Nigeria: Things happening fast in Nigeria’s beer market

With a market share of 9%, Nigeria’s beer market has been rated one of the 10 fastest growing beer markets in the world. Raheem Akingbolu in a report by Thisday Newspapers on February 1 looks at the competition in the market and emerging trends.

Like in the game of football, where players make frantic efforts to score goals, things are happening fast in the Nigerian beer market. Until recently, the duel was well pronounced between Nigerian Breweries Plc and Guinness Nigeria. But since 2011, when SABMiller, one of the world’s top brewers, acquired majority share in the International Breweries Ilesa, manufacturers of Trophy Larger and also took control of the ownership of Hero, a popular brand in the Eastern market, the game has changed.

Within three years of the acquisition, top strikers in the nation’s beer market were not only tackled by Trophy and Hero, the two brands assumed good positions among the low to middle class consumers, the largest segment of beer consumers in the country. A development, which sent handlers of the existing market leaders back to drawing board for strategies that could help them control their slowing market share. To this end, industry watchers have consistently argued that the threat posed by these challengers led to recent decision by the giants in the industry to focus on brands that will appeal to low to middle class consumers otherwise known as the value segment.

Since SABMiller’s entry, NB and Guinness have had to tighten their belts, re-strategize, and launch series of campaigns to stay at the top. Obviously, it is no longer a two horse race between the two leading brands.

One major strategy that has helped all the players to become stronger is acquisition and mergers.
To gain entrance into the Nigerian market, after its initial alliance with Castel in 2009, SABMiller had bought Pabod Breweries, Port Harcourt, where it owns 57 percent and Voltic Nigeria Limited (Voltic produces table water), Lagos, where it owns 80 percent. The company also bought Standard Breweries in Ibadan, Oyo State.

In response to SABMiller’s entry into the Nigerian market, Heineken N.V., Nigerian Breweries plc’s parent company acquired breweries across the country.

In October 2011, Nigerian Breweries acquired majority equity interests in Sona Systems Associates Business Management Limited, (Sona Systems) and Life Breweries Limited from Heineken N.V. This followed Heineken’s acquisition of controlling interests in five breweries in Nigeria from Sona Group in January 2011.Sona Systems’ two breweries in Ota and Kaduna, and Life Breweries in Onitsha have now become part of Nigerian Breweries Plc, together with the three brands: Goldberg lager, Malta Gold and Life Continental lager.

In 2014, Nigerian Breweries merged with Consolidated Brewerie Plc which added the three breweries in Ijebu-ode, Awo-Omama and Makurdi to the company. The additional brands include 33 Export Lager, Williams Dark Ale, Turbo King Stout, More Lager, Breezer, Hi-malt and Maltex.

Also last year, Guinness Nigeria acquired the right to distribute McDowell’s, a mainstream spirits brand of United Spirits Limited in Nigeria. USL is an Indian mainstream spirits business which is also a subsidiary of Diageo Plc.

Guinness Nigeria also commissioned a local spirits line at its Benin brewery to produce brands like Smirnoff X1 intense chocolate vodka, Smirnoff Extra Smooth Vodka, Gordon’s Dry Gin, Moringa Citrus Blend, McDowell’s No. 1 Reserved Whisky, McDowell’s VSOP and Royal Challenge Finest Premium Whisky.

Similarly, two years ago, same Guinness acquired the distribution rights to Diageo’s international spirits brands like Johnnie Walker, Baileys and Cîroc.

Known then in the local parlance as ‘Omi Asoro’ a name Trophy earned because of the area where International Breweries was located in Imo, Ilesa in the 80s, Trophy has metamorphosed into a major brand of choice, driven by the fancy name of Honourable, a moniker ascribed to it as feel-good tag to drive patronage. Though popular among beer drinkers in some part of Osun, Oyo, Ondo and Ekiti States, it was then regarded as the drink for consumers at the lowest ebb of the market, hence the reason for its acceptability among artisans and drivers.

By 2011 when SABMiller Nigeria, now AbInBev Nigeria acquired the brand, its fortune had almost nosedived. According to a source close to the management of the company, the first thing that was discovered after a research was that the Trophy brand was merely blinking in the dark, without any modern marketing support to showcase its uniqueness and push in the market. This was said to have led to the engagement of Culture Communications, a company that became fully operational on January 04, 2010, barely a year before SABMiller bought into the business.

The full-service advertising agency, headed by Yomi Benson, a marketing communication practitioner with over two decades experience on both client and agency sides, quickly mapped out strategies to play up the unique selling points of the brand with relevant campaigns. Aside working for AbInBev Nigeria, Culture Communications also handles the Advertising accounts of BAT Nigeria, KFC Nigeria and GoGamePro. The agency’s exploits on Trophy could be said to have had instant impact on the brand as Trophy soon moved out of its narrow regional market to challenge and conquer the presumed market leaders across the beer market in the Western part of the country.

Since last year when AbInBev Nigeria acquired SABMiller, there have been speculations in the market that the development may be the opportunity the brand had been waiting for to finally take over the market. The reason is simple; AbInBev being the World’s second largest brewer may pull a stronger string to unsettle competitions. The brewery giant is currently operating three breweries, with the fourth one to go operational in the first quarter of this year while also reportedly constructing in Nigeria a brewery that will be largest of its kind in sub-Saharan Africa.

If there is anything that has contributed to the growth of the Trophy brand in Nigeria, that thing is believed to be inherent in innovation and creativity. For instance, aside the use of advertising and experiential supports, promoters of the brand, through their agency have invested hugely in sponsorship and celebrity endorsement. The height of this was when the company suddenly unveiled a credential campaign that christened the brand as ‘The Honourable’. Again, the decision of the spin doctors behind the brand to have settled for a suave Nollywood personality –Femi Adebayo, as the face of ‘The Honourable’ has been applauded because the actor is believed to represent the best in the new generation of theater industry in the South West. The campaign didn’t only cause a stir in the market place, it boosted the profile of the brand and took it to the premium position. Today, Trophy’s acceptability has cut across all segments of the market. The imports of all these marketing exploits explain why pundits have continued to refer to Culture Communications as the agency that owns the magic wand that redefined the brand.

In truth, Trophy was not the first beer brand in Nigeria to adopt a moniker. At the Nigerian Breweries, Heineken had long been known as the “Chairman,” a name that was adopted by consumers to speak to its premium positioning. There have been others. But interestingly, it has been only Trophy that went the extra mile to add its own moniker to the label, thereby deepening the value the consumer ascribes to the brand, especially at the point of consumption interaction.

According to Mr. Aina Johnson, a patron of the brand, who switched from another brand 10 months ago, the beauties in the Trophy brand, had been hidden for years until new investors came in.

He said; ‘’Though I was lured to try Trophy 10 months ago when I couldn’t get my favourite beer in a village in Ondo State, where I had gone for an assignment, I have not regretted doing so for a day. I thought of words of mouth by my friends in Lagos who were addicted to it and I thought of series of campaigns being dished out by its promoters. I tried the first and second bottles and noticed its unique and smooth taste. Few Days in the village, I noticed that Trophy has the lowest sugar content compared to other beers, hence my decision to pitch my tent with the brand,’’

If the conclusion of this consumer is anything to go by, then the growth of Trophy and how it changed the status quo in the beer market may soon become a case study for marketing professionals and budding students in brand building and management.

This is so because the brand has witnessed incredible growth in equity and volume since 2010 when a marketing agency was hired. For instance, between then and now, it’s risen from production level of just about 300 hectoliters to over 1,000 hectoliters. It has also grown from one 60cl SKU to now four: 60cl RGB, 45cl RGB, 33cl Can and 50cl Can. The brand is also believed to have moved from a beer consumed on the fringes of Ilesa to the favourite beer across South West Nigeria.

Perhaps for strategic reasons, Trophy is supported by a communication campaign that rides on a deep insight about the people of South West Nigeria. A marketing expert and former brand manager at Nestle and Unilever, Sola Fakorede captured it succinctly by stating that its various campaigns speak to both consumers and the brand itself.

‘’One thing that is clear is that the agency that works on Trophy has taken time to study the brand and understand the market. Successfully, they have selected words that can appeal to all segments and all demographics. I think another thing that has worked for the brand is the incredible result of nearly 100% on all brand health tests that have been conducted to date,’’ Fakorede said.

All these notwithstanding, the competition is becoming intense every single day as consumers and beer enthusiasts are thrilled by series of campaigns aimed to attract their buying consciousness.

Among other tools of positioning, concerts, sponsorship of traditional festivals, partnership with football associations, massive marketing campaigns in the mass media, among others are some of the ways Nigerian Breweries, Guinness Nigeria and the new comers are using to deepen their consumer engagement.

Like other brands from Nigerian Breweries and Guinness Nigeria; AbInBev Nigeria brands such as Hero Lager, Trophy Lager, Grand Lager, Trophy Lager, Castle Milk Stout, Castle Lager, Eagle, Redds and non-alcoholic malt beverages Grand Malt, Beta Malt and others have become forces to be reckoned with and they have found their ways into the heart of consumers.

01 February, 2018