N594.3bn from N511.8bn. Notwithstanding, the Brewery sector is not out of the woods yet as intense competition still presents limited scope for volume growth while the impact of regulation and higher cost pressures continue to weigh heavily on the overall performance.

Equally, macroeconomic fundamentals are little changed in favour of consumer spending in the face of persistently weak economic growth, currency pressures, and higher unemployment & inflation rates.

Notably, data from the NBS shows that consumers spent the least on alcoholic drinks at N150.2bn, representing 0.4% of the total consumption expenditure in the last decade.

This is not unexpected given the poor state of consumer’s disposable income with a slow CAGR of 1.7% in the last five years as well as the discretionary nature of alcohol consumption.

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While Nigeria’s large population and strong demographic appeal are some of the key industry growth propellers, we note that the Brewery sector is still faced with tough fiscal regulations including the June 2018 new excise duty burden on beer, wines and spirits as well as the new VAT rate of 7.5% implemented in February 2020.

Likewise, external risk factors mainly lower oil prices are also constraints to FX capital flows for the importation of essential raw and packaging materials such as barley and aluminium cans.

Meanwhile, the insecurity issues in the Middle-belt region still persists, upsetting the supply of locally sourced raw materials such as rice and sorghum, thus threatening brewer’s backward integration strategies with added cost pressures.

Given these changing dynamics and the limited room for the pricing, brewers have been compelled to actively seek to improve efficiency across the value chain through backward integration as well as to retain and increase market share through brand visibility.

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Observably, as the battle for market share deepens, industry players continue to leverage product innovations to remain competitive in the face of constrained pricing actions.

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Nigerian Breweries, for instance, launched a new “45cl Legend Extra Stout” in 2019 – a variation of the popular Legend Stout (originally in 33cl and 60cl bottle sizes) while GUINNESS introduced two (2) new products in the premium lager segment – “Guinness Gold” and “Baileys Delight” (a variation of its popular Baileys Cream liquor) – and one (1) in the spirit segment, “Orijin Herbal Gin”.

As at FY:2019, the market structure of the Nigerian brewery industry is still oligopolistic with four (4) major listed players – Nigerian Breweries Plc (NB), International Breweries Plc (INTBREW), Guinness Nigeria Plc (GUINNESS) and Champion Breweries Plc (CHAMPION).

However, in our analysis, we focused on 3 of the 4 listed brewers noting that NB maintained dominance as the largest brewer with a coverage market share by revenue of 54.3%, INTBREW trailed, accounting for 22.3% and displacing GUINNESS as the second-largest brewer while GUINNESS now accounts for 22.1% of coverage market share by revenue.

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Overall, we note that growing volumes and improving profitability remains a tight rope to walk especially in the wake of the COVID-19 pandemic. We believe short term growth triggers are limited considering the devastating impact of the pandemic on consumer’s income.

Therefore, we suspect the trend of increased product offerings especially at the mainstream and value segments of the market as well as targeted marketing and advertising strategies would be sustained over the short to medium term.

In addition, despite the recent drive to boost the local supply of raw materials, brewers remain largely dependent on the importation, still accounting for over 40.0% of raw material components on the average.

Meanwhile, increased competition has strongly restricted the scope for pricing actions to support margins due to cost pressures, fragile consumer spending and shifting consumer preferences.

Thus, we now expect the response to FX devaluation and COVID-19 economic shocks to largely influence pricing decisions in the industry as consumers’ disposable income takes a hit.

Download the Brewery Sector Update: Brewing in Tough Times Report Here.

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Brewery Sector Update: Brewing in Tough Times - Brand SpurBrewery Sector Update: Brewing in Tough Times - Brand Spur

Latest News

Spackman Entertainment Group’s Upcoming Musical Film THE BOX, Starring EXO’s Chanyeol, Scheduled To Be Released In The Spring Of 2021

  • Following the art film STONE SKIPPING, THE BOX is the next film production of the Company's wholly‐owned indirect subsidiary, Studio Take, founded by veteran movie producer, Mr. Song Dae‐chan
  • THE BOX will be EXO's Chanyeol's first lead acting role in a film
  • Directed by Yang Jung Woong, the Executive Producer of the 2018 PyeongChang Winter Olympics opening and closing ceremonies, THE BOX is set to be screened in Korea in the spring of 2021

SINGAPORE - Media OutReach - 3 March 2021 - Spackman Entertainment Group Limited ("Spackman Entertainment Group" or the "Company" and together with its subsidiaries, the "Group"), one of Korea's leading entertainment production groups, wishes to announce that its upcoming musical film THE BOX, produced by the Company's indirect wholly-owned subsidiary, Studio Take Co., Ltd. ("Studio Take"), is set to be released in Korea in the spring of 2021.


Following the art film STONE SKIPPING, THE BOX is the next film production of Studio Take, which was founded by veteran movie producer, Mr. Song Dae‐chan.

THE BOX is about the musical journey of an aspiring singer and a once popular producer.

Directed by Yang Jung Woong, the Executive Producer of the 2018 PyeongChang Winter Olympics opening and closing ceremonies, THE BOX stars EXO's Chanyeol who plays the aspiring singer and Jo Dal Hwan who acts as the once popular producer. This is Chanyeol's first lead role for a Korean commercial film. Jo Dal Hwan is known for his role in SECRET HEALER (2016), TRAFFICKERS (2012) and THE CON ARTISTS (2014).

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About Spackman Entertainment Group Limited

Spackman Entertainment Group Limited ("SEGL" or the "Company"), and together with its subsidiaries, (the "Group"), founded in 2011 by Charles Spackman, is one of Korea's leading entertainment production groups. SEGL is primarily engaged in the independent development, production, presentation, and financing of theatrical motion pictures in Korea. According to Variety, Korea was the world's fourth largest box office market in 2019, behind only North America, China and Japan.


The Group also invests into and produces Korean television dramas. In addition to our content business, we also own equity stakes in entertainment-related companies and film funds that can financially and strategically complement our existing core operations. SEGL is listed on the Catalist of the Singapore Exchange Securities Trading Limited under the ticker 40E.

Production Labels

SEGL's wholly-owned Zip Cinema Co., Ltd. ("Zip Cinema") is one of the most recognised film production labels in Korea and has originated and produced some of Korea's most commercially successful theatrical films, consecutively producing 10 profitable movies since 2009 representing an industry leading track record. Recent theatrical releases of Zip Cinema's motion pictures include some of Korea's highest grossing and award-winning films such as CRAZY ROMANCE (2019), DEFAULT (2018), MASTER (2016), THE PRIESTS (2015), COLD EYES (2013), and ALL ABOUT MY WIFE (2012). For more information on Zip Cinema, do visit http://zipcine.com


SEGL also owns Novus Mediacorp Co., Ltd. ("Novus Mediacorp"), an investor, presenter, and/or post-theatrical distributor for a total of 79 films (58 Korean and 21 foreign) including ROSE OF BETRAYAL, THE OUTLAWS and SECRETLY, GREATLY, which was one of the biggest box office hits of 2013 starring Kim Soo-hyun of MY LOVE FROM THE STARS, as well as FRIEND 2: THE GREAT LEGACY. In 2012, Novus Mediacorp was also the post-theatrical rights distributor of ALL ABOUT MY WIFE, a top-grossing romantic comedy produced by Zip Cinema. In 2018, THE OUTLAWS, co-presented by Novus Mediacorp broke the all-time highest Video On Demand ("VOD") sales records in Korea. For more information on Novus Mediacorp, do visit http://novusmediacorp.com.


The Company owns a 100% equity interest in Simplex Films Limited ("Simplex Films") which is an early stage film production firm. The maiden film of Simplex Films, JESTERS: THE GAME CHANGERS (2019), was released in Korea on 21 August 2019. Simplex Films has several line-up of films including A BOLT FROM THE BLUE (working title).


The Company owns a 100% equity interest in Take Pictures Pte. Ltd. ("Take Pictures") which produced STONE SKIPPING (2020) and shall release THE BOX and GUARDIAN (working title) in 2021 tentatively.


The Company owns a 100% equity interest in Greenlight Content Limited ("Greenlight Content") which is mainly involved in the business of investing into dramas and movies, as well as providing consulting services for the production of Korean content. Through the acquisition of Greenlight Content, the Group's first co-produced drama, MY SECRET TERRIUS, starring top Korean star, So Ji Sub, achieved #1 in drama viewership ratings for its time slot and recorded double digits for its highest viewership ratings. Greenlight Content was one of the main investors of MY SECRET TERRIUS.


The Company owns a 20% equity interest in The Makers Studio Co. Ltd., which plans to produce and release four upcoming films, the first of which will be THE ISLAND OF THE GHOST'S WAIL, a comedy horror film.


Our films are theatrically distributed and released in Korea and overseas markets, as well as for subsequent post-theatrical worldwide release in other forms of media, including online streaming, cable TV, broadcast TV, IPTV, video-on-demand, and home video/DVD, etc. We release all of our motion pictures into wide-theatrical exhibition initially in Korea, and then in overseas and ancillary markets.

Talent Representation

The Company holds an effective shareholding interest of 43.88% in Spackman Media Group Limited ("SMGL"). SMGL, a company incorporated in Hong Kong, together with its subsidiaries, is collectively one of the largest entertainment talent agencies in Korea in terms of the number of artists under management, including some of the top names in the Korean entertainment industry. SMGL operates its talent management business through renowned agencies such as MSteam Entertainment Co., Ltd. (Son Ye-jin, Lee Min-jung, Ko Sung-hee), UAA&CO Inc. (Song Hye-kyo, Yoo Ah-in, Park Hyung-sik), Fiftyone K Inc. (So Ji Sub, Ok Taec-yeon), SBD Entertainment Inc. (Son Suk-ku), and Kook Entertainment Co., Ltd. (Kim Sang-kyung, Kim Ji-young). Through these full-service talent agencies in Korea, SMGL represents and guides the professional careers of a leading roster of award-winning actors/actresses in the practice areas of motion pictures, television, commercial endorsements, and branded entertainment. SMGL leverages its unparalleled portfolio of artists as a platform to develop, produce, finance and own the highest quality of entertainment content projects, including theatrical motion pictures, variety shows and TV dramas. This platform also creates and derives opportunities for SMGL to make strategic investments in development stage businesses that can collaborate with SMGL artists. SMGL is an associated company of the Company.


The Company owns a 100% equity interest in Constellation Agency Pte. Ltd. ("Constellation Agency"). Constellation Agency, which owns The P Factory Co., Ltd. ("The P Factory") and Platform Media Group Co., Ltd. ("PMG"), is primarily involved in the business of overseas agency for Korean artists venturing into the overseas market. The P Factory is an innovative marketing solutions provider specializing in event and branded content production. PMG is a talent management agency which represents and manages the careers of major artists in film, television, commercial endorsements and branded entertainment.

Strategic Businesses

The Company owns a 100% equity interest in Frame Pictures Co., Ltd. ("Frame Pictures"). Frame Pictures is a leader in the movie/drama equipment leasing business in Korea. Established in 2014, Frame Pictures has worked with over 25 top directors and provided the camera and lighting equipment for some of Korea's most notable drama and movie projects including ITAEWON CLASS (2020), HOW TO BUY A FRIEND (2020), KIM JI-YOUNG, BORN 1982 (2019), FOUR MEN (2019) and ASADAL CHRONICLES (2019).

We also operate a café-lounge called Upper West, in the Gangnam district of Seoul and own a professional photography studio, noon pictures Co., Ltd.

For more details, do visit http://www.spackmanentertainmentgroup.com/

Brewery Sector Update: Brewing in Tough Times - Brand Spur
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